Michigan Breaks for Batteries

January 5, 2009
Remember the National Alliance for Advanced Transportation Battery Cell Manufacture--you know, that think tank/prototyping coaltion we told you about a couple of weeks back? Of course you do. Well, if Governor Jennifer Granholm and her esteemed colleagues in the Michigan legislature have their way, the NAATBCM will soon have a state to call home.

Before closing shop for winter break, Michigan's house and senate gave nearly unanimous approval to a bill backed by the governor offering significant tax incentives to companies that develop and produce batteries for hybrid and electric vehicles. (At the moment, such outfits typically have their sights set on the lithium-ion battery--you know, the one Chevy's planning to use in its new Volt?--but presumably the legislation would apply to all sorts of cells.)

This was a no-brainer on Michigan's part, since (a) electric and hybrid vehicles constitute a serious "growth sector" , and (b) the production of batteries to power those vehicles could go a long way toward keeping the state's manufacturing sector afload--maybe even prosperous. This may also encourage a shift in battery development away from Asia to the U.S., which wouldn't be bad for our domestic economy either.

However, there is one potential downside: the fact that the bill creates not merely tax breaks, but tax credits, which means that the state could be writing refund checks to manufacturers if they spend more than a certain amount. With the total allotment for the program currently set at $335 million, that could be one very fat piper to pay down the line--but one Michigan would probably be thankful to pay.

--Richard Read

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