Battery Investing for Beginners, Part 4 64 comments
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In "The Sixth Revolution: The Coming of Cleantech (.pdf)," Merill Lynch strategist Steven Milunovich heralded cleantech as a new investment theme and forecast a period of gut wrenching change followed by an age of plenty. A few days later venture capital icon Vinod Khosla warned his audience “500 million people on earth enjoy a lifestyle that 9 billion people will want in 2050.” The differences between these two informed viewpoints are more than a little stark, but they highlight a frightening truth about cleantech: for the first time in human history the fundamental drivers of a technological revolution are constraints rather than opportunities. In this final installment of my series on battery investing for beginners, I want to explain why cost considerations and the transitory nature of government policies should temper the optimism of energy storage investors.
Warren Buffett advocates investing in companies you understand, companies that that sell products and services you know, trust and use. Unfortunately, that advice is almost impossible to follow in cleantech because most of the players are new, few can point to a long and successful operating history and the principal disclosures investors rely on are forward-looking statements from people that are trying to build a company in an emerging industry; people who are by nature optimists. Any time you put an optimist's forward-looking perspective into the hands of an optimistic reader, the only possible outcome is optimism squared and that's a dangerous equation.
In 1999, Toyota (TM) introduced a radical concept called the Prius, a hybrid electric vehicle, or HEV, that used recuperative braking, stop-start idle elimination, electric only launch and electric boost to reduce energy waste and slash fuel consumption by roughly 40%. Over the last 10 years, the Prius has progressed from an eco-bling status symbol to a mass-market product. In the process it won the loyalty of consumers and forced other automakers to develop competitive vehicles. The following 10-year graph of domestic HEV sales comes from hybridcars.com and shows how unit sales and product offerings ramped up over time.
US hybrid market historical sales (1999 – 2009)
This chart shows a normal market for an innovative product that evolved organically in response to consumer demand. If not for the current recession, it's easy to see how HEV sales could easily have been in the 500,000 to 700,000 vehicles per year range by now. The HEV is a winning concept that can only get more popular as the base of satisfied customers broadens and gasoline prices rise.
The unspoken truth about PHEVs and EVs is that the fundamental driver for change is government compulsion, not customer demand. The automakers know that they can't possibly meet new U.S. CAFE standards and European CO2 emission standards without including a high percentage of HEVs or a more modest percentage of PHEVs and EVs in their sales forecasts. The government's theory seems to be "if you build it they will come." While there is a high degree of automaker skepticism over whether the average consumer can or will pay an 80% to 100% premium for a PHEV or EV, the automakers all know that if they spend the money to build and introduce PHEVs and EVs and consumers refuse to buy, they'll have the perfect cover when the regulators come calling. Greenwash is expensive, but it's not as costly as being excluded from major markets or finding another line of business.
The hard question I think investors need to ask themselves is, "do you plan to spend at least $40,000 to buy yourself a PHEV or EV?" Unless your answer is an enthusiastic yes, you need to question whether investing in a battery company that has tied its future to the success of PHEVs and EVs makes sense.
My favorite part of the blogging experience is the lengthy debates I get into with informed and opinionated readers. They add a depth and balance I could never achieve on my own. They also provide wonderful insights into what people believe the future holds. The following is a compendium of a few cherished mythologies and incontrovertible realities that I’ve seen time after time in reader comments.
Cherished Mythology lithium-ion batteries are expensive today but they'll get cheaper with economies of scale.
Incontrovertible Reality The lithium-ion battery industry already sells $7 billion of products annually and big companies like Sony (SNE), Sanyo (SANYY.PK), Panasonic (PC), LG Chem, Toshiba (TOSBF.PK) and Johnson Controls (JCI) have done a great job of optimizing their production economies. According to a presentation by RolandBerger Strategy Consultants at last month's Frankfurt Auto Show, between 65% and 75% of the manufacturing cost for lithium-ion batteries represents the purchase price of raw materials and another 20% to 30% represents the cost of increasingly sophisticated and expensive equipment and factories. The balance goes for energy, labor and overhead. The only factors that can reasonably be expected to significantly reduce costs are generational improvements in battery chemistry and manufacturing technology.
Cherished Mythology PHEVs and EVs have limited range for now, but they'll have more flexibility in the future.
Incontrovertible Reality A typical PHEV or EV will get about four miles of travel range for each kWh of useful battery capacity. A comparable car with an internal combusion engine would get at least 28 mpg. In a normal car the fuel tank is cheap and the fuel is expensive. In a PHEV or EV the dynamic is reversed and the battery pack is the functional equivalent of a fuel tank that costs $7,000 per gallon of capacity (28 mpg/4 miles per kWh @ $1,000 per kWh). Once you buy the tank, filling it is dirt-cheap. Under current economic conditions long-range PHEVs and EVs can never be cost effective and the only way to make the economics come close to working is to buy no more battery capacity than you plan to use every day.
Cherished Mythology PHEVs and EVs will help reduce America's dependence on imported oil.
Incontrovertible Reality A PHEV or EV will use 10 times the battery capacity of an HEV. If the batteries are used in one PHEV or EV, national gasoline consumption will fall by 400 gallons per year. If the batteries are used in 10 HEVs, national gasoline consumption will fall by 1,600 gallons per year. In truth, PHEVs and EVs will sabotage America's drive for energy independence instead of supporting it.
Cherished Mythology PHEVs and EVs will help reduce America's CO2 footprint.
Incontrovertible Reality A PHEV or EV will use 10 times the battery capacity of an HEV. If the batteries are used in one PHEV or EV, national CO2 emissions will decline by 190 grams per mile, or roughly 2.375 metric tons per year. If the batteries are used in 10 HEVs, national CO2 emissions will fall by 135 grams per mile, or roughly 16.875 metric tons per year. Until we stop generating electricity with coal, PHEVs and EVs will not significantly reduce CO2 emissions.
Cherished Mythology PHEVs and EVs will become a dominant automotive technology in the next decade.
Incontrovertible Reality In its 2009 Annual Energy Outlook, the DOE estimated that PHEVs and EVs would account for 1.26% of the new light duty vehicle sales in 2020 and grow to 2.28% by 2030. At the Frankfort Auto Show, Roland Berger Strategy Consultants forecast the following market penetration rates for the principal automotive powertrain technologies in 2020:
| USA | Europe | Japan | China | |
| Internal combustion | 23% | 6% | 17% | 48% |
| Micro hybrid | 51% | 67% | 60% | 30% |
| Mild hybrid | 5% | 6% | 9% | 4% |
| Full hybrid | 8% | 1% | 6% | 2% |
| PHEV | 9% | 15% | 4% | 10% |
| EV | 4% | 5% | 4% | 6% |
Cherished Mythology
Lithium-ion batteries will be needed for mild, micro and full hybrids.
Incontrovertible Reality Advanced lead-carbon batteries and systems that combine lead-acid batteries with supercapacitors are up to 75% cheaper than lithium-ion batteries and offer acceptable performance in the micro and mild hybrid vehicles that Roland Berger says will account for 56% of U.S. auto sales, 69% of Japanese auto sales and 73% of European auto sales in 2020. While lithium-ion batteries will undoubtedly be used in some luxury hybrid vehicles, they're not expected to be a major factor in the mass markets for affordable light duty vehicles.
Cherished Mythology
Revenues will ramp up rapidly for lithium-ion battery manufacturers over the next decade.
Incontrovertible Reality
There is no substantial unused lithium-ion battery manufacturing capacity anywhere in the world and future revenue growth will be directly tied to the construction of new factories that typically take three years to plan and build. The only energy storage device manufacturers that already have excess manufacturing capacity are in the lead-acid group. As a rule of thumb, lithium-ion battery manufacturers plan on $1 in capital spending for every $1 of incremental sales revenue. In comparison, lead-acid battery manufacturers generally plan on $1 in capital spending for every $3 to $5 of incremental sales revenue.
Cherished Mythology
New battery technologies will take revenue away from established manufacturers and hurt their bottom lines.
Incontrovertible Reality
History teaches that increased energy efficiency leads to increased energy consumption and new technology inevitably increases aggregate demand by facilitating the development of new applications that were impossible using old technology. For the foreseeable future, demand for all classes of energy storage devices will increase at rapid rates and the only losers will be companies that can't bring a competitive product to market.
Lithium-ion batteries are a very valuable technology and their future importance to the cleantech revolution cannot be overstated. Nevertheless we've all seen the disastrous consequences investors suffered from ill advised governmental policies to encourage the use of ethanol, the wonder fuel of the new millennium. In a slideshow presentation at a recent clean air conference one auto industry executive described government's "technology du jour syndrome" and offered the following table to prove his point.
| 25 years ago | Methanol |
| 15 years ago | Electric vehicles |
| 10 years ago | HEVs and Electric vehicles |
| 5 years ago | Hydrogen Fuel Cells |
| 2 years ago | Ethanol |
| Today | PHEVs and Electric vehicles |
| 2011 | What’s next? |
It's enough to make you go Hmmm.
As a young lawyer in Houston, my first mentor taught me that you can describe every oil and gas deal with a venn diagram that consists of three concentric circles. The outer circle represents the seller's expectations, the middle circle represents the buyer's expectations, and the innermost circle represents the actual outcome. In the market for energy storage stocks I worry that the venn diagram is distorted because investor optimism exceeds industry expectations by a wide margin. These are conditions that can give birth to bubbles.
My favorite story of unbridled optimism begins with a straight-laced father who thinks his son is overly optimistic and decides to teach the boy a lesson by telling him that a load of manure is his birthday gift. The manure is delivered and dumped in the driveway and the father puts a big red bow on top of the pile. When the son gets home from school, he promptly dives headfirst into the manure pile and starts digging. When the surprised father asks "What's going on?" the boy promptly replies, "There has to be a pony in here somewhere!"
The good news is there are several workhorses in the pile. The bad news is that none of them are the pretty ponies that the government, the mainstream media and the environmental activists are praising with quasi-religious fervor. Unless investors are willing to spend a huge amount of time studying deathless tomes on energy storage, the only rational way to invest in the sector is through a diversified portfolio of cheap and cool stocks.
This will be my last blog for a week or so because I'm scheduled to give a luncheon speech at Sandia National Laboratories’ EESAT 2009 Conference in Seattle on Tuesday. In connection with the speech I'll have an opportunity to attend three days of high-level presentations on electrical energy storage applications and technologies. Hopefully I'll return with some new insights that can help make readers better investors.
DISCLOSURE: None
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This article has 64 comments:
seekingalpha.com/autho...
"Battery" is a term that has creeped into the everyday lexicon for all goods, from the alkalines in the TV remote, to large grid storage batteries. A battery is made up of a number of cells, which is what you are referring to.
There is, however, a difference between the cell-level costs and the battery-level costs. At the cell-level, the price will drop for larger format cells, just not drop the orders of magnitudes that people claim during the "economies of scale" debate (which, from experience, I find offensive, laughable, and somewhat of a herd mentality all at the same time). At this level manufacturing equiptment and raw materials make up almost all of the associated costs. Labor is relatively insignificant.
At the full battery level, i.e. any number of cells >1 put together in some fashion, there is significant room for improvement in costs. A large part of this still is labor intensive, with significant less materials overhead.
As a short, rant-ending summary:
All cells can be considered batteries, but batteries ARE NOT cells.
China's Electric Car MarketChina in the spotlight at the Frankfurt Motor Show
By Brian Hicks
Wednesday, September 16th, 2009
As you read this, the future of transportation is taking place in a convention hall in Frankfurt, Germany.
It's called the Frankfurt Motor Show. . . and insider reports indicate electric cars are taking over the world like an army of robots, hell-bent on revenge against their flesh masters.
Every company represented at the show is featuring their version of an electric/hybrid automobile. Even high-end brands like Porsche and Ferrari are going electric.
But while SAAB, BMW, and Mercedes size-up each others' electric motor, the Chinese are the ones that are the talk of the show.
The bottom line: China's car market is the Holy Grail.
While the U.S. and European dealers have to create tempting incentive plans to get cars off their lots, Chinese dealerships literally have waiting lists of customers who want to buy cars and are willing to take a spot in the queue.
The potential numbers are mind-boggling.
Freya, I was reading an article last week about 3 billion people in the wired world and how every ten cell new phones in the developing world increased GDP by $0.59 per person. This all ties back to my fundamental theory that constraints will drive cleantech and the most important thing we can do is minimize waste. I don't talk about the Chinese battery manufacturers influencing the US market because I'm convinced they'll have way too much business at home and will likely be subject to export restrictions as the Chinese government comes to grips with skyrocketing domestic demand. You can't increase the number of consumers from a few hundred million to a few billion without creating monstrous shortage of almost everything. Until we adjust to that new normal and change our wasteful ways, I suspect things will be unpleasant.
www.mobilemag.com/2009.../
www.2greenenergy.com/r.../
On Oct 04 10:37 AM William Taylor wrote:
> John, do you have any comment on this article about IBM and lithium-air-oxygen
> batteries? They seem like a real game changer!
>
>
> www.mobilemag.com/2009.../
On Oct 04 08:51 AM John Petersen wrote:
> MRTTF, I never consider anything you have to say nit-picking, rather
> it's clarification from somebody who knows far more about the detail
> than I. I'm very grateful that you take the time to read, comment
> and expand where necessary.
>
> Freya, I was reading an article last week about 3 billion people
> in the wired world and how every ten cell new phones in the developing
> world increased GDP by $0.59 per person. This all ties back to my
> fundamental theory that constraints will drive cleantech and the
> most important thing we can do is minimize waste. I don't talk about
> the Chinese battery manufacturers influencing the US market because
> I'm convinced they'll have way too much business at home and will
> likely be subject to export restrictions as the Chinese government
> comes to grips with skyrocketing domestic demand. You can't increase
> the number of consumers from a few hundred million to a few billion
> without creating monstrous shortage of almost everything. Until we
> adjust to that new normal and change our wasteful ways, I suspect
> things will be unpleasant.
Have a good trip to EESAT - I can not make it this time.
MRTTF, you are right - there are a lot of cost reduction on the battery level to be had. Until we narrow down on standard sizes and standard electronic interfaces, there will be a significant labor component and specialized material component.
John, the material cost reduction is already happening with the FePO4 and MnO batteries. The price projections for the Nissan / NEC EV battery are very attractive and can compete with advanced lead acid on cost per cycle according to the data I got from NEC.
John - Your articles greatly appreciated and they have brought clarity to use of existing technologies. I recently read that Toyota agrees with you analysis on Lithium ION.
On Oct 04 10:37 AM William Taylor wrote:
> John, do you have any comment on this article about IBM and lithium-air-oxygen
> batteries? They seem like a real game changer!
>
>
> www.mobilemag.com/2009.../
While john is right on some points, he is not on many.points. As John removes people who don't agree with him we'll see how long this stays up.
First Buffet is right, if you don't understand something you shouldn't invest in it. I and my other EVers understand batteries because we use them every day.
Every production EV built has been bought, most far before they have been made. The brightest spot is A Better Place just ordered 100k Nissan EV's. A Better Place is a battery swap/leasing company giving EV's unlimited range. Worth an investing look.
PHEV's have unlimited range. Soon as powerful enough charging , swapping stations are up, other EV's will too.
Not enough EV's, PHEV's will be built for yrs to get anywhere near taxing battery production. And those that are planned are already sewn up. In fact it's lack or orders that has hampered production, not capacity. There are many Lithium battery plants now that are way under capacity and others being built.
EV's will not cost $40k except for the first few and not even then in most cases. Likely by 2012 they will be under $20k. Nissan in which you lease your battery by the mile are likely to cost the same or less than ICE's because they are far more simple with the motor only having a couple parts and no transmission needed. All the rest is the same. The Electronics is cheap and getting cheaper.
Whether HEV's uses less battery is a non issue with many. And John uses what he thinks is good pricing from what seems good sources but is not to prove his point. EVer's already pay far less, $.30/wt for Lithiums. I've proven this with sources.
Plus a good EV in 3-4 yrs will use far less Wt/mile, dropping to 100-150wt/mile. Our EV's already use that. The most successful EV will be a lightweight, aero commuter car with 2 seats, not 4 + passenger cars for a while. But most car companies don't want successful EV's or small cars so that won't happen for a while.
No car company has said they were interested, much less use advanced Carbon Lead batteries and none are available. Maybe in the future but not in 3 yrs for sure at the earliest used in HEV's as they would need testing. By then my opinion Lithium will be cheaper.
In my view I don't see much good investing in batteries because there is little market for them for the next 4 yrs and a very large number of companies trying to sell theirs which will make a bloodbath soon as they all scramble for the very few orders out there.
After 4 yrs when EV's, PHEV's and utility, home electric storage orders start rolling in then yes, batteries will be a huge but in a competitive market with little profit margin.
jerry, if this were true then why are there so many projects going on right now that are indeed using advanced Lithium-ion battery systems? Perhaps you mean huge production orders - but obviously these can only come from "proof of concept" projects which are now in development. If battery developers and manufacturers wait 4 more years until there is huge demand for these products they might as well exit the business now!
Sometimes you logic seems clouded to me ? Oh, and I have never seen John "remove" a post either. In fact I don't believe he has the power to do that anyway, just to be fair on that issue.
I remember when I worked for Litton Ind. in the late 50 s reading about robots made in USA that would not sell to major plants but were finally taken up by Japan which then revolutionized production lines in Japan. I also remember when Italian steel mfg introduced continuous cast rolling mills also rejected here by our steel mills as not practical. This process was then adopted by Japan and Korea.
My point unless the US manufacture s wake up all your green products will be imported from China and other Asian countries
Toyota/Nisssan/Honda
None of the Engineers at these companies appear to know that their efforts are doomed from the start.
I mention Nissan because they are building a New Lithium Battery plant in the UK. They don't have a clue that they are wasting money as well.
What's really interesting is the amount of Lithium available in the earth's crust. Is Chlorine Scarce?
> jerrydd wrote: In my view I don't see much good investing in batteries
> because there is little market for them for the next 4 yrs and a
> very large number of companies trying to sell theirs which will make
> a bloodbath soon as they all scramble for the very few orders out
> there.
>
> jerry, if this were true then why are there so many projects going
> on right now that are indeed using advanced Lithium-ion battery systems?
> Perhaps you mean huge production orders - but obviously these can
> only come from "proof of concept" projects which are now in development.
All the present orders are only enough for a couple factories. There are many more factories that just don't have enough orders and many more factories being built. The proof of concepts stage still has yrs to go as most are just getting started.
I don't see over 200k EV/PHEV's built in the next 3 yrs and that is only 1 factory's worth at 66k/yr. Even if 3 factories are needed that still leaves 50-100 factories fighting for a very small market.
As for utility/home storage regular lead is now at under $100/kwhr is the target price and I don't see Lithium hitting that for yrs..
> If battery developers and manufacturers wait 4 more years until there
> is huge demand for these products they might as well exit the business
> now!
Yes and many will. A bunch will because of just not good enough product and many of the rest from not enough orders. Probably only 1/3 will survive.
>
> Sometimes you logic seems clouded to me ? Oh, and I have never seen
> John "remove" a post either. In fact I don't believe he has the
> power to do that anyway, just to be fair on that issue.
Several of my posts have been deleted when I questioned the viability of Carbon Lead batts harshly and where is davewmart, others who use to post here who also disagreed with John?
This is the kind of insight that I keep asking John to provide in his blog and the reason that I stick around here - to keep him honest as I really do respect this man's insight and his influence on this most important sector.
Best wishes on your spot next week, and keep in mind there is a big world of opportunity waiting for our children to develop. Us old folks might not buy green bannanas, but our children certainly will.
It will take the U.S. at least 5 years to even catch up with new manufacturing plants now being conceived by A123 and JCI using big government grants they recently won. Once online I believe we, as an industry, will have a chance of acheiving parity with Asia, but as I am getting older (not younger) I will have to put my production into Asia and not into the U.S. And we are an advanced Lithium battery developer and manufacturer.
We have no other choice here. I have no fear of a shortage of Lithium however and I think this subject is overworked and at this point is a "strawman" for the advanced carbon battery makers to trot out in place of actually showing the public what they claim to be able to do for 1/3 the price of the Lithium battery companies.
earth2tech.com/2009/09.../
Well, thats just the point. On the "show me" stage, we have the the Lithium Battery makers and their plans for the Future. They Are installing Product.
On the Lead/carbon front, all I've heard from John for about a Year is "Just Wait". Its coming.
I may as well wait for Zenn's "its coming".
As for the cost of lithuim battery raw materials:
Engineers will make History repeat itself (lithium prices will plummet again): "Lithium's boom had begun in earnest just a year before, when Sony (nyse: SNE - news - people ) launched its first generation of lithium-ion batteries for consumer electronics. By the end of 1991 Sony was making 100,000 a month. SQM began selling lithium carbonate in late 1996,
and within a matter of weeks, lithium carbonate prices fell by a third, to $2,000 a ton. The American lithium industry vanished overnight."
www.forbes.com/forbes/...
So much for the 75% of the battery cost being in the raw materials...that will be a myth at the end of the first year of a lithium battery vehicle on the market.
William Taylor, IBM’s work on lithium-air batteries is intriguing, but the typical development path in this sector is 8 to 10 years to move something from a technology that can be demonstrated by PhDs in white coats to a technology that can be manufactured in volume at a reasonable cost by guys in gimme caps.
Don Harmon, I agree wholeheartedly that change is both unavoidable and essential if we are going to move from where we are to where we need to be. I focus on a narrow list of companies that people can invest in because they’re the companies people can invest in. It doesn’t make the companies that people can’t invest in less important, it just accepts the limitation and moves on.
Jerrydd, EVs will always cost $40,000. Leasing is a financing tool for batteries, it doesn’t change the basic cost of the batteries. Unless and until there are massive improvements in battery technology, the PHEVs and EVs will not work as a matter of pure economics. There will be people who buy for eco-bling value and there will be people who will buy for access to the HOV lanes. But all of those decisions will be based on something other than pure cost comparisons.
We’ve ha the battery cost argument many times and I’ll not disagree that you can find cheaper products from thundersky and other Chinese companies. Those products will not be used, however, by top tier automotive OEMs that have corporate reputations, warranty concerns and product liability concerns. Their boards of directors and lawyers won’t let them. The things that you can do as an individual have little or no bearing on what a multi-billion public company can do.
I have no power to delete posts from anyone. I do, however, have the power to report behavior that I find abusive. I don't care if readers disagree with me, but I will report commenters who are abusive toward other readers. The decision to then keep a comment up or delete it rests with the editorial staff of Seeking Alpha.
Freya, the major OEMs are in a no risk position. If they build PHEVs and EVs and consumers buy them everybody will be happy. If they build PHEVs and EVs and they flop, the consumers will be happy and the OEMs will be able to tell the government “we tried your way and it didn’t work – go find somebody else to abuse.”
The amount of something in the earth’s crust is interesting but irrelevant. The question is the amount of something in concentrated deposits that can be economically mined and processed into a useful raw material. There’s a metric ton of gold in a cubic mile of sea water, but that abundance does not make extraction and refining economic.
On Oct 04 07:31 PM Longinvestor wrote:
> Fact: The Chevy Volt gets 230 mpg in the PHEV mode and 100 mpg in
> the HEV mode. (HEV mofe means never plug it into an outlet, just
> run it on gasoline).
>
> As for the cost of lithuim battery raw materials:
> Engineers will make History repeat itself (lithium prices will plummet
> again): "Lithium's boom had begun in earnest just a year before,
> when Sony (nyse: SNE - news - people ) launched its first generation
> of lithium-ion batteries for consumer electronics. By the end of
> 1991 Sony was making 100,000 a month. SQM began selling lithium carbonate
> in late 1996,
> and within a matter of weeks, lithium carbonate prices fell by a
> third, to $2,000 a ton. The American lithium industry vanished overnight."
>
> www.forbes.com/forbes/...
>
> So much for the 75% of the battery cost being in the raw materials...that
> will be a myth at the end of the first year of a lithium battery
> vehicle on the market.
And as far as world price of some other commodities goes, if China now produces/consumes 1/2 of the world's steel production, why is the price of steel/iron ore not crazy high? (particularly with the Vale / BHP Rio market share) The answer is that some commodities are resistant to market manipulation/whereas others are not. Oil and coal are very similar minerals yet oil has high economic rent, whereas coal is low economic rent. Aluminum ore is relatively scarce but magnesium ores are everywhere. I would be more concerned about the Phosphate (fertilizer) component of a battery than the Lithium component.
On Oct 04 04:39 PM freya wrote:
> Don: I agree. But, So far its been all "show me" from John on the
> Zenn Stage.
>
> Well, thats just the point. On the "show me" stage, we have the the
> Lithium Battery makers and their plans for the Future. They Are installing
> Product.
>
> On the Lead/carbon front, all I've heard from John for about a Year
> is "Just Wait". Its coming.
>
> I may as well wait for Zenn's "its coming".
Good post Renim. Many commodities are in bubbles at the moment including lithium. They is little demand from EV batteries as there are few orders for them. Even consumer E products are down in demand.
Don't worry about phosphate as I'm sitting on the biggest deposit in the world here in Fla. Plenty left here. We supply about 50% of the world,'s needs last I checked.
As far as where China gets their steel ore, recycling ours!!
Thougfh Panasonic in a few days is coming out with a great one, a 25vdc, 58amps 1.5kwhr one with I think a built in regulator/BMS which if priced right will be great for EV's. It's designed to be series and/or paralleled to make up the pack size needed. If so and it costs under $750 or $500/kwhr it will be a big success. Finally a large respected company coming out with a usable product.
On Oct 05 07:25 AM renim wrote:
> Did anyone notice that SQM dropped its price for Lithium by 20% this
> week. The potential output from spodumene mines form a bit a ceiling
> for the price of raw lithium.
> And as far as world price of some other commodities goes, if China
> now produces/consumes 1/2 of the world's steel production, why is
> the price of steel/iron ore not crazy high? (particularly with the
> Vale / BHP Rio market share) The answer is that some commodities
> are resistant to market manipulation/whereas others are not. Oil
> and coal are very similar minerals yet oil has high economic rent,
> whereas coal is low economic rent. Aluminum ore is relatively
> scarce but magnesium ores are everywhere. I would be more concerned
> about the Phosphate (fertilizer) component of a battery than the
> Lithium component.
Hi Battman,
First Furukawa is the Battery manufacturer so not creditable. They also say their battery is a ultracap which is not possible as they work in totally different ways. Now their battery has a lot of surface area which is the old, tried and true method of getting high amps from lead, calling that supercap is rather a stretch.
EEStor has been doing that to as they are lithium cells, not supercaps. Speaking of EEStor, were they not suppose to be in production last month?. Just another of the long list of battery hype.
So until someone else tests it I remain skeptical.
As for the government giving East Penn money, nor Axion, you forget they are in Senator Murtha's district known for his pork.. This is just pork I'd bet. East Penn is a very good company. They build very good. cost effective lead batteries. I use them in my EV's.
I hope CL does work, I've just been waiting 8 yrs on them and still nothing!! But I've seen that one too many times before.
When they produce product for sale and it's independently tested, then I'll believe it. This is my test for all battery companies, not just CL's which no car company has ever been interested in I've heard of having asked many times before.
On Oct 05 09:43 AM battman wrote:
> John doesn't need me to stick up for him, but I do think it's important
> to say a couple of things. First off, with respect to "show me",
> Furukawa ran a Honda hybrid for over 100,000 miles using a version
> of Lead carbon, so someone has "shown you", you just choose not to
> see it. Secondly, the government felt it warranted a $34,000,000
> injection for Axion/Exide. I guess someone "showed them" something.
> You can pick and choose what you see, but don't pretend that YOUR
> bias is just you being impartial.
Why are all these companies like Axion and Eestor playing coy with the public? I have heard all the reasons put forth by the experts and I just don't buy it anymore. If these companies really have a great product then why is there nothing available from them for the market to evaluate & test.
One test of the Furakowa battery in a hybrid car which was paid for by the company who invented the battery is not going to cut it period.
Somebody please tell me why I should believe in Axion any more than I would believe in Eestor? No, don't give me the story about supply chain and how a new Lead Carbon battery doesn't have to prove itself......that also doesn't wash.
According to this article in autoblogGreen, the Panasonic offering will be using laptop cells - 18650 format and LiCoO2 cathode chemistry. Tesla uses a similar approach with 6,831 cells required for its 53 kWh battery packs. Compared to a LiFePO4 and LiMn2O4 cells in a prismatic package, LiCoO2 18650-format cells have higher specific energy, use expensive cobalt, are less stable, require more cooling and wiring interconnections but are available in much larger quantities from existing production lines.
green.autoblog.com/200...
yes the furukawa ultrabattery, is a rare beast, but it is also a government beast, CSIRO which developed it is the Australian government research arm, www.csiro.au/science/U... its as legit as you can get. they are famous for their science, not their commerce.
And yes it is both a battery and a capacitor.
Yes the Panasonic battery is a big step forward depending on it's price. Having such a quality company put these out for sale so those of us who want EV's is very good. They need to be under $750 or $500/kwhr to do that.
As a battery it will have to have a built in regulator/BMS which is critical to consumer Lithium battery packs.
Remin, a battery/cap combo would only be able to use at most 1/10 the cap capacity because of the way each works. Sorry but this does not make sense physics wise. I've been in electronics for 41yrs and they are not compatible in the same package.
Why is a cap must drop in voltage to 0 to get it's power out but the battery won't let it as it's difference between it's full and empty is only 10% voltage drop in lead batteries. Without very expensive electronics, they just can't work together. These are chemical cells, thus batteries with lots of surface area. Nothing new here as it's been done that way for a century with lead and other batteries to get more peak power.
To say they are supercaps is a scam.
On Oct 05 09:35 PM NorthernPiker wrote:
> jerrydd,
>
> According to this article in autoblogGreen, the Panasonic offering
> will be using laptop cells - 18650 format and LiCoO2 cathode chemistry.
> Tesla uses a similar approach with 6,831 cells required for its 53
> kWh battery packs. Compared to a LiFePO4 and LiMn2O4 cells in a prismatic
> package, LiCoO2 18650-format cells have higher specific energy, use
> expensive cobalt, are less stable, require more cooling and wiring
> interconnections but are available in much larger quantities from
> existing production lines.
>
> green.autoblog.com/200...
With LCO, the cooling is definitely critical. However, I would disagree about cooling of small cells in general. Using smaller cells allows for better heat dissipation than larger format cells. While I think that using LCO-based cells borders on insane for HEV applications, the idea to use small format, cylindrical cells does have merit.
a quick primer on combined battery/capacitors
v3.espacenet.com/publi...
v3.espacenet.com/publi...
www.sandia.gov/ess/Pub...
The core science is beyond dispute. One variant of lead-carbon chemistry has proven itself a serious challenger in applications where size and weight is not critical. So let's take the discussion back to the high level that you historically maintained.
My position is that the US economic powerhouse can no longer mortgage its future by importing 10 Million barrels of oil a day. This represents a $710 Million a day trade deficit that fails to be balanced. The longer the imbalance remains the weaker the US becomes and the closer its collapse becomes. The real question should be what is the true cost to the US of imported oil? The sooner the US is willing to get off the addiction the better chance it will survive economically. Remember it wasn’t that long ago that England was the world dominate power and before them France and Spain. All failed because they didn’t watch their bottom line… they went broke.
Taxes on gasoline need to be increased until the desire to import oil drops off to a level that can be economically sustained.
Failure to do it means the US will become a has been… like England, France, Spain and other empires before them.
I am a Canadian and always glad to sell oil to the US, but as are each other’s major trading partner what happens to the US will happen to Canada.
I wish to disclose that I work for a company with a competing technology to that of batteries and that LTL’s technology is disruptive that has a speculative component to it.
Having an already existing product line out on the open market for the world to evaluate is quite another story. Even if the Pcb battery makers have a built-in market for their product - it doesn't exclude them from demonstrating it to the public, does it?
You use this as a blanket to explain why they do not have that yet and to me that is also every bit as disingenuous.
On Oct 06 07:40 PM John Petersen wrote:
> Don, feeding the skeptics is more than a little disingenuous when
> you know as well as I that Sandia tested your LiFeBatt cell against
> the Ultrabattery in positive state of charge utility life cycle tests
> and Tom Hund published a slideshow presentation on the test results
> here:
>
> www.sandia.gov/ess/Pub...
>
>
> The core science is beyond dispute. One variant of lead-carbon chemistry
> has proven itself a serious challenger in applications where size
> and weight is not critical. So let's take the discussion back to
> the high level that you historically maintained.
People who point out the emptiness of the pretensions of powerful people and institutions are often compared to the child who says that the emperor has no clothes.
I mean no harm or ill will towards any of the new technolgies and in fact do believe that we need them all and every green tech energy source we can develop to move us away from dependence on fossil fuels.
I only like to level the playing field for those who tend to argue religiously or otherwise for certain technologies to succeed and others to fail based simply on market metrics. I am here because the level of discussion is generally on a much higher plane than many other blogs out there and precisely because John welcomes opposing viewpoints as long as we all respect each other and don't resort to flaming other posters.
This is the way a professional blog should be conducted. If I occasionally seem to dip into a negative tone I appreciate being told that and will always try to improve my communication skills as we all should do.
Thanks,
Don Harmon
Thanks for your introduction on the battery industry, which is very helpful.
I was wondering if you have followed the Vanadium battery technology. If you do, can you offer your thoughts on the future of this battery technology? What do you think the reasons of the failure of VRB (a former Canadian Vanadium battery company)? Thanks a lot.
Tao
web.worldbank.org/WBSI...~pagePK:64167689~piPK:...
Cherished assumption
The increase in commodity over the last 10 years indicates the world is running out out resources
Likely scenario
The cost of exploration/production of iron, copper, zinc, lead, lithium, magnesium, aluminum, REE, coal will continue to reduce when measured in manhours. Electric cars are 'front loaded' with costs that are on a declining cost curve.
Oil is excluded from the above list (but not the above graph), and could may increase in cost over time.
Sooner or later the life time cost of ICE (Internal COmbustion Engine) cars will go from being less than EV (Electric Vehicle) to being higher than EV. After that occurs, the transition to EV will be natural. By comparing the component costs of ICE to EV, this transition has occurred about 4 years ago, but the life span of the batteries are still be real world tested. This is the real force pushing EVs (not zero emissions or energy security).
this is the graph I was attempting to link to...
User497557 the vanadium redox battery has huge potential application, particularly in third world countries and some alternative energy applications. The VRB technology was sold to Prudent Energy, a Chinese company that may well decide to go public in the future. In the meantime, another competitor in the flow battery space that is selling at a very low market capitalization is ZBB Energy. They seem to have as close to a can't miss strategy as anybody in the business and have a clear potential for outsized returns as their market capitalization catches up with the peer group.
Renim, I have no doubt that some version of electric transportation will eventually become necessary, although I'm not sure that the current plans for PHEVs and EVs will ever make sense because of battery costs. More importantly, I think there's a real issue of whether lots of battery capacity in a single vehicle is the highest and best use of the batteries. It just seems wasteful when there are so many applications that get more economic value in return for each kWh of battery power. The nice part of that particular argument is that a free market will ultimately make the decision and if my theory is right, the lithium-ion battery makers are going to have too much business from high-end applications to fool around with PHEVs and EVs.
What you said about the cooling of small cells is correct generally, but not specifically for the Tesla:
"However, I would disagree about cooling of small cells in general. Using smaller cells allows for better heat dissipation than larger format cells."
For the specific case of the Tesla battery pack, many steel partitions are required to contain any thermal incident in any of the 6,831 cells to a limited number of its neighboring cells. These partitions limit the flow of air around the cells and necessitate the use of a complex water/glycol cooling system that, with the partitions and electrical connections, adds several hundred pounds to the weight of the Tesla Roadster.
www.teslamotors.com/di...
(It looks ideal for military and medical applications)
I would add some conjecture that the world's second largest computer chip company is about to get into electric cars...
Renim, I wish I had more high level contact in the auto industry because I'm not certain how serious the automakers are about PHEVs and EVs and I have grave questions about whether the small percentage of the population that can afford them will actually buy them. I'm skeptical enough that I wouldn't pay a premium to be part of the play but uncertain enough that I wouldn't take a short position either. In the end it's all good because everything that takes us a step closer to the goal has value.
The "mature segment" of the OEM automotive industry has no faith in the technology or the demand for PHEVs or EVs. The design and very limited production of such vehicles is entirely driven in the west by politics. If American, Japanese, and European car makers do not worship at the shrine of electrifciation they will be and have been punsished by governments allowing free market forces to overwhelm them. So long as they waste government resources on sillyness like the Chevrolet Volt they will be rewarded with high salaries (at the top level), but they know that as a reward they will also take the blame when either the technology or the market fails to live up to political expectations.
The Wall Street Journal today refers to the room temperature IQs of America's Congresspeople. The problem really can't be better analyzed.
On Oct 15 10:46 AM John Petersen wrote:
> Experienced, thanks for the link, it's always interesting to follow
> what people are working on. I'm inclined to agree with renim that
> this one is a long way from commercialization, but everything that
> takes us a step closer to the goal has value. Thanks for taking the
> time to read and comment.
>
> Renim, I wish I had more high level contact in the auto industry
> because I'm not certain how serious the automakers are about PHEVs
> and EVs and I have grave questions about whether the small percentage
> of the population that can afford them will actually buy them. I'm
> skeptical enough that I wouldn't pay a premium to be part of the
> play but uncertain enough that I wouldn't take a short position either.
> In the end it's all good because everything that takes us a step
> closer to the goal has value.
By the way, Great Western Minerals has a $10M warrant offering today. Thought you should know.
Smaller cells are easier to thermally manage than large format cells. The reason for such an elaborate system in the Tesla Roadster is the asinine cell choice. The possibility of something going wrong leads to the need for steel partitions and water/glycol active cooling.
It will always be easier for heat to dissapate from a small cell than from a large cell. That is not to say that it is impossible to do with a small cell, just harder.
On Oct 12 01:05 AM NorthernPiker wrote:
> John,
>
> What you said about the cooling of small cells is correct generally,
> but not specifically for the Tesla:
>
> "However, I would disagree about cooling of small cells in general.
> Using smaller cells allows for better heat dissipation than larger
> format cells."
>
> For the specific case of the Tesla battery pack, many steel partitions
> are required to contain any thermal incident in any of the 6,831
> cells to a limited number of its neighboring cells. These partitions
> limit the flow of air around the cells and necessitate the use of
> a complex water/glycol cooling system that, with the partitions and
> electrical connections, adds several hundred pounds to the weight
> of the Tesla Roadster.
>
> www.teslamotors.com/di...
As we turn the corner from the age of IT to the age of cleantech, all things old will be new again. The old line manufacturers that have fallen out of favor over the last 50 years will surge to prominence because of their unique ability to serve a booming global market with proven and cost effective products. The emerging manufacturers will have to prove themselves as young companies always do, but they will serve markets that were more properly though of a science fiction a few short years ago.
Energy storage is not a sector where historical performance has any meaning because completely new markets of unimaginable size are just now coming to prominence. For a deeper background of what was and what will be the following piece from Merrill Lynch strategist Steve Millunovich is priceless:
www.responsible-invest...