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In automotive boardrooms from Tokyo to Detroit the race is not only on, it’s as heated as ever. This time, though, it has less to do with sexy styling and more with something considerably deeper–the very future of the industry.
Thanks to rising oil prices and growing concerns about global warming, the automotive industry is now racing to perfect the new battery technology that will enable it to take the next step in producing more marketable hybrid and plug-in vehicles.
At stake, of course, is nothing less than hopes of an entire industry and its workforce.
That’s because, even amid the tens of thousands of headline-making layoffs in the rapidly shrinking industry, Detroit is still hiring.
But it’s not low wage jobs they are looking to fill, but highly advanced and technical skills.
Take General Motors (GM:NYSE), for instance. Despite an increasingly troubled outlook and one bad story after another in the press, the auto maker continues to hire. In fact, , in a turnaround story that is heavily dependent on the cars of the future, the automotive giant has added over 1,000 employees in some of the most technologically advanced positions in the last year.
“We’re looking for a handful of people,” said Troy Clarke, President of GM North America, “with the technical expertise to help us change the way the world drives.”
And that’s where batteries come in, because unlike most of the other alternatives, new battery technology may be the shortest route to changing the entire industry.
But before that day can arrive, the nickel-metal hydride batteries that are now the mainstay of most hybrid cars need to be radically improved, or even better, replaced.
At least that’s the opinion of the market as it races to produce a whole new set of batteries that use the same type of lithium-ion technology that powers the world’s laptops, since it can store considerably more power in a much lighter and smaller stack.
That’s what makes battery developers such a hot property to automotive executives around the world. Because whoever is able to overcome the limitations imposed by lithium-ion batteries and build them into their vehicles first will have a major leg up on the competition.
It’s a bit of cold, hard marketplace reality that hasn’t gone unnoticed by Senator Joe Biden of Delaware. His state is slated to lose nearly 2,100 automotive jobs over the next three years with the closing of a Chrysler SUV plant.
Sen. Biden introduced legislation last month that would boost federal investment in the development of lithium-ion batteries, which he admits are critical for producing the next generation of hybrid vehicles.
Called “The American Automobile Industry Promotion Act of 2007,” his bill would provide $100 million a year for five years to the troubled sector. The funds would go towards furthering the research and development of battery technology at national laboratories, small businesses and universities.
And in Biden’s mind, there is no time to waste.
“Right now, the Japanese dominate the market for lithium-ion batteries because they invested hundreds of millions of dollars in developing this technology and in supporting their industry,” Biden said. “American auto makers are playing catch-up and we need to move quickly.”
But it’s a playing field that continues evolve.
On Friday, Japan’s Nissan Motor Corp.(NSANY:NASDAQ) and NEC (NIPNY:NASDAQ) revealed that they would form a joint venture to produce new lithium-ion batteries that could be brought to market by 2009.
Nissan and NEC claim that a breakthrough in the highly contested business could hold the key for the automaker as it attempts to regain its market share–especially in the U.S.
“The evolution of battery technology will be the deciding factor in bringing tomorrow’s electric vehicles closer to reality,” Nissan senior vice president Minoru Shinohara told a news conference related to the announcement.
Closer to home, it is Cobasys, a joint venture between Energy Conversion Devices Inc. (ENER:NASDAQ) and Chevron Corp. (CVX:NYSE), that has been making the most noise.
In January, the Michigan-based company was awarded a contract to develop and test a lithium-ion battery system for the General Motors plug-in hybrid electric vehicle (PHEV) program, along with its partner, A123 systems.
The Cobasys lithium-ion package will consist of a “plug and play” solution featuring batteries, packaging and thermal management that will allow it to work seamlessly with the vehicle.
Even so, there is quite a bit of work necessary before one of these or another innovation becomes the industry standard.
With so much at stake, 2010 may finally be the year when it all comes together for the electric car after so many failed promises.
Tokyo and Detroit are both betting on it.
Wishing you happiness, health, and wealth,
Steve Christ, Editor