Ex-Intel CEO Wants Company To Produce Auto Batteries

Andy Grove, former CEO at Intel, says the company should set its sights on manufacturing batteries for electric vehicles. Grove, who is an advocate of PHEV and EV technologies, says that the country currently lacks a credible supplier for PHEVs and EVs. According to Grove, US auto manufacturers are hamstrung by the cost of manufacturing PHEV and EV batteries, demand for which is too low and the cost too high to justify manufacturing the batteries at home.

GM, which was testing automotive batteries from A123 Systems and LG Chem for use in the company's Volt, due in dealerships during the 2011 model year, has not publicly named its supplier of choice, but press leaks in October pointed to LG Chem as the winner of the Volt contract. The company had been expected to announce the supplier in November, but has yet to make a statement.

Grove says that development of lithium-ion batteries is continuing, and that other firms intend to enter the automotive market in anticipation of an increase in demand for hybrid electric vehicles. Intel has also been investing in alternative energy firms.

For Grove, the issue of battery manufacturing is more than a good business decision. According to a paper he released earlier this year, Grove says that the move to PHEVs and EVs should be driven by national security concerns. Grove says electricity can come from a variety of sources, and the US could easily improve its domestic production capacity to meet the growing demand. In his view, this makes electricity the preferred alternative to petroleum-based fuels. He advocates a substantial increase in the US effort to convert to electricity as a primary energy source.

If we accept Grove's position, American manufacturers must be prepared to secure domestic battery production capabilities. It does no good to rely on battery manufacturing capacity located outside of the country, and for which, the competition is increasing. As more automotive manufacturers move to hybrid vehicles, the supply of readily available batteries will dwindle. Unless free, fair and open access to batteries are guaranteed to all automotive manufacturers, US and European automakers may need to wait in line for vehicle batteries.

At a time as critical as this for US automakers, US manufacturers can not afford to wait in this kind of line.