Seeking Alpha

Neil Energy

Neil Energy
Send Message
View as an RSS Feed
View Neil Energy's Comments BY TICKER:
Latest  |  Highest rated
  • Micro-Hybrids: The Fuel Efficiency Innovation Of The Decade [View article]
    Did you notice it lists 25 city and 36 highway? I would have thought the city mileage would be better due to the start/stop system and the lower speeds (less aerodynamic drag).

    Perhaps the city mileage would have been 20 mpg without the start/stop system.
    Oct 5 11:34 PM | 1 Like Like |Link to Comment
  • Will Fuel Cells Replace Battery-Powered Cars? [View article]
    So I ran a few quick calculations. First, consider a generous 15,000 miles per year for 10 years, or 150,000 mile total. Let's pit a Prius averaging 44 mpg (in my Prius, I can get 50 in the city, but lower 40s at highway speeds) against a traditional ICE at 28 mpg.

    Over the 10 year period, with gas at $3.50, $4.00, $4.50 and $5.00 per gallon, you would save $6,818, $7,792, $8,766 and $9,740 respectively. Conclusion: At 28 vs. 44 mpg, the gas savings probably pay for the hybrid premium. My 28 number might be a little low, as many cars today (that are similar in size to the Prius) can beat 30 mpg.

    Second scenario: Let's say the Prius improves to 50 mpg and the ICE is improved to 37 mpg. For the same ranges in fuel costs between $3.50 and $5.00, the total cost savings over 150,000 miles is $3,689, $4,216, $4,743 and $5,270.

    It all depends on the fuel cost and the differential between the cost of the improved ICE vehicle and the cost of the full hybrid. Also, for those that keep their cars longer than 10 years, there is always the fear that the battery might go. I've got a 2004 Prius with 110,000 miles, and I hope to keep the vehicle for another 9 years, but worry what a battery replacement will cost me.

    Also, I would not have purchased a new Prius (too expensive), but now that I have an inexpensive used Prius, I love it! But for a new car, my willingness to purchase hybrid technology is going to be based solely on the cost savings.

    What do you think about actual economic trade-offs for fuel savings vs. upfront vehicle cost?
    Sep 20 10:56 PM | Likes Like |Link to Comment
  • Aggressive New CAFE Standards: Economic Impact Will Be Immense [View article]
    Over the last ten years, I have gained a lot of experience buying, but have always had a hard time _selling_. Finally, this year, I've sold major positions in several stocks, being grateful for the run-up, but also recognizing that they were overvalued. I sold half of my Active Power holdings on the way up to $3.00 per share and another 10% on the way down below $2.00. Now that it is at $1.50, I wish I had sold it all, but I still believe in the long-term potential of their technology and their management.

    I'm leaning to be a better seller (damn the tax consequences!), but still need to work on it. And as John said, you have to be careful what you do with the profits, as I did manage to piss away some of my Active Power profits on AMSC (American Superconductor).
    Sep 18 06:51 PM | Likes Like |Link to Comment
  • Aggressive New CAFE Standards: Economic Impact Will Be Immense [View article]
    With the run-up in Westport over the last few weeks, I did think about selling some of my position, but would only do so out of a concern for the stock market and global economy in general, and not because I think Westport is overvalued. While Westport is still not profitable, they have a $162 million cash position and have been investing in significant new development programs with Volvo, and General Motors, as well has having just done a few acquisitions over the last few years.

    Their existing partnership with Cummins (a heavy-duty engine manufacturer) is really starting to pay off, with natural-gas powered garbage trucks becoming the norm rather than a curiosity. Also, after 3-4 years of slow but steady progress, long-haul trucks are really starting to make the transition to natural gas, and the joint marketing relationship recently announced between Shell and Westport is a huge step forward in reassuring truck owners that the refueling infrastructure will be in place.

    But the recent development that absolutely blew me away was when I looked at slides 24 and 25 of the following corporate presentation from Westport. Slide 25 shows that diesel fuel comprises 90% and 92% of the total life cycle costs of locomotives and mining trucks! That's crazy! If you could reduce fuel consumption significantly in those scenarios, it might make economic sense to just buy a whole new natural-gas powered locomotive or mining truck just for the fuel savings alone. Or at least do a retrofit.

    See slides 24 and 25 here:
    http://bit.ly/oh4MZ2

    On May 17th, "Westport has entered into an agreement with Caterpillar, Inc. (NYSE:CAT) to evaluate direct injection, natural gas fuel system technologies for possible use on Caterpillar’s large engines."
    http://bit.ly/mUwRDT-

    Especially for mining trucks out in the middle of nowhere (think Alberta tar sands), the cost of trucking diesel fuel up there must be significant. They already have a natural gas pipeline running to these tar sands deposits to heat the tar sands, so using the natural gas from a pipeline to fuel the mining trucks makes perfect sense.

    Westport has had a nice run-up, and while I think they have a bright future, I would not buy any more at this price under the current economic conditions. I'd wait for (yet another) global economic meltdown/panic and pick up shares on the cheap. Perhaps when a few European countries finally default on their debt would be a good time.

    Just in case the world economy does NOT crater, I'm holding on to my Westport, Maxwell and Cree, since I think they stand the best chance to do well even in hard economic times due to their cost savings potential. I'm selling some other holdings to reduce my equities exposure.

    Best wishes to all investors! Keep your eye on Westport; who knows when the next buying opportunity will open up.
    Sep 18 06:44 PM | 1 Like Like |Link to Comment
  • Shell Deal Great For Westport, But Raises Issues For Clean Energy Fuels [View article]
    I've been buying Westport stock for more than 5 years now, much of it at $4.50, and am thrilled with the recent developments.

    While I wholeheartedly agree with the article (great job!), one thing that makes me a little nervous is that automakers (or tier 1 engine suppliers) might do their own development work and not need Westport's technology any longer. Under what circumstances do you think Westport could be pushed aside by larger players, or even other companies that duplicate their technology (avoiding patent infringements of course)?
    Sep 17 03:44 PM | Likes Like |Link to Comment
  • Aggressive New CAFE Standards: Economic Impact Will Be Immense [View article]
    While it was mentioned a few times in the comments, I view medium mileage commercial fleets (like taxis and delivery vehicles), with a fixed home base every night, as the first logical application for electric vehicles.

    All of this discussion of electric passenger vehicles is interesting from a technology point of view, but not a good idea for investing. Payback for an all-electric delivery vehicle that has a fixed daily route of 40-70 miles, with dozens, if not a hundred stops, is actually quite reasonable (3 to 5 years depending on fuel costs, electricity costs, maintenance savings, etc.). Charging infrastructure could be built for 50 trucks (out of say 150 in a fleet) at a much more economical cost, without all of the concerns of neighborhood transformer overloading.

    I've made a small investment in Azure (AZD.TO), who make electric delivery vehicles based on the Ford Transit Connect. But most of my "transportation" investment has gone to Westport (natural gas engines). I've been buying them for 4 years now, with the bulk of my holdings at $4.50 per share. They are now at $31.

    In the last 150 years, we've transitioned from wood to coal to oil. Five years ago I thought we might skip over gas and go straight to electrons, but I now believe we'll make a major switch to gas (at least in the U.S.), with electrons somewhat in parallel, but not in the same quantities. Long haul trucking, construction and mining equipment and locomotives will all transition to gas in my opinion. Electrons may be used for medium-duty and smaller vehicles, but it will be a long, slow transition in my mind, since it's all about how many miles you drive. A few passenger vehicles are driven more than 20,000 miles per years, but the vast majority just don't log enough miles to pay for the extra cost of the batteries.

    The only thing that would change my mind on electron adoption (vs. gas adoption) is a true breakthrough in ultracapacitor technology (like EEStor), but I'll wait for real-world products to come out before declaring electrons the winner!
    Sep 17 03:28 PM | 1 Like Like |Link to Comment
  • Johnson Controls Forecasts Enormous Stop-Start Growth [View article]
    I've never heard of a company releasing transcripts from their analyst day or annual meetings. Barring a transcript, there is no substitute for listening to the analyst day audios. You can fast forward through the first hour or so (mostly high level overview) and there is a 45 minute break or so for lunch. So you don't have to listen to the whole 5 hours.

    While JCI's take on the whole start-stop market is obviously going to provide a slanted viewpoint, they did step back and take a reasonably long-term and balanced view in my opinion.

    I'd love to see your final summary!
    Jul 25 08:41 PM | Likes Like |Link to Comment
  • Johnson Controls Forecasts Enormous Stop-Start Growth [View article]
    I'm not worried about manufacturing capacity. I'm trying to explain to myself how JCI, with 80% of the market share for start-stop batteries, can dismiss PbC technology so easily and claim that their AGM technology is the answer. And they have firm contracts, with guaranteed minimums, through 2015 with large automakers.

    I'm fundamentally an optimist, but also try to honestly look at the factors that could slow down the adoption of new technology, like Axion's PbC.
    Jul 19 02:10 PM | Likes Like |Link to Comment
  • Johnson Controls Forecasts Enormous Stop-Start Growth [View article]
    John, I completely agree with you. So why does JCI so emphatically dismiss the PbC based on it's lack of energy density? They dismiss the PbC because it "can no longer support the vehicle functions and it requires a second battery." Surely they know what you just stated, regarding the 1.3% of 2.3% of the battery's total energy being used during a stop-start event. What is the purpose of a 70 Ah AGM battery when you only use a few % of it!?

    My only explanation is the non-invented-here syndrome. They want to push their product and retain all the margins. I was encouraged when they said in their presentation that they prefer to be able to take advantage of various technologies, and so if push comes to shove (the PbC is clearly desired by the OEMs), you can bet JCI will use the PbC electrodes. I'm sure they'll negotiate hard, and Axion will not get what they would like, but it will still be a win-win-win for everybody.
    Jul 19 10:23 AM | Likes Like |Link to Comment
  • Johnson Controls Forecasts Enormous Stop-Start Growth [View article]
    Amen brother! That combination would be the battery industry's version of a killer app! And at a price that everybody could afford...
    Jul 18 11:17 PM | Likes Like |Link to Comment
  • Johnson Controls Forecasts Enormous Stop-Start Growth [View article]
    For those of you that don't have the time to listen to the presentations, here is the paraphrased text of the speaker as he talks through slides 78 and 79. I didn't bother with the comments on SLI and EFB. I didn't type it word for word, but it's at least 95% accurate.

    "Adding carbon to the negative electrode increases charge acceptance, and doesn't take any more space. We see results that are "sketchy at best" and it stimulates failure modes that significantly reduce the life of the battery."

    "If you replace the entire electrode with a carbon plate, you go "all the way." There is a clear improvement in charge acceptance, and we've seen that. But when you do that, a 70 Ah battery becomes a less than 40 Ah battery. It can no longer support the vehicle functions. Now it requires a second battery. So you have to couple these things now with multiple sources of energy, which increases complexity and affects packaging."

    "Ultracaps: great great power capabilities - absolutely true, but does nothing for you on energy capacity. Electronics, power electronics are needed to combine these technologies. Does that enable enough improvement in the system? That's the question that needs to be answered."

    "As we have worked on these and developed each of these technologies, we evaluate them based on the characteristics on slide 79."

    SLI - Flooded Lead Acid
    EFB - Enhanced Flooded

    "AGM battery gives significant improvement in cycling, better charge acceptance, much better ability to use the full capacity of the battery. Impact on system cost is not that significant.

    "Adding carbon plates improves charge acceptance, but reduces energy and adds cost to the system

    "Ultracaps on their own have great cycle life, but add no usable energy to the system. They do not contribute to the system except to add cost and complexity.

    "Li-ion: clearly brings in some good characteristics (cycle life, charge acceptance, usable energy), but it brings a lot of cost with it.


    After listening to this for the 2nd time, here are my thoughts:

    JCI sees the PbC as a two-battery solution because the reduced energy density. If Axion and their potential customers can overcome that limitation after some pretty thorough and brutal testing, the two-battery drawback would be solved and suddenly the PbC could leap ahead of AGM. This looks like a very real scenario to me, even though it will take time.

    As I looked at the slides again, it struck me that the Li-ion solution is the best on every characteristic except cost (the most important characteristic of course!). As auto manufacturers move up to mild hybrids though (like GM is doing with their eAssist), a relatively small Li-ion battery (even smaller in energy capacity than a Prius) might deliver most of the benefits of a full HEV without most of the cost of a full HEV.

    I know current projections show start/stop getting the lion's share of the market, mild and full hybrids getting a small fraction and PHEVs and BEVs getting just a few percent, but I wonder if analysts are missing out on the potential for mild hybrids. If mild hybrids come on more quickly, will ultracaps and a relatively inexpensive AGM battery be the solution? Will a single, relatively small Li-ion alone be the solution (no ultracaps needed)? Or will two good batteries, like a PbC for power and an AGM for energy beat everybody else out on cost?
    Jul 18 09:43 PM | Likes Like |Link to Comment
  • Johnson Controls Forecasts Enormous Stop-Start Growth [View article]
    But in principle, a single Axion PbC battery should be able to handle the whole start-stop system, including the load when the engine is off, right?

    Even if the PbC battery has 30% less energy capacity, it can be cycled more deeply than traditional or even AGM batteries, so it should have plenty of energy. Furthermore, it should be able to be recharged very quickly.

    Seems to me the value proposition will be a hell of a lot better if the OEM only has to design in a single battery, eh?

    John: wouldn't you expect this type of testing to be going on right now with prototypes?
    Jul 18 08:40 PM | Likes Like |Link to Comment
  • The Lithium-Ion Battery Glut Will Be Massive [View article]
    This is why I believe EVs will first be successful in delivery vehicles, with fixed routes. The user pays only for the range they need, and they use that range every day. They may only drive 50 miles in a day, but they get start-stop for free and eliminate all of the idling that is present in current day vehicles.

    EVs don't make sense for passenger vehicles yet because of the range issues John raises. And even if you never need to go on a long trip, and your EV range covers your worst-case scenario, you are unlikely driving close enough to the full range every day to reach payback on your batteries.
    Jul 18 03:34 PM | Likes Like |Link to Comment
  • Johnson Controls Forecasts Enormous Stop-Start Growth [View article]
    I finally finished listening to the entire 5 hours of the JCI Power Solutions Analyst Day presentations.

    A few things that stood out to me:
    - JCI is "all in" on their AGM technology. Not surprisingly (since they are the leader in AGM), they strongly emphasized how AGM was the right technology for start stop, and that they were aggressively increasing their capacity to meet demand.
    - While this would seem to be wishful thinking on their part, due to side-by-side comparisons like the BMW/Axion presentation that shows PbC was superior to AGM, one thing gave me pause: They repeated several times that their projections for demand for AGM batteries in start stop applications are based on firm orders they already have in place from automakers, through 2015, with guaranteed minimums.
    - They emphasized a beefed up engineering effort, with more engineers being added in Europe to continue to improve AGM technology.
    - My personal take is this: they are running fast and hard with AGM and will do everything possible to improve it. They are making massive investments in factories and leaving the traditional flooded SLI battery behind. I assume they have a backup plan: If PbC does take off, and OEMs tell them that is what they want, they will buy the Axion electrodes and use them in their AGM factories. However, not even a hint of this was mentioned in the presentations.

    - They emphasized their relationships and scale a lot, even to the point where they admitted that they might not have the best technology, but they can deliver consistent quality across multiple markets in massive volumes. One of the reasons they cited for the breakup of the JV with Saft was because they want to be able to pick and choose technologies as they develop and partner as appropriate. So they are open to changing their tune if need be.

    They claim to have 85% of the start-stop battery market, compared to a much smaller overall market share. It looks to me like they are making the big bet on AGM in an effort to keep as much of that advantage as possible as the start-stop market rockets ahead.

    My conclusion: From what we've seen, PbC prototypes seem to be far superior to current AGM. But it will take time even for a superior technology to be available in the kinds of volumes JCI talks about. That being said, Axion doesn't need but a small percent of the market to become profitable, but I suspect the adoption of their technology will be gradual from a big picture point-of-view, but still significant from Axion's point of view.

    Even if you don't have time to listen to the entire 5 hour event, I strongly recommend reading the slides. John has provided a link above to the event page on their website.
    Jul 17 10:53 PM | Likes Like |Link to Comment
  • The Lithium-Ion Battery Glut Will Be Massive [View article]
    OK, let me try a different angle. Let's assume that Li-ion battery prices will only fall moderately, perhaps 10 to 30% over the next 3-5 years, but energy density continues to see moderate improvements, safety improves, thermal management gets easier and less costly, and most importantly, cycle life and calendar life improve, providing for better lifetime economics.

    At what point does the combined improvements make more applications practical?

    I'm not trying to rebut the glut of battery manufacturing capacity. I'm simply asking if there might be a long tail of applications (outside of passenger vehicles) for which the value proposition for Li-ion batteries makes more sense, and if so, will they be able to absorb an appreciable amount of the capacity?

    I'm not a Valence fan boy, and do not own any of their stock. But I do respect their consistency of their business plan that they have never been after the passenger auto market. They have targeted fleet vehicles (like delivery trucks), where the economics make more sense. They have also said repeatedly that they cannot predict where the Li-ion applications will go, so they will go where the applications lead them. Their latest examples are in the marine market. You could argue that it's very dangerous for a company to be looking for a problem that needs their answer. I am not promoting Valence stock. I'm simply trying to ask what applications (in power levels considerably above cell phones and laptops) might be able to take advantage of the latest round of Li-ion batteries.
    Jul 16 06:01 PM | Likes Like |Link to Comment
COMMENTS STATS
139 Comments
142 Likes