Charles W. Wessner THE NATIONAL ACADEMIES PRESS Copyright © National Academy of Sciences. All rights reserved. Building the U.S. Battery Industry for Electric Drive Vehicles: Summary of a Symposium Charles W. Wessner, Rapporteur Subcommittee on Electric Drive Battery Research and Development Activities Committee on Competing in the 21 st Century: Best Practice in State and Regional Innovation Initiatives Board on Science, Technology, and Economic Policy Policy and Global Affairs Copyright © National Academy of Sciences. All rights reserved. Building the U.S. Battery Industry for Electric Drive Vehicles: Summary of a Symposium THE NATIONAL ACADEMIES PRESS 500 Fifth Street NW Washington DC 20001 NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance. This study was supported by: Contract/Grant No. DE-DT0000584, TO# 29, between the National Academy of Sciences and the Department of Energy. This report was prepared by the National Academy of Sciences under award number SB134106Z0011, TO# 4 (68059) from the U.S. Department of Commerce, National Institute of Standards and Technology (NIST). This report was prepared by the National Academy of Sciences under award number 99-06-07543-02 from the Economic Development Administration, U.S. Department of Commerce. The statements, findings, conclusions, and recommendations are those of the author(s) and do not necessarily reflect the views of the National Institute of Standards and Technology, the Economic Development Administration, or the U.S. Department of Commerce. Additional support was provided by the Michigan Economic Development Corporation and Michigan’s University Research Corridor. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the views of the organizations or agencies that provided support for the project. International Standard Book Number 13: 978-0-309-25452-6 (Book) International Standard Book Number 10: 0-309-25452-3 (Book) Additional copies of this report are available for sale from the National Academies Press, 500 Fifth Street, N.W., Keck 360, Washington, DC 20001; (800) 624-6242 or (202) 334-3313; http://www.nap.edu/. Copyright 2012 by the National Academy of Sciences. All rights reserved. Printed in the United States of America Copyright © National Academy of Sciences. All rights reserved. Building the U.S. Battery Industry for Electric Drive Vehicles: Summary of a Symposium The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. 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The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Charles M. Vest are chair and vice chair, respectively, of the National Research Council. www.national-academies.org Copyright © National Academy of Sciences. All rights reserved. Building the U.S. Battery Industry for Electric Drive Vehicles: Summary of a Symposium Copyright © National Academy of Sciences. All rights reserved. Building the U.S. Battery Industry for Electric Drive Vehicles: Summary of a Symposium v Subcommittee on Electric Drive Battery Research and Development Activities Mary L. Good (NAE), Chair Dean Emeritus, Donaghey College of Engineering and Information Technology Special Advisor to the Chancellor for Economic Development University of Arkansas at Little Rock Raymond G. Boeman Director, Energy Partnerships Oak Ridge National Laboratory Michael G. Borrus Founding General Partner X/Seed Capital Management Ralph Brodd President Broddarp of Nevada Robert Kruse Principal EV Consulting W. Clark McFadden II Senior Counsel Orrick, Herrington & Sutcliffe LLP Daniel Sperling Director, Institute of Transportation Studies University of California, Davis Committee on Competing in the 21 st Century: Best Practice in State and Regional Innovation Initiatives Mary L. Good (NAE), Chair Dean Emeritus, Donaghey College of Engineering and Information Technology Special Advisor to the Chancellor for Economic Development University of Arkansas at Little Rock Michael G. Borrus Founding General Partner X/Seed Capital Management William C. Harris President and CEO Science Foundation Arizona W. Clark McFadden II Senior Counsel Orrick, Herrington & Sutcliffe LLP David T. Morgenthaler Founding Partner Morgenthaler Ventures Edward E. Penhoet (IOM) Director Alta Partners Tyrone C. Taylor President Capitol Advisors on Technology, LLC Copyright © National Academy of Sciences. All rights reserved. Building the U.S. Battery Industry for Electric Drive Vehicles: Summary of a Symposium vi PROJECT STAFF Charles W. Wessner Study Director McAlister T. Clabaugh Program Officer David S. Dawson Senior Program Assistant Sujai J. Shivakumar Senior Program Officer David E. Dierksheide Program Officer Peter Engardio Consultant Copyright © National Academy of Sciences. All rights reserved. Building the U.S. Battery Industry for Electric Drive Vehicles: Summary of a Symposium vii For the National Research Council (NRC), this project was overseen by the Board on Science, Technology and Economic Policy (STEP), a standing board of the NRC established by the National Academies of Sciences and Engineering and the Institute of Medicine in 1991. The mandate of the Board on Science, Technology, and Economic Policy is to advise federal, state, and local governments and inform the public about economic and related public policies to promote the creation, diffusion, and application of new scientific and technical knowledge to enhance the productivity and competitiveness of the U.S. economy and foster economic prosperity for all Americans. The STEP Board and its committees marshal research and the expertise of scholars, industrial managers, investors, and former public officials in a wide range of policy areas that affect the speed and direction of scientific and technological change and their contributions to the growth of the U.S. and global economies. Results are communicated through reports, conferences, workshops, briefings, and electronic media subject to the procedures of the National Academies to ensure their authoritativeness, independence, and objectivity. The members of the STEP Board* and the NRC staff are listed below: Paul L. Joskow, Chair President Alfred P. Sloan Foundation Ernst R. Berndt Louis E. Seley Professor in Applied Economics Massachusetts Institute of Technology John Donovan Chief Technology Officer AT&T Inc. Alan M. Garber (IOM) Provost Harvard University Ralph E. Gomory (NAS/NAE) Research Professor Stern School of Business New York University *As of September 2012. Mary L. Good (NAE) Dean Emeritus, Donaghey College of Engineering and Information Technology Special Advisor to the Chancellor for Economic Development University of Arkansas at Little Rock William H. Janeway Partner Warburg Pincus, LLC Richard K. Lester Japan Steel Industry Professor Head, Nuclear Science and Engineering Founding Director, Industrial Performance Center Massachusetts Institute of Technology continued Copyright © National Academy of Sciences. All rights reserved. Building the U.S. Battery Industry for Electric Drive Vehicles: Summary of a Symposium viii William F. Meehan III Lecturer in Strategic Management Raccoon Partners Lecturer in Management Graduate School of Business Stanford University and Director Emeritus McKinsey and Co., Inc. David T. Morgenthaler Founding Partner Morgenthaler Ventures Luis M. Proenza President The University of Akron William J. Raduchel Chairman Opera Software ASA Kathryn L. Shaw Ernest C. Arbuckle Professor of Economics Graduate School of Business Stanford University Laura D’Andrea Tyson S.K. and Angela Chan Professor of Global Management Haas School of Business University of California, Berkeley Harold R. Varian Chief Economist Google, Inc. Alan Wm. Wolff Senior Counsel McKenna Long & Aldridge LLP STEP Staff Stephen A. Merrill Executive Director Paul T. Beaton Program Officer McAlister T. Clabaugh Program Officer Aqila A. Coulthurst Program Coordinator Charles W. Wessner Program Director David S. Dawson Senior Program Assistant David E. Dierksheide Program Officer Sujai J. Shivakumar Senior Program Officer Copyright © National Academy of Sciences. All rights reserved. Building the U.S. Battery Industry for Electric Drive Vehicles: Summary of a Symposium ix Contents PREFACE xiii I. OVERVIEW 1 II. PROCEEDINGS 45 DAY ONE Welcome 47 Greg Main, Michigan Economic Development Corporation Opening Remarks I 48 Carl Levin, United States Senate Opening Remarks II Introduction by Charles W. Wessner, The National Academies 51 Sridhar Kota, White House Office of Science and Technology Policy 52 Opening Remarks III 56 Jennifer Granholm, State of Michigan Overview of NAS Study: Building the Battery Industry for Electric Vehicles 59 Mary Good, University of Arkansas at Little Rock Keynote Address Introduction by John R. Chalifoux, Original Equipment Suppliers 62 Association Debbie Stabenow, United States Senate 63 Panel I: The Federal Outlook for the U.S. Battery Industry 70 Moderator: Charles W. Wessner, The National Academies The Department of Energy Perspective 70 Patrick B. Davis, U.S. Department of Energy Vehicle Technologies Program [...]... and electric vehicles. ” 24 See the summary of the presentation by Patrick Davis of the Department of Energy in the next chapter 25 See the summary of the presentation by David Howell of the Department of Energy in the next chapter 26 See the summary of the presentation by Patrick Davis of the Department of Energy in the next chapter 27 27 See the summary of the presentation by Sen Stabenow The Advanced... “Institutes” to foster innovation around the country 22 The Vehicle Technologies Program is administered by the Energy Efficiency and Renewable Energy Office of the Department of Energy It funds projects aimed at developing “leap frog” technologies that will lead to more energy-efficient and environmentally friendly transportation See presentation by David Howell of the Department of Energy’s Vehicle Technologies... of Sciences All rights reserved Building the U.S Battery Industry for Electric Drive Vehicles: Summary of a Symposium I OVERVIEW Copyright © National Academy of Sciences All rights reserved Building the U.S Battery Industry for Electric Drive Vehicles: Summary of a Symposium Copyright © National Academy of Sciences All rights reserved Building the U.S Battery Industry for Electric Drive Vehicles: ... summary of the presentation by Michael Reed in the next chapter 29 See the summary of the presentation by Sen Stabenow Copyright © National Academy of Sciences All rights reserved Building the U.S Battery Industry for Electric Drive Vehicles: Summary of a Symposium 10 U.S BATTERY INDUSTRY FOR ELECTRIC DRIVE VEHICLES • Standards Tougher federal and state environmental standards are being proposed to... motive for reducing fuel use Through the Tank-Automotive Command Research, Development, and Engineering Center (TARDEC), which is based in the Detroit area, and the Army Research Laboratory, the Army collaborates with the Department of Energy and industry on research and development in batteries, new materials, and electrical systems.34 Getting in the Game Despite entering the industry late, a number of. .. advances in battery research and technology, the United States does not at present lead in the manufacture of this strategic technology Box B Advanced Batteries and the Future of the U.S Auto Industry: Trading Oil Dependency for Battery Dependency? Eric Shreffler of the Michigan Economic Development Corporation asserted at the symposium that battery cells and packs are the the new power train” of future... premium for a battery- powered car The resulting slow pace of adoption of Electric Drive Vehicles is making it difficult for U.S Battery Companies to survive and a domestic supply chain to develop.20 The emergence of the US battery industry therefore is likely to depend on markets other than electric vehicles such as Consumer Electronics and Grid Storage Established companies with good balance sheets... Vehicles: Summary of a Symposium OVERVIEW 5 In her introductory remarks at the symposium, Dr Mary Good, of the National Academies STEP Board noted that the conference would inform the Department of Energy and other federal agencies, Congress, and states on the government -industry collaboration required to support the expansion of the market for electric- drive vehicles and “hasten the widespread use of. .. authorizes the Department of Energy to issue loan guarantees to acceleration commercialization of technologies that "avoid, reduce, or sequester air pollutants or anthropogenic emission of greenhouse gases." Section 1705 of the EP Act is a temporary program set up under the American Recovery and Reinvestment Act authorizing the Department of Energy to make loan guarantees to renewable energy systems, electric. .. federal support in a complex and rapidly evolving industry will necessarily succeed A number of the firms discussed here have been absorbed by competitors, others have gone out of business, and others continue to progress.2 2 The Overview chapter of this report takes note of these recent developments Copyright © National Academy of Sciences All rights reserved Building the U.S Battery Industry for Electric . This report captures the presentations and discussions of the STEP symposium on Building the U. S. Battery Industry for Electric Drive Vehicles: Progress,. this symposium. Needless to say, the battery industry has evolved very substantially since the conference was held, and indeed some of the caveats raised