Yesterday’s big Stimulus hand-out was $1.5 billion for battery makers and Michigan companies raked in almost $1 billion of it. Another $900 million went for vehicle electric drives.
When President Obama signed the $787 billion Stimulus bill on Feb. 17, it seemed like an abstraction that carried an incomprehensible amount of debt. And of course, it does, but now the money is getting awarded for what seems like investments that could have a huge pay-off. At the same time, Stimulus haves and have-nots are emerging.
One winner was lithium ion battery maker A123 Systems of Watertown, Mass. which received $249 million from the Dept. of Energy (DOE). The money will go toward auto battery manufacturing and R&D in Michigan. No fewer than four senators, two Congressmen and one governor (Michigan’s of course) got in their two cents in A123’s press release to take credit.
I’ve written about A123’s formidable technology several times although it seems like the company has perpetually been in a public offering quiet period. As a result, company officials routinely decline media interviews. In March, I wrote a piece for the Boston Globe about an electric racing motorcycle that used an A123 battery pack. Known as the Killacycle (see video), the bike has dragged race at 174 MPH.
Killacycle owner Bill Dubé raved about A123’s technology and explained how it works using a Slurpee analogy: “The energy is the juice in the cup. Power is how quickly you can get it out of there through the straw. A123 has this huge straw to get the power out and back in again quickly. And you don’t have to suck hard on the straw, meaning you don’t lose energy in the transfer.”
A123 expressed its pleasure about the grant in a canned statement: “The capital provided by the DOE’s investment will help us speed our growth and better compete in global markets,” A123 CEO David Vieau said.
The company has been a money raising machine. In April, it received $100 million in incentives from a Michigan development agency and has raised $350 million in private funds since its founding in 2001.
On the have-not side, a disappointed Boston Power which makes long-life batteries (longer as in more charges and less power degradation over time) for Hewlett Packard laptops was passed over for a $100 million to start manufacturing batteries for cars in Massachusetts.
“There’s a separate opportunity for the same amount with the Dept. of Defense. The company expects to find out about that in the Fall,” according to a Boston Power spokesman. Hanging in the balance is an electric auto battery plant that could employ 600.
Both companies have strong ties to Massachusetts Institute of Technology.
To see how fast and diversely Stimulus funds are being paid out, check out Recovery.gov. So far, 28 government agencies have paid out $73 billion and awarded of $197 billion. And apparently in the name of transparency, you can check out the geographically dispersion of the battery money.