U.S. firms join forces to regain tech lead in making batteries

The United States has lost the lead in battery manufacturing. This is the sobering message as 14 U.S. companies join forces to build a plant capable of making advanced batteries for next-generation electric cars. Companies in this coalition include 3M and Johnson Controls, and they are seeking $1 billion in federal aid as they try to catch up with Asian rivals. The gap is wide due to the high cost of such a plant--estimates range from $1 billion to $2 billion. It doesn't help that the United States does not currently have a single plant of this type, compared to the "more than four dozen" advanced battery factories being built in China alone.

Ironically, it appears that much of the advanced battery technology was developed in the United States, but was abandoned by American companies due to the low returns. At least part of the reason is related to the manufacturing supply chain; after all, it doesn't make sense to manufacture a battery in the United States and then ship it to China, for example, for packing with a consumer electronic product.

Experts, including former Intel chairman Andrew Grove, believe that battery technology and the ability to manufacture them could eventually parallel the strategic importance of oil today. As such, the formation of a consortium would be the best bet to launch the initiative.

The consortium will be modeled after Sematech, another consortium formed over 20 years ago, which successfully allowed the computer-chip companies in the United States to compete with the Japanese. Not surprisingly, the goal this time will be to manufacture batteries that are lighter and cheaper, yet more powerful than batteries that are made elsewhere.

To read more about this story:
- check out this article from the Wall Street Journal

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