Electric vehicles currently face a variety of Catch-22 style challenges. They require vast, cutting-edge battery manufacturing capacity, but building that capacity won't happen until it's clear that electric vehicles will be sold on a large enough scale. Driving electric vehicles will be challenging without a support network of charging and maintenance stations, but it's hard to make an economic case for building the support infrastructure until the vehicles are already on the road. President Obama, armed with stimulus money, has apparently decided that the US government is now ideally placed to break the deadlock.

Obama used a tour of Southern California Edison's electric vehicle testing center to announce that $2.4 billion of stimulus money would be used to help get everything in place for widespread adoption of electric vehicles. The goal: to put a million plugin hybrid vehicles on the road by 2015.

All of this money will be administered by the Department of Energy, where agency head Steve Chu has recently streamlined the funding protocols with the intention of making sure the stimulus money is put to use quickly. The bulk of it, $1.5 billion, will go to the development of battery technology and manufacturing capacity. This was the sort of thing US battery manufacturers were looking for, as they've already formed the National Alliance for Advanced Transportation Battery Cell Manufacture in the hope of spreading some of the risk of investment in expanded battery manufacturing technology.

The DOE has announced that, in addition to manufacturing, the money will be used to develop recycling capacity for lithium batteries, something that will be essential if electric vehicles take off. They money will be distributed in the form of competitive grants. Another $500 million of grants will go to the companies that make components such as electric motors. As this technology is already fairly mature—it's certainly not viewed as the primary roadblock to electric cars—this will presumably go primarily to expanding the manufacturing capacity.

The last $400 million will be spent on infrastructure concepts, with grants funding research on the basic technology, and other money being spent on demonstration projects. According to the DOE, this money will cover everything from evaluating different approaches to plugin hybrid vehicles to training mechanics to service them.

This is actually one case where we may be underspending. Not a month goes by where a new public-private partnership for electric vehicle infrastructure is announced (see here for this month's example), and some of these are very clearly based on incompatible concepts, such as battery swaps vs. quick-charge stations. The US risks a balkanization of its roadways if each region winds up doing its own thing, and it seems worthwhile to spend the money up front to figure out what system is likely to scale to a market the size of the US.

In any case, the announcements make it clear that the US government is putting its money behind the plugin hybrid concept, rather than a pure electric vehicle. They also make it clear that the administration is viewing the issue as part of a larger whole—Obama specifically mentioned that this effort shouldn't be seen as separate from the efforts to upgrade the electric grid. "It won't come without cost, nor will it be easy," he said. "We've got 240 million cars already on the road. We've got to upgrade the world's largest energy grid while it's already in use."

Despite the challenges, Obama indicated that the effort was essential, saying, "We'll do this because we know that the nation that leads on energy will be the nation that leads the world in the 21st century."