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Big 3 Seek Battery Subsidies -- Deliver White Paper Says Wall St. Journal
Jan 10, 2007 (From the CalCars-News archive)
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We haven't seen the white paper described here -- having been submitted to the government, it may be a public document...we think the auto-makers joining the chorus suggesting more support for battery research will help secure Congressional passage of the Vehicle and Fuel Choices for American Security Act. But the fact that we need better batteries shouldn't become a "free pass" -- auto-makers can get started on PHEVs now using the batteries we have!

Big Three Seek Battery Subsidies
Larger U.S. Outlay Would Speed Work On Electric Vehicles
By NEAL E. BOUDETTE and JOHN D. STOLL
January 9, 2007; Page A14
http://online.wsj.com/­article/­SB116831919685971148.html

POWER PLAY
- The News: The Big Three have asked the U.S. to subsidize development of advanced batteries that would power electric cars.
- The Issue: Japan has the lead in powerful, lightweight battery design.
- What's Next: The proposal is under review by a technology adviser to the President and the Energy Department.

DETROIT -- The Big Three auto makers have asked the federal government to spend roughly $500 million over five years to subsidize the development of advanced batteries required to power future vehicles such as the electric prototype generating buzz for General Motors Corp.

In a follow-up to a November meeting between President Bush and their chief executives, GM, Ford Motor Co. and DaimlerChrysler AG's Chrysler Group last month submitted a white paper to a White House technology adviser saying the U.S. is trailing Japan in development of batteries for fuel-efficient automobiles and could suffer economically if the government doesn't help accelerate domestic research efforts in this area, company officials said.

The proposal is being reviewed by a technology advisor to Mr. Bush and the Department of Energy, said Scott W. Schramm, DaimlerChrysler's manager for regulatory and technical affairs. Spokesmen for the White House and the Energy Department couldn't comment yesterday afternoon.

The Detroit auto makers are worried they could be locked out of a key component for future vehicles if Japan maintains its lead in developing high-powered, lightweight batteries needed for gasoline-electric hybrids and pure electric vehicles.

Their request also underscores the longer-term competitive difficulties their financial troubles are causing. All three are losing money in North America. GM and Ford are both expected to report losses for 2006. Chrysler had an operating loss of $1.5 billion but parent DaimlerChrysler remained profitable. In contrast, Toyota Motor Corp. has billions to pour into new technologies and fund development projects with myriad suppliers.

Mr. Schramm said Chrysler, Ford and GM haven't always been able to get the technical help they would like from Japanese suppliers that have been developing the lithium-ion batteries that auto makers think will be light enough and inexpensive enough for next-generation vehicles.

"There's not a lot of sharing of information about prototype batteries. We've had some difficulties even getting prototypes," Mr. Schramm said. The U.S., he added, is "behind on this."

In 2005, Toyota obtained a majority stake in a leading battery maker, Panasonic EV Energy Co., that was widely seen as a way to tighten the auto maker's control over the supply of batteries for its Prius hybrid. The move effectively gave Toyota power over whom Panasonic EV does business with.

At the North American International Auto Show in Detroit, GM unveiled the Chevrolet Volt, a prototype of a battery-powered vehicle that appears to be a step ahead of the hybrids on the market. The Volt has an onboard engine that generates electricity once its batteries run down, and owners would be able to recharge the car by plugging it in to an electrical outlet. Hybrids use a battery-powered motor in stop-and-go driving and use an internal-combustion engine for acceleration and higher speeds.

The Volt should get about 150 miles per gallon for short commutes, GM estimated. GM officials promised the company would produce a drivable version of the Volt later this year but said it probably can't commercialize the vehicle without government help in developing batteries. "We are not battery experts," said Elizabeth A. Lowery, GM vice president for environment and energy. Last week GM contracted with two U.S. suppliers -- Saft Advanced Power Solutions LLC and Cobasys -- to develop lithium-ion batteries for a future plug-in version of the Saturn Vue hybrid sports-utility vehicle.

Ms. Lowery and Mr. Schramm rejected suggestions their companies were looking for government help on the kind of development efforts the industry should fund on its own. In the proposal sent to the White House, the Big Three said developing advanced batteries is critical for the U.S. to produce the kinds of fuel-efficient vehicles that will help reduce greenhouse emissions and dependence on foreign oil.

To produce electric cars in large volumes, GM "would like to have a domestic [battery] supplier and have the technical expertise in the U.S.," Ms. Lowry said.

-- John J. Fialka in Washington contributed to this article. Write to Neal E. Boudette at neal.boudette@... and John D. Stoll at john.stoll@...

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