Hybrid batteries: one more way we're dependent on foreign energy

DETROIT — The future of the U.S. auto industry resembles a box of parts for hybrids, plug-in electrics and fuel cells. But that box comes with a familiar disclaimer:

Batteries not included.

As Detroit's automakers rush to develop electric cars, they find themselves reliant on foreign sources for advanced batteries. While much of the science was developed in U.S. labs, Asian companies have a two-decade head start on actually making rechargeable batteries.

That gap concerns U.S. automakers, which often have to shop Asian manufacturers for the most expensive parts of hybrids and their first generation of plug-in vehicles. The batteries for GM's Chevrolet Volt will be made in South Korea or China and likely will cost more than $10,000 per car.

"One of the reasons for having hybrids is to reduce dependence on foreign oil," said Sherif Marakby, Ford's chief engineer of hybrid core engineering. "You don't want to substitute dependence on foreign oil with dependence on foreign materials for lithium-ion batteries."

While the first commercial plug-in hybrids have yet to hit the road, Wall Street already has begun to salivate over the potential for the market, with estimates of battery sales approaching $10 billion annually worldwide by 2015. Fuel-cell cars would also require batteries.

U.S. automakers and battery companies have unsuccessfully lobbied Congress to authorize loans and loan guarantees to firms that want to set up battery production.

"Other countries such as Korea and Japan have identified advanced battery research and production as competitive priorities. We have to make sure not to cede that competitive race," said GM spokesman Greg Martin. "If we rely on foreign sources for those products, we still could in a sense be relying on foreign sources of energy."

U.S. companies have long led the race to research and invent new types of batteries. The first lithium-ion designs were developed here in the late 1980s. But Sony first licensed the technology for manufacturing, and since consumer electronics are mostly Asian, battery suppliers there had a natural advantage.

Some companies are betting that battery manufacturing will cross back to North America. Toda Kogyo Corp., a Japanese maker of battery components, bought a factory in Sarnia, Ontario, earlier this year to supply lithium-ion parts.

Andreas Jazdanian, marketing manager for Toda America, said automakers will need North American battery sources. One reason is logistics: Vehicle batteries will be large and expensive, meaning automakers won't want long supply chains.

One supplier could be Enerdel, a joint venture between energy company Ener1 and Delphi Corp. formed in 2004. Enerdel plans to start building lithium batteries for Norway's Think electric vehicle later this year at Delphi's old battery plant in Indiana.