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How Short Term Supply Constraints Will Impact Booming HEV Markets 55 comments

by: John Petersen June 21, 2009 | about: ALTI / HEV / JCI / VLNC    
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For several weeks I've been writing about robust demand in Europe for a new class of HEVs that are usually referred to as "stop-start" or "micro hybrids." According to the EPA's website:

"Stop/Start hybrids are not true hybrids since electricity from the battery is not used to propel the vehicle. However, the Stop/Start feature is an important, energy-saving building block used in hybrid vehicles.

Stop/Start technology conserves energy by shutting off the gasoline engine when the vehicle is at rest, such as at a traffic light, and automatically re-starting it when the driver pushes the gas pedal to go forward."

The concept is simple and so is the technology. Adding micro hybrid capabilities at the factory typically costs less than $1,000 per vehicle and improves fuel efficiency by an estimated 5% to 8%. It's a baby step, but as my first table in The Obama Fast Track for HEVs shows, it's more cost-effective than any other class of HEV technology. The main reason micro hybrids are so affordable is that they use advanced lead-acid batteries instead of more expensive alternatives.

Since the booming European micro hybrid phenomenon has not reached the U.S., a couple skeptical readers challenged me to show them press releases from major European OEMs announcing plans to produce HEVs that didn't use NiMH or Li-ion batteries. They were not satisfied with my initial response that micro hybrids are being adopted as standard equipment without major fanfare. Yesterday I found an October 2008 "Power Solutions Backgrounder" from Johnson Controls, Inc. (JCI) that proves the point nicely:

"We sold 400,000 advanced batteries for start/stop micro hybrid vehicles in Europe in 2007 and 800,000 in 2008, with the expectation of doubling that number again in 2009 to approximately 1.5 million batteries. These vehicles achieve a 5 percent to 8 percent fuel savings compared to conventional gas vehicles."

I then found www.hybridcars.com, a rich source of data that describes itself as the Internet’s premier website dedicated to hybrid gas-electric vehicles. By combining the micro hybrid battery sales data from JCI with additional data from hybridcars.com, I was able to cobble together the following graph that shows the growth of the global HEV market over the last 10 years. Since I don't have access to comprehensive data on the European micro hybrid market, I assumed that JCI was the only competitor. As a result, the graph understates European micro hybrid sales by a couple of percentage points, but in this case shape is far more important than numerical precision.

Click to enlarge
Click to enlarge

With historical data to provide context, the following graph from a 2008 Frost & Sullivan presentation that summarizes their forecast of future growth in global HEV sales makes a good deal more sense than it may have in earlier articles.

Click to enlarge


As I explained in How Growing HEV Markets Will Impact Battery Manufacturing Revenues, the Frost & Sullivan forecast was based solely on European CO2 tailpipe emission standards that take effect in 2012 and did not account for President Obama's subsequent acceleration of CAFE standards. That recent change will have the effect of pushing growth that would normally have occurred in the 2015 to 2020 timeframe into earlier years and could easily double the growth rates that were expected last fall. While I'm happy to leave the work of updating growth forecasts to experts like Frost & Sullivan, it seems safe to conclude that the next few years will be a challenging time for the battery industry.

Under the growth scenario presented in the Frost & Sullivan graph, the bulk of the unit growth in the HEV markets will go to lead-acid battery manufacturers who will not need to make larger numbers of batteries, but will need to make higher quality batteries that are better suited to the performance requirements of micro hybrids. This changing product mix will reduce production volumes for low cost VRLA batteries and increase production volumes for advanced lead-acid batteries, and should lead to rapid and sustained revenue growth for all lead-acid battery producers.

As we move away from the micro hybrid market and focus on the higher value markets for mild, full and plug-in hybrids, the challenges become more daunting. Jack Lifton has written several articles on global production constraints for the rare earth metal lanthanum; the "M" in NiMH batteries. His basic concerns are that substantially all of the world's supply of rare earth metals comes from China; their current production of roughly 33,000 tons of lanthanum per year can only provide raw materials for about a million HEV battery packs; and their domestic demand for rare earth metals is growing at an extraordinary rate that will limit future exports. Since it usually takes several years to increase production from an existing mine and even longer to bring a new mine into production, Jack expects the battery industry to encounter substantial short- to medium-term bottlenecks in the lanthanum supply chain. If he's right, automakers will be forced to make a Hobson's choice for an increasing percentage of their HEV battery needs:

  • Use Li-ion batteries despite the performance, cost, abuse tolerance and cycle life concerns; or
  • Use advanced lead-acid batteries despite the weight and volume concerns.

On its face this seems to be good news for Li-ion battery developers like Ener1 (HEV), Valence Technology (VLNC) and Altair Nanotechnologies (ALTI) who consistently argue that their proposed products are best choice to fill the gap between surging HEV demand and constrained NiMH battery supply. While many find those arguments persuasive if not compelling, I remain skeptical for several reasons.

First, Li-ion batteries have a checkered history in portable electronics that are used indoors. We know almost nothing about their long-term performance when exposed to the extreme heat, cold, moisture, vibration, driving habits, user neglect and physical stress that automobiles have to endure on a daily basis. The only way to develop that knowledge base will be to get Li-ion batteries out of the laboratory and into test fleets. While many automakers have announced plans to begin limited production of HEVs and PHEVs that use Li-ion traction batteries over the next two years, I can't help but wonder whether the Li-ion battery sector isn't in exactly the same position that the NiMH battery sector was in 10 years ago.

My next graph comes from the May 2009 Dashboard at hybridcars.com and shows the 10 -year U.S. sales history for HEVs with NiMH batteries. Call me a Ludditeluddite, but I have a hard time accepting the idea that HEVs with Li-ion batteries will follow a development path that goes from zero vehicles per year to a million vehicles hundreds of thousands of per year over the course of four or five years. From all of the numerical forecasts I’ve seen, the DOE and all major automakers share those reservations.

Click to enlarge
Click to enlargeSecond, the world's productive capacity for the large-format Li-ion batteries that are needed for automotive applications is very limited. There have been numerous announcements about plans to build new factories, but the bulk of those planned facilities will not be operational until 2011 or 2012. Since most existing Li-ion battery plants are already running at full capacity to make batteries for the high value portable electronics markets, I don't believe Li-ion batteries will be able to make a meaningful contribution to the auto industry's drive to meet European CO2
emission standards by 2012.

Third, I remain concerned that global rates of lithium production will not be able to keep pace with rapidly increasing demand for Li-ion batteries. According to USGS publications , approximately 25% of global lithium production is used for Li-ion batteries. While global lithium production has grown at an annual rate of roughly 6% over the last couple of years to a 2008 total of 27,400 tons, the production process for lithium from brines involves an 18-month evaporation cycle before the alkali salts contained in the brine are ready for separation, refining, processing and use.

Moreover lithium mining is subject to the same expansion constraints as other extractive industries. I'm no longer worried about the long-term adequacy of global lithium resources and I know that production capacity can be expanded over time, but production capacity cannot be expanded quickly and there are certain to be substantial short- to medium-term production bottlenecks.

Finally, I remain concerned about the current development status of large-format Li-ion batteries for automotive use. In a February article titled DOE Reports That Lithium-on Batteries Are Not Ready for Prime Time, I summarized the conclusions of the DOE's 2008 Annual Progress Report for the Energy Storage Research and Development Vehicle Technologies Program that basically said Li-ion batteries would not be suitable for use in mass market HEV and PHEV applications until technical barriers relating to cost, performance, abuse tolerance and cycle life were overcome.

I expanded on that theme in Understanding the Development Path for Li-ion Battery Technologies after a reader sent me sent me an unpublished "pre-decisional draft" of a DOE report titled National Battery Collaborative (NBC) Roadmap, December 9, 2008, a high-level policy analysis that discusses the merits, risks and expected costs of an aggressive eight-year initiative to foster the development and facilitate the commercialization of Li-ion batteries. While the draft roadmap went a long way toward easing my concerns over the long-term future of large format Li-ion batteries, it merely reinforced my conviction that Li-ion batteries are not currently ready for the big show.

Automakers are a conservative lot and they are intensely sensitive to price, performance and supply chain issues. They understand that NiMH and Li-ion battery supplies are constrained by limited global production of lanthanum and lithium, and that large format Li-ion battery supplies will be further constrained for several years by inadequate manufacturing capacity. They also have substantial reservations about the long-term performance of Li-ion batteries under the extreme heat, cold, humidity and vibration conditions that automobiles have to endure on a daily basis. Notwithstanding these known and very real business constraints, the automakers are under strict regulatory edicts to reduce fleet average CO2 emissions to 130 grams per kilometer in Europe by 2012 and improve fuel economy by roughly 35% in the U.S. by 2016. These are very brief timeframes for changes of this magnitude.

The end result is an untenable situation where proven NiMH batteries won't be available in adequate volumes during the regulatory compliance period and even unproven Li-ion batteries will be subject to daunting supply constraints. In a nutshell, supply constraints will leave the booming HEV markets in a critical state of flux for several years. While nothing can be predicted with certainty, I believe the likely responses from automakers will fit in three distinct categories:

  1. Automakers will continue to use proven NiMH batteries as their preferred HEV battery technology until limited lanthanum supplies restrict the ability to manufacture NiMH batteries;
  2. Automakers will accelerate their efforts to build demonstration fleets of high value products using unproven Li-ion batteries, but production volumes will remain small until they gather enough hard performance data to justify the widespread commercialization of Li-ion batteriesthe technology; and
  3. Automakers will significantly increase their use of advanced lead-acid batteries in high volume budget priced product lines, including mild and full hybrids that can tolerate the hundredseventy-five pound weight gain and one cubic foot space loss that will typically arise from using advanced lead-acid batteries instead of NiMH or Li-ion.

This is a sub-optimal environment for all parties because automakers do not have the flexibility to develop new product lines on a multi-year schedule. They have to go to work immediately with the tools at their disposal and bring their product lines into regulatory compliance in a little over five years. The end result will be an accelerated timeline for Li-ion batteries and increased use of advanced lead-acid batteries in product lines that might have been introduced with NiMH batteries under more normal conditions. As automakers develop experience with using both advanced lead-acid and Li-ion batteries in roughly equivalent applications, the unanswered technical and cost-benefit questions about which technology is best for automotive applications will be conclusively answered. In other words, we're going to have a horse race after all.

DISCLOSURE: Author does not own any of the stocks mentioned in this article because all of his personal investments are in pure-play lead-acid battery manufacturers.

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This article has 55 comments:

  •  
    What about advance diesel technologies? And diesel emission technology? They claim 50 mpg. It would seem to me to be the answer to reducing emissions.
    Who does JCI get their lead acid batteries form? AXPW? We wish!
    Jun 21 08:34 AM | Link | Reply
  •  
    Javaharv, advanced diesel has been monster big in Europe for as long as I've lived her (going on 12 years) and just keeps gaining popularity. The big push for stop-start comes from an across the board reduction of CO2 tailpipe emissions that has to happen by 2012. The Frost & Sullivan presentation showed a current fleet average of 160 g/km and a 2012 target of 120 g/km. If you start with a 160 g/km vehicle and use start-stop, you immediately get a 13 g/km improvement without changing anything.

    JCI is one of the top three automotive lead-acid battery manufacturers in the world. The other two have strategic relationships with AXPW. In my world, two out of three's not bad.
    Jun 21 08:46 AM | Link | Reply
  •  
    CLARIFICATION: I just found a high level clarification of what the European standards require:

    "Members of the European Parliament (MEPs) voted yesterday to formally approve a reduction in the carbon dioxide (CO2) emissions of all new passenger cars sold in the European Union (EU), starting from 2012. As per the deal that was struck between EU governments and MEPs at the start of this month, carmakers must reduce their fleet average CO2 emissions to 130 g/km by 2015, with a further 10 g/km emission savings to come from supplementary measures such as biofuels and tyre pressure monitoring systems.

    * * *

    Under the phase-in, 65% of Europe's new car fleet must meet the target in 2012; 75% in 2013, 80% in 2014 and 100% from the beginning of 2015. There will be a sliding scale whereby each carmaker is given an individual target based on the average weight of their cars. Fiat, which makes the lightest cars in Europe, is at the bottom of this scale and will have to reduce its fleet average CO2 emissions to 122 g/km. BMW and Daimler, which make the heaviest cars are thus at the top of the scale, will have to reduce their average emissions to 137 g/km."

    www.globalinsight.com/...
    Jun 21 08:59 AM | Link | Reply
  •  
    i sense a problem with use of micro hybrid in the u.s.a since there must be a time delay in getting the engine started & then up to some useful rpm where some torque is being produced,
    maybe european drivers are more patient but here if you don't peel out the instant the green goes on you are likely to be rammed in the tail by some dude driving a big heavy thing. ouch.
    i have used a sort of 'micro hybrid' in the past, when waiting in a line of cars in summer & want to avold overheating. just turn the key off & restart manually when needed. just don't be @ the head of the line.
    > jack
    Jun 21 10:08 AM | Link | Reply
  •  
    You note: "Adding micro hybrid capabilities at the factory typically costs less than $1,000 per vehicle and improves fuel efficiency by an estimated 5% to 8%."

    This is not a cost-effective add-on for vehicles which are already relatively fuel-efficient. If a car gets 35 mpg and is driven 15,000 miles per year, at $4.00 per gallon, it will take a good 10 years to make up the cost of the add-on, not including the time value of money. Most consumers would rather have $1,000 in their pocket now, rather than get a payout of less than $100 per year.
    Jun 21 11:35 AM | Link | Reply
  •  
    john s. gordon, you've identified the big issue that carmakers are grappling with right now. A Mercedes executive was recently quoted as saying:

    ""Fitting the system to any engine and gearbox is not a problem, we can get reliability quite easily," said Spengel. "Achieving the smoothness of the start is the real problem. Engaging the starter takes a little time, and then firing the engine takes a little time, and it is important that our system does not disturb the driver."

    With lots of people working on the issue, I'm confident that we'll see rapid improvement.

    Caveat M Tor, the economics for drivers is invariably poor on HEV technologies for the reasons you identify, which has always been my main criticism of plug-ins. What we're seeing on the micro hybrid issue is government rules that require the fuel savings regardless of whether the consumer thinks they offer sound economics. On the bright side, micro hybrids get the biggest gas savings for every dollar invested. On the dimmer side, the payback periods are still too long and in the final analysis cheap will beat cool every time.
    Jun 21 11:47 AM | Link | Reply
  •  
    John,

    As it happens this weekend I have spoken at length with Dudley Kingsnorth in Perth Australia., and corresponded by email and phone with David Kennerdy in Birkenhead (Liverpoole) UK. Respectively they are the world's leading authority on the market fundamental of rare earths and the only man in the west who engineers and produces rare earth magnet alloy powder (rare earth magnets are made by sintering alloy powders either of samarium-cobalt or of neodymium-iron-boron). Both of these gentlemen are scheduled to be on a panel with me (Mr. end-use of rare earth metals "expert") in Washington, DC, in October.

    In any case we all agree that NiMH battery production is severely resource production rate limited. I googled ""lanthanum production" and 2008" just to see what info is out there and lo and behold I got an article on the new "Chinese Rare Earths Society" web site that is almost word for word constructed of quotes from me! My articles are also featured on their site. I'm one of their key sources of the production levels of the rare earths. Dudley and David are of course my most reliable sources, but they don't write as much as I do, publicly.

    The point of this immodest rant is this: Reasonable men can disagree on the total of accessible resources (known and measured) and reserves (implied and extrapolated) of the rare earths, but no one disagrees that any increase in output rate of metals and minerals is a market issue. No one is arbitrarily making the massive and long term payout type of investment required to increase the output of a mine and to increase the refining capacity for the mine's product and the manufacturing capacity for the end use of the mine's refined product just based on newspaper stories or market hype. This is as true for lithium as it is for rare earths.

    Note well that the use of lanthanum to make fluid cracking catalysts to process increasingly lower grades of petroleum resources may be the largest use today of lanthanum. If this is so then the availability of lanthanum for NiMH batteries may only be half of what we think. I was at Molycorp's Mountain Pass mine two weeks ago, and they told me that all of their current lanthanum production, only 4 tons a day at the moment, goes to FCC production. They plan to ultimately ramp up to 32 tons/day, but their FCC customer is interested in all of that. Note that Toyota has just announced the addition of hybrid lift-trucks to their line. Those NiMH batteries are big ones. Toyota is a marketing genius. Instead of having one lift truck working and one or two charging you can have a hybrid running all the time. If the cost increase and the reliability and durability and maintenance are equal to the ICE powered lift truck and the cost per unit is less than double it's a great deal.

    I think that the shortages and their causes -market dynamics-cannot be hidden much longer. Choices have to be made. As you say in the near term there is no choice but lead-acid technology for widespread application in transportation.

    Best regards,

    Jack
    Jun 21 11:50 AM | Link | Reply
  •  
    I don't get it. What is the difference between GM's mild hybrids (namely, Vue, Aura, and Malibu) and the "micro hybrids?" As you know from the data at hybridcars.com, GM's milds are a total failure. Less than 6,000 milds sold in 2008, combined. And now they are being discontinued.
    Jun 21 11:56 AM | Link | Reply
  •  
    Jack, as usual you comments and insights are truly appreciated. The clarity that you've added over the last few months on the difference between "resources" that might be put into production at some future date and "proved developed producing reserves" that can be used to solve our problems over the next five years is a breath of fresh air.

    ECD Fan, micro hybrids are stop-start only and the electric motor does not augment the ICE during acceleration. Mild hybrids use slightly bigger batteries to provide another 20 hp of boost during acceleration. Full hybrids use the electric motor to launch from a stop and don't start the ICE until it's needed. For more detail see:

    seekingalpha.com/artic...
    Jun 21 12:02 PM | Link | Reply
  •  
    Battery technology will continue to develop, it's natural evolution. The part your all missing is the charging ability of the power source. How about a mobile power source that can charge 40% faster than any conventional charger? We have that in a U/L -CE approved unit today. The XPX C-1000 DC Charge Controller., (as tested in documented test results from the U S Military) This works best when powered by Solar, or any other unstable energy source. When XPX Technology is widely introduced it will change the whole landscape for the automotive and the solar industry also. In addition to Charging batteries faster, it also extracts a minimum of 15% under optimal to in excess of 100% more electrical energy under very low light conditions, from any PV or Thin Film solar system. If your interested in finding out more visit our web site at heliospowersolutions.com
    Jun 21 12:28 PM | Link | Reply
  •  
    John - - -

    You and your commenting readership are doing a great job keeping the rest of us informed about developments in the storgae arena. I know I have thanked you before, but I feel I am not thanking you enough.
    Jun 21 01:04 PM | Link | Reply
  •  
    John, you only specified one weight gain for mild and full hybrid batteries - “the hundred seventy-five pound (80 kg) weight gain … that will typically arise from using advanced lead-acid batteries instead of NiMH or Li-ion.” There is no mention of the weight gain for a micro HEV battery.

    You may want to specify the weight (and mileage) gain of a micro, mild and full HEV since your article states that a micro HEV only “improves fuel efficiency (and CO2 emissions) by an estimated 5% to 8%” – an improvement that would be effectively canceled by a 80 kg weight gain.

    An 80 kg weight gain would translate to a fuel penalty of 0.30 liters per 100km and an increase of 8g of CO2 per km, based on interpolation of numbers published in a European Aluminium Association (EAA) newsletter:

    “Using 1 kg of aluminium replaces 2kg of standard steel, secondary weight savings included, and by saving 100kg of weight in a car, 0.38 litres per 100km of fuel are saved…. By using 100kg of aluminium the car’s emissions are reduced by 10g of CO2 per km, …”

    www.eaa.net/upl/4/defa...
    Jun 21 01:05 PM | Link | Reply
  •  
    This 2005 paper on the impact of NiMH batteries and HEV electric motors on the minor metals market may help in the discussions, although its main focus is on the cobalt market.

    It also defines a micro hybrid a bit differently than John in that there is no electric motor.

    "Soft- or Micro-hybrids
    These are constructed like conventional vehicles but have an engine programmed to shut down when the car is in stationary traffic, thus saving fuel. Soft-hybrids have zero impact on cobalt consumption and are not included in the forecasts made later"

    www.formcap.com/i/pdf/...
    Jun 21 01:16 PM | Link | Reply
  •  
    John, what is the average number of advanced carbon (Lead Acid) batteries that go into a micro-hybrid vehicle?
    Jun 21 01:26 PM | Link | Reply
  •  
    John, you present a very convincing argument, particularly in this piece. However, something that has struck me as I read about the American Recovery and Reinvestment Act is that it actually mentions the government's intentions to place a lot of emphasis (I assume that translates into $dollars$) on the development of advanced lithium ion batteries. Isn't it implicit in your position that this money would be better spent elsewhere? Is this just another example of our government not thoroughly weighing all sides on an issue and are placing their bets on a horse that can't win? Do you think they're position on where best to invest the advanced battery grants is better informed and developed now that they've been analyzing the battery companies' grant proposals?
    Jun 21 01:38 PM | Link | Reply
  •  
    European min-hybrids are great for making human hamburgers on American freeways.

    Just for the safety of my family, I would rather cough several thousands more for gasoline each year than to have them hit by the average American SUVs/truchs/vans.
    Jun 21 01:55 PM | Link | Reply
  •  
    John, coming from someone who is as widely followed and read as you are, I take any kind words as high praise. This is the hardest work I've ever done to have the time of my life.

    Northernpiker, the weight gain at the micro hybrid level is insignificant because it only uses a single battery. The replacement is the same size, just higher quality.

    The 100,000 mile road-test that the Advanced Lead Acid Battery Consortium sponsored using the lead-carbon Ultrabattery in a retrofitted Honda Insight (a mild hybrid) ended up with a 2.8% reduction in fuel economy in return for a $2,000 saving on production costs.

    www.autobloggreen.com/.../

    I'm using the same definition for micro hybrids. A micro does stop-start only with no boost to the traction system. A mild hybrid adds a low level of traction boost and a full hybrid can do electric only launch.

    Don, it's just a single battery because it's only function is powering the starter motor. Since the starter motor gets used a lot more frequently, it has to be a good deal stronger than what we've traditionally seen used for OEM starter batteries.

    ginchinchili, advanced lead-acid is very important for the short- to medium-term because it will work well as a bridging technology in micro, mild and probably full hybrids. If the ultimate goal is a PHEV or EV future, Li-ion is a critical development project. $2 billion is an immense amount of money, particularly if it's spread over short- medium- and long-term solutions. There is precious little data to analyze on the grant proposals because that information isn't publicly available. Given the number and variety of ARRA grant applications that were filed, I would love to see the DOE do 2 or 3 major grants ($100 to $150 million) and a dozen or more smaller grants ($30 to $50 million) instead of following their original plan that called for 7 or 8 major grants totaling $1.2 billion.

    mkreisel, under the accelerated CAFE standards, each class of vehicle on the road will have to cut fuel consumption by roughly 35% by 2016.. The same rules will apply equally to both Smart Cars and Hummers. So if you really want to drive a gas guzzler, you might think about buying several and warehousing them for future use.
    Jun 21 02:37 PM | Link | Reply
  •  
    Yes, but here the approach is REDUCING CO not the payback of certain feature, so is not a matter of putting something in a car that gets a cost-effective gagdet, when you have a cost -AFFECTIVE one (double turbocharge for example) you assume that is not a cost effective but affective, in this case reducing CO2 is a mandatory law, has having airbags or belts in cars

    Regards


    On Jun 21 11:35 AM Caveat M. Tor wrote:

    > You note: "Adding micro hybrid capabilities at the factory typically
    > costs less than $1,000 per vehicle and improves fuel efficiency by
    > an estimated 5% to 8%."
    >
    > This is not a cost-effective add-on for vehicles which are already
    > relatively fuel-efficient. If a car gets 35 mpg and is driven 15,000
    > miles per year, at $4.00 per gallon, it will take a good 10 years
    > to make up the cost of the add-on, not including the time value of
    > money. Most consumers would rather have $1,000 in their pocket now,
    > rather than get a payout of less than $100 per year.
    Jun 21 02:40 PM | Link | Reply
  •  

    As a builder and driver of custom EV's and member of EV groups who actually use the techs politics and Corporate inertia are the only problems here.

    NiMh is not and never will be a good battery because it's materials cost too much and Chevron who bought the patents has refused to allow more than 10amphr batteries to be made so EV's couldn't use them. But that doesn't matter anymore as Li is easily a far better battery.

    There are multiple Li battery types that are ready for hybrid and EV use now. The only thing holding them back is orders. Until they get orders there is no reason to build plants though many are anyway. The facts are car companies have never liked EV's and don't want to produce them. Baker Electric built 110 mile range EV's back in 1911 and Jay Leno's still has some of the original Edison/NiFe batteries. Why can't we do the same 100 yrs later?

    EV people, mostly hobbyist because no one will build them for us so we have to build our own, now buy Li batteries at prices, $.30/wthr that is less than sealed lead batteries in 10 EV lots.

    As for micro hybrids there is no reason they have to cost more than present starter/alt/flywheel/ they need need anyway. By putting these into the flywheel saves much weight, belts, ect easily enough to pay any control costs needed. As for restarting speed there is no reason for it not to be instant, faster than a regular throttle response due to no gears, ect.

    As for Li supply we have plenty and there are millions of underground salt dome/brines including many in already drilled oil/NG fields that have Li for the pumping. Facts are we have just started looking for it. Test all these wells and I'm sure many will be a Lithium source.

    Then for more used, commercial vehicles Sodium batteries like the Zebra are excellent and long lasting. I own many flooded Ni-cad batteries that are over 35 yrs old and still put out more than rated power in my small EV's.

    What we need for cost effective EV's are light, aero vehicles to put them in. With such a glider even lead batteries can do 100 mile range in a cost effective manor. I'm building a Lovin's Hypercar style EV that uses medium tech composites instead of carbon fiber to make a crash resistant body/chassis stronger than steel at 1/2 the weight with a CD of .22. It's a 2 seat sportswagon that if produced could be for under $12k. With an option generator it would have unlimited range for another $1k. This uses 30-100 yr old tech so nothing needed to be invented, just produced. My prototype got 300mpg cost equivalent for fuel.

    As I said before, the only things holding plug in Hybrids and EV's is politics, oil and car companies.

    BTW unless Valence has developed new tech their Li batteries suck. Ones I know are good are A123 and Kokam. Others are still being tested.
    Jun 21 02:43 PM | Link | Reply
  •  
    Again we are here reducing the battery world to lead-acid and Li-io, there are many technologies that are emerging , to start with NIMH is not a static product, is is having improvements as new Prius and some others are having NIMH 2.0 and the same porous carbon technology being applied in AXPW can be use in other types.

    There are a new generation of batteries using air as reactive instead liquids, acids etc. Zinc-air, and others will come in very short time, sooner perhaps that Axion product which is moving slowly into the market.

    Other point, from my point of view CO2 is independent of what is driven US and Europe in relation with cars, what the goverments are after is reduce oil exposure with all the consecuences...which is in this moment fortunately in the same trend with reducing CO2, but if they have to choose between....be sure they will decide reduce oil exposure as much as they can, so there are many "micro hybrids" solutions that compete with batteries.

    Regards
    Jun 21 02:54 PM | Link | Reply
  •  
    Don, it's just a single battery because it's only function is powering the starter motor. Since the starter motor gets used a lot more frequently, it has to be a good deal stronger than what we've traditionally seen used for OEM starter batteries.

    Precisely, which means the choice between Advanced Carbon and Lithium-ion is maybe double the difference in price? We can make a LiFePO4 car battery for about 20% more $$ than the Axion Car battery in a volume of 5,000 units. We can offer a 5 Year Warranty and easily double the life cycles of the Axion battery.

    So I don't agree here with your micro-hybrid conclusions as you might already have suspected. The industry will have to factor in a 2x replacement factor of the advanced lead acid over the advanced lithium-ion.
    Jun 21 03:04 PM | Link | Reply
  •  
    Advill, I'm for everything that will get us to the goal at the most affordable price. I write about batteries because that's what I know, but we need a lot more than batteries for the job that lies ahead.

    jerrydd, notwithstanding your good experience with Li-ion, the draft roadmap that I provided a link for in the article concludes that Li-ion needs another six to eight years of research, development and testing before it will be suitable for anything beyond validation testing in starter fleets. OEM's have warranty liabilities and potential product liability obligations that you can't even begin to imagine. Since they're not my field of specialization I don't claim extensive knowledge of either legal sub-specialty, but what I do know would scare me to death if I was an automaker. Your comments about the existence of lithium resources is interesting over the long-term and meaningless over the short-term because it takes five to seven years to get a new mineral deposit explored, permitted, developed and ready for production. Then you can add another couple years of evaporation time before you have something that can be used to make a battery.

    Advill, I agree that there are lots of battery chemistries out there and over time I hope that better ones will be developed. NiMH is a great chemistry but it's resource constrained and until the environmentalists in California, Idaho and Canada get their heads right, there won't be any North American supplies of the "M."

    There are no existing factories for any of the battery chemistries you mention. Building capacity to implement any of them (including Li-ion) on an auto industry scale will take decades. Axion's carbon electrodes are being developed on Axion's timetable. Once the development work is completed, the electrodes will be suitable for use in any existing lead-acid plant in the world and the only new facilities will be for electrode fabrication. It is a far more immediate solution to industrial scale problems than anything on the horizon.

    Don, I don't know what the cost and cycle-life figures are going to be for Axion's PbC device and neither do you. So let's quit the guessing games until they publish details. From what I've heard, you're wrong on all points but without public documents that I can link to it would be irresponsible for me to represent facts, any facts.

    The ability to offer a price on a few thousand batteries is interesting for validation testing but it says nothing about pricing and delivery schedules for the millions of batteries that are needed today. It also says nothing about the existence of a reliable supply chain for all of that new battery production.

    I expect you to believe in your product, but without years of experience using your chemistry in automotive applications it's nothing more than guess work. As I recall, you told me last week that you'd gotten huge energy density gains over the last year. Why would I want to buy your battery today when you tell me that it's going to be lots better and lots cheaper a year from now? Take the time, finish your development work, conduct a responsible validation testing program and then commercialize your new chemistry. This is the standard path for every innovation in history and every time somebody shortcuts the process somebody gets short changed.
    Jun 21 03:44 PM | Link | Reply
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    John wrote: Don, I don't know what the cost and cycle-life figures are going to be for Axion's PbC device and neither do you. So let's quit the guessing games until they publish details. From what I've heard, you're wrong on all points but without public documents that I can link to it would be irresponsible for me to represent facts, any facts.

    Exactly, lets drop all the secrecy crap about Axion batteries. Since they are run of the mill (no big deal) batteries why not put out the data on pricing and let's see exactly how they compare - especially on a single battery application for micro-hybrids.

    Since we are talking a "single battery" here the actual difference in overall dollars considering life cycles might not be that much between the two batteries now would it?

    Until Axion proves it's economics, I remain very skeptical of the economics that you put forward here.
    Jun 21 03:52 PM | Link | Reply
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    Don, I didn't even mention Axion in this article. I wrote about which battery chemistries were resource constrained and which were not. Li-ion may not have a long term problem with natural resource availability, but the short- to medium-term supply constraints are daunting and there is nothing you or I can do to change that fact.

    Currently JCI is the lead dog in the European micro hybrid market by a very wide margin. Exide and the others are working hard to catch up and make sure their customers are served. But that's business as usual competition between established competitors who have existing factories and reliable supply chains.

    Decisions on the release of cost and performance data on the PbC battery are going to be made by Axion and its strategic partners Exide and East Penn when they decide it is in their best interest to do so. I have no voice in that decision and await the results as eagerly as you. I can assure you, however, that the PbC battery is far from run of the mill.

    Your job as a Li-ion executive is to argue the best case for your proposed product. All I'm doing is pointing out the differences between happy talk PR and hard natural resource facts, while reminding people that lead-acid has been king for the last 75 years and rumors of its death are greatly exaggerated. Companies like Axion, Firefly and CSIRO are doing their best to give the king a rejuvenation treatment so that he can reign for the next 25 years. They've made immense progress in a very short amount of time.

    The Li-ion crowd wants the world to believe that they can develop better, cheaper and more durable Li-ion batteries with improved chemistry, materials and manufacturing methods, but refuses to tolerate the suggestion that anyone can make better, cheaper and more durable lead-acid batteries using similar materials and manufacturing methods. The argument is intellectually dishonest. Science is science and it doesn't care who is doing the development work or what the chemical reaction is.
    Jun 21 04:21 PM | Link | Reply
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    My point is simply this. John and Jack both focus on an impossible production schedule for Lithium-ion (and NiMh) batteries to meet the demands of the EV market immediately.

    This is their whole thesis + the scare tactics they cite regarding the availability of "precious metals". Then John explains to us all how Micro-Hybrids are the first wave of the EV market and these vehicles only require a single battery to acheive their goal. Well, guess what - a single battery of ANY chemistry is not a big deal to supply with current production worldwide with Lithium-ion. Lead Acid has no advantage here. Sorry guys, I could easily line up production for the Micro-Hybrid market in a few weeks!

    Then with Mild-Hybrids, the need for more batteries increases and the advantages between advanced carbon & advanced lithium-ion start to decrease according to John's argument. By the time we reach Full-Hybrid and Plug in Hybrid the advantages clearly go to advanced Lithium-ion even by John's own admission.

    My point is by the time this "evolution" has taken place there will be plenty of advanced Lithium-ion production already "in-place" to handle the needs of the world EV market - despite the dire shortage of rare metals that Jack loves to dwell on. Jack, I do respect you, but I just can't back your game here.

    What both of these esteemed gentleman keep forgetting is the ability of the free market and the ingenuity of the future graduates of our higher education institutions to rally behind the vision now being shaped by the new director of the DOE, Dr. Steven Chu. It is no coincidence that he has defunded Hydrogen research in favor of an Electric future that can be realized NOW rather than waste money on a Hydrogen future that will take way too long to matter anymore.

    See his comments at the commencement address at Cal Tech recently: revengeoftheelectricca.../

    Also note again the ARRA funding specifically mentions the development of advanced Lithium-ion manufacturing capability here in the U.S. While I am sure that does not exclude funding of advanced carbon battery technology, the grant money will mostly go to Lithium-ion and that happens to be true.

    Therefore I have disagree with both that there is NO choice but lead-acid technology for widespread application in transportation. Not only are there choices, but there is funding and very powerful forces fueling the trend toward advanced Lithium-ion technology that even the car makers cannot ignore. NO car maker has made the public statement that they are bringing out EV's with advanced carbon battery technology and I doubt any will in the near future either?
    Jun 21 04:34 PM | Link | Reply
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    Don, the law in Europe establishes CO2 emission standards and requires 65% compliance by 2012 and 100% compliance by 2015. The situation is only a bit better in the U.S. because we don't need 100% compliance until 2016.

    This is one of those times when an industry is caught between a mineral production constraint rock and a regulatory hard place. Your sector cannot, build factories, develop additional mines, finish research and development and complete validation testing in time to make a significant difference. Like it or not, the answer has to be lead first followed by lithium, but only if the products you ultimately develop are as superior as you assure us they will be.

    Li-ion has huge potential after the six to eight year development plan outlined in the draft DOE roadmap. The bulk of the ARRA funding may well go to Li-ion, but even if all the funds went to Li-ion development, the potential future production wouldn't solve the near-term problems.

    Vinod Khosla talks about the need to find "relevant scale" solutions and there is no way that Li-ion battery manufacturing can achieve relevant scale by 2012 to 2016 because it won't be out of the validation testing stage by then. Look at the ramp-up graph for NiMH and then explain to me why it makes sense for anyone to believe "it's different this time."
    Jun 21 05:09 PM | Link | Reply
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    John wrote: "The Li-ion crowd wants the world to believe that they can develop better, cheaper and more durable Li-ion batteries with improved chemistry, materials and manufacturing methods, but refuses to tolerate the suggestion that anyone can make better, cheaper and more durable lead-acid batteries using similar materials and manufacturing methods. The argument is intellectually dishonest. Science is science and it doesn't care who is doing the development work or what the chemical reaction is."

    NO, the Li-ion crown wants the world to know that Li-ion is a far superior chemistry to Lead Acid. That simple fact that Lead Acid can stick ultracapacitors into their existing manufacturing methods is like a bandaid approach to trying to keep a 75 year old technology alive for another 25 years. It just won't work - the public doesn't buy it, the car company's certainly have not embraced it, and the new generation of EV developers won't touch it either.

    There is not a single new EV startup designing their new vehicles from scratch that are basing their designs on advanced carbon batteries. That much I can attest to.

    If you want to believe otherwise, then you have to prove your thesis beyond citing Frost & Sullivan and obsolete DOE papers which by your own admission were done before this administration even took office. Witness the new administrations backing of advanced Lithium-ion as I already mentioned in the ARRA reference previous post.

    What you fail to take into consideration is that Lithium-ion is a "true disruptive technology" and a real game changer. Once funded, and widely invested in by the very investment community you represent, it will rapidly prove to be a winner over lead acid.

    I doubt Lead Acid will even be able to compete except possibly in stand by UPS power systems - and even there advanced Lithium-ion will eventually replace it for life-cycles and maintenance requirements.

    Don't get me wrong - there will be a place for advanced Lead Acid but it definately won't be for widespread application in the transportation market!
    Jun 21 05:16 PM | Link | Reply
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    John writes: "Vinod Khosla talks about the need to find "relevant scale" solutions and there is no way that Li-ion battery manufacturing can achieve relevant scale by 2012 to 2016 because it won't be out of the validation testing stage by then. Look at the ramp-up graph for NiMH and then explain to me why it makes sense for anyone to believe "it's different this time."

    Again, I do beg to differ with you. Whilst I do appreciate Mr. Khosla's opinion I have found his organization to be very much like most VC capitalists - only interested in IP portfolio's and immediate returns on investment. I do believe his advice would be to off-shore the production as most VC's would agree. Here is where I take a different approach and one more in line with Dr. Steven Chu. If we don't establish a manufacturing base in the U.S. for advanced Lithium-ion we will lose immeasurable amounts of jobs and technology transfer to Asia. The U.S. will be in the same predicament we are in now being dependent on a major "resource" only this time it will be on Asia instead of the Arabs.

    Can anybody see this or not?
    Jun 21 05:36 PM | Link | Reply
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    Don, we obviously have different opinions about the future of lead-acid and Li-ion chemistries. But those differences are not going to be decided here. They will be decided in the real world when both technologies are fully and fairly tested side by side in comparable applications.

    The automakers all know and love lead-acid, which is why JCI could go from a standstill to 800,000 vehicles in two years while it took NiMH 10 years to reach that level of market penetration. The global market does not lie and last year it spent four times the money on lead acid batteries that it spent on Li-ion batteries.

    I'm the first to admit that I think Li-ion will dominate the PHEV and EV markets once it has been fully developed and properly tested, validated and commercialized. I don't, however, believe it will ever be cheap. Since I know that the vast majority of consumers can't afford to pay more to store energy than the stored energy is worth, this is a major problem for Joe Lunchbucket and in his mind cheap and effective will always beat cool, even if it's a little chubby.

    I'm perfectly happy for both technologies to co-exist in a free market and for the best technology to prove its worth in each application. I think your suggestion that "THERE CAN BE ONLY ONE" is both premature and disingenuous, because you are basing that suggestion on expectation rather than experience.

    A few minutes ago, Tom Konrad sent me an e-mail with his favorite quote. I think it's particularly appropriate here:

    "Explanations exist; they have existed for all time; there is always a well-known solution to every human problem — neat, plausible, and wrong." – HL Mencken

    I'm delighted that we are going to have a horse race with head to head comparisons in real world applications. I believe lead-acid will make a respectable showing and continue to claim the lion's share of the energy storage market. You obviously disagree. Only time will tell which one of us is right.

    In the meantime, it's almost midnight here and I'm going to bed.
    Jun 21 05:50 PM | Link | Reply
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    Anybody want to talk about reliance on Argentina, Chile, Bolivia and China for critical resources like lithium.

    I agree with Don that Li-ion technology needs to be developed and factories need to be built as an essential part of the validation process. But validation testing is not commercialization and anybody who expects profitability in the Li-ion sector before 2020 is dreaming.

    In 30 years of practicing law I've never seen a client survive that started its sales pitch with the disclosure that "Our products cannot be cost effective unless we slash our production costs by 75%." It's a good R&D story, but a lousy commercialization story.
    Jun 21 05:55 PM | Link | Reply
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    Sorry, but I got on a roll here on Father's Day - but one last post and a different way to look at all this? Since the U.S. already has the biggest Lead Acid Battery mfg.capability in the world with plants all over the globe we aren't worried about dominating that market are we?

    Now, if you can agree that a new battery chemistry WILL be coming on-line if we are to make the EV cars of the future - wouldn't you want to invest in and support this new technology? Wouldn't you want the U.S. to dominate this market like we have with Lead Acid? If your answer is you want to wait and see what the new technology is then I really can't believe that you and I are on the same page. The U.S. Government and the DOE are there and if you aren't well what is there to say?

    If so - then why not be an advocate for the future instead of being a retro-advocate for the past? If your focus on Seeking Alpha is short term investment strategy - then I buy your argument, but if it goes anywhere beyond that then I guess I just don't get it?
    Jun 21 06:02 PM | Link | Reply
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    Have a good night and Happy Father's Day to you! Remember it IS a horse race now and no matter what you and Jack think don't count out Litium-ion! Remember the Kentucky Derby this year?
    Jun 21 06:14 PM | Link | Reply
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    I believe Li-ion batteries are a critical part of the long term solution to America's energy problems and manufacturing those devices is far too important to national security to leave it in the hands of countries that may not always be as friendly as they are today. So I have no problem if the government decides to pursue a policy of fostering research, development, testing and commercialization of Li-ion batteries. It's going to be a long and expensive process that needs a healthy jump start. But I draw the line when companies suggest that we are nearing the end of the process when the fact is that we've just made a decision to begin the process in earnest.

    The draft roadmap that I keep asking people to read for themselves may have been prepared during the Bush administration, but the similarities between the plan and the decisive actions coming out of Washington today are amazing. It was either used as the blueprint or the authors were channeling Steven Chu. But science is no respecter of politics and devices that were not market ready in a republican administration don't miraculously become market ready when a democrat takes the helm.

    I believe we are entering into a century of global shortage as 6 billion people try to earn a piece of the lifestyle that 500 million of us enjoy today and largely take for granted. The only way I see to avoid catastrophic conflict is to reduce waste at every possible opportunity. I've spent a lot of time in Asia where 3 people going to work on a single motor-scooter is common. I've also spent a lot of time in Houston where one person going to work in a Suburban is common. Over the next 50 years we're going to be forced to meet the 6 billion partway and while nobody wants to talk about the change, it's coming in any event.

    Using a 3,000 pound machine to move 300 pounds of passengers at highway speed is wasteful. Trying to do it with batteries is even more wasteful. At current oil prices, the fundamental economics of micro, mild and full hybrids are hard to justify and the fundamental economics of PHEVs and EVs are simply terrible. I don't see how finding new ways to waste resources is in anybody's best interest. We need to be looking for ways to save resources; to reduce, reuse and recycle.

    Companies that can help people do work better, faster and cheaper today are worth a lot of money today. Companies that may be in a position to help people do work better, faster and cheaper five or ten years from now are worth less. In both cases the values have to be adjusted downward for relative risk. They all need and deserve support. My principal concern with the Li-ion battery companies is a question of valuation, not business merit.
    Jun 21 11:29 PM | Link | Reply
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    Don, I wanted to add a quick follow-up note about Jack Lifton since you were a bit critical of his comments. Jack does not have any interest in the battery industry beyond its impact on the markets for rare earth metals, which have important applications in other industries like petroleum refining, power generation, aerospace and defense. His primary clients are in the mining and defense industries. When Jack talks about sustainability of resources, he's coming from the perspective of a metals expert who understands all of the potential competing uses for those metals. I'm the only one that has a dog in the battery fight.
    Jun 22 12:26 AM | Link | Reply
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    As a man who earns his livelihood from maintenance and repair of vehicles, I can assure all readers that one thing will happen-- the servicing and repair of these new inventions will be more costly and require far more training. The days of removing 2 hold-down J-bolts and loosening two cables for a battery exchange are over. If you don't connect an auxiliary source to maintain voltage, all sorts of unfortunate things happen. Even mundane operations lke repairing a tire/ wheel assembly with TPMS (tire pressure monitoring system) have become much more involved. You now need a costly scan tool (updated with each model change) to reprogram the computer if a wheel rotation or puncture repair is performed. Do not wander around nilly-willy with a screwdriver in the 300 volt systems, either. No one ever got a shock from 12 volt primary vehicles. What do you do with a PHEV that has run out of gas and amps on the side of the road? You cannot come out with a can of gasoline or a jumper battery to get rolling--you will need a tow truck- preferably one with a platform. When I learned to drive in a 1935 Ford, a weak battery could be overcome by pushing the car by hand, jumping in and popping the clutch in 2nd gear, and away we went. Now, with automatic transmissions and electronic fuel management dependent on voltage, those maneuvers will not work. I would like to stick around a while longer, just to see what happens.
    Jun 22 09:09 AM | Link | Reply
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    Tireman, I think the only certainty we have before us is increasingly rapid rates of change. I once knew an executive with a major PC manufacturer who quit his job, went back to college and now works as a counsellor with high-tech executives suffering from burn-out. Now the trick seems to be welcoming change and avoiding the temptation to turn into our fathers.
    Jun 22 11:19 AM | Link | Reply
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    Don Harmon writes:
    "Also note again the ARRA funding specifically mentions the development of advanced Lithium-ion manufacturing capability here in the U.S. While I am sure that does not exclude funding of advanced carbon battery technology, the grant money will mostly go to Lithium-ion and that happens to be true."

    Don, I have great respect for your knowledge on Li-ion batteries and have learned a lot from your exchanges with John, but I don't think it's useful to make any assumptions about where the grant money is going among the advanced battery manufacturers, and would-be manufacturers. The DOE has asked for grant proposals from the most knowledgeable minds on battery technology and the industry that the US has to offer. It can't help but be a learning experience for the DOE and will no doubt do much to shape the decision making process on where the money goes and how the DOE sees the future of the US battery industry.

    You're absolutely right in pointing out that the ARRA actually mentions the DOE's particular interest in Li-ion and from that we can safely assume that there will be government dollars going toward the advancement of Li-ion battery manufacturing, but that's about as far as we can currently take those assumptions. They have specific overriding goals that the grant money is intended to help achieve and those goals take precedence over any one type of battery or battery company and I'm sure they will want to get as much bang for the buck as possible. Keep in mind that the Act also states that there are specific requirements that must be met in order to be awarded grant money including having the matching funds (with some leeway on that) and these businesses requesting the grants have to be in a position to sustain themselves after the grant money is depleted. I don't think they want the grants to be used to pay off company debt already accumulated.

    This should all be cleared up within the next few weeks. I'm just cautioning all interested parties about making assumptions regarding these grants. I think it will be profoundly interesting as we learn who gets what and why. I'm not even sure how much the public will be privy to in regards the grant proposals. Companies tend to keep mum on their near future plans. After all, as you and John both agree, this is going to be a horse race and the grant announcements will act as a kind of starting bell for this horse race. Who wants to reveal their strategy to the competition?


    On Jun 21 04:34 PM Don Harmon wrote:

    > My point is simply this. John and Jack both focus on an impossible
    > production schedule for Lithium-ion (and NiMh) batteries to meet
    > the demands of the EV market immediately.
    >
    > This is their whole thesis + the scare tactics they cite regarding
    > the availability of "precious metals". Then John explains to us
    > all how Micro-Hybrids are the first wave of the EV market and these
    > vehicles only require a single battery to acheive their goal. Well,
    > guess what - a single battery of ANY chemistry is not a big deal
    > to supply with current production worldwide with Lithium-ion. Lead
    > Acid has no advantage here. Sorry guys, I could easily line up production
    > for the Micro-Hybrid market in a few weeks!
    >
    > Then with Mild-Hybrids, the need for more batteries increases and
    > the advantages between advanced carbon & advanced lithium-ion
    > start to decrease according to John's argument. By the time we reach
    > Full-Hybrid and Plug in Hybrid the advantages clearly go to advanced
    > Lithium-ion even by John's own admission.
    >
    > My point is by the time this "evolution" has taken place there will
    > be plenty of advanced Lithium-ion production already "in-place" to
    > handle the needs of the world EV market - despite the dire shortage
    > of rare metals that Jack loves to dwell on. Jack, I do respect you,
    > but I just can't back your game here.
    >
    > What both of these esteemed gentleman keep forgetting is the ability
    > of the free market and the ingenuity of the future graduates of our
    > higher education institutions to rally behind the vision now being
    > shaped by the new director of the DOE, Dr. Steven Chu. It is no
    > coincidence that he has defunded Hydrogen research in favor of an
    > Electric future that can be realized NOW rather than waste money
    > on a Hydrogen future that will take way too long to matter anymore.
    >
    >
    > See his comments at the commencement address at Cal Tech recently:
    > revengeoftheelectricca.../
    >
    >
    > Also note again the ARRA funding specifically mentions the development
    > of advanced Lithium-ion manufacturing capability here in the U.S.
    > While I am sure that does not exclude funding of advanced carbon
    > battery technology, the grant money will mostly go to Lithium-ion
    > and that happens to be true.
    >
    > Therefore I have disagree with both that there is NO choice but lead-acid
    > technology for widespread application in transportation. Not only
    > are there choices, but there is funding and very powerful forces
    > fueling the trend toward advanced Lithium-ion technology that even
    > the car makers cannot ignore. NO car maker has made the public statement
    > that they are bringing out EV's with advanced carbon battery technology
    > and I doubt any will in the near future either?
    >
    >
    Jun 22 02:27 PM | Link | Reply
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    John, I too believe that one doesn't need a 3000lb vehicle to move 300lbs of people.

    That's why I've designed, built a 1300lb Lovin's hypercar style EV 2 seat sportswagon but with medium tech composites to reduce costs and lead batteries yet still get 100+ mile range. It could be mass produced for under $12k with a very good profit using 30-100 yr old tech. I'm a boat designer/builder by trade getting into EV's for the last 12 yrs so this is just a 12' electric boat to me. Once Lithium gets cheaper, BMS's better, cheaper I'll switch to them but for now golf cart batteries are hard to beat cost wise.

    We buy now LiFePo4 batteries from Sky for $.35/wthr which is less than sealed lead batteries in 10 EV quantities. So the cost is what car maker said they would need it at already.

    As for China they will be happy to sell their Li as will Argentina,Peru, the US even if Bolivia doesn't. And they better because there is no lack of Lithium in the earth and will be bypassed if they don't.

    We'll have to disagree on the length of time to get underground Lithium started which should not take more than 4-5 yrs. And facts are we won't have that many hybrids or EV's by then regretfully. We have plenty of Lithium for that now and by the time we need more it will be found, produced. After all there are 100's of thousands of old wells already drilled into salt brines/domes and many of those will have Lithium. One can evaporate the brine fast, cheap by solar, heat recycling. It doesn't have to take 18 months.

    I also disagree on the time needed to start a li battery line as ones I know of are being done now in under 2 yrs. LiFePo4 is fairly well known now without much risk and materials are widely available and new battery factories popping up so fast I can't keep track. Of course most will fail but lots will survive.

    Plus both Kokam and A123 have great Li batts that have a track record. My friend has been drag racing A123's for 5 yrs now and only gets 168mph at 7.9sec i the 1/4 mile on his MC, Killa-cycle. Another is getting close to that and hasn't even dialed it in yet.

    On lead batts they are about as far as they can go. Cat's/Axion is so far a dud after 7 yrs of research.

    And no mention of Sodium batteries which I believe will take over the commercial market for taxi's, delivery trucks, ect, anything that needs a lot of use. Zebra is selling theirs to any OEM now.

    Plus other like Zinc/air, alum/air are already known and if demand was there which there is not, they cold be ramped up quickly.

    Facts are there are plenty of batteries for EV's, plug in hybrids, ect. What we need are EV's to put them in.
    Jun 22 02:37 PM | Link | Reply
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    Jerry, you've missed the point of this article. The auto industry has an incredibly short regulatory timeframe to accomplish a herculean goal. The drop dead completion dates are 2015 and 2016, which means the industry must go to work immediately if there is to be any hope of compliance.

    Internet prices for batteries of unknown quality in small quantities do not say anything about availability of adequate quantity and quality for millions of vehicles. The ugly fact is there are not enough factories in the world to fill the potential demand and the bulk of the current production goes to high value electronics companies that can pay far higher prices than the auto industry.

    There is no excess lithium production right now. There are no stockpiles. Mines of every stripe take 4 to 5 years to develop after all relevant permits are issued. Since environmentalists hate mining above all else the permitting process always takes years and can easily drag on for decades. In the case of lithium, you don't have a useful product until the mine has begun production and you've gone through an 18 month evaporation cycle.

    I was being incredibly generous with a 7 year estimate and assumed environmentalists would choose new mines as the least offensive alternative. No guarantees there.

    Building a new factory from the ground up is far more time consuming than adding a line to an existing factory, but of course we have no existing factories beyond the Ener1 ghost-town. With the exception of Asian factories that are already being built, I've not seen a projected completion date before 2012.

    The draft roadmap that I linked in the article specifically says that battery technology needs to advance through three generations and manufacturing technology needs to advance through two generations before Li-ion batteries are ready for anything beyond validation testing in entry fleets. So does the DOE's 2008 annual progress report. The products are ready for first generation test vehicles. They are not ready for commercialization and won't be for years.

    I know a good deal more about the work that is being done by companies like Firefly, Axion and CSIRO and the simple fact is you're wrong. They will release their data when it suits their purposes, but the fact that it hasn't been released does not mean it doesn't exist.

    Sodium batteries will be worth mentioning on Seeking Alpha when there is a public company that makes them and people can invest in. GE will probably fill that bill first but batteries will be such a small part of its overall business that I'll never write about them. The same rules hold for zinc/air, aluminum/air and all the other cool stuff on the planet.

    This is an investment site not a technology site.If a reader can't walk into his broker's office and order shares on the public market, I don't care how cool it is.

    Once again, I'd like to remind people of Tom Konrad's favorite quote:

    "Explanations exist; they have existed for all time; there is always a well-known solution to every human problem — neat, plausible, and wrong." – HL Mencken
    Jun 22 03:17 PM | Link | Reply
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    John writes: "This is an investment site not a technology site.If a reader can't walk into his broker's office and order shares on the public market, I don't care how cool it is."

    I understand that, and you are correct, however if you Google any of the key phrases these articles concern the first things that turn up are these very posts that you are writing on Seeking Alpha. My point is that apparently there is a dearth of information out there and a tremendous thirst for discussion - so while this may be an "investment" site it has morphed into an "information" site too.

    Not really a bad combination and certainly a higher road and a better crowd of people than you usually find on highly specialized forums!

    What I like is the civility and the mutual respect that posters here extend to each other.
    Jun 22 03:55 PM | Link | Reply
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    Don, understanding the available investments requires at least a brief understanding of the business issues facing the core technologies, so I think the technical aspects are important. But I do feel an obligation to guide things back to the relevant market realities when we start drifting too far afield.

    What you or I might be able to buy from the Internet has nothing to do with what the purchasing management team at an automaker would consider reasonable. What you or I might think sufficiently proven for our personal use has no bearing on what an automaker would consider sufficiently proven.

    From an investment perspective, we need to worry about battery deliveries in multi-million unit quantities to companies that have decades of history, reputation and brand value to protect. Those companies are invariably staffed by legions of lawyers who spend all day every day worrying about warranty and product liability lawsuits. Discussions of hand crafted EVs that are made in batches of 10 or 20 or even 1,000 can and do distract from that focus.
    Jun 22 04:15 PM | Link | Reply
  •  
    Well, first of all, sorry i m late in responding, hopefully Axion will get product soon...( a hope of a small shareholder), Sodium batts will be in US this year, and problems with whatever metal and air is temperature of reaction, if a proper heat aislant is implemented the use in grid and fix station will become an strong contender, for cars perhaps will be more difficult but buses, trucks and big heavy wheels are a quick hit.
    As usual regards.


    On Jun 21 03:44 PM John Petersen wrote:

    > Advill, I'm for everything that will get us to the goal at the most
    > affordable price. I write about batteries because that's what I know,
    > but we need a lot more than batteries for the job that lies ahead.
    >
    >
    > jerrydd, notwithstanding your good experience with Li-ion, the draft
    > roadmap that I provided a link for in the article concludes that
    > Li-ion needs another six to eight years of research, development
    > and testing before it will be suitable for anything beyond validation
    > testing in starter fleets. OEM's have warranty liabilities and potential
    > product liability obligations that you can't even begin to imagine.
    > Since they're not my field of specialization I don't claim extensive
    > knowledge of either legal sub-specialty, but what I do know would
    > scare me to death if I was an automaker. Your comments about the
    > existence of lithium resources is interesting over the long-term
    > and meaningless over the short-term because it takes five to seven
    > years to get a new mineral deposit explored, permitted, developed
    > and ready for production. Then you can add another couple years of
    > evaporation time before you have something that can be used to make
    > a battery.
    >
    > Advill, I agree that there are lots of battery chemistries out there
    > and over time I hope that better ones will be developed. NiMH is
    > a great chemistry but it's resource constrained and until the environmentalists
    > in California, Idaho and Canada get their heads right, there won't
    > be any North American supplies of the "M."
    >
    > There are no existing factories for any of the battery chemistries
    > you mention. Building capacity to implement any of them (including
    > Li-ion) on an auto industry scale will take decades. Axion's carbon
    > electrodes are being developed on Axion's timetable. Once the development
    > work is completed, the electrodes will be suitable for use in any
    > existing lead-acid plant in the world and the only new facilities
    > will be for electrode fabrication. It is a far more immediate solution
    > to industrial scale problems than anything on the horizon.
    >
    > Don, I don't know what the cost and cycle-life figures are going
    > to be for Axion's PbC device and neither do you. So let's quit the
    > guessing games until they publish details. From what I've heard,
    > you're wrong on all points but without public documents that I can
    > link to it would be irresponsible for me to represent facts, any
    > facts.
    >
    > The ability to offer a price on a few thousand batteries is interesting
    > for validation testing but it says nothing about pricing and delivery
    > schedules for the millions of batteries that are needed today. It
    > also says nothing about the existence of a reliable supply chain
    > for all of that new battery production.
    >
    > I expect you to believe in your product, but without years of experience
    > using your chemistry in automotive applications it's nothing more
    > than guess work. As I recall, you told me last week that you'd gotten
    > huge energy density gains over the last year. Why would I want to
    > buy your battery today when you tell me that it's going to be lots
    > better and lots cheaper a year from now? Take the time, finish your
    > development work, conduct a responsible validation testing program
    > and then commercialize your new chemistry. This is the standard path
    > for every innovation in history and every time somebody shortcuts
    > the process somebody gets short changed.
    Jun 22 04:16 PM | Link | Reply
  •  
    You won't find any argument from here, John. My point and it's just a point is that your articles have become a technology reference for many people on the internet. Not just potential investors - but for the average working American who wants to learn more about the different aspects of battery technology and to get a handle on what the trends of the future are for Electric Vehicles.

    In other words, congratulations, on launching a new career! The internet works in mysterious ways.
    Jun 22 04:20 PM | Link | Reply
  •  
    Advill, there is nothing I'd like to see better than a healthy market for all battery technologies with each class doing what it does best. Any time you can look at a market and identify several niches that are significantly different from each other and represent billion dollar revenue potentials, it's a target rich environment.

    Don, you point is well taken and I'll endeavor to be more patient. Now if I could just find a way to monetize it.
    Jun 23 01:01 AM | Link | Reply
  •  

    Hi John and All,

    We don't buy batteries off the internet, we by containers of them from China by Sky and Thundersky every month or so and growing.
    As for new factories, a Lithium production line is not that hard and is a well known process. One new line in Europe is being built now, only started 6 months ago and we'll be buying their product in 6 months so yes new factories are going up fast. Like I said we already know about LiFePo4 as it was developed over 10 yrs ago.
    As for investing one needs to know what works and doesn't as unless you are only investing short term it's important to know what competition your investment will have even if it's not traded.
    The basic physics of lead/carbon batteries is not unknown. What little extra specific power/cap/lb they can improve by using carbon grids is minor. And at present they only have it in one plate, not both so improvement is even less.

    A123, Kokam has long track records and GM went with another less known about formula for the Volt instead so your point big auto doesn't take chances is not correct.

    Nor are that many hybrids or EV's going to be built soon. It won't be for 4 yrs before any real numbers of them are on the road. By then battery recycling will be mandatory reducing the supply problems just as lead is now in the US.
    Jun 23 11:24 AM | Link | Reply
  •  
    jerrydd, it's easy to suggest that substantial numbers of HEVs are going to be built over the next four years, but can you tell me how European EOMs are going to reduce CO2 emissions to 130 g/km for 65% of the 2012 fleet without a shift to stop-start technology as standard equipment? For that matter, how could they possibly get to 100% compliance in Europe by 2015 or 100% compliance in the US by 2016 without that baby step? It has to happen because there is no other single technology they can implement that gives as much bang for the buck. This is not a question of picking the optimal long-term technology. It's a matter of taking immediate steps to satisfy looming regulatory requirements. Over the longer term, systems will be optimized. Over the short term, legal compliance and fine avoidance will reign supreme

    Adding a battery fabrication line to an existing facility is not difficult and might be possible in a year for somebody who has done it several times. Building a factory takes closer to three years by the time you handle permitting, equipment order lead-times (which are currently 12 to 18 months and growing) construction, installation and shakedown testing. Read the announcements. All of the high profile projects are scheduled for completion in 2012 to 2015. The only exceptions are plants that are already under construction.

    I have no question that the major automakers are eventually going to follow the trail you're blazing right now, but all the information I'm getting about automotive OEMs in the US and Europe is that they don't expect PHEVs and EVs to be a big business segment until 2020 at the earliest. There will be lots of testing and a methodical ramp up in production (exactly like we saw with HEVs) but even the DOEs numbers for the 2009 Annual Energy Outlook don't show annual production of cars with plugs exceeding 350,000 units per year until about 2030. I hope it happens faster, but I'm not going to hold my breath. Download tables 45-71 and see for yourself:

    www.eia.doe.gov/oiaf/a...

    I'm not going to argue with you about the physics of lead-carbon, but the devices I'm talking about are replacing all or part of the negative electrode with a supercapacitor, not simply replacing a lead grid with a carbon grid. The hybrid has an entirely different performance profile on both power and cycle-life. I think it will always be too bulky for an EV application like yours, but in micro mild and possibly full hybrids it could prove to be a real game changer.

    There will always be technical improvements and hopefully there will always be better, faster and cheaper ways to do things. Oddly enough, I'll be delighted to see automakers move to Li-ion as the technology becomes cost-effective because I think that over time, aggregate growth in the battery industry will maintain a rate where all lithium will do is slow the growth rate for lead-acid.

    I like to think of this market in bell shaped curve terms. Currently we have roughly $40 billion of annual sales revenue under the curve and only the "A" students buy lithium. Over the next 10 years , the volume under the curve will grow to $100 billion or more and if the research is successful, lithium will work its way down through the "B" students and maybe take some of the "C+" crowd. That will still leave over half of a much bigger pie in the hands of companies that provide lowest cost solutions.

    This is not a zero sum game and nobody is likely to see their year on year revenues decline. For the next ten years, I think lead-acid growth will outpace the newcomers. After that, the newcomers will probably outpace lead-acid. So the real question for an investor is not "which will get to the biggest number by 2030?," but "which provides the optimal discounted present value of anticipated future profitability over the next 20 years."

    Depending on the question, the answers can change remarkably.

    .
    Jun 23 12:26 PM | Link | Reply
  •  
    There should be a "not" at the end of the first line in the preceding answer.
    Jun 23 12:46 PM | Link | Reply
  •  
    I wonder if Jack can comment on this mining start-up and whether they have perfected their "zero waste" lithium mining process?
    Since Jack is the expert here and I am not - perhaps he might be able to update us all?

    news.cnet.com/8301-111...
    Jun 23 01:32 PM | Link | Reply
  •  
    Don, I too will be curious to hear what Jack thinks about this plan. I spent a number of years working with a company that was producing natural gas from superheated brines in Louisiana and know just how hard it can be to deal with a couple hundred thousand gallons of water per day in an environmentally safe manner. Evaporation ponds would not seem terribly efficient unless the brines are super-concentrated like they are in Chile, but there are any number of ways to skin a cat.

    Based on my oilfield experience, I think Simbol Mining has a tough path in front of it. Developing new technologies is never easy and getting permission to conduct mining process experimentation in California may well be a nightmare. But nothing worthwhile ever gets invented and developed if somebody doesn't have a novel idea, take a risk and give it a go. So I wish them all the luck in the world.
    Jun 23 03:10 PM | Link | Reply
  •  
    Me too:-)
    Jun 23 03:44 PM | Link | Reply
  •  
    blogs.edmunds.com/gree...
    Jun 25 10:35 AM | Link | Reply
  •  
    Expect more changes in direction for Toyota - Original founder's grandson takes the wheel: www.businessweek.com/g...
    Jun 25 04:17 PM | Link | Reply
  •  
    Anyone care to comment about the US/EU WTO case against China for placing an export tax on various commodities. I noticed that Lanthanum or Lithium was not on the list, but it is curious anyway.
    It does highlight the strength of the Chinese economy that EU/US go bantering to the WTO about an export tax.
    Jun 29 08:07 AM | Link | Reply
  •  
    Renim, I did some surfing about and it looks like all of the rare earth metals, including lanthanum, are part of the planned WTO dispute. See Item 7:

    steelguru.com/news/ind...

    China is just like any other country, it prefers to export finished goods instead of raw materials and it doesn't want to export finished goods unless it makes more of them than it's own population can consume.
    Jun 29 09:17 AM | Link | Reply
  •  
    I think this article, and commentary, is a great analysis and broaches some important public policy questions. Like shouldn't government incentives focus on results (reducing oil consumption) not specific technologies (lithium-ion, lead-carbon, hybrids, etc). I think that if GM, Ford, or Chrysler sold the Prius it would receive a government subsidy.

    However, I think you might be thinking too linearly. Technology doesn't move stair stepped it moves in dramatic paradigm shifts. Given enough investment and smart people working on it I think both battery and solar technology could dramatically tip in 10-15 years so I think the government incentives are more than justified. You're focus on the current and not future state makes hybrids appear too obvious a solution.

    I think that removing the heavy gas power train offers significant benefits once battery technology reaches a certain point. There is also a lot of efficiency potential in electric systems versus naturally more inefficient gas systems. I'm not sure who could disagree with your complaint that the government shouldn't pick which battery technology succeeds.

    Based on cash for clunkers, rescuing the financial services industry, and the current health care debate the biggest problem appears that public policy will favor industry incumbatants for the foreseeable future. The vast majority of great technology achievements have not occurred within legacy organizations.

    So do you think electric vehicles couldn't hit a tipping point in the next 10 years because of the inherent difficulties associated with battery technology or because of the current state of public policy?
    Aug 26 07:01 PM | Link | Reply
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