Douglas Korthof

Lithium Ion Batteries and GEVs: False Gods for the New Millennium

Well, it's true that recyclable batteries are the future; the problem with Lithium is the high cost, and the lack of scrap value. Lithium is a one-way resource, from brine deposits for new Li to the dump for discarded batteries. So the only real possibilities are lead and NiMH batteries, of course, because they recycle. Using old batteries to make new ones, no new mining is needed for this operation.

But Natural Gas vehicles do work and make sense; there is no problem with making CNG charging stations, they already exist. What I stress is that if you are a "believer" in fuel cells, ask youself, why not CNG? It's here, now, it operates at lower pressure than H2, doesn't require an expensive fuel cell stack, and any car or truck can be converted to CNG. Ironically, natural gas is used to refine gasoline as well as extract high-density oil from tar sands; the natural gas used to refine gasoline would carry a CNG car about as far as the gasoline produced would take an oil-fired car. But the money is in oil, so both EVs and CNG are not pursued. Suprise??


On Nov 29 09:17 AM nrgrat wrote:

> I guess I'm not clear on whether this is an article about what makes
> sense or what is reality. Natural gas makes a whole lot of sense
> for transport, and never more than right now with these huge reserves
> being tapped from Gorgon off of Australia to Forgotonia, Pa. But
> the reality is that the auto majors tried this a decade ago. They
> got killed. They're not going back. Nobody is going to build a U.S.
> network of CNG stations for Toyota. I agree with everything you're
> saying, except the 'only significant drawback' part about the lack
> of stations. You are discounting some pretty recent pain. Nobody
> is going to invest that kind of money in technology that everyone
> describes as a bridge to battery technology. Sorry, it's battery
> or bust. Everything else is smoke and mirrors.

A123 Systems Looks Headed Back to IPO Price

The problem for me with A123 is that it is priced as if it were selling to electric cars, but the reality is it's major customer is power tools...and it seems to lose money on each kWh of battery sold.

Will A123 work in cars? Well, that's an open question. So far, all "real" EVs (that is the only one left, the Toyota RAV4-EV, last sold in nov., 2002) use Nickel Metal Hydride (NiMH) , the only battery that so far is economical in EVs (and thus sabotaged by GM and by Chevron Oil's Oct. 10, 2000 purchase of control and subsequent lawsuit to stop production, settled in Nov., 2002).

Even the "costly and phony" EVs, which are all Lithium and of unknown but high cost, such as the super-costly Tesla, the promised "Volt-hoax", the Nissan Leaf, and others, chose NOT to use A123 for technical and other reasons that would take a page to explain. But they turned away from A123, is the fact of the matter; perhaps they will return...or not.

Apparently, the only public potential customer is the EV version of the Daimler "smart car", but Daimler is a very weak company, technically, so they may change their minds, too, when they find out the issues that, for me, put A123 in question for EVs. Basically, Daimler doesn't care a fig about EVs, so their proposed "use" of A123 may be purely fanciful.

The idea of "grid backup" using $1000/kWh batteries is laughable; $50/kWh lead-acid batteries would make more sense if "peak shaving" via batteries made any sense at all. But it doesn't; the current way to "store" massive amounts of power (and thus to have instantaneous "peak power" reserves) is pumping water up to reservoirs (such as at DWP's Lake Castaic) for hydro generation.

Imagine a 1 mWh battery installation -- LOL -- contrast with a modest 340 mW combined cycle natural gas generators, and you will see that batteries don't really compare in terms of order of magnitude. And the space...cost...longevity! Discharge that 1 mWh completely over one hour, and it gooses the natural gas plant to only 341 mW -- instead, SCE is building cheap 45 mW "peakers".

Lithium remains the only proposed battery chemistry without a recycle value, it is just one way from the mines to the landfill, a completely unsustainable life cycle, IMO.

Is Fiat and Chrysler's Pullback on Electric Cars Bad News for A123 Systems?

Until Nickel-Metal Hydride (NiMH) batteries go back into production (Chevron-GM stopped their use via lawsuit), EVs will have the WRONG BATTERY with expensive Lithium that doesn't last long enough to amortize the original cost and that has no recycle value. A123 didn't have much prospect of use in transport, IMO, even before the GM pullout. Look at A123 revenues; it's almost all power tools, not EVs or hybrids. Unless Lithium works in EVs and/or hybrids, it's not easy for me to see where Aone's market cap comes from.

A123 vs. BYD and Other Irrational Battery Investments

Another insightful article.

While I don't believe in Lithium batteries for EVs and HEV, since lead-acid and NiMH are much cheaper and have a sunset (recycle) value instead of being discarded into landfills, certainly they work in power tools and consumer electronics. Li has been improved, but still there is
<br>no Lithium hybrid,
<br>no Lithium plug-in hybrid, and
<br> no Lithium EV battery pack has lasted more than 50K miles (Tesla included).
<br>Nissan leases the battery for $150/month; that should give you a hint about how high the cost. GM is already singing the weeps about VOLT-hoax costing, because they are using the wrong battery, of course.

Whereas, our NiMH EVs are still running over 100K miles, and the batteries contain ALL the metals needed for new batteries, they recycle 100% and don't require any mining of new metals; Lithium requires a continuous supply of new mined metal, which is unsustainable.

Aone may find a use for their batteries in EVs, but so far, the bulk of their revenue is in power tools, like all the other Lithium makers.

As for Valence, it's been touting its "superior technology" for a long time, but has only managed pitifully small sales, even compared to marginal companies who try to sell Lithium batteries. Valence has become an article of faith, with a circle-jerk of the same old sales pitch about the coming deluge of cash.

Well, as Aone will find out, it's a lot more difficult to make a living off Li batteries than it is to make hoopla about them.

IPO Analysis: The Ultimate Story Stock, A123 Systems

Lithium has NOT proven itself as more than a niche market in Battery EVs. The proven battery chemistry is LEAD and NIMH, that's why GM and Chevron went out of their way to kill those and don't seem to even care about killing Lithium. Lithium is much more expensive, and doesn't last as long as NiMH. So what's to like?? An unproven technology that the one foe who SHOULD hate it, Chevron, has not bothered to stop. Since Chevron hasn't bothered to kill Lithium, you can bet that they aren't worried about it! So the battery EV market is problematic, at best, for Lithium.

The energy storage idea is just plain bullshit. It's not practical to use batteries to store solar energy or for peak shaving!! Utilities pump water up to places like Lake Castaic to "store" off-peak energy; the loss is at most 20%, there isn't any big replacement costs, as there would be for Lithium, and it's proven and reliable. So yes, I doubt this; it's as much hogwash as the idea of a large market for solar backup batteries. I have 8-year-old lead-acid backup batteries that cost less than $100/kWh; why would I go to Lithium for my solar electric backup system?? At a cost of $1200/kWh??? And how many people have solar electric systems, much less battery backup systems?

The power tool market is fine, but look at the numbers: it's just not enough money to support this kind of hype, IMO.

The big question is, if it's a bubble, when will the peak of the bubble be reached?

Battery Investing for Beginners

John,
The ZEBRA battery was tried, but lasts only one year in EVs; the economics are impossible. Phoenix and others stumbled on that one, while they were flopping around looking for batteries. Sodium sulfur is kind of a joke; while it seems not much more temperature than a diesel engine, the heat density is much greater and it proved illusory in Ford's "EcoStar" boondoggle.


On Sep 28 01:03 AM John Petersen wrote:

> No1, there are two types of sodium based batteries. NGK Insulators
> of Japan makes a sodium sulfur battery that's used primarily in long
> discharge utility based applications. GE has recently announced plans
> to begin commercial production of sodium-metal-halide batteries that
> they plan to use first in hybrid locomotives. Both chemistries have
> their strengths and their weaknesses. The biggest weakness seems
> to be operating temperatures in the 400 to 700 degree range. A variant
> on the sodium metal halide chemistry called the Zebra battery has
> been proposed for use EVs. There's also talk out of Colorado that
> a company funded by the Coors family has found a way to make a sodium
> based battery that runs at lower temperatures. I don't generally
> talk much about the sodium batteries because they're hard to invest
> in, but the fundamental technologies have a lot of promise.

Battery Investing for Beginners

From the Aone filing, their losses to date are about twice their total sales. Other Lithium battery companies have this same economics, it means they lose $1 for each $1 in sales.

If you look at the Aone filing, most of their sales are batteries for tools, not for transportation; they've got, so I understand, about 100 plug-in prii running, with a conversion that costs $10,000. But if their cost is $20,000, this business is not sustainable; and, so far, the longest one has lasted less than a year. Perhaps it will do better than the others which have failed; we don't know yet. But that's the point: it's speculation, not fact, you're betting on.

Yes, we DO know how long existing Lithium will last; it's true that we don't know how long newer technologies will last, but then, neither do those who are betting their money that these untried batteries will perform in ways that existing Lithium failed at.

I'm not saying it's impossible that Aone (or one of the others) will succeed; just that propontents of Lithium EVs are, alarmingly, putting all their marbles on unproven ideas, and not using existing proven batteries that are cheaper and last longer.

Some of these, such as GM's Bob Lutz, are ignorant of battery economics in a breathtakingly sweeping manner. Don't be taken in the same way; remember, Lutz presided over the bankruptcy of Exide, before he was involved in the GM bankruptcy.

Peak shaving with EV batteries is bullshit, pure and simple. I've got a battery backup system and a solar system that makes more energy than needed to power two EVs (three, now); having produced $250 more energy last year than I used, why would I want to fall for the "peak shaving" fable??


On Sep 27 08:25 PM jerrydd wrote:

>
> Douglas, your posts are very your way or no way. But that is not
> true. Lithium is not expensive and is not likely to be. You only
> need less than .5lb of lithium/kwhr. So while recycling it is a good
> idea, it's not necessary. Look at my and Tom's above posts and follow
> the links and you'll find lots of .
>
> Nor are your other costs accurate anymore as they are yrs old now.
> Lithium has dropped a lot recently since they stopped using expensive
> materials like cobalt, etc.
>
> And used batteries for peak shaving at home is very viable, dropping
> your electric b50-75%. I use Cell phone tower take out batteries
> in 1 of my EV's and they work fine at very low costs.
>
> And I guaranty many EVer's will reuse every lithium battery that
> is usable they can get their hands on. Just like they do now with
> Prius packs, ganging up 4-8 packs. A companies rebuilds Prius packs
> too and that can be done with EV packs.
>
> As for how long Lithium batts will last, we don't know as many haven't
> been around long enough to see. But if after 10 yrs they still have
> 75% range left, for many that is fine. And you have to use some virgin
> lithium packs or you won't have any to recycle.
>
> Just because some companies make battery access hard doesn't mean
> they will in the future. In fact A Better Place will swap them in
> 90 seconds!!
>
> And more than lithium is going to be used as Sodium batteries are
> better for trucks, taxi's, vehicles that get used a lot so the heat
> energy loss isn't as much a problem. They are likely to last 20 yrs
> too.
>
> So lighten up. Things are not as bad as you think.
>
> On Sep 27 07:13 PM Douglas Korthof wrote:

Battery Investing for Beginners

Toxco pays NOTHING for the Lithium; they make money off the additives, Cd for example. The economics of battery production is something that is hidden from those putting their money down on stocks they basically know nothing about.

EV batteries, you need to realize, are high-power-output batteries; it's hidden in engineer-speak gobblydygood, but the EV1, for example, needed to put out up to 100 kW; the Tesla, up to 185 kW; the RAV4-EV, up to 50 kW. EV batteries age when their internal resistence rises; dV=I*r, or voltage drop depends on current times internal resistence. Spent EV batteries don't have this ability, so they are merely energy batteries, which can put out low power draw for a long time; for such batteries, it's always better to use lead-acid, which last longer and are uniform in their ability to put out energy.

So, in practice, for my 13 kWh battery backup for my solar system, I never considered spent EV batteries; I use lead AGM, which are balanced, matched and will last perhaps two decades, maybe more. Yes, I have spent EV batteries; they need to be recycled, but I never considered using them, in their rag-tag glory, for my solar system.

Lead "energy batteries" are so much cheaper than EV batteries, it makes more sense to buy new ones rather than try to match junk EV batteries. For powering a segway or wheelchair, who knows? But the market is not large enough to support an EV battery industry, if one were to develop.


On Sep 27 07:59 PM Don Harmon wrote:

> Oh contrare, Douglas. There are many uses for Lithium -ion battery
> packs which are considered "spent" by EV standards. These include
> solar, wind, e-bikes, and lots of wheelchairs for example. You just
> have a block to what this technology is capable of. You might also
> want to check out this company: www.toxco.com/ who just received
> a grant from the ARRA/DOE battery funds. They already have developed
> a real technology for recycling Lithium batteries, so you need to
> brush up on just how fast this sector is moving my friend!

Battery Investing for Beginners

Don: Also, the idea that spent EV batteries can be used in peak-shaving or solar backup is enticing, but without reality, like EEStor's claims. Most solar is grid-tied, not battery backup, and it's much cheaper to use solar for peak-shaving, with hydro storage even lower cost (at Lake Castaic, and other places, at night water is pumped up to the lake by 6 huge pump-generators powered by cheap off-peak Washington electric at 3 cents/kWh; the next day, during peak, the pumps turn into generators to retrieve the "stored" power at a cost no more than 4 cents). There's no market for spent EV batteries.


On Sep 27 06:52 PM Don Harmon wrote:

> Douglas, consider for a moment the useable life cycle of a LiFePO4
> battery pack in an automobile is 10 years. At this point the same
> battery pack still has over 75% of it's original power or energy
> density thus can be re-purposed for other markets like wind or solar
> giving it another 10 years of life (or more). Thus after 20 years
> these batteries might be ready to go to the re-cycling companies
> for reclaiming the original resources used to produce them.
>
> Don't you think that 20 years will suffice to develop the sufficient
> re-cycling technology that Lithium will require?
>
> It's only common sense when you really think about it!

Battery Investing for Beginners

So far, the maximum Lithium of any sort has powered an EV is 50,000 miles; and there's a shelf life issue. Besides this ominous fact of current Li life, the overall point is that you CANNOT talk seriously about cost until you consider logistics and sunset. Yes, it's common sense, which is sorely lacking in the supposed march to Lihtium.


On Sep 27 06:52 PM Don Harmon wrote:

> Douglas, consider for a moment the useable life cycle of a LiFePO4
> battery pack in an automobile is 10 years. At this point the same
> battery pack still has over 75% of it's original power or energy
> density thus can be re-purposed for other markets like wind or solar
> giving it another 10 years of life (or more). Thus after 20 years
> these batteries might be ready to go to the re-cycling companies
> for reclaiming the original resources used to produce them.
>
> Don't you think that 20 years will suffice to develop the sufficient
> re-cycling technology that Lithium will require?
>
> It's only common sense when you really think about it!

Battery Investing for Beginners

Lithium and nanotechnology *sounds* good; but it translates in my mind to the world "hogwash".

Lithium batteries have a bright EV future, perhaps, but they are about 4 to 10 times as expensive as NiMH and over 20 times as expensive as lead. Concentrating all EV efforts on Lithium, like concentrating all efforts on fuel cells, simply removes the EV program from a mass-market to a niche-demonstration program, "no threat" to the current oil-auto companies, and no chance for large-scale production of batteries or for the kind of growth that some seem to be expecting..

You are never going to build a mass-market for EVs or plug-in cars using virgin Lithium, it's always going to be a niche or demonstration market, maybe 500 or, gasp, even 5000, or, gurgle, 50,000 cars. The WORST thing is that there are already good batteries that will do the job; but no one is even looking at them.

I have no doubt that a battery technology COULD be developed, if there were anyone who wanted to do so in the existing oil-auto companies!

But so far, there is no interest in developing a battery recycling program, for example, needed for lowering costs. After the (curently 500) Tesla need new batteries, say after 60K miles, what's to be done with the old batteries? No one outside of, maybe, Tesla has a plan, and if they do, it's secret.

If there's to be a fleet of EVs, really, then it must be understood to form an "urban mine" of spent batteries for reuse in making new batteries, using all the same materials and ever-improved methods.

Like the Internal Combustion car business has been for the last 100 years.

EVs should be looked at as a source of "reforming" those batteries when they sunset; every metal is an artifact, except gold, it takes mining and refining. The re-use of old batteries, which have all the alloys and components needed, would be the way industry were headed, IF they were serious about a mass market EV; but of course, they are not serious.

The steel industry dramatically lowered costs when they used scrap steel as the basis for processing, instead of virgin iron ore! Put a lot of legacy companies out of business, with their legacy bessemer furnaces!!

Imagine, after 200K miles, when the NiMH batteries finally give up the ghost, they are brought to a reforming facility, all the rare earth metals, Ni, Ti, V, etc., fractionated and used directly to "refresh" the battery to new, using ever-more-successful techniques to prolong battery life, more robust batteries after each generation.

Or, let's say, when the good lead PSB batteries finally fry, after 50K miles, the high-quality lead is reformed into new batteries. Or, when Tesla's Lithium batteries are finished, they are brought to a reforming facility to make new Lithium batteries, using the same materials in the old batteries. Currently, this is much more expensive with old batteries than with new Lithium ore from brines, dooming the idea of economical production.

BTW, replacement and servicing of batteries ("logistical considerations") is something that NO one has looked at; replacing one battery on the EV1, RangerEV, Rav4-EV, etc., requires an expensive 4- to 8-hour process of "dropping the pack" that can only be done at the dealer and only with a $100K lift. Any competent M.E. would lose his lunch over that one!

Practical considerations and lowering life-cycle cost; that's the way to make a battery EV industry.

But it's not being done, nor looked at, by those Auto Alliance companies supposedly "racing" to "develop" EVs. Lutz, for example, pretends to think that GM can just "order" the batteries, and they will appear; and need have no concern for life-cycle cost.

Obviously, any expectations of a burgeoning, ballooning market for high-quality batteries would require such infrastructure as logistical support and planning as well as sunset or scrap value; the lack of the latter seems to invalidate the former.

Better Lithium-Ion Battery Plays than A123 Systems

I wouldn't buy Aone with YOUR money. It's got over 100 million shares, has about 2 years left of cash from the bailout (oops, meant IPO) at the indicated present rate of cash burn, and an unrealistic business plan. It's got to get a few cars on the road, in addition to the 100 plug-in-prii, that make it some money. The power tool market so far doesn't seem to generate any profits, and that's where the bulk of Aone revenue has been coming from according to the filing.

But who knows, hype may prevail. Remember all those sky-high fuel cell cars that Ford, GM and other car companies handed money to? Where's Plug Power, Ballard, etc., now??

A123 Systems IPO Meets with Great Success

John,
The more important issue is whether spent Lithium batteries can be recycled profitably. Currenly, it's cheaper to mine fresh Lithium than to reprocess spent Lithium cells; that means a steady supply of new Lithium is needed, which will RAISE the price.

The only way batteries make sense is to reprocess old batteries from the fleet of EVs; that way, the only expense is to reform them into NEW batteries.

Unfortunately, the economics of battery manufacture are lost in the hype of "the next big thing". Solving the reprocessing problem is really the key to Lithium viability; Lithium hypesters hide and suppress this fact by glibly conning people with the line that "Lithium can be safetly discarded into the landfill", missing the point of wasting all those resources.


On Sep 24 11:02 AM John Petersen wrote:

> marketquant, I go both ways on the pricing. A123's last private financing
> round went off at $9.20 per share last April. In my experience the
> last round of private investors are looking for something approaching
> a double at the IPO. So I suspect that most of those private placement
> investors feel like the price wasn't high enough. On the other hand
> there's nothing like a big gain after an IPO to build excitement.
> On balance I think the more important metric is cash in the till
> and the ability to do the factory build and finance operations without
> going back to the well.
>
> Don, the only thing I find a little troubling in the Evans article
> is the 18-month evaporation cycle between the extraction of brines
> and the production of a product that's ready for further refining.
> If the lithium producers expand production "in response to market
> demand" and demand increases faster than they expect, there could
> be some significant supply chain bottlenecks. I'd feel a lot better
> if the miners were saying "we have already increased brine production
> in anticipation of future demand."

A123 Systems IPO Meets with Great Success

Some folks will make a lot of money on this IPO, not least of them the original venture capitalists. But the fact remains, it's deeply UNPROFITABLE, losing about $1 for each $1 in sales; and the great bulk of sales comes from power tools, a limited market at best, which is also unprofitable.

Sales DON'T come from transportation segment, in general; and it's problematic to think that there might be more sales. The A123 technology was rejected by GM, reputedly, because of the very flat discharge curve and if discharged too deeply the batteries get ruined.

Will transportation segment find a place for these batteries? If breakeven is $2500/kWh, and a real EV needs 30 kWh, that's a battery revenue potential of $75,000 per EV. And, it would be worth it if the batteries lasted 1 million miles or so.

To compare, lead-acid is $50 to $200 per kWh, and NiMH, if Bosch/Samsung/Chevron allowed it, would be $400/kWh.

The economics seem very challenging; to meet viable performance parameters would take a qualitative change in technology, which (so far) A123 has not seemed to demonstrate. Same old problems: limited life-span and very high production costs.

Will they make it work? The past is agin' 'em, no Lithium company seems so far to have succeeded in making money from rechargeable batteries.

A123 Increases IPO Price Range

A123 has financials not unlike other Lithium battery companies, which is to say, limited production at a cost about twice what the batteries sell for. No Lithium company so far has cracked this barrier: A123, for example, produced 124,000 kWh of batteries and received $154 million in product sales revenue -- meaning a sales price of about $1200/kWh. Understand, that's about 4 times what NiMH was estimated to cost in volume production, and about 10 times lead-acid.

But the worst part is that to PRODUCE that $154 million in product sales, A123 generated about $150 million in cumulative losses to date, meaning that it lost $1 for each $1 in sales.

This is the problem with other Lithium companies; even when they gear up to higher volume, the economics don't seem to change. But time will tell; certainly, Li batteries work; whether they become mass-market is the issue, and whether they last long enough to bring the life-cycle cost down is a big thing.

Some unrealities from the filing: while it's true that there are, perhaps, 19 "EV, PHEV, HEV" cars on the market in 2009 which sold more than 20,000 per car, NONE OF THEM ARE PLUG-IN, ALL OF THEM HAVE TINY HEV batteries like the Prius, only 1.3 kWh per car. This kind of sales are not going to generate the kind of revenue that PHEV would do, with at least 5 kWh per car, optimally 30 kWh per car. So that's one little bit of mis-information.

Secondly, the filing claims that Ni is toxic; formally, that may be true in some sense, but it generates a laugh here. Then it goes on to claim that, at the end of their useful life in EVs, the spent Li batteries might find a use in peak-shaving ideas!! That's the biggest crock, an old chestnut that fails to convince. Old batteries are best RECYCLED to reform the spent materials into new batteries, and reuse them, so that no new mining is necessary except for new cars.

Overall, while the IPO leaves them with 100 million shares and $200 million in cash, it leave them with an indicated capitalization of $2 billion; lot for a company that lost $80 million last year on product sales of $80 million, and stands to do even worse this year.