Barack Obama will use a visit to a Chicago-area lab on Friday to call on Congress to set aside $2bn over the next decade to fund research into a next generation of electric cars.

The White House said the Energy Security Trust, which Obama first proposed in his state of the union address, would use royalties from offshore oil and gas drilling in public waters and would not add to the deficit.

But the proposal – which would divert $200m a year over 10 years to the research fund, remains a hard sell in Congress.

The White House said the money would help fund research into “breakthrough” technologies, such as advanced batteries for electric cars, or biofuels made from switch grass rather than corn ethanol.

Officials chose Argonne Labs, outside Chicago, because the facility led research into electric car batteries.

The fund was first proposed by a non-partisan group of former generals and military executives, called Securing America’s Future Energy. However, the original proposal called for a much larger fund, with some $500m in annual investment.

Obama incorporated the idea into his state of the union address, pitching the trust as part of his plan for job creation, arguing that America needed to retain its technological edge to remain competitive in the global economy.

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