CHICAGO --- Leading U.S. battery and advanced materials companies, with support from one of the country's largest national laboratories, have formed an alliance to develop advanced lithium ion battery cells for transportation applications in the U.S.

The group, known as the National Alliance for Advanced Transportation Battery Cell Manufacture, will focus on developing lithium ion batteries that can replace gasoline as the principal source of energy in future cars and military vehicles. Today, United States automobile manufacturers and defense contractors depend upon foreign suppliers -- increasingly concentrated in Asia -- for lithium ion battery cells.

The founding members of the alliance include 3M, ActaCell, All Cell Technologies, Altair Nanotechnologies, Dontech Global, EaglePicher Corp., EnerSys, Envia Systems, FMC, MicroSun Technologies, Mobius Power, SiLyte, Superior Graphite, and Townsend Advanced Energy. Additional battery developers and materials suppliers are anticipated to join the alliance.

The U.S. Department of Energy's Argonne National Laboratory, a leading developer of new battery technologies, will serve in an advisory role as the alliance begins operations.

The group hopes to develop one or more manufacturing and prototype development centers in the United States, which will be shared by alliance members. Developing the capability to mass manufacture advanced battery cells is expected to require an investment of $1 billion to $2 billion over five years. Most of that investment will likely come from the federal government.

The alliance said it intends to promote the most efficient use of available government support by having its members share in the use of a large manufacturing facility.

"A small, fragmented battery industry will not long survive in the face of determined Asian competition," said Ralph Brodd, a consultant to battery manufacturers. "Other countries are investing heavily in the manufacture of lithium ion cells. Those countries understand that whoever makes the batteries will one day make the cars."

Lithium ion battery cell manufacture is heavily subsidized in many countries. The alliance hopes to level the playing field.

The alliance's formation marks a turning point for the U.S. battery industry. Alan Elshafei, CEO and founder of MicroSun Technologies, explained:  "For 20 years the United States has sat idly and watched foreign markets become the leaders in lithium-ion technology. I am excited by the prospects of creating this collaberation to concentrate the educational and manufacturing resources within the United States to create safer, more powerful battery cells for our markets. The alliance represents the beginning of a new technology age in cell development and manufacture."

U.S. auto makers are expected to play an important role in the alliance. "U.S. truck and automakers and representatives of the Department of Defense will be invited to serve on the alliance's advisory board," said alliance attorney James J. Greenberger of Reed Smith LLP. The advisory board will help the cell makers move toward standardized cell formats that will simplify manufacture and ultimately lower the costs of cells.