Over the last couple of years, the mainstream media has been awash in reports of how automakers are lining up to build fleets of PHEVs and EVs using lithium-ion batteries as a principal power source. I've consistently argued that investing in objectively expensive lithium-ion battery company shares on the basis of testing decisions was dangerous. The reason for my caution is simple, a decision to test a new concept is very different from a decision to commercialize a proven concept and failures in the preliminary testing stages are far more common than successes. In other words, automakers frequently spend a huge amount of money to test a new technology before deciding, "this simply doesn't work for us."
Yesterday and this morning we learned that after secretly testing a fleet of 126 Prius Hatchbacks with lithium-ion battery packs for three years, Toyota Motors (NYSE:TM
) has decided to stick with its tried and true nickel metal hydride, or NiMH, battery technology for the foreseeable future.
The first report appeared yesterday on hybridcars.com
, one of the most authoritative sites on the Internet for hybrid car news. The second report appeared today on Bloomberg.com
, one of the most authoritative financial sites on the Internet. Commenting on the Toyota tests, Menahem Anderman, president of Advanced Automotive Batteries said. "We now know that a lithium-ion battery can work; that's not really the question," he said. "Cost is critical, and we still don't know enough about long-term durability."
- Cost – The current cost of Li-based batteries is approximately a factor of two too high on a kW basis. The main cost drivers being addressed are the high cost of raw materials and materials processing, the cost of cell and module packaging, and manufacturing costs.
- Performance – The barriers related to battery performance include a loss in discharge power at low temperatures and power fade over time and/or when cycled.
- Abuse Tolerance – Many high-power batteries are not intrinsically tolerant to abusive conditions such as short circuits (including internal short circuits), overcharge, over-discharge, crush, or exposure to fire and/or other high-temperature environment.
- Life – The calendar life target for hybrid systems (with conventional engines) is 15 years. Battery life goals were set to meet those targets. A cycle life goal of 300,000 cycles has been attained in laboratory tests. The 15-year calendar life is yet to be demonstrated. Although several mature electrochemistries have exhibited a 10-15 year life through accelerated aging, more accurate life prediction methods need to be developed.
My reading of Toyota's decision to stick with NiMH batteries for the Prius is that they were happy with the performance of the lithium-ion battery packs, unhappy with the battery pack cost and uncertain about the battery pack's long-term durability (e.g. abuse tolerance and life). I find it more than a bit telling that a 3-year, 126 unit test was not enough to satisfy Toyota that lithium-ion batteries would have a 10-year life.
Toyota's decision to stick with NiMH is not a death knell for lithium-ion batteries. Toyota still plans to build and test fleets of PHEVs and EVs using lithium-ion battery packs and most of the other automotive manufacturers will do exactly the same thing. It's all part of the normal product development cycle and entirely consistent with the process described in 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.
Toyota's decision does tell us, however, that it may be a long time before the major automakers have enough performance data to make a well-reasoned decision to commence large-scale commercialization of PHEVs and EVs. That day may indeed come, but it won't come without adequate testing. After all, automakers understand the meaning of the phrase "warranty repair costs" far better than most and there isn't a snowball's chance in hell that they'll assume warranty risks without adequate long-term testing.
I firmly believe that lithium-ion battery technology holds tremendous potential in the energy storage markets and that like most new technologies, the existence of new technical capabilities will give rise to new markets and new opportunities that we can't yet imagine. That being said, I think it's wasteful arrogance when the highest and best use people can imagine for a great technology like lithium-ion batteries is moving them and 3,000 pounds of steel to and from work.