Additionally, there are provisions that will help ensure a market for the batteries. Tax credits of up to $7,500 will go to people who buy hybrids with large batteries that can be recharged by plugging them in; there will also be smaller incentives for converting cars into such plug-in vehicles. What’s more, $300 million is set aside for federal agencies to buy alternative fuel vehicles, including plug-ins, as well as $400 million for “transportation electrification.” There will also be $4.5 billion set aside for improving the electric grid, some of which is supposed to go for research on and manufacturing of batteries.
Some experts are nervous about how the money will be spent. The Department of Energy (DOE), which will be administering much of the funds, is under pressure to distribute money quickly, which some fear will increase the possibility that the funds will be misallocated. Patil, whose company will be supplying the battery packs for the Chevrolet Volt electric vehicle due out in 2010, says that there are plenty of lithium ion chemistries that don’t make sense for automotive applications, and he hopes that the DOE will take note of this in its funding. Robert Kanode, the CEO of Valence Technologies, a battery manufacturer based in the United States (but with manufacturing in China), is likewise concerned that funding will go to technologies that have little chance of commercial success.
While it’s not clear that battery costs will come down enough to create a large market for plug-in hybrids, the advances in battery technology in the United States have put the country in a position to develop a new battery industry, says Ted Miller, the senior manager for energy storage strategy and research at Ford Motor Company and a manager at a research consortium set up by the Big Three automakers. “Our weakness is not in research,” he says. “Now we need to find a way to kick-start manufacturing.”