The shift toward electric drive systems is well underway—whether the future is an all-electric vehicle, a plug-in hybrid or a fuel cell vehicle, the machine that actually turns the wheels will likely be an electric motor, with some form of energy storage.
That makes electric motors and batteries critical technologies. Ford continues to grumble about predatory practices locking up hybrid components. Yet the US, despite its role in researching and developing new rechargeable battery technologies, has no volume manufacturing role.
A study prepared earlier this year for the Advanced Technology Program of the National Institute of Standards and Technology (NIST) explores the problem of R&D versus manufacturing through the lens of lithium-ion batteries—the rechargeable battery technology that’s on deck for the next wave of mass deployment.
The report—Factors Affecting U.S. Production Decisions: Why are There No Volume Lithium-Ion Battery Manufacturers in the United States?—draws the following conclusions:
The U.S. battery companies opted out of volume manufacturing of Li-ion batteries, primarily because of a low return on investment compared with their existing business, the significant time and investment required from conception to commercialization, and the time and expense required to establish a sales organization in Japan to access product design opportunities and take advantage of them.
Labor costs were not a major issue impeding large-volume production of the cells in the United States. The cost of labor in the United States was essentially the same as for the Japanese manufacturers domestically. The Asian strategy of providing facilities and loans to establish manufacturing locally and create jobs was a more important factor.
The tendency could be for technological development to follow manufacturing to East Asia, as a natural consequence of developing manufacturing expertise. Primary as well as rechargeable battery production will slowly shift to China, Korea, and Southeast Asia. U.S. manufacturers pursuing other budding energy technologies, such as fuel cells, will face similar issues.
Opportunities still exist for U.S. companies to successfully enter niche markets, such as those with medical, military, or space applications. Mechanisms for cooperation between government-academia and industry need to be implemented to assure that advanced materials technologies have the resources and direction to succeed.
Not that encouraging a picture.
(A hat-tip to Joe Adiletta!)