TechPulse 360

Boston-Power said Friday it raised another $60 million in venture funding as it closes in on stimulus money from China and its first Chinese factory.

The new capital brings financing for the lithium-ion battery maker to $185 million, making it one of the most richly financed start-ups in the industry. The high cost of battery factories makes large bank accounts a necessity.

The Westborough, MA, company said the money should help it win stimulus funding from the Chinese government. CEO Christina Lampe-Onnerud declined to predict how much or provide details on the negotiations. But she said talks with several authorities in the country are continuing and an arrangement is expected in three to four months.

Boston-Power says it expects to announce new electric vehicle deals this year. The company is already working to develop an EV patterned after the Saab 9-3.

A deal will require Boston-Power to build a factory in China, which reportedly will be near Shanghai. Such a deal would represent a major step for a company that was turned down for $100 million in federal stimulus money last August in a bid  to build a U.S. factory.

Separately on Friday, Boston-Power said it is close to announcing deals with additional vehicle manufacturers and utility customers. The announcements are expected later this year.

The company’s first contract, a deal with Saab, was unveiled in December. Lampe-Onnerud said in an interview that the development of an electric car patterned after the Saab 9-3 is on track. The first prototype is to be on the road this summer at Saab’s Trollhattan headquarters in Sweden. More will follow in 2011. The program has production models scheduled for release but has not disclosed the date, she said.

Despite the progress, Boston-Power has no shortage of well-funded competitors. Battery maker A123, which went public in a $378 million IPO in September, raised $266 million prior to the offering and added another $249 million last year with an Energy Department grant.

EnerDel received $118.5 million of government funds, and Warren Buffett put $230 million of his money in Chinese battery maker BYD.

Boston-Power said it would use its new money to expand manufacturing in Taiwan. The company’s plant, owned by GP Batteries, needs scale to supply laptop batteries to Hewlett-Packard and Asus, which Boston-Power added as a customer earlier this month.

The company also will add engineers and sales staff at its Westborough, MA, headquarters and elsewhere.

The five-year-old start-up differentiates itself from rivals by making a lithium-cobalt battery with the same chemistry commonly used in notebooks and by the Tesla Roadster. The technology is modular, meaning that numerous small cells are packed into a single casing, as with laptops. The Saab prototype now under development will have 2,000 small cells clustered together from Boston-Power’s new Swing battery line.

The advantage with lithium cobalt is power and long life – perhaps 1,000 charge cycles compared with 300 or so with more conventional lithium-ion technologies. The downside is the greater chance of a meltdown and short circuit. Alternative chemistries – lithium manganese and lithium phosphates – don’t catch fire, but also don’t have as much power.

Boston-Power says that despite the competition, revenue growth is “very fast.” It declines to offer figures, but says it employs 110 people in Massachusetts, 50 in China and 350 in Taiwan.

“I believe we have the chance to be one of the significant players” in the industry, says Lampe-Onerud. “I think (the funding) will be a very serious signal for big time growth.”

This entry was posted on Thursday, June 24th, 2010 at 9:23 pm and is filed under news. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.