President Barack Obama celebrated the opening of an advanced battery plant on Monday as a critical boost for hybrid and electric cars — and a success for his administration's economic stimulus program.
But even as mass-produced advanced batteries start rolling off assembly lines, costs are high for consumers, and hurdles remain.
"This is about the birth of an entire new industry in America, an industry that's going to be central to the next generation of cars," Obama said Monday in a phone call broadcast at the opening of A123 Systems Inc.'s lithium ion battery plant in the state of Michigan.
"And it's going to allow us to start exporting those cars, making them comfortable, convenient, and affordable. .... When folks lift up their hoods on the cars of the future, I want them to see engines and batteries that are stamped: 'Made in America,'" Obama said, according to a transcript of the call released by the White House.
Fending off criticism of the $814 billion stimulus program, the administration has cited the battery industry as one of the success stories. With new facilities coming online in the Midwest, battery manufacturers for the advanced vehicles are providing a test case for the government's attempt to revive the economy.
About 300 workers, many formerly laid-off auto workers, listened Monday as Obama spoke. Energy Secretary Steven Chu, Michigan Gov. Jennifer Granholm and others were also on hand to promote their production of battery cells and components. A123 Systems Inc. received $249 million under the stimulus program and plans to open a second facility next year. aslo in Michigan.
Automotive supplier Johnson Controls Inc. last week started shipping batteries that were made at another Michigan facility built with the help of $299 million in federal grants. The factory expects to employ 90 workers by late next year and could produce 75,000 to 150,000 batteries a year, depending on the mix of hybrid and electric vehicles it supplies.
The Energy Department estimates that the 48 advanced battery and electric drive projects announced last year under the $2.4 billion program could lead to the production of about 75,000 batteries by next year and 500,000 batteries annually by 2014. Michigan, Indiana, Ohio and South Carolina are the states with the largest share of the projects.
Despite the fanfare, the battery industry faces many hurdles. Gas-electric hybrid vehicles represent about 1 percent of new vehicle sales, and many plug-in hybrids and battery electric cars are just entering the market.
Costs are high. The government has estimated that a battery with a 100-mile (160 kilometer) range costs about $33,000, although stimulus money could bring that down to $10,000 by the end of 2015.
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Associated Press writer Erica Werner contributed to this report.
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Online:
A123: http://www.a123systems.com/
Johnson Controls Inc.: http://www.johnsoncontrols.com
Energy Department: http://tinyurl.com/3xunnp6
