When hybrids first appeared, Japan beat the United States by about 10 years with its Toyota Prius, the report by researchers at Duke’s Center for Globalization, Governance & Competitiveness notes. But while the Prius runs on a nickel metal hydride battery, the next generation of hybrid and electric cars will overwhelmingly use lithium-ion batteries, which have yet to be fully developed, commercialized and mass-produced for use in vehicles.
Marcy Lowe, lead author of the report, notes that nearly all lithium-ion batteries for cell phones and laptops today are made in Asia, even though a University of Texas professor helped develop the technology in the 1980s.
"However, advancing the battery technology so it can power vehicles opens a whole new window of opportunity," Lowe says. "And this time around, the U.S. has learned to be quicker and more strategic."
The report indicates that thanks largely to stimulus funds, the U.S. supply chain has 119 sites spread out across 27 states that could play relevant roles in the production of advanced car batteries.
"According to announced capacity expansions, the United States will have a 40-percent share of global capacity to produce lithium-ion batteries for vehicles by 2015," the report says. "Funds from the American Reinvestment and Recovery Act of 2009 have jumpstarted the U.S. industry from only two battery pack plants pre-ARRA, to 30 planned sites, all playing key roles across the value chain, including materials, components, and production of cells and battery packs."
Lowe says U.S. advantages include advanced research capabilities, a well-established auto manufacturing sector, supportive government policies and the industry’s projection that the largest share of electric vehicles in the near future will be made in the U.S.
The U.S. push includes an effort to tap universities’ research strengths and bring new technologies to market. One small startup company, Tec-Cel, grew out of a class project for graduate students in North Carolina State University’s MBA program. Tec-Cel aims to commercialize lithium-ion battery applications based on nanofiber technology invented by N.C. State professor Xiangwu Zhang.
Also, two of the four major cell components that go into a lithium-ion battery have major U.S. manufacturers — Ohio-based Novolyte, with 30 years of experience in electrolytes (also used in other battery types), and North Carolina-based Celgard, with 20-30 percent of the global market in separators. Two additional North Carolina firms, FMC Lithium and Chemetall Foote, together supply nearly 50 percent of the world’s demand for lithium.
The Duke research team says the emerging industry still faces fierce competition from Asia, and further domestic capabilities are needed in several aspects of battery cell making, including the production of cathodes and anodes. And competing with low-cost Asian manufacturing will require bringing down costs through advanced, automated production.
As in any new industry, it is difficult to know exactly when the market for electric car batteries will take off, making it tricky to time capacity expansions, Lowe says. Battery firms worldwide seem to be playing a "wait-and-see" game.
"What’s at stake here is not just batteries, but the very basis of the future auto industry," Lowe says. "And if you’re going to be in the right place at the right time, you have to commit and invest, even if no one can tell you for sure when that ‘right’ time will arrive."
Jackie Roberts, director of sustainable technologies for Environmental Defense Fund, the study’s sponsor, said "tremendous economic opportunities in electric vehicles exist for the U.S., but we need to make sure we are creating customers here as well. Eventually, we think that mandatory limits on greenhouse gases will not only avoid long-term consequences of climate change, but also help create markets and jobs for American workers."
The findings build on research that the Duke group conducted last year regarding potential "green economy" jobs in the U.S.