The Electric Car Battery Battle

Includes: HMC, NIS, TM
by: Jim Kingsdale

The next five years will clearly be a transition period from the petro-car to the electric car.  But this transition will feature an interesting horse race between two different battery technologies, a lithium-ion (Li-on)  or an upgraded Nickel Metal Hydride [NiMH] powered battery. 

Apparently Toyota (NYSE:TM) and Honda (NYSE:HMC), the two currently leading makers of transition hybrid cars, do not think the Li-on is ready for prime time yet.  They reportedly are going with an upgraded NiMH battery.   Carlos Ghosn, on the other hand, is taking Nissan (NIS) directly into what he thinks will be the ultimate answer, a Li-on powered electric car with a short stop in hybrid-land, but still powered with Li-on.

This report offers a preview of Ghosn’s all-electric Li-on powered dream car.  It also confirms that Ghosn is a realist who understands that the all-electric vision that he has embraced so fully along with Project Better Place needs a hybrid transition period.  To solve that problem he has purchased a power plant from Toyota.  But apparently deciding that the transition will last for quite a while, he is also now building his own hybrid, but still one with a Li-on battery.

On “the outside”, as they say in horse racing, is an untested potential game changer, the ultracapacitor powered car by EEStor/Zenn.  That has to be considered a very long shot at this point since so little is really known about it.  But this will be a long race and there is certainly time for a twist that is not currently anticipated. 

The largest stakes in this horse race are not so much which battery is best or whether the electric vehicle [EV] or hybrid electric vehicle [HEV] is ultimately proved better (it might be both).  Rather it is whether the global fleet can be taken off petroleum faster than the decline of old oil fields causes the amount of crude available to the market to become truly scarce as predicted by megaprojects analysis. 

Honing in on just the battery issue  though, this horse race bears on the fortunes of companies that produce lithium, e.g. (NYSE:SQM), and Rare Earth Elements that are used in the NiMH battery.  It is entirely possible that both will be winners.  I have re-established a position in SQM now that it has fallen to my target of the mid-30’s.