The Obama administration announced today $2.4 billion in grants to car companies and battery-makers, setting the course for US manufacturers to build next-generation auto batteries for hybrid and plug-in cars. Michigan-based companies received approximately half of the funds.

Johnson Controls

Workers at Johnson Controls assemble lithium ion automotive batteries. Johnson Controls, the single largest recipient, will receive $299.2 million in government grants.

“If we want to reduce our dependence on oil, put Americans back to work and reassert our manufacturing sector as one of the greatest in the world, we must produce the advanced, efficient vehicles of the future,” said Obama in Elkhart, Indiana.

The spending is the US government’s bet on battery-powered vehicles—an attempt to overcome the challenges of creating small, lightweight, reliable and affordable rechargeable hybrid and electric car batteries, as well as the infrastructure to allow drivers to bypass gas stations and charge their cars from the electric grid.

Almost all battery manufacturing for advanced technology vehicles is currently based in Asia.

Detroit Is the Big Winner

General Motors will receive more than $240 million in grants, including $106 million for its planned battery pack assembly factory in Brownstown Township. Ford will receive nearly $100 million, while Chrysler will get $70 million.

Major US-based auto battery makers vying to produce batteries for hybrid and electric cars will receive support: Johnson Controls, the single largest recipient, will receive $299.2 million for production of nickel-cobalt-metal cells and pack; A123 Systems will get $249.1 million for manufacturing nano-iron phospate cells and battery pack assembly for hybrid and electric cars; Compact Power (a division of LG Chem) will get $151.4 million to produce lithium ion polymer batter cells for the Chevy Volt; and EnerDel will receive $118.5 million for production of lithium ion batteries and cells.

GM will receive $105.9 million for production of the packs using LG Chem’s battery cells, as well as $30.5 million to demonstrate as many as 5,000 Chevrolet Volt cars with electric utilities and a limited number of consumers, and $105 million for electric drive component manufacturing facilities.

The largest grant for developing a charging infrastructure went to eTec, a subsidiary of Ecotality, and Nissan which will test a network of fast-charging stations in cities in Arizona, California, Oregon, Washington, and Tennessee.

A dozen universities and colleges received smaller grants to run educational programs related to electric-drive vehicles, targeting graduate and undergraduate students as well as area teachers, technicians and the general public. See a complete list of recipients.

The government funds come from the $787 billion federal stimulus bill approved in February. Some 122 companies applied for the funds, and 48 winners in 25 states were selected.