Executives at Quallion, a lithium-ion battery maker, believe they can provide an energizing jolt to the Southern California economy if they're able to secure a slice of the $2 billion in stimulus funds aimed at developing batteries for hybrid cars.
The Sylmar company, owned by California philanthropist and serial entrepreneur Alfred Mann, has already made believers out of the California Energy Commission, several members of Congress and the city of Palmdale. Now it needs the go-ahead from Uncle Sam.
Quallion's quest is indicative of the potential rewards -- and incredible competition -- in the race to develop so-called green technology. Only seven or eight companies will receive grants to build factories to make lithium-ion batteries, believed by many to be the next step toward making hybrid cars more efficient and easier to mass produce.
The company is requesting $220 million to build a manufacturing plant that will produce more than 20,000 batteries a year for hybrid cars and trucks by 2012.
Quallion President Paul Beach said the plant would create about 400 construction jobs in Southern California. An additional 2,350 long-term "green-collar" jobs will be generated in-state and across the country as business picks up, he said.
But for Quallion to get the plan off the ground, it has to convince the U.S. Department of Energy -- which controls the stimulus funds -- that it deserves the money.
That won't be an easy feat.
More than 120 companies submitted proposals for the funding, which includes about $1.5 billion for manufacturing plants like the one Quallion wants to build. The remaining $500 million will go toward other aspects of manufacturing.
The process is highly competitive, said Sara Bradford, an energy and power systems consultant with Frost & Sullivan. That's because companies that receive stimulus funding will have a leg up on competitors in the effort to take the U.S. into the future of lithium-ion technology, she said.
Until now, U.S. companies were reticent to get into the lithium-ion business because research and development is expensive and, until recently, the outcomes were relatively uncertain, Bradford said.
As a result, Japanese, Chinese and South Korean manufacturers represent about 80% of the business -- in large part because their governments subsidize the work.
"The stimulus was necessary for the U.S. to be competitive on the world stage," Bradford said. "Companies know this is their chance."
