WASHINGTON — President Obama celebrated the opening of an advanced battery plant in Michigan on Monday as a critical boost for hybrid and electric cars – and a success for his administration’s economic stimulus program.

But even as mass-produced advanced batteries start rolling off assembly lines, costs are high for consumers, and hurdles remain.

“This is about the birth of an entire new industry in America, an industry that’s going to be central to the next generation of cars,” Obama said Monday in a phone call broadcast at the opening of A123 Systems Inc.’s lithium ion battery plant in Livonia, Mich.

With new facilities coming online in the Midwest, battery manufacturers for the advanced vehicles are providing a test case for the government’s attempt to revive the economy.

About 300 workers, many formerly laid-off auto workers, listened Monday as Obama spoke. Energy Secretary Steven Chu, Michigan Gov. Jennifer Granholm and others were also on hand to promote their production of battery cells and components.

Watertown, Mass.-based A123 Systems Inc. received $249 million under the stimulus program and plans to open a second facility next year in Romulus, Mich.

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Automotive supplier Johnson Controls Inc. last week started shipping batteries that were made at a Holland, Mich., facility built with the help of $299 million in federal grants.

Despite the fanfare, the battery industry faces many hurdles.

Gas-electric hybrid vehicles represent about 1 percent of new vehicle sales, and many plug-in hybrids and battery electric cars are just entering the market.

Mary Ann Wright, a Johnson Controls vice president, said if all of the battery companies follow through on plans to build up the industry, it could create more capacity than is needed in the short term.

But she said the administration was working to address that by creating tax policies to encourage consumers to buy the vehicles and directing government fleets to adopt the technology.

 


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