Government Stimulus for Electric Car Parts

The Obama administration has awarded $2 billion in grant money for the production of electric car components such as batteries. President Obama and four of his cabinet members traveled last week to areas of the country that have suffered during the recent recession to announce the grant funding.

Obama went to Indiana to visit Navistar International of Elkhart. Navistar manufactures trucks, and was the recipients of $39 million of the grant.

Also travelling and announcing grant awards were the secretaries of energy and commerce, the deputy secretary of transportation, the head of the EPA, and Vice President Biden.

Most of the grant recipients will be required to match the awards dollar for dollar, and the funds will be used to help build bigger manufacturing facilities for modern electric car batteries, which are now being produced mainly in Asia.

The grant recipients include companies that make the chemicals used for batteries or battery parts and those that make capacitors that absorb or release electricity. Both types of businesses are used by electric car manufacturers to provide the components necessary to produce electricity for the cars or to recharge an electric car’s battery when the brakes are applied.

The grant money is coming from the economic stimulus package and is aimed at creating jobs and making America more competitive in the market for electric vehicle components. Other goals for the money include the reduction of carbon emissions and reducing U.S. dependence on petroleum.

General Motors received a huge chunk of the grant for its manufacturing of battery packs for its new Volt, which has a small gas powered engine and can draw electricity from a wall socket. GM’s goal for the Volt is to run for 40 miles strictly on electricity before using gasoline for the rest of a day’s driving.

GM received $106 million for production of Volt battery packs and $30 million to build a consumer test fleet. It also received $105 million for factories in which a new line of rear-wheel drive electric vehicles will be manufactured.

$151 million was awarded to Compact Power (part of LG Chem) to make cells for the GM Volt in Michigan.

Ford was awarded $30 million for the manufacturing and deployment of plug-in hybrids like the Escape and E-450 van, working along with 15 electric utilities.

Chrysler also got a share of the money: $70 million for the development and deployment of 220 hybrid pickup trucks and minivans.

Not all grant recipients were U.S. manufacturers; some foreign companies that have plants in the U.S. will also receive funds.

Most of the grant will go to lowering the cost of manufacturing lithium-ion batteries on a large scale, but some went to companies like Cascade Sierra Solutions in Oregon. They will be installing the electrical outlets needed at truck stops and modifying 5,450 trucks to be heated and cooled while idling with electricity rather than diesel fuel.

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