Battery Breakthroughs: Would John McCain's $300 Million Help?

Though he didn't have much to say about it at the just-concluded Republican National Convention, where most of the energy talk concerned offshore drilling, John McCain went on record last June as favoring a $300 million federal prize to deliver an automotive battery with "the size, capacity, cost and power to leapfrog the commercially available plug-in hybrid or electric cars."

The constantly evolving Chevrolet Volt: Whose batteries will it use? (General Motors photo)

McCain also said he would stiffen fines on automakers that play fast and loose with Corporate Average Fuel Economy (CAFE) standards, and pump up incentives for developing alternative fuels.

Remember, he said all this back in June when prices were over $4 a gallon. With the tiny easing of prices since then, perhaps the McCain campaign has back-burnered this bright idea. Besides, he makes more headlines when he talked about offshore drilling.

But, wow, $300 million, that's a lot of money! I agree with McCain that this kind of competition can foster a lot of useful innovation. But I'd have to be convinced we could quickly develop technology to "leapfrog" what is going into prototype electric cars and trucks right now. And the fast-moving global race to develop clean cars may be all the incentive cutting-edge companies need.

The state of the art for batteries today is lithium-ion. And a leading player is Massachusetts-based A123 Systems, which the Department of Energy (presumed host of McCain's contest) would not have to go far to find -- they're already working together. A123 is well connected both at DOE and the auto companies with batteries for the next generation of hybrids, as well as plug-in hybrids.

A123's battery technology is being considered for what I would call General Motors' most important project: The Chevrolet Volt, which is tentatively scheduled for showrooms in 2010. The Volt is a new kind of hybrid, with a gasoline motor that's not connected to the wheels -- instead, it's there to keep the batteries charged and provide much greater range than is possible today with conventional electric cars.

It's by no means a certainty that A123 will get the Volt contract. Also in the running as the car goes down to the wire, we hear, is a division of Korea's LG Chem Ltd, the largest chemical company in that country. LG Chem was recently awarded a $4.6 million grant by the U.S. Advanced Battery Consortium (USABC) to develop advanced lithium-ion polymer batteries for hybrid cars.

Whoever wins, the batteries will have to be truly great -- able to last 150,000 miles or 10 years, and help speed the car to 60 mph in less than nine seconds.

A123 was not available for comment, but GM Vice Chairman Bob Lutz is clear that a competition of sorts is underway. "Breakthrough battery technology will drive future automotive propulsion, and the company that aligns with the best strategic partners will win," he said. "That's what is so important about this deal. Whether you're talking about the Chevy Volt, a fuel cell or even a plug-in hybrid such as our planned Saturn Vue, we need to understand the fundamental battery cell performance."

Agreed. The future will undoubtedly be electric. So even if McCain loses, there's a big incentive for companies to get started cranking out better batteries.