Stimulus package’s $2B investment in domestic US battery manufacturing
Investment bank HSBC recently called battery makers, blessed with $2 billion in funding in the stimulus package, “one of the most compelling investment opportunities” in clean energy, according to the Wall Street Journal.
I had a conversation last week with Neil Maguire, VP of business development at Silicon Valley battery start-up Imara, and asked what this influx of money can mean to the US domestic battery companies. He agrees that the stimulus money, “is the [scale] of investment that could make a difference in building a battery industry in this country.”
Battery manufacturing is a very capital-intensive business. The stimulus money will be in the form of 7-8 awards of approximately $100-150M each awarded to US battery companies. (Winning one of those wards must be like winning the lottery for those lucky seven battery companies.) What difference would it make to a relatively young lithium ion battery technology company like Imara?
Imara’s business plan has always called for them to make the industry-standard 18650 cells, which are similar in size to a AA battery, in Asia using existing Asian capacity. This still makes sense, because those cells ultimately end up in products that are also made in Asia, like laptops and small hand-tools. However, Imara’s long-term plans are for a larger format cell targeting the automotive electric vehicle market, as well as large outdoor equipment, like mowers and lawn tractors. The stimulus money would accelerate plans to build that manufacturing capacity here.
How will the DOE decide to make the awards? Maguire hopes that the decisions take into consideration not just which company can put up a factory the fastest. “We’re hopeful that the decisions are made largely on the technology, as well as who can not just build a factory the fastest and hire create some green jobs, but, who has the technology that will be able to compete with the Sonys and Sanyos and Samsungs so that we have green careers and not just green jobs.”