U.S. Firms Join Forces to Build Car Batteries

Bouyed by the push into alternative energy sources, fourteen U.S. tech companies, among them 3M Corp. and Johnson Controls Inc., are seeking $1 billion in federal aid in a joint effort to make advanced batteries for electric cars. Asian rivals are currently way ahead of U.S. competitors in making car batteries.

The pitch is a similar effort to an alliance two decades ago that helped the U.S. computer-chip industry restore its competitiveness. Experts forecast that battery technology and manufacturing capacity will become as vital strategically as oil is.

Car makers, General Motors Corp. and Ford Motor Co., plan to roll out plug-in electric cars by 2010. The U.S. currently has limited capacity to make lithium-ion batteries that those cars will require. Panasonic Corp. currently dominates the car-battery market.

The consortium estimates the plan to build the first large-scale lithium-ion battery plant in the U.S. will cost $1billion to $2billion.

Though much of the advanced battery technology was developed in the U.S., American companies declined to pursue the business because of low returns offered by battery production. Asian manufacturers picked up the business because they were close to makers of electronic devices, which required a steady supply of batteries.

The consortium’s mission is to make U.S.-built batteries lighter, cheaper and more powerful than batteries made by competitors. The consortium is modeled on Sematech of Austin, Texas, the group formed by U.S. computer-chip companies in1987 to compete with the Japanese. They intend to solicit as much as $1 billion in federal funds from the Obama administration by tapping loan guarantees contained in an energy-security act passed last year.

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