Last week, President Barack Obama announced the availability of $2.4 billion to provide much-needed funding to produce next-generation hybrid-electric vehicles and the advanced battery components used in them. Under the measure, the Department of Energy will offer $1.5 billion in grants to U.S. companies to produce advanced batteries, $500 million to companies manufacturing electric motors and other related components for hybrid vehicles, and $400 million to demonstrate plug-in hybrid and other electric infrastructure concepts, such as charging stations.

The initiative would reportedly create thousands of jobs and also provide a tax credit of up to $7,500 to a buyer of a plug-in hybrid vehicle. It is part of the President’s goal to put one million plug-in hybrid vehicles on the road by 2015 to reduce gasoline use and lower greenhouse emissions.

This news will not alone lift the U.S. auto industry out of its deep economic malaise, but it can’t hurt. Several recent online news reports noted that sales of hybrid-electric cars – one of the few bright spots in the U.S. automotive industry over the past year – have slumped dramatically in recent months as gas prices fell below $2 per gallon. With the $4 per gallon fuel prices of last summer now seemingly a distant memory, the few car buyers out there are not exactly rushing out to buy hybrid-electric vehicles, given their price premium over gas-powered counterparts. Even the once hot-selling Toyota Prius has languished on dealer lots in recent months, forcing Toyota to offer price incentives.

But the fact is that gas prices will likely rise again – in the New York City area for instance, average fuel prices have crept back over $2 per gallon in recent days. The specter of higher gas prices along with stringent future regulations on fuel economy and greenhouse emissions dictate that automakers must stay on course developing electric and hybrid-electric vehicles. Helping cash-strapped U.S. automakers continue to design and manufacture these next-generation vehicles is a welcome move.