According to a report in the Wall Street Journal, former Intel chairman and chief executive officer Andy Grove is urging Intel to diversify from its core chip business by investing in battery manufacturing. Intel has lot of expertise in making processors, and, in a move spearheaded by Grove, the company was able to brilliantly transform itself from a memory chip maker to a central processing unit and chipset maker.

Of late, Grove has become an advocate for government policies that promote plug-in hybrid cars. In a manifesto - called “Our Electric Future” - published by him this summer in The American magazine, he called for transitioning the American auto fleet to electricity for national security reasons. In his speech at the Plug-in 2008 conference in August, he called for a goal of putting ten million plug-in vehicles on the road in the next decade.

Grove said that Intel, with its cash resources, can invest in battery technology and manufacturing to bring down the cost of car batteries, which would drive adoption of plug-in electric cars. He told WSJ that Intel’s “strategic objective is tackling big problems and turning them into big businesses.”

The market of batteries, which are the most expensive component in plug-in electric vehicles, is a market that only a few US companies are pursuing.

Notebook battery maker Boston Power also intends to enter the auto market. Moreover, General Motor’s 2011 Volt too is testing batteries from lithium-ion maker A123 Systems. Other US companies include Ener1 and Valence Technology.

Intel has already invested in battery technology, through its venture capital arm and other energy-related firms, and spun out SpectraWatt, for lowering the cost of manufacturing solar cells.