ginchinchili

How Short Term Supply Constraints Will Impact Booming HEV Markets

John, you present a very convincing argument, particularly in this piece. However, something that has struck me as I read about the American Recovery and Reinvestment Act is that it actually mentions the government's intentions to place a lot of emphasis (I assume that translates into $dollars$) on the development of advanced lithium ion batteries. Isn't it implicit in your position that this money would be better spent elsewhere? Is this just another example of our government not thoroughly weighing all sides on an issue and are placing their bets on a horse that can't win? Do you think they're position on where best to invest the advanced battery grants is better informed and developed now that they've been analyzing the battery companies' grant proposals?

How Growing HEV Markets Will Impact Battery Manufacturing Revenues

John, you present a very convincing argument. Thanks again for sharing your understanding of this industry with us in a very well organized and coherent series of articles.

I brought this up in a comment to your last article as did at least one other reader. We hear seemingly endless anecdotes and read article after article about new battery technologies that are being explored, like Li-ion and NiMH technologies, as well as others that you ofter discuss, and their strengths and weaknesses. I'm curious, and I'm sure others would join me, about what advancements have been developed in lead acid battery technology and, more importantly, what is currently being pursued? Do you believe that lead acid battery technology has been taken as far as it can go and that it's just a matter of time before other technologies over-take it, or do industry R&D folks have something in the works?

Why Advanced Lead-Acid Batteries Will Dominate HEV Markets

speculawyer, your link is to a partial map of the Nile. What's up with that???


On May 31 11:21 PM speculawyer wrote:

> www.mrdowling.com/imag...

Why Advanced Lead-Acid Batteries Will Dominate HEV Markets

John, thanks once again for another well-written, informative piece. Would you please elaborate for this layman your use of the term "standardization," e.g., "Eight months later, it’s clear that the industry response has been a concerted effort to standardize micro and mild hybrid technologies throughout Europe" ?

I wanted to also make a comment about the advancement of Advanced Lead-acid batteries and would appreciate any insight you might wish to share. Clearly there is a kind of competition between Advanced Lead-acid batteries and Li-ion batteries, but only in certain applications since I believe we can accept the premise that there are certain applications where there is little dispute over which battery type is most suitable. Many comments to your articles mention the potential for a decrease in production costs for the Li-ion battery, though proof of this remains to be seen. Very possible, but not yet realized in a very substantial way. However, in the meantime during the last couple of years or so Lead-acid battery makers have gotten off their static behinds and have started breathing life back into their R&D departments, thus, the modifier "Advanced" in Advanced Lead-acid batteries, for example.

As you have pointed out, the real competition is for the HEV industry where you make the argument that Advanced Lead-acid batteries have the advantage primarily through cost savings. I only wish to add that this competition has just begun and I agree with you that Advanced Lead-acid batteries are already in a more favorable position. That position may be insurmountable given the continued advancements in the Lead-acid battery, not to mention working in conjunction with other technology. Can you mention a little about what advancements have taken place with Lead-acid batteries and what may be in the works for the near future?

Finally, though it might be impossible to do at this time, do you envision writing an article examining the grant proposals submitted by the major battery makers in conjunction with the American Recovery and Reinvestment Act of 2009 once they have been made public? I think that would fascinating.

Thanks in advance and I apologize for being so long winded.

General Electric's Impressive Entry into the Grid Based Energy Storage Business

John, as I'm sure you are aware of, yesterday EnerSys released a preliminary earnings report that handily beat estimates for this quarter and was actually quite strong all around except for their guidance on next quarter due to the economic downturn. I'm surprised at the extent of the market's negative reaction to this report and, as a shareholder, hope sanity prevails as investors have more time to digest the numbers and give greater consideration of EnerySys' improved business model resulting from their cost reduction initiatives placing them in, what I believe to be, a very advantageous position as the energy storage industry races its way into this green technology revolution.

I find it interesting that in GE's announcement about the building of a new manufacturing facility they used a lot of forward looking statements including a strong suggestion that they will likely be receiving a significant grant from Uncle Sam, not to mention the other political assistance given them in the building of this facility. Though it is only a preliminary report, EnerSys gave not even an intimation regarding application for any of the ARRA grants. Though I think it's safe to assume EnerSys will be, or already is, an applicant for this money (you may already be aware of their application), I wondered if this issue should have been brought up in yesterday's report, perhaps helping to soften any negative impact from next quarter's weak guidance.

I know different companies have different approaches to their public relations, but do you think this was a faux pas on EnerSys' part, even if the beating their share price is currently taking is only temporary (hopefully)? I was hoping you might discuss this issue for us a bit. Thanks.

Internet Infrastructure Stocks on a Tear

Like every other investment analyst, professional and amature, you've ignored a stock that makes your "pitbulls" look like cowering chihuahuas (no offense to chihuahuas and their owners; that includes Mickey Rourke). Take a look at General Cable (BGC). It's up over $33.00 a share from its November low of $7.62, and considering that the world is moving toward alternative energy and a lot of energy grid "updating," General Cable's future couldn't look better.

Why does every analyst ignore this stock? They've got great international exposure; their management team is efficient, smart and aggressive; they've got a billion dollars for internal and acquisition expansion; and a great R&D department that recently applied for a patent on their newly developed GenSPEED® 10 MTP™ Category 6A 10 Gig cable, featuring the Company’s patent-pending Mosaic Crossblock ™ technology (yes, that was copied; my memory isn't that good). This company doesn't have to rely on US sales to keep up its strong revenue stream, even so, its North American sales are up and will continue to strengthen over the next 2 - 3 years. What's there not to like? Ignore this company at your own financial loss.

The Plug In Vehicle Scam

John, I could spend weeks researching the ins and outs of battery technology and still not learn half of what I've learned from your articles. Thanks again.

No, I don't swallow blindly everything you put forth and I keep in mind that you stand to benefit from the positions you reiterate so thoroughly due to your holdings in certain battery companies, and I would encourage all readers to also bear this in mind. However, I read the various sides of the energy storage topics you examine in your articles and the research I do beyond Seeking Alpha, and frankly I find your arguments the most convincing from just a layman's pragmatic perspective. This would be true even if you didn't own a single share of stock.

I worry about GM's considerable stake in the Volt, but to me it's very symptomatic of the problems that have gotten GM in their current financial difficulties. They seem to be more focused on basing production decisions on what they see as the trend of the day rather than focusing on designing a practical quality product to sell consumers on. They too often seem to be behind the curve even when they're aiming not to be. It's the same sort of thinking that has allured so many investors into sinking money into the "centerfold" technology battery stocks (great term).

I agree that we are entering into a brave new world, one dominated by a major shift in how we power our world, but also a world where we will have to be more selective, much less wasteful, and, perhaps more than ever before, Darwin's survival of the fittest will be more about wisdom and less about might. I just hope the people who are bound and determined to keep their money in Li-ion battery companies are not doing it out of a refusal to change their minds now that we know so much more about the different battery technologies and our economic need toward abstemious prudence. One of the characteristics of a good investor is someone who can acknowledge being wrong and recognizing that it is the mark of a genuinely successful achiever.

Likewise, I hope our government demonstrates the same sort of prudence in how they are spending our stimulus money, particularly in the energy storage industry, and don't become overly fascinated with the trendy technology of the month. If we are to succeed in this brave new world we will have to be smarter than we have been in the past, both as individuals and our government. This is not a change of choice; it's a change of necessity.



On Apr 29 12:32 PM John Petersen wrote:

> Jack, my favorite quote is "Translation: Unless and until gas prices
> shoot up, you'd be crazy to buy one of these much-ballyhooed vehicles,
> which will run 40 miles on a single charge if GM can overcome difficult
> battery-engineering issues."

The Obama Effect: Is Clean Energy Outperforming the Market?

Maybe the best of the clean energy stocks is a company that nobody ever mentions, to my amazement, even though it hit a low of $6.73 in November and is now trading at $25.27, and still only a P/E of 6.21. That company is the cable giant General Cable (BGC). All of the alternative energy plays are going to require power cable, and lots of it. Obama specifically mentioned the need for miles and miles of power cable in his de facto State of the Union speech.

Perhaps it isn't listed among the clean energy stocks because people don't associate cable production with clean energy, but surely if you're going to mention a company like American Superconductor or even the battery companies, then General Cable should no longer be ignored.

General Cable is not only a great play on the Obama stimulus plan, but over the next several years the whole world will be moving to alternative energy and this clean tech revolution can't be done without cable. It is the most diverse cable company both in terms of the type of cable they produce and in terms of their worldwide locations. I just wish this company would get the recognition it is due.

White House Report: GM Volt Is Not Ready for Prime Time

I'm not intending to be political here, but the following analogy works in this context. I was against the invasion of Iraq because I felt that it was a monolithic gamble and that we could not afford to gamble on the lives of our military personnel, nor the trillion plus dollars it will eventually cost us. I'm not here to debate the success or failure of this undertaking, but I think it's safe to conclude that if we used the invasion of Iraq as a blueprint for our foreign policy and repeated implementation of that policy in other areas around the globe then our country would soon be bankrupt in a way that makes our current financial situation look like a kid deprived of one week's allowance.

By the same token, we likely have one real shot at this effort to turn our economic base into cleantech industries because it will be a long time, if ever, before our government will be able to invest this kind of money into our industrial complex. We have to make this work.

As far as the energy storage piece of this industrial revolution goes it would be foolish to gamble on focusing on the development of Li-ion batteries for large scale energy storage like cars and alternative energy storage like wind, geothermal, solar, etc. Thus, my analogy; it's a gamble we can't afford to make at this juncture.

If I understand him correctly, John isn't against Li-ion technology. In fact, he praises the technology. Nor is he saying we shouldn't be trying to develop that technology, and that's not a point I'm trying to make either. The onetime tremendous financial push that the government is prepared to implement has to go toward something that we know can work for us now, and then as the technology is helping us move forward in this incredible social/technological sea change we can continue full bore on improving all forms of energy storage, lead-acid, Li-ion, fuel cells, ultracapacitors, and every other potential form of energy storage, even some we haven't thought of yet. But we disparately need what works for us now.

Correctly me if I'm wrong, but it's my understanding that EnerSys, has fairly recently developed a Li-ion battery and yet the engine that continues producing strong profits for them is the lead-acid battery. My point is, they continue to improve energy storage batteries, but in a way that allows them to produce the necessary revenue to fund their R&D. Compare that to, say, Valence Technology, that has a negative cash flow and a very heavy accumulation of debt. I ask, which of these 2 companies are in a better position to fund battery development through their R&D departments? After this initial stimulus funding from our government the rest will have to come from the companies themselves. We can't afford to gamble our country's future on a risky venture, and that's what we would be doing if too much of this stimulus money goes to building plants for small Li-ion companies.

A Very Smart Plan for Federal Smart Grid Grants

Thanks for the education on energy storage, John. I've learned a lot from your series of articles. As an investor, I've found the current advent of this cleantech revolution both exciting with opportunity and challenging. This article helps to relieve some of that anxiety, at least regarding battery companies, because it looks like our government has just improved the odds for all battery companies.

So much of the diverse cleantech industry is a roll of the dice for investors. As always, DD is necessary, but now with battery companies part of that research should include a company's R&D goals; an idea of the money a company invests in R&D; the feasibility of their projects; and, ideally, some track record of R&D spending and results. I'd appreciate any comments you have regarding this.

I will add that one of the investments decisions I've made in my attempt to invest in clean technology while reducing investment risk is power cable, because nearly every major alternative energy goal in the works involves a lot of power cable, of all kinds. Just a thought. Thanks again.

Axion Power: Time Is Right for Gas Guzzlers to Dual Mode EV Conversions

D. Harmon: Couldn't this same argument be made for Starbucks recharging stations:

"Third by the time LiFePO4 batteries need to be recycled the industry will have matured to where recycling processes have naturally developed along with the growth of the Lithium-ion battery manufacturing & development thus solving this issue along the way."

It seems somewhat contradictory to say the market will take care of consumer needs in one case and then state that that same market is supine when it comes to the other case. Consistency of argument is necessary if you want to make that argument effective.


On Apr 19 11:45 AM Don Harmon wrote:

> First of all I suggest that Jack Lifton read this report on the abundance
> of Lithium: lithiumabundance.blogs.../
>
> Second LiFePO4 Lithium Iron Phosphate batteries (properly made) have
> a life cycle 10X Lead Acid - which means even when they out-live
> their useful life for an HEV or PHEV application they still have
> 80% of their energy left over. This allows these batteries to be
> "re-purposed" as opposed to "re-cycled" which is something that cannot
> be done with SLA batteries.
>
> Third by the time LiFePO4 batteries need to be recycled the industry
> will have matured to where recycling processes have naturally developed
> along with the growth of the Lithium-ion battery manufacturing &
> development thus solving this issue along the way.
>
> Don Harmon

Turning point, maybe. In London, Obama hails the G20 summit as a "turning point in our pursuit of global economic recovery," but warns, "there are no guarantees."

It's unfortunate that some people's attitude toward Obama is to simply criticize and oppose everything he says and does. He's obviously trying to be optimistic without misleading us. I can see you prefer Bush's leading by misleading style, or have you forgotten how Bush kept reiterating that everything was fine as the worst economic collapse since the great depression was taking place? You're probably one of those who go around saying "God bless America" while hoping for our president's failure. No wonder our country is falling apart.
On Apr 02 06:44 PM j_remington wrote:

> Obama covers his back with a disclaimer, again.

Cleantech Is Hurting, But Some Firms Still Worth a Closer Look

You bring to light some interesting stocks.

On one hand, green tech investing is a real challenge because at this point it's very difficult to decide which will survive and which ones will fade. On the other hand, it's the wave of the future and the area where there's some serious money to be made through equity investing.

I like EnerSys because it's less of a gamble due to its strong standing even before the green energy movement and that, I'd say inevitably, it will benefit greatly from Obama's stimulus spending because of the disproportionate amount of money set aside for battery development and that EnerSys is one of the two largest battery producers and uses an array of battery technology in its various lines of batteries, already with a line of batteries designed specifically for alternative energy storage.

Another company I would couple with EnerSys is General Cable, the world's largest and best globally positioned cable company. Like EnerSys, they have a diverse line of products that will be heavily relied on in both the rebuilding of the energy grid and the production of alternative energy. In Obama's de facto "State of the Union" speech he even mentioned that we would need miles and miles of power cables.

But the other companies mentioned here look interesting and worth further research.

Li-ion Batteries and How Cheap Beat Cool in the Chevy Volt

Thanks for your series of articles on batteries. One question that this particular piece brings to mind is, if we bank so much of our energy's future on lithium, with very little processed here in the US, aren't we putting ourselves at risk of winding up in the same place we are presently with oil, at the mercy of, oftentimes, unreliable foreign countries?

Three Solar and Wind Companies That Still Look Good

Perhaps the best green energy play is a company that isn't immediately associated with green energy and that's General Cable. No matter what kind of energy we're talking about producing it's going to have to be transferred long distances to be used, there's no getting around that. General Cable makes every kind of cable that will be needed for revamping the electrical grid and distribution of any alternative energy source. To me it seems to be the safest investment bet.