Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
The numbers are all over the place because people quote prices for cells and perhaps modules, but never quote prices for complete packs with cooling and required safety systems. The most common estimate of pack level costs for EVs is in the neighborhood of $600 per kWh, but I've been unable to find anything better than a rough estimate.
Since Axion does not manufacture an energy battery and dollars per kWh is only relevant in the context of energy batteries, I'm unwilling to devote a ton of time to researching meaningless metrics.
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
A fleet testing program with BMW would be far more important from a proof of progress perspective than it would be from a revenue perspective. Typical test fleet sizes run from 50 to 200 vehicles, which means that even a large test wouldn't generate more than $100,000 in revenue. The reason we want fleet testing is so that the world will know the PbC is in fact a contender in a multi-billion dollar market.
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
I'm not flashing immediately on what you might have read a couple years ago, but one of the more useful features of the SA platform is that they maintain a complete historical archive of all articles and comments. Mine is here:
The number I recall for Rosewater's retail price on the HUB was about $40,000, which is a lot to pay for a 12 kWh backup unless you're an audiophile who needs squeaky clean power to avoid tiny distortions. The meat and potatoes issue with backup system pricing isn't so much the batteries as the inverters, control electronics and system housings that frequently cost more than the batteries.
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
If you look at the Agrion website you'll see that they have a hectic schedule of planned conferences on a wide variety of issues. An e-mail I got this morning identified six events between now and the end of July. While active participation is important, they don't strike me as the kind of events that are likely to create immediate opportunities. Like all journeys through the valley of death, the path must be trod one step at a time.
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
The problem with price and margin expectations is that learning curve economies are so massive on new technologies like the PbC.
BCG has studied learning curve efficiencies for decades and developed an experience-based model that says the cost of value added manufacturing activities in a company or industry will fall by 20% to 30% for each doubling of cumulative production volume.
Since the PbC has two distinct cost components – an established process for manufacturing AGM batteries and a new process for manufacturing carbon electrode assemblies, you really need to bifurcate the cost analysis. The cost of manufacturing the AGM part won't change much over time because cumulative volumes in the industry are already massive. The electrode assemblies, on the other hand, should continue to see steep cost declines as Axion learns how to make them better and cheaper.
If you sit down and calculate a bill of materials, a PbC battery has roughly the same material cost as an AGM battery. The big difference boils down to the incremental value added cost of making the electrode assemblies. Since cumulative production volumes on the electrode assemblies are quite small, I think we're likely to see continued rapid progress on making the assemblies better and cheaper, which means that any price and margin expectations we create today are likely to be obsolete in fairly short order.
Historically batteries have been a commoditized business where price was the only thing that mattered. That dynamic is changing rapidly as users come to grips with the reality that storage is a critical system efficiency tool and the overall cost of shaving a few bucks on battery pricing can have a disastrous impact on system performance.
So far Axion has studiously avoided forecasts of product pricing and margin targets because the targets are moving so quickly. That being said there's little question that the margins on electrode assemblies will be higher than the margins on battery manufacturing, particularly in applications where the PbC is able to do the required work that competitive technologies can't do.
I agree that it would be wonderful if management could clearly state what they think future costs and margins will be. I just don't think that kind of statement would be meaningful or for that matter particularly helpful to either stockholders or potential customers.
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
I've joined the Agrion network but don't have much of a feel for how effective they are or are likely to become. The industry faces a huge number of challenges as manufacturers struggle to understand the needs and economic constraints of users and users try to find a way forward. It's like everybody knows that the needs are immense and nobody really understands the best way to respond to the needs. Anything that helps minimize the role of imagination while promoting real economic solutions to real economic problems is good. While I believe that grid-based solutions will eventually be a massive market, it's a market that will be slow to develop and may well run down several blind alleys before everybody develops a good understanding of the distinction between technically possible and economically sensible.
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
I think grid based storage is an incredibly tough business, but I'm confident that the team is taking a rifle approach to profitable business instead of relying on a scattergun loaded with loss leaders.
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
Axion has already completed four years of validation testing with BMW and three years of double redundant testing with NS.
BMW is reportedly pushing Axion to partner with one of its first tier battery suppliers so that it won't face a sole source issue.
NS has bought the first set of batteries to get the 999 back on the rails and is reportedly planning to do an over the road locomotive after it finishes work on the NS 999. The locomotive has been in one of the work bays in Altoona for several months, which leads many to speculate that something's wrong. While I tend to think it's just an obsessive desire to avoid another high profile failure, the speculation is pretty rampant.
The shortest route to visible sales is probably ePower, which has built a series hybrid Class 8 tractor, tested the PbC in one of them and ordered batteries for a second. Since their market is trucking companies that do major overhauls every three to five years and the cost of the hybrid retrofit is comparable to the cost of a conventional retrofit, ePower could grow like a house afire if the truckers like the performance and economy.
The bottom line is I can identify several applications that could take off within the two-year window including BMW, NS and ePower.
I've been involved with Axion since 2003 and am delighted that the battery is proving itself to be everything we hoped it could be. Axion has not only developed the battery technology, but it's invented all of the equipment and processes necessary to manufacture the battery. Now it's just a matter of waiting while obsessive compulsive customers do all the things they have to do before committing to a new technology.
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
Stefan> While everybody uses $ per kWh as some sort of magic incantation, it is without question the most meaningless metric in the battery industry unless you happen to be designing an electric car.
The typical automotive battery is a great example. It may store 500 to 1,000 Wh of energy, but the system never uses more than 1% to 2% of that energy. The battery is sized like it is because of CCA requirements.
For better or worse the PbC is not an energy battery. Uneconomic grid applications like renewables time shift and diurnal storage will never select the PbC. Profitable applications like renewables smoothing and frequency regulation may. In any event grid will be the slowest market to develop because the customers don't have a clue about their needs or their value proposition.
I have to smile every time management talks about islands because those discrete markets have immense potential. The reason is simple, most islands generate their power from oil and any time you compare the cost of oil fueled electricity with the cost of storage, storage wins handily.
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
Despite the rumor to the contrary, lithium is not significantly resource constrained. Production can be ramped quite easily to whatever levels the world needs. The best article I've ever seen on the subject is here:
Cobalt, on the other hand, is incredibly constrained, one of the most useful technology metals on the planet and a key metal for all lithium ion chemistries except iron phosphate and titanates.
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
It's important to remember that the undercut Axion bids were based on pricing before the automated sheeting line was commissioned in March of this year. Based on my back of the napkin calculations, it looks like automating the sheeting process stripped about 80% of the labor cost out of PbC battery production. FWIW ePower is hearing talk of price reductions in the 20% to 30% range as they ramp volume.
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
Six miles is a pretty easy bike ride and could be a lot of fun on fair weather days. You might want to give it a try. I did in my mid-40s and found that it was every bit as fun as it was in my early teens.
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
Since Axion does not manufacture an energy battery and dollars per kWh is only relevant in the context of energy batteries, I'm unwilling to devote a ton of time to researching meaningless metrics.
Axion Power Concentrator 245: June 19: Axion Power Reports First Quarter Results For 2013 [View instapost]
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
http://bit.ly/pYHjyh
The number I recall for Rosewater's retail price on the HUB was about $40,000, which is a lot to pay for a 12 kWh backup unless you're an audiophile who needs squeaky clean power to avoid tiny distortions. The meat and potatoes issue with backup system pricing isn't so much the batteries as the inverters, control electronics and system housings that frequently cost more than the batteries.
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
http://1.usa.gov/10KaJ2C
I think TG's "end of July" language was simply to provide some rubber in setting expectations.
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
BCG has studied learning curve efficiencies for decades and developed an experience-based model that says the cost of value added manufacturing activities in a company or industry will fall by 20% to 30% for each doubling of cumulative production volume.
Since the PbC has two distinct cost components – an established process for manufacturing AGM batteries and a new process for manufacturing carbon electrode assemblies, you really need to bifurcate the cost analysis. The cost of manufacturing the AGM part won't change much over time because cumulative volumes in the industry are already massive. The electrode assemblies, on the other hand, should continue to see steep cost declines as Axion learns how to make them better and cheaper.
If you sit down and calculate a bill of materials, a PbC battery has roughly the same material cost as an AGM battery. The big difference boils down to the incremental value added cost of making the electrode assemblies. Since cumulative production volumes on the electrode assemblies are quite small, I think we're likely to see continued rapid progress on making the assemblies better and cheaper, which means that any price and margin expectations we create today are likely to be obsolete in fairly short order.
Historically batteries have been a commoditized business where price was the only thing that mattered. That dynamic is changing rapidly as users come to grips with the reality that storage is a critical system efficiency tool and the overall cost of shaving a few bucks on battery pricing can have a disastrous impact on system performance.
So far Axion has studiously avoided forecasts of product pricing and margin targets because the targets are moving so quickly. That being said there's little question that the margins on electrode assemblies will be higher than the margins on battery manufacturing, particularly in applications where the PbC is able to do the required work that competitive technologies can't do.
I agree that it would be wonderful if management could clearly state what they think future costs and margins will be. I just don't think that kind of statement would be meaningful or for that matter particularly helpful to either stockholders or potential customers.
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
BMW is reportedly pushing Axion to partner with one of its first tier battery suppliers so that it won't face a sole source issue.
NS has bought the first set of batteries to get the 999 back on the rails and is reportedly planning to do an over the road locomotive after it finishes work on the NS 999. The locomotive has been in one of the work bays in Altoona for several months, which leads many to speculate that something's wrong. While I tend to think it's just an obsessive desire to avoid another high profile failure, the speculation is pretty rampant.
The shortest route to visible sales is probably ePower, which has built a series hybrid Class 8 tractor, tested the PbC in one of them and ordered batteries for a second. Since their market is trucking companies that do major overhauls every three to five years and the cost of the hybrid retrofit is comparable to the cost of a conventional retrofit, ePower could grow like a house afire if the truckers like the performance and economy.
The bottom line is I can identify several applications that could take off within the two-year window including BMW, NS and ePower.
I've been involved with Axion since 2003 and am delighted that the battery is proving itself to be everything we hoped it could be. Axion has not only developed the battery technology, but it's invented all of the equipment and processes necessary to manufacture the battery. Now it's just a matter of waiting while obsessive compulsive customers do all the things they have to do before committing to a new technology.
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
The typical automotive battery is a great example. It may store 500 to 1,000 Wh of energy, but the system never uses more than 1% to 2% of that energy. The battery is sized like it is because of CCA requirements.
For better or worse the PbC is not an energy battery. Uneconomic grid applications like renewables time shift and diurnal storage will never select the PbC. Profitable applications like renewables smoothing and frequency regulation may. In any event grid will be the slowest market to develop because the customers don't have a clue about their needs or their value proposition.
I have to smile every time management talks about islands because those discrete markets have immense potential. The reason is simple, most islands generate their power from oil and any time you compare the cost of oil fueled electricity with the cost of storage, storage wins handily.
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
http://seekingalpha.co...
(note the first comment on the article)
Cobalt, on the other hand, is incredibly constrained, one of the most useful technology metals on the planet and a key metal for all lithium ion chemistries except iron phosphate and titanates.
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]
Axion Power Concentrator 244: June 14: Axion Power Reports First Quarter Results For 2013 [View instapost]