U.S. spending $2B to challenge Asia on laptop battery manufacturing

Feds to move swiftly to fund construction of lithium-ion battery plants

Boston-Power Inc. CEO Christina Lampe-Onnerud is ready to build a laptop battery factory in China. The plans are already drawn. But if her firm can get several hundred million dollars out of the recently approved $787 billion federal stimulus bill, she will take those plans and instead build the factory somewhere in the U.S.

The facility, over time, would support up to 10,000 jobs -- workers whose jobs are either with the company or are part of its supply chain.

If Boston-Power gets federal support to build its factory, "in principal, we would be able to compete with the leading Japanese manufacturers very, very quickly," said Lampe-Onnerud, whose Westborough, Mass.-based firm makes a long-life, lithium-ion battery. "I think it is an interesting time to be a small company."

Boston-Power says it would deliver batteries that can charge to 80% power in 30 minutes and offer "like-new" performance in a laptop for three years. In December, Hewlett-Packard Co. said it plans to start offering lithium-ion batteries in its laptops this year.

One of the larger chunks of money that the U.S. is planning to spend on technology -- $2 billion -- will go to the battery industry for manufacturing facilities.

The U.S. is hoping to build a battery manufacturing industry, which supplies the automotive and electronics industries, in the U.S. -- largely from scratch. Battery manufacturing is now centered in Asia.

"Right now, there is effectively no manufacturing of lithium-ion cell batteries in the United States," said Jim Greenberg, who heads up the National Alliance for Advanced Transportation Battery Cell Manufacturers. "The principle barrier to it is the very high capital cost of getting into that business."

This alliance, which represents some 14 companies -- including 3M Co., Altair Nanotechnologies Inc. and EaglePicher Corp. -- was formed late last year to try to convince the government to support lithium-ion manufacturing. The alliance wants to build two factories and is seeking as much as $1.2 billion.

Scott Faris, CEO of Planar Energy Devices Corp. in Orlando, Fla., a venture-backed battery maker that has licensed technology developed at national labs, said the U.S. needs battery manufacturing capability, especially for automotive makers likely to rely increasingly on batteries. The company is still in development and isn't shipping any products yet, but Faris said his company's batteries can hold tens of thousands of charges for use in everything from automotive to consumer electronics.

"For national security purposes, from a military perspective, for the automotive industry, for a variety of industries, having a robust and dynamic onshore domestic manufacturing infrastructure for batteries is critical," said Faris.

The jobs that emerge may pay better than most, requiring skilled workers with an abundance of engineering talent, said the battery makers.

The U.S. could begin seeking proposals for battery manufacturing facilities within 60 to 90 days.

Boston-Power currently has an agreement with a battery manufacturer in Taiwan -- GP Batteries International Ltd. -- to make batteries there. That production work will continue, but the firm's expansion would be in the U.S., not in China. Lampe-Onnerud said she hopes to help create new U.S. manufacturing jobs. "I think the stimulus bill has the chance to inject a little bit of confidence in U.S. manufacturing again," she said.

If the $2 billion stimulus were to create 10 new manufacturing facilities, "that would be absolutely spectacular," said Lampe-Onnerud.

Copyright © 2009 IDG Communications, Inc.

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