My last post took a look at the development of lithium-ion batteries and the fight for dominance in what is set to become a $40 billion battery market by 2012 if President Obama’s commitment to a million electric cars on America’s roads is to be met.

Johnson-Saft are probably ahead of many other rivals globally with Johnson enjoying the design and management relationships with major car makers as well as understanding better the integration of the power management system with the rest of the car.  Saft on the other hand is a French company which has world leading expertise in lithium ion battery design and manufacture for aeronautical applications.

This all sounds good stuff but there is one major aspect of putting all of this together that has to be addressed or this is all pie in the sky.

How are you going to recharge/refuel your lithium ion battery on the road?

This is the really big issue because if batteries are a $40 billion market what is the value of the grid that will recharge the vehicle while you are on the road – the honest answer is we don’t know yet but it’s a very big number.

Ford and GM both believe that this part of the puzzle is crucial to unlocking who will win out in the lithium ion war and there are some vicious debates taking place in DC right now on whether the US should encourage and foster a domestic lithium ion battery manufacturing base (which will also take on developing the national grid) or whether America should simply import the batteries and expertise from low-cost Asian importers.

To me the answer is simple – we have had several decades of reliance upon foreign oil so why should we swap foreign oil for foreign batteries?

This is a no-brainer for the folks on the hill.