GM, Chrysler, Ford share US grants for batteries

Ford Motor Co.,General Motors Co. and Chrysler Group LLC are among the recipients of $2.4 billion in federal grants President Barack Obama announced today to encourage the development of hybrid and electric vehicles.

The funds include $1.5 billion for makers of batteries and $500 million for companies making electric motors and drive components. An additional $400 million will be used to test a system for recharging electric-powered cars.

The grants are part of the $787 billion U.S. economic stimulus measure passed this year. The money will make some battery projects possible and can speed development of research that has no guaranteed return, said Stephanie Brinley, an auto analyst at AutoPacific Inc. in Tustin, California.

"To get more battery power and electric cars takes quite a bit of investment in products that are not guaranteed success," Brinley said. The U.S. automakers would "take a lot longer to complete" projects without the aid, she said.

A U.S. supply base of batteries "makes sense logistically," Chief Executive Officer Fritz Henderson said.

"These batteries are very heavy, and they'd be close by to our engineering centers," Henderson said in an interview in Detroit, where Vice President Joe Biden spoke on the topic. The battery in the Volt weighs 400 pounds, said Bob Kruse, GM's executive director of hybrid, electric vehicle and battery engineering.

Funding 'Tsunami'

GM received $105.9 million to use in a Brownstown Township, Michigan, factory that will produce battery packs for the Chevrolet Volt range-extended electric vehicle. GM has said it plans to produce the Volt at its Detroit-Hamtramck assembly plant. GM also got funding for Volt demonstration fleets, and for a second-generation, rear-wheel electric drive system.