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Thursday, August 06, 2009

DOE Awards $2.4 Billion to Electric Vehicle and Advanced Vehicle Battery Manufacturers

It’s been a busy past couple days for the Department of Energy.Yesterday, President Obama announced that the DOE has awarded $2.4 billion to 48 projects for manufacturing electric vehicles, vehicle batteries and components. The funding comes from the American Recovery and Reinvestment Act (ARRA) and is directed at increasing U.S. manufacturing capacity for electric vehicles and vehicle batteries. Of the $2.4 billion, the general breakdown is as follows:

  • $1.5 billion in grants to U.S. based manufacturers to produce batteries and their components and to expand battery recycling capacity;
  • $500 million in grants to U.S. based manufacturers to produce electric drive components for vehicles, including electric motors, power electronics, and other drive train components; and
  • $400 million in grants to purchase thousands of plug-in hybrid and all-electric vehicles for test demonstrations in several dozen locations; to deploy them and evaluate their performance; to install electric charging infrastructure; and to provide education and workforce training to support the transition to advanced electric transportation systems.
Most recipients are required to match government funding, meaning this move will unleash about $2.4 billion in private investment.

“These are incredibly effective investments that will come back to us many times over – by creating jobs, reducing our dependence on foreign oil, cleaning up the air we breathe, and combating climate change,” said Energy Secretary Steven Chu. “They will help achieve the President’s goal of putting one million plug-in hybrid vehicles on the road by 2015. And, most importantly, they will launch an advanced battery industry in America and make our auto industry cleaner and more competitive.”

Michigan and Indiana, states with two of the highest rates of unemployment in the country and existing vehicle manufacturing bases, received 19 of the 48 grants. The plan is to reinvigorate the manufacturing capacity that has been decimated by the decline of the American auto industry. Additionally, because the cost of labor is such a minor part of the total cost of the vehicle batteries (10-15% according to Sarwant Singh of Frost & Sullivan), it is not likely that these jobs will be shipped overseas where labor is cheaper. Developing domestic vehicle battery production is important not only to creating jobs and improving the performance of the transportation sector, but it will keep the United States from becoming too dependent on foreign battery manufacturers (the Ford Fusion and first generation of Chevy Volts both use foreign batteries). This is one small step to keep the U.S. competitive in the clean energy race.

Check below the fold for a more detailed summary of the project grants:
  • Cell, Battery, and Materials Manufacturing Facilities: 9 projects, $1,096 million
  • Advanced Battery Supplier Manufacturing Facilities: 10 projects, $235 million
  • Advanced Lithium-Ion Battery Recycling Facilities: 1 project, $9.5 million
  • Electric Drive Component Manufacturing Facilities: 7 projects, $465 million
  • Electric Drive Subcomponent Manufacturing Facilities: 3 projects, $32.3 million
  • Advanced Vehicle Electrification: 4 projects, $254 million
  • Transportation Sector Electrification: 1 project, $22.2 million
  • Advanced Vehicle Electrification + Transportation Sector Electrification: 3 projects, $70.5 million
  • Advanced Electric Drive Vehicle Education Program: 10 projects, $39.1 million

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