Back in December 2008 with the parties still celebrating Obama’s election success, a deal was struck with China on the development of electric batteries for car power.

Now we have touched on battery development previously and it is right we do so again because battery-powered vehicles are a prime player in the future of green cares while development and progress within this field will be a fair weather vane of progress in delivering green initiatives across the board.

China is in an even worse position than the US when it comes to the need to develop green power sources – over half of the oil it uses comes from imports leaving it highly susceptible to the global oil markets (remember when $5 a gallon was a reality for us – now imagine that multiplied several times).

The deal involving the US Department of Energy, involves BYD Autos, a Chinese company which is heavily involved in green car development and with a market such as China which is beginning to open and has billions of consumers in it, there is a huge profit potential.

What’s in it for the US?

Green car developments are not going to be 100% American researched and developed – the technologies involved are diverse and many are leading edge; no one country will have a monopoly on the technology or the cars. The US in this instance gains direct access to battery testing and benchmarking standards that are essential to measuring true battery performance and in turn this has a direct impact on the actual battery development for use by consumers.

The battery market alone is thought to be worth some USD $40 billion by 2020 based on one million electric cars on US roads – this is the target now set by President Obama for the country.

President Obama has set a target of 1 million electric cars on America’s roads by 2012 and the battery market ALONE is worth some $40 billion.

$40 billion just for car batteries by 2012 and that’s just the electric car market!

The competition is fierce and it is a global competition and here and now, Americans are making a decision with the federal monies being put up on a large slice of the battery market being American manufacturers turf and not Asian overseas manufacturers.

Ener1 is the leading US competitor with a lithium ion battery but there are others including A123 Systems of Massachusetts and Johnson Controls-Saft who have already contracted with Ford, Mercedes and BMW.  All sounds good and healthy but there is a major fly in the ointment – Asia.

Asian manufacturers have been pumping billions into R&D and manufacture of lithium ion batteries for years – if you want to place a lithium ion battery practically just take a look at your laptop battery because that is what this fight is all about.  Now consider how long Honda and Toyota have been working on integrating new battery technology into their cars and especially the car power management system which is also a key piece of technology.

Bluntly, the Asian manufacturers have had a jump start on the US for years and it is going to take a great deal of work and funds to get the US back into this particular $40 billion race and all the jobs that is going to create for mainstreet America.