The B2B platform for full-electric and plug-in hybrid electric vehicles: Policy News

On 5 July, the US government formally approved $600 million in grants for battery manufacturers. The budget is part of a $2.4 billion US investment in "greening" its auto industry to both respond to the current economic crisis and reduce the US dependence on foreign oil. Update: Bill Clinton suggests introducing a ”Cash for EVs” programme using the “cash for clunkers” scheme as a model.

In a move set to create thousands of jobs and boost the depressed manufacturing sector, 48 projects in 25 different states should be sharing this amount. 18 of them will be in the traditional auto states of Michigan and Indiana while new comers will also be making the most of such an opportunity to break down upfront costs.

US: world leader in clean vehicles?

Today, the main manufacturers of batteries are in Asia. As countries like China are already deploying major resources to become EV leaders, the US is pushing its auto industry, via these grants, to establish the country as a number one player in battery manufacturing. This is the first-ever such investment in battery development.

The funding will "develop the next generation of fuel-efficient cars and trucks, powered by the next generation of battery technologies -- all made right here in America," argued US President Obama, stressing his desire for the US to become a world leader in clean vehicles.

$2.4 billion to green the industry

As part of the general $2.4 billion package, US-based companies will receive:

• $1.5 billion to produce batteries and components and expand battery recycling capabilities
• $500 million to produce electric motors and other drive train components
• $400 million to pay for testing plug-in hybrids and all-electric vehicles

"I don't want to just reduce our dependence on foreign oil and then end up being dependent on their foreign innovations. I don't want to have to import a hybrid car. I want to be able to build a hybrid car here," added the US President.

Among companies receiving grants were: Johnson Controls Inc., $299.2 million; A123 System, $249.1 million; GM, $240 million; Dow Chemical Co., $161 million; Dearborn, Mich.-based Ford, $92.7 million; and Chrysler, in Auburn, Mich., $70 million.

Opportunities to save the old players and kick start new comers

While 18 of the awarded projects are still in the traditional auto states of Michigan and Indiana, smaller players with different business models are entering the game.

EnerDel battery manufacturer, which has supply agreements with Fisker Automotive and Think, received $118.5 million and intends to match the same amount to expand lithium ion battery manufacturing in its home state of Indiana.

EnerDel CEO Charles Gassenheimer said the grant will allow the company to double the volume at its existing auto battery plant in Indiana. "What this money does is accelerate our business plan tremendously," he said.

Cash for clunkers extension

Meanwhile, the U.S. Senate voted yesterday favourably on extending the "cash for clunkers" incentive adding $2 billion to the programme. Lawmakers wanted to extend the programme after unexpected demand exhausted the initial $1 billion resource. The bill, identical to the one that passed the House last week, will now go to President Barack Obama for his signature.

Cash for EVs proposed by Bill Clinton

At the Las Vegas National Clean Energy Summit this week former US President Bill Clinton suggested to take the “cash for clunkers” programme as a model to introduce a similar programme that subsidises Electric Vehicles.

Clinton estimates that following a similar concept to provide incentives to buy EVs could significantly speed up the adoption of electric cars. Without giving any details on how it would work or how it could be funded he added, that the cash for clunkers programme “proves that Americans will bite if you make it economical enough.”