The Car Battery Race: Showing Favorites?

(MoneyWatch)  The lithium-ion batteries that Silicon Valley's Imara Corporation is developing for electric lawnmowers are a means to an end. In the future, Imara hopes to be powering your car, not just four-wheeled lawn equipment.

Imara, which has raised almost $20 million to date, is in some ways a typical green-tech startup, especially since its vice president for business development, Neil Maguire, developed software and sold his company before he migrated into Menlo Park battery development. But Maquire has gasoline in his blood, having started out in Flint, Michigan doing vehicle validation; he also has experience with GM, Delphi and Ford.

Imara CEO and founder Jeff Depew, formerly a General Electric vice president, was involved in marketing and sales for GM's OnStar division. So it's perhaps inevitable that Imara batteries now aimed at power tools will end up in vehicles (especially since, as Tesla Motors has shown, laptop-sized batteries can and do power cars).

Depew states flatly that Imara has the best li-ion technology on the market. "Our cells are delivering three to four times the cycle life of the best batteries that Sony and Sanyo have on the market," he claims. Depew says that as many as 10 of the top 16 vehicle companies have come sniffing around Imara's technology. "We've definitely had discussions," he said.

Imara is ahead of many battery companies in that it already has manufacturing capacity in California, enough to finish a million cells a year, Depew said. It asked for $80 million in federal funding from the so far undistributed $25 billion Advanced Technology Vehicles Manufacturing Loan program to build the capacity to make 30 million cells a year.

But Depew and Maguire are convinced that their company is at a disadvantage because it's not close to the Big Three. And so it is no longer pursuing the $80 million. "We walked away from it because we didn't think we could qualify," Depew said. "Our batteries are not tied to a specific vehicle program, and we're not trying to build a factory on an existing brownfield development site." Maguire adds that the program seems to be geared to "helping the Big Three and subsidizing the incumbents--it's not geared to startups."

Instead, Maguire says, the company but might ask for funding from the $2 billion for advanced batteries that is part of the stimulus bill. "We're taking a look at going after that," he said.