Green Battery Maker Seeks Slice Of Stimulus Pie

You might think of Boston-Power as the little engine that could. The little-known green lithium-ion battery company Monday said it will open its first U.S.-based manufacturing site and it hopes to get funding from a federal government technology stimulus package that has been flooded with applications from larger rivals.

The fledgling, four-year-old Westborough, Mass.-based firm already has gotten backing from the state, which promises to contribute up to $9 million in matching financing to support the company's planned Auburn manufacturing plant. The facility would add 600 new jobs at the company and as many as 2,000 more indirectly through the extended supply chain.

In May, the firm filed an application to receive $100 million from the U.S. Department of Energy's (DOE) advanced battery and cell manufacturing grant program that was set up as a part of the American Recovery and Reinvestment Act. The DOE is expected to announce how it will parcel out the funds in July.

In addition, Boston-Power is trying to receive funds through a proposed program allocation in the fiscal year 2010 federal budget under the Defense Production Act, which encourages building manufacturing facilities in the U.S. Nearly all lithium-ion batteries in the world are manufactured in Asia. Boston-Power already has three operations in China.

"Since the other lithium-ion battery plants are all in Asia, the government's funding is a perfect storm to bring this manufacturing and jobs to the U.S. --- that's what Obama wanted," said founder and CEO Christina Lampe-Onnerud.

"Green lithium-ion batteries weren't high on the radar when we first started, and were dominated by about 20 or so Japanese and Korean companies," she said. "Now it's down to just a few players."

Those companies include Panasonic, NEC and GS Yuasa in Japan, LG in Korea and BYD in China, and account for nearly all current lithium-ion sales, according to CNN.

The market for lithium-ion batteries continues to grow -- they're already used in many devices such as iPods and laptops. Last December, Hewlett-Packard signed a deal with Boston-Power to use its green batteries, Sonata, as replacement batteries in the company's notebooks. Boston-Power also is in the sweet spot regarding the gradual shift of consumers to more green-friendly hybrid cars. The company just introduced Swing, the only eco-certified battery for plug-in hybrid and battery electric vehicles.