Fareed Zakaria Talks Plug-In Cars With Molinaroli

Discussions of cutting-edge energy always come down to a technology that's more than 200 years old: the battery. Modern versions are much more powerful than Alessandro Volta's pile of copper and zinc discs and brine-soaked cardboard. But they're still not up to 21st-century tasks like powering the autos of 2020 or storing solar power for use at night. NEWSWEEK's Fareed Zakaria spoke with Alex Molinaroli, the president of power solutions at Johnson Controls, which will supply the battery for Ford's first plug-in electric vehicle. Excerpts:

Zakaria: Am I right that batteries are the key to our energy future?
Molinaroli: Absolutely. Energy storage is going to be vitally important. You have to match the production with the demand. That's easy to do when you have oil in the ground or coal that you can pile up, but you can't do that with electricity. You have to be able to store it somehow.

So in the future we're talking about not just batteries in cars, but batteries in power plants or on wind farms?
You have to be able to have different types of energy storage. You have to be able to store at the site, and you have to be able to store in a distributed way. And then when you talk about vehicles, you have to be able to store in a more compact and efficient way. So there'll be all types of different battery systems that are required.

Are the batteries in our future going to be up to this challenge?
I have no doubt about it. Over the last couple of years there's been a lot of talk about how the battery is not ready for this. That's a fact: batteries and battery systems aren't ready for this. But that's because they haven't been required—there hasn't been a market. What you're seeing now is people moving beyond demonstration projects to commercialization ... That's how this whole thing is going to move much more exponentially.

So what changed? Was it $140-a-barrel oil?
I honestly don't know if oil at $140 actually was the change. The automotive companies' being in a crisis [means] now's the time for a disruptive technology. Before, I don't think they could afford to retool, and they weren't motivated to retool. The automotive industry has now moved beyond trying to protect the old technology, to a place where they want to be a part of the solution. Now it's a race.

So if it's a race among private-sector enterprises, why do you need subsidies? The stimulus bill that just passed has loan guarantees and tax credits for battery makers.
Does the United States want to have the same kind of leadership position it's had in other emerging technologies? When the dotcom era came, our technology position made us competitive. Do United States citizens want to open up the hood of these vehicles and instead of seeing Middle East oil, do we want to see Asian battery suppliers? The United States is not coming from a position of strength. The consumer battery industry moved offshore 15, 20 years ago.

So where is it now?
Today it's in Korea. It's in Japan. And there's an awful lot of development in China. That's where the critical mass is. A partnership with the U.S. government to put manufacturing here and research and development in the U.S.—I think that's the proper thing. The payback on that is something that we're not going to see over the next few years exclusively; I think we'll see that for a long, long time. Today we have a plant in France because that's where our first customers were—in Europe. But we really want to put manufacturing here in the United States, and [government support] gives us that opportunity.

Batteries are improving at the rate of roughly 8 percent a year. That doesn't seem like the kind of disruptive technological advance we need.
I think that's because we haven't really pushed the technology.

Do you think we'll see a step-function change—a truly breakthrough advance?
This whole field has been underfunded and underfocused. But this is not in the back rooms anymore. I'm absolutely sure that if you start driving toward a purpose of putting vehicles on the road with real volume commitments, you're going to see a step change.

The current hybrid has both a gas engine and a battery-powered one. Wouldn't it make sense to have an all-electric vehicle?
Absolutely. It'll get there. The hybridization of the fleet is moving very quickly in Europe, and you're going to see it in the United States very, very, quickly. Then the plug-ins will come. You'll see the combustion engine get smaller, and then as you get confidence in the technology, and as the battery becomes more capable, you'll see the combustion engine go away, particularly for urban environments ... I think that you're going to see people who have vehicles that they commute to work in, or that they use in their urban environments. And you're going to have other vehicles for other purposes. We're going to see a transformation that is unlike anything you've seen in the automotive industry for 50 years.

Your advanced batteries are made with lithium. Most of the world's lithium reserves are found in Bolivia. Are we transferring our dependence from unpredictable Middle Eastern oil to unpredictable Bolivian lithium?
It's not something I see as a problem. Ninety-seven percent of the batteries that are purchased today, lead-acid batteries, are recycled. So the lead that you get in your battery, you're just borrowing it for a little while. It's a highly recycled product. You're going to see the same kind of recycling in this industry.

Does the U.S. still have the potential to become a world leader in battery technology, or is that position now too far away?
Ford didn't pick us because we're from the United States. We were picked based on our technical capabilities, based on our energy density, based on our cell capability, our system capability. Daimler's first vehicle lithium battery will be ours; BMW's first lithium battery will be ours. We're behind from the standpoint of mass production of cells, and if we don't make this a priority, we could lose this race. But we are not as far behind as some of the rhetoric suggests. This is something that could be done.