WASHINGTON – Michael Andrews doesn’t lose sleep over whether lithium-ion battery technology can pave the way to electrification of the automobile – that much of the equation is a given, he says.

But what does keep him awake at night is whether the U.S. supply base is ready for the transformation.

“Right now in this country, we are faced with a critical problem. We have, at best, an immature supply chain,” says Andrews, director-government affairs at Johnson Controls Inc.

Andrew oversees development contracts between the supplier and U.S. government agencies, such as the Dept. of Energy, and has worked within the company’s advanced-battery technology unit since its inception.

“Most of these components and a lot of the raw materials are coming from offshore,” he tells the annual Society of Automotive Engineers’ Government/Industry Meeting here. “So from the battery manufacturer’s perspective, if we are to support the needs of our OEM customers, we have to be able to do this regionally.”

Andrews characterizes advanced-battery technology component sourcing in the U.S. as “a challenge,” especially when it come to cell technologies, such as the important cathode and anode materials.

“Let’s face it, that’s the heart,” he says. “Those are the driving soul, and we don’t have a lot of options for these materials validated against our specifications in large quantities,” he says. “We need to develop that supply base here.”

Andrews says he frets over the development of a supply base in the U.S. to provide the manufacturing equipment to assemble advanced-battery technology. If that infrastructure does not move forward quickly, suppliers such as Johnson Controls will import the batteries from elsewhere. As the order lists grow larger every day, the wait will grow.

“The problem won’t be the brick and mortar, it will be the manufacturing equipment,” Andrews says.

But help is on the way. In addition to the $25 billion in loans provided by last year’s federal energy bill for the auto industry to retool manufacturing facilities for advanced-propulsion vehicles, another $30 billion of grants within the legislation awaits funding, he says.

In addition, the massive stimulus plan from President Obama making its way through Congress puts at least another $5 billion towards advanced-battery technology.

Andrews, who splits his time between company headquarters in Milwaukee, WI, and the offices of policy makers and federal agencies in Washington, says despite the appearance of foot-dragging at the DOE over the release of the first $25 billion in loans, government administrators are acting with a great sense of urgency.

General Motors Corp., Ford Motor Co. and Chrysler LLC, as well as a number of suppliers, have applied for the money, but none has been released. However, Johnson Controls has not applied for any of the money, he says.

The supplier inked a major contract earlier this week to provide batteries for Ford’s first commercial plug-in hybrid-electric vehicle, scheduled to hit dealerships in 2012.

“Regardless of what side of the debate you are on about how involved the government should be, it’s good because people are getting that this is an important topic and needs to be addressed,” Andrews says.

The government also is motivating its national laboratories, such as Argonne and Oak Ridge, to focus more on advanced-battery technology, he says. And a growing movement is under way at the university level to perform research and build battery-specific curriculums.

But the government could go a step further by using the purchasing power of the General Accounting Office to electrify the fleets of, for instance, the U.S. Postal Service, Dept. of Defense and state municipalities, Andrews suggests. The federal government’s fleet, alone, accounts for more than 1 million vehicles.

“There’s talk of significant dollars being made available for fleet conversions to energy-efficient vehicles,” he says.

“These are exactly the type of activities that could launch a business and give a solid baseline to our OEM customers, as well as ourselves and our competitors as battery suppliers, so we can do a business plan and look forward and see some foundation for our planning and reduce investment risk.”

Concerns over the volatility of Li-ion batteries and the availability of lithium are somewhat overblown, Andrews cautions. “They’re not a problem,” he says of Li-ion fires in laptop computers.

Nevertheless, he admits there have been incidents recently and says there will always be user-abuse issues and quality glitches when so much energy is placed in such a small package.

“That is one of the realities of chemistry and engineering,” says Andrews. “But you need to recognize control issues you might have and be willing to take a battery off the line.”

Lithium supplies should not be a problem, either, although the U.S. would be smart to maintain healthy relations with lithium-rich South American countries, he says. “But for (Johnson Controls), from a business standpoint, it is not a problem.”

jamend@wardsauto.com