U.S. to spend $2.4 billion to boost electric vehicles

WASHINGTON - Declaring that electric cars could help put Americans to work and reduce dependence on oil, President Barack Obama said Wednesday that the federal government would spend $2.4 billion in stimulus money to build batteries and get the first batch of thousands of U.S.-made electric vehicles onto the roads.

Most of the money - $1.5 billion - will go to U.S.-based companies to make advanced batteries and battery components. The remainder comprises $500 million in grants for companies that build parts for electric-drive vehicles and $400 million in grants to buy and test electric vehicles, install charging stations and train workers for electric transportation.

Despite many years of battery research, manufacturing in the United States is still in the early stages. Most of the battery cells for vehicles are made in South Korea, Japan and China. The federal funding will make more U.S.-made batteries and components available for the vehicles that manufacturers are promising to build in the next few years.

"I want the cars of the future and the technologies that power them to be developed and deployed right here in America," Obama said when he announced the grants in Elkhart, Ind., at a Navistar International Corp. plant. Navistar will get $39 million to develop and deploy 400 electric delivery trucks with 100-mile ranges.

Indiana was the second-biggest recipient of the funding, after Michigan, which received more than $1 billion.

Commerce Secretary Gary Locke visited Kansas City, Mo., where Smith Electric Vehicles will get $10 million to build up to 100 electric vans, pickups and medium-duty trucks, including conversion of the popular Ford F-150 truck to an electric vehicle.

Locke also announced $30 million to Ford for making plug-in hybrid electric vehicles in Kansas City and Michigan, a $73 million grant to Chrysler for hybrid and electric pickups made in St. Louis and Michigan, and a $5 million grant to Missouri University of Science and Technology, one of a number of such grants nationally, for training in the technology of the cars of the future.

In Charlotte, N.C., Energy Secretary Steven Chu announced a $49 million grant for Celgard, one of the largest suppliers for lithium battery production in the U.S., to build the separators used in lithium-ion batteries in Charlotte and in Aiken, S.C.

The federal government no longer is trying to figure out whether it's possible to make a workable battery, but instead is trying to help companies that already have them develop manufacturing facilities, said Felix Kramer, the founder of the California Cars Initiative, a nonprofit group that promotes plug-in hybrid electric vehicles.

"The whole point is we can do it now. We don't need to wait for something better. If we get better batteries it will be icing on the cake," Kramer said.

Kramer's CalCars has argued that it's possible to electrify existing vehicles, and it's developed a conversion of the Toyota Prius hybrid to a plug-in electric vehicle. Now for the first time the government will be paying to demonstrate the same thing, Kramer said.

No U.S. company makes a plug-in hybrid yet, though General Motors is trying to be first with the Chevrolet Volt. China's BYD in December became the first company in the world to sell a mass-produced plug-in hybrid.

Nissan announced Sunday that it will build the electric Leaf, a five-seat hatchback with a 100-mile range. Nissan said the car would be available in the United States in late 2010 and would be made in Smyrna, Tenn., beginning in 2012.

Obama said he wanted to ensure that the auto industry in the United States was moving ahead with innovation, because the country needed the jobs.

"With these investments, we're planting the seeds of progress for our country, and good-paying, private-sector jobs for the American people," he said.

The grants included nearly $100 million for Nissan and its partner, the Electric Transportation Engineering Corp. of Phoenix, to develop and build charging stations and demonstrate the use of 5,000 of Nissan's new electric cars. The stations are planned for Portland, Salem, Eugene and Corvallis, Ore.; Seattle; San Diego; Phoenix and Tucson, Ariz.; and Nashville, Chattanooga and Knoxville, Tenn.

The stimulus money for electrified transportation includes $22.2 million for charging stations at 50 truck stops along interstates and rebates for modifying trucks to use electricity while idling.

The bulk of the funding, however, will go to help companies that use existing technology to make batteries and their components.

Bruce M. Belzowski of the University of Michigan Transportation Research Institute said the battery technology that the administration was trying to get into the marketplace eventually would be replaced with better designs. "There's no way you could consider battery development at its endpoint," he said.

In addition to Chu and Locke, other administration officials went to economically hard-hit regions of the country Wednesday to announce grants under the program. Vice President Joe Biden went to NextEnergy, a nonprofit corporation in Detroit that helps bring alternative and renewable energy technology to the marketplace. Others visited Florida and Pennsylvania.

With the exception of Missouri, all the states visited were battleground states that went to Obama in the presidential election. Kentucky, which went to Republican Sen. John McCain of Arizona, lost out on a bid for stimulus funding to build an advanced battery-manufacturing plant.

(McClatchy Newspapers correspondent Halimah Abdullah contributed to this report.)