stimulus

The stimulus package has allocated somewhere in the neighborhood of $92 billion to “CleanTech” with approximately $300 million to hybrid vehicles, with an amazing $2 billion in grants for battery manufacturing. I realize the purpose of the stimulus is to jump-start the economy with near-term “shovel-ready” projects, but I don’t think longer-term investments we need to drive fossil fuel-free transportation – in particular, investment in battery technology research.

Batteries are the most costly component in hybrid and plug-in hybrid cars, adding ~85% of the incremental cost beyond traditional gas-powered cars. In addition, these costs make Plug-in hybrids and many electric cars economically inefficient for the consumer, often not paying back over the lifetime of the investment. Current battery chemistries yield prices of approximately $1200/kWh for sustained power, and to provide pay-back will require costs closer to $500/kWh. 

The scaling benefits from additional manufacturing facilities will bring these costs down, however, raw materials are roughly 25% of current battery costs, so there is a limit to scale cost savings. There is still significant research and development needed to make these products economically neutral. 

Searching the shovel-ready projects for “battery” only shows ~$15.7m in stimulus funding, and “fuel cell” received a slightly better influx of cash at $100m. But very little of this money is allocated towards motive battery or fuel cell research that will make a step-change difference in cost.  Perhaps they have not made it into the database yet. 

The $2 billion in grants plus $300m for hybrids will drive battery scale, however, I am not sure it will bring costs down enough to sustainably compete with fossil fuels.