"Splintered," "ultra-competitive" and "secretive"

It seems as if the fledgling U.S. offshore wind energy and electric vehicle industries have a great deal in common. Both have tremendous potential for mitigating the negative impacts of climate change and for creating a new generation of good paying manufacturing jobs. They could serve as linchpins of a new industrial revolution.

However, they both suffer from a failure to a level of collaboration in counterpoint to the fierce competition that exists amongst stakeholders that is necessary to transform individual companies, initiatives and projects into vibrant sustainable industries.

If we wait to long to figure this out, those industries will certainly take hold and flourish elsewhere. (GW)

U.S. battery makers see many 'disconnects' in U.S. supply chain

By Darious Dixon
Climate Wire
December 13, 2010

The nascent electric vehicle market is also a troubled one dependent on advances in battery technology, "splintered," "ultra-competitive" and "secretive," according to a report summarizing a meeting among players in the industry.

For years, battery researchers, consultants and manufacturers have been wondering how to get around issues of scale, manufacturing and overall cost. Problems have only become more acute with expanding a market alongside stiff -- and growing -- international competition.

In September, with help from the National Institute of Standards and Technology (NIST) and the National Electrical Manufacturers Association, nearly three dozen people with a stake in the battery industry met in Rosemont, Ill. A summary report of the Advanced Batteries Café was prepared by Energetics Inc. and released last week.

The notes of the meeting are fairly candid, discussing everything from the role of government funding and regulation to problems with the U.S. battery supply chain and foreign competition.

Government pushes, but little 'market pull'

"The battery manufacturing supply chain in the U.S. is 'splintered,'" the report states. "There are a lot of disconnects throughout the chain. Participants are angling for a position -- and roles, responsibilities, accountabilities, and standard making are fractured."

The opinions and assessments found in the report, NIST said, belong solely to the meeting participants and do not reflect any official NIST analysis.

Most notably, there seemed to be mixed feelings on the role of government in the battery industry.

"Government funding and incentives are helping to get the industry of the ground," the report states, "but this probably is not enough to establish a sustainable, long-lasting domestic industry without additional mandates and policies." Even though the United States has had a leading role in battery research, its successes "can be attributed more to government funding or regulations than market pull."

"EV development is now driven by policy, but we cannot have government policy for 20 years to make it work," the report states. It goes on to note: "CAFE standards help push [electric vehicles]. National security and/or manufacturing jobs might be motivators." But "government support underpins much of the progress taking place overseas."

Japan has best batteries; China has manufacturing muscle

At all tiers of production, electric vehicles costs in China are low, the report notes. "Other companies around the globe have a lot more to lose financially by making the high-risk investment in EV than China."

"I think what the industry needs [in order] to grow -- to be honest with you -- is markets," said Khalil Amine, head of the Technology Development group in Argonne National Laboratory's Battery Technology Department. Amine was consulted on the results of the discussion but wasn't a participant.

He said that the development of lithium-ion battery manufacturing in the United States has been slow to pick up because, for years, "there was no market and therefore there is no battery company established in the United States for consumer electronics."

For Japan, on the other hand, whose economy depends heavily on consumer electronics and automobiles, supporting advanced battery technology has been a vital investment.

Besides China's manufacturing muscle, the report states that Japan produces the best batteries, "and it will take a lot of effort for the U.S. to match or exceed that quality." It adds, "Can we catch up with Japan?"

Yet in spite of the international competition, "the situation is going to change," Amine said. "That, I can guarantee you."

Even if American companies were to resist putting hybrid and electric vehicles into their product lines, foreign companies will be happy to setup shop in the United States in order to be close to their customers, said Amine. Also, foreign companies will build battery facilities in the United States to avoid the cost and complication of shipping.