Obama Administration-Electric Car Future

The grants might be the largest auto-battery investment ever. The funds will be split among 48 projects throughout the supply chain, from developing batteries to building manufacturing plants. While companies receive federal funding most will have to match the grant with their own spending, dime for dime.

Mark Duvall, director of electric transportation for the Electric Power Research Institute, a utility-funded think tank, said the funding will drive projects pushed to the sidelines by the recession.

Brian Wynne, president of the Electric Drive Transportation Association, indicated that one reason the grants are so important is that the availability of automotive-grade batteries worldwide will be critical to the success of electric vehicles.

For the U.S., of course, a major incentive is to assure more jobs in this country. Currently, Japan produces most of the batteries for the hybrid cars on U.S. roads.

American automakers want more domestic production of these batteries, since that should allow them to cut costs. As part of the grant program, the Big Three U.S. automakers received about $400 million to boost their chances of thriving in the emerging market for electric cars, especially in the U.S., the largest consumer market in the world.

General Motors Corp, not only received a large portion of the grant money, but will also benefit from the grant dollars invested in the continued development and manufacture of the lithium-ion batteries which GM uses in its new plug-in hybrid, the Chevy Volt.

Also, in America's race to take advantage of the slow but sure transition to electric, it's worth noting that U.S. truck makers are already world leaders in medium- and heavy-duty hybrids and the grants could extend their lead in this significant market. For example, Navistar Inc. received nearly $40 million to build all-electric delivery trucks that make frequent stops. In these hybrids, braking actually charges the battery, so they'll be able to run far more in electric mode, saving substantially in fossil fuel and reducing emissions.

Whether you're talking about the market for electric trucks, cars or other modes of transportation, seizing the enormous potential will be determined in large part by the continued development of high performing batteries. And though this grant program is small as federal programs go, it's great news for believers in cleaning our environment and charging up our economy via the road to all-electric transportation.

Of course, federal dollars are not the only source of funding for stimulating the production of electric vehicles. Corporations are providing financial incentives for people developing new concepts and even for companies that are communicating the pros and cons of electric transportation.

By any measure, it seems the market for electric vehicles is expanding, but it's a bumpy road rife with uncertainties and potential pot holes.