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2013 Ford Fusion Family - Customer Choice, Telematics, Lithium And Rare Earth Leadership
This city traffic is heavy and the parking space is tight. Like Luke Skywalker, I listen to "The Force" and I let go of the steering wheel. This 2013 Ford (NYSE:F) Fusion Hybrid then parks itself. With Active Park Assist it backs into the city parking space, spinning the steering wheel as it makes a perfect parallel park and while I sit hands-free. I watch on the 8-inch display as the rear camera captures the action. I do have to remember to work the brakes. If I get mesmerized with the automatic parking and forget to brake, the car will hit the car behind it.
This new 2013 Ford Fusion Hybrid is impressive to drive. It delivers 47 miles per gallon (MPG) not only on the highway, but also on city streets. This best-in-class MPG is the result of a new drive system, improved internal software, and a new Ford lithium-ion battery pack. This Fusion Hybrid assists me in a number of ways from parking to safety. When I touch the voice button, the conversation between car and me is natural thanks to Nuance (NUAN) technology. For example, I touch the voice button on the steering wheel and say "navigation destination California." The car replies, I then say "333 Battery Street San Francisco." I'm understood the first time, with no training. The destination correctly displays on the navigation map and I hear turn-by-turn directions while I drive. I don't listen to endless menus; I don't touch the screen. No "I'm sorry, I did not understand you."
The new 2013 Ford Fusion Family is loaded with telematics and safety features to make life easier for us in tight spots and intense traffic. The following options are available in Ford's Driver Assist Technology.
- Active Park Assist
- Lane-Keeping Aid
- Lane Departure Warning
- Adaptive Cruise Control
- Blind Spot Indicator
- Rear Camera
- Collision Alert
- Driver Alert
New Fusion Family Shows That Ford Listens to Its CustomersIn addition to test-driving several Fusion models, I join Ford's Chief Technical Officer Paul Mascarenas and key members of Ford's research, technology, and engineering teams such as Chuck Gray, Chief Engineer, Electrification, and Jim Buczkowski, Henry Ford Technical Fellow. Ford is advancing in several fronts:
The 2013 Ford Fusion is available in five drive systems to meet customer's mileage, cost, and driving preferences:
The new Ford Fusion gives car owners unprecedented choice in powertrains and fuel economy. The Ford Fusion can be offered with an efficient EcoBoost engine or as a hybrid with better mileage than any midsized sedan or as a plug-in hybrid that allows many trips to use zero gasoline.
More Lithium Batteries, Less Rare EarthsThere is concern that as hybrid and electric cars make us less dependent on oil from unstable and hostile countries, we become more dependent on rare earth elements from China. Among the rare earth metals used in nickel-metal-hydride batteries are neodymium, cerium, lanthanum and praseodymium, none of which are used in the new lithium-ion batteries which are standard on all new Ford hybrid and electric cars.
Additionally, Ford has reduced its use of dysprosium by approximately 50 percent in magnets employed in the Ford electric motors. Dysprosium is the most expensive rare earth metal used in Ford vehicles. This reduction is the result of a new diffusion process that is used in the magnet manufacturing process.
Ford will only use lithium batteries in all Ford hybrids starting in calendar year 2012 when it announces the new Focus using the Ford global C platform. Ford is currently second only to Toyota in global hybrid sales. Ford may be the first car maker to sell 100,000 cars annually that includes lithium batteries. When I lasted interviewed Nancy Gioia, Director Ford Global Electrification, she said that Ford has a 2020 goal of 10 to 25 percent of its vehicle sales including lithium batteries. Her best guess is that 70% would be hybrids, 20 to 25% plug-in hybrids, and 5 to 10% battery-electric. Everything from technology innovation to oil prices will affect the future mix.
Disclosure: I am long NUAN.
China Plans 220,000 EV Charge Points and 2,351 Battery Switch Stations
China will move to a more efficient lower carbon economy not only with electric cars and electric scooters. China is expanding electric transit and rail. For example, electric high-speed rail is targeted to expand by 29,000 miles between now and 2015. China high-speed rail is already more extensive than the mid-speed U.S. Acela system that supports daily riders in New York, Boston, Philadelphia, Washington DC and other Eastern cities.
Over the next five years, China will reduce its percentage of transportation that requires foreign oil for gasoline and diesel. China will also reduce the percentage of electricity generated by coal. By 2015, China will add:
China plans to lead the world in using renewable energy. Although the Japanese nuclear disaster occurred as the 12th Plan was being drafted, China appears to be moving ahead with Generation IV nuclear which it views as safer than the Japanese plants built over 30 years ago. For example, Huaneng, China, is proceeding with the construction of a 200MW high-temperature gas-cooled reactor according to the DB report. More cost-effective natural gas plants, however, may yet be substituted for half of the planned nuclear expansion.
$76.7 billion will be invested in new ultra high-voltage grid transmission to support the added capacity of new power according to the 12th Plan.
These investments will directly benefit China and support Chinese ambitions for Chinese global leadership in technology of the future. The 12th Plan identifies 7 Strategic Emerging Industries:
Disclosure: I am long TSL, YGE, MY.
Global X Lithium ETF Plays Growth of Electric Cars and Mobile Electronics
Currently, electric cars cost more to purchase than many gasoline-powered cars, but less to fuel. Electric charging is equivalent to fueling with gasoline at 75 cents per gallon in many situations. Nighttime charge rates are even lower.
In 2012, Ford (F) will deliver about 100,000 lithium battery packs in its electric vehicles, newplug-in hybrid, and in all hybrids. Nissan (NSANY) will bring on-line a new battery plant in Tennessee that can make 200,000 lithium battery packs annually for its LEAF and hybrids. These volumes, improved battery chemistry, and streamlined supply chains will drive down the cost of lithium batteries. Automotive lithium battery packs currently cost about $700 per kilowatt-hour. By the end of the decade, automakers are optimistic that they will lower the cost to $250/kWh, at which point electric cars will be less expensive to buy than most gasoline cars.
What do the financial markets make of lithium? To find out, I interviewed Bruno del Ama, CEO of Global X Funds. His exchange-traded fund, Global X Lithium ETF (NYSE: LIT), was launched on July 23, 2010, at 16. It has already soared to 20. For some investors, lithium is the new gold. 10 of the fund holdings are in lithium mining and processing companies; 10 in lithium battery makers.
The fund is dominated with large mining firms such as Sociedad Quimica y Minera de Chile (SQM), FMC Corporation (FMC), and Rockwood Holdings (ROC). The fund is not a dream for environmentally and socially conscience investors. These companies mine a range of metals, using energy intensive processes, chemicals, and put miners in harm’s way.
The fund’s largest lithium battery company holdings include Saft, Ener1, ABT, GS Yuasa, and A123. Saft in a joint venture (JV) with Johnson Controls supplies Ford for the Transit Connect Electric and Mercedes hybrids. GS Yuasa supplies the current Japanese EV leader, Mitsubishi; GS Yuasa is well positioned to be Honda’s supplier for new electric and plug-in hybrids. Ener1 is betting on the Think. A123 is supplying Fisker and non-automotive applications.
The fund does not include the battery companies most successful in lithium: NEC, Panasonic, Samsung, and LG Chem. These diversified giants are excluded because their lithium battery business is less than the 15 percent minimum to be included in LIT. NEC is in the AESC joint venture with Nissan. Panasonic supplies Toyota and Tesla. Samsung is in a JV with Bosch to supply makers such as BMW. LG Chem’s Compact Power is supplying lithium batteries for the Chevrolet Volt and the Ford Electric.
Scientific American reports a 500-year supply of lithium, compared with only decades of available cooper. Demand for lithium will increase as we expand from devices that only need one battery cell, to notebook PCs needing the equivalent of 8, to hybrid cars that use the equivalent of 125, to the Nissan LEAF, which uses the equivalent of 3,000.Reuters Lithium Facts
It would take 60 million cars to use the current annual production of lithium. Although there is plenty of lithium, prices will increase to keep up with the growing demand. Since a typical electric car battery pack only uses 4 pounds of lithium, the price will have little impact on the total battery cost.
There is no guarantee that today’s lithium ion batteries will be the leaders in future decades. Labs to start-ups are working on lithium air, zinc air, fuel cells, ultracapacitors, and hybrid energy storage. It is challenging to overcome lithium ion’s cost and scale advantages. More energy can be stored in an ounce of this metal than any practical metal alternative.
By 2020, the California Energy Commission forecasts 1.5 million plug-in cars on California roads. Clean Fleet Report forecasts 10 million for the USA. Cars, mobile electronics, and many applications will fuel the demand for the lightest of metals and create growth opportunities for the leading battery suppliers.
Disclosure: Long LIT