President Phones In His Support for Electric Vehicles

"Governor Granholm, this is your friend Barack Obama…"

A phone call from the President livened up the audience at a lengthy dedication ceremony for the A123 Systems lithium ion battery plant in Livonia.

"This is about the birth of an entire new industry in America," said Mr. Obama.  "An industry that's gonna be central to the next generation of cars.  It's going to allow us to start exporting those cars, making them comfortable, convenient and affordable."

Fending off criticism of the $814 billion stimulus program, the administration has cited the battery industry as one of the success stories.   The President saying that in the coming years forty per cent of electric vehicle battery production will be done in the United States.  In 2002, almost all of that production was done in Asia.

"I do not see a decline in manufacturing as inevitable for the United States.  I know you don't either.  We're starting to reverse that slide.  Anybody who doubts that, has to go and see what you guys are achieving."

(Listen to the President's call to today's battery plant dedication.)

Energy Secretary Steven Chu was at the dedication ceremonies, defending the Obama Administration's support for the electric vehicle battery industry.

"There are people who think the economy can run on white collar and service jobs, like financial services," said Chu.  "But, I think they are wrong.  We can and must make high quality products in the United States."

The A123 plant is the largest of sixteen electric vehicle battery plants, in Michigan, being built with the help of federal stimulus money and state tax breaks.  Backers say this will create 65,000 jobs long term.  But there are those who are skeptical.

(Jeff Gilbert's video on driving the electric Nissan Leaf.)

"We may be seeing a glut of batteries and electric vehicles in the near future," said Mike Omotoso, who tracks alternative powertrains for J.D. Power and Associates.

Omotoso sees much of the electric vehicle market being pushed by the government, and is concerned about consumer interest."

"From the consumer perspective, consumers want value for the money," said Omotoso, in an interview with WWJ AutoBeat Reporter Jeff Gilbert.   "Right now with gas being less than three dollars a gallon and electric vehicles being expensive initially, we don't see a large demand for electric vehicles in the short term."

(Hear the Mike Omotoso interview on today's Worldwide Automotive Report)

Governor Granholm telling Gilbert at Monday morning's dedication that she understands that issue, and feels the government has to help create the market for electric vehicles.

"Clearly we've got to work on creating that demand," said Granholm.  "When I said 'we', I think the federal government has to keep up the    incentives that will bring down the initial cost of that battery."

Incentives will help make the first electric vehicles affordable, keeping the all electric Nissan Leaf in the $25,000  range, and the Chevrolet Volt, with its onboard recharger, in the $30,000 range.

But those who are developing electric vehicles know that the incentives are just a short term solution.

"Our goal is to prepare for a world when there isn't the amount of government support that we have today to establish the marketplace," said Mark Perry, who's director of product planning for Nissan USA.  "You have to do it through scale."

Perry says Nissan is gearing up to build 500 thousand electric vehicles worldwide, 150 thousand of them in the United States.

Others in EV development say that moving battery production to the United States is a big help in keeping costs down. 

"In the end, if we don't do this, the cost of electrification will far exceed customers ability to purchase it," said Mickey Bly, who heads General Motors electric vehicle operations.

President Obama told the battery plant dedication that helping create a market for electric vehicles is all about keeping the United States a center of auto production.

"When folks lift up their hoods on the cars of the future, I want them to see engines and batteries that are stamped: 'Made in America."

(Copyright 2010 WWJ Radio.  All Rights Reserved.)