Contour Energy Claims Big Improvements In Next Gen Lithium Battery

September 20, 2010

Contour Energy Systems joined the ranks of next-generation lithium-ion battery producers Monday by announcing its first product.

The company said it will begin shipping a coin-shaped non-rechargeable cell battery for the consumer, industrial and medical markets in the fourth quarter. It claims its carbon-fluorine based battery offers improved energy density, greater efficiency in extreme temperatures and better peak performance because of its high discharge rate.

The Azusa, CA, company that has raised close to $30 million said in an interview it also is conducting “advanced” research to develop a rechargeable battery for broader markets – suggesting efforts to address the large opportunities of electric cars and grid storage.

The race to develop a more capable lithium-ion battery has been accelerating recently, with companies such as Panasonic earmarking substantial resources. The reasons are obvious. Utility-scale grid storage alone could become a $1.1 billion market for lithium batteries by 2018, according to Pike Research. Electric-car battery sales will dwarf that – rising to $8 billion by 2015.

Contour’s present strategy is to target niche applications where margins and profitability are greater, says CEO Joe Fisher. The company claims its products show an eight-fold improvement over current batteries in high-demanding applications.

While the carbon-fluoride technology Contour uses has been around for about 30 years, it has suffered from limited capacity and poor performance at low temperatures. The company offers improvements to these deficiencies that are the result of collaboration between CalTech and the French National Center for Scientific Research. Contour came out of stealth in March and changed its name from CFX Battery.

Its first coin cell will target applications in tire pressure monitoring, defibrillators, unmanned aerial vehicles, military radios, and water and gas meters. Separately, it has a contract with NASA to develop batteries for space flight.

Contour’s $30 million in funding came from the venture firms CMEA Capital and USVP and from Schlumberger. CMEA also is an investor in the battery maker A123 and in CNano Technology, a company developing nano-materials for lithium-ion batteries.

Contour says it anticipates raising a C round of funding early next year.

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Posted by Mark Boslet

Time To Recalibrate The Electric Car Hype?

August 23, 2010

Electric cars are widely expected to be a hit with consumers. This is especially true in places such as California, where residents show a special interest in new environmental technologies.

But it is easy to wonder if hype is getting ahead of reality. Factories will take years to ratchet up the production of these low-profit autos. And the impracticality of EVs will likely delay purchases once the early adopters snap up their babies.

In short, modest growth at a modest pace will probably define this market. Any thing else is guesswork at this point. Here are several divergent predictions just from today that show how difficult it is anticipating this market place:

*China will have 50 million electric cars in operation in 2020. This total will rise to 200 million by 2030, according to Frbiz, a business-to-business Web site. Clearly this number is pie in the sky. Chinese officials have an government production target of 500,000 alternative fuel vehicles next year. So a 50 million target implies a ten fold manufacturing increase in a real hurry.

*Pike Research expects 3.1 million electric vehicles to be sold worldwide by 2015 – an obviously more realistic assessment. But this too suggests a sharp manufacturing increase. If worldwide production is roughly 50,000 vehicles this year, factories will need to increase 10 fold to reach the 620,000 annual level to meet this forecast.

*Pike also expects that from 2010 to 2015, 4.7 million charging stations will be installed across the globe. This requires roughly 1 million new stations a year.

*That pace implies Americans will have access to 1 million vehicle charging spots by 2015 – primarily at home. (The rest of the world will rely more heavily on public charging spots since home charging is less convenient.) To accomplish this gargantuan task, the world needs to move beyond pilot phase rapidly. But this doesn’t appear likely.

*For instance, Icon Parking Systems said today it will install EV charging stations at some of its 200 parking garages in Manhattan. All well and good. But the level II stations will operate in a test mode (managed by Car Charging Group and running on equipment from Coulomb Technologies) for an unspecified period providing monthly, weekly and daily charging. So just how long will the test will last before commercial deployment begins? And more than that, how that will electric charger swapping work in Manhattan?

*This same uncertainty accompanies Enterprise Rent-A-Car’s promise last week to offer about 500 Nissan Leafs at rental dealerships in Los Angeles, Seattle, Portland and San Diego. The announcement follows a similar agreement by Hertz to do the same – with expectations EVs could be available as early as January. But what will a customer do when the car runs out of juice after 100 miles (or less)? And do you bring back a car with an uncharged battery? There remains a lot to work out.

*Finally, Chelsea Sexton, the former GM employee best known for her defense of the EV-1 electric car in “Who Killed the Electric Car,” highlights the dilemma facing car manufacturers. She predicts 40,000 to 50,000 electric cars will be on the market for sale next year. Consumer demand will be 200,000, creating a shortage, Sexton said in an interview of the Forbes Web site. However, what she is referring to is demand from early adopters. What happens when this initial surge passes?

Clearly experts expect electric cars to create strong consumer interest. PG&E officials, for example, are planning for quick-than-expected pick up in northern California, where they seriously worry electrical transformers will not be able to handle the extra juice. A single electric car can draw as much power as a home on a hot summer day.

But given the sour economy, faster-than-expected might be less than some anticipate. This was certainly the gist of the observation from Chinese carmaker BYD, which released quarterly earnings on Sunday. Revenue from the company’s lithium-ion battery and other electronic businesses (cell phone components) rose 55 percent. But overall, the company warned of an auto market that slowed during the second quarter and which would only show modest growth in coming months.

The company, which is 10 percent owned by a unit of Warren Buffett’s Berkshire Hathaway, plans to begin selling its e6 electric car in the United States this year. One hopes BYD does not anticipate this EV is a ticket to new prosperity.

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Posted by Mark Boslet

A123 Looks To Add More Production Capacity

August 11, 2010

A123 Systems disappointed Wall Street with weak second-quarter results on Tuesday, but said it remains confident a huge market for its batteries is just around the corner.

The lithium-ion battery maker said that once again it is considering expanding production capacity. And it calculated its market opportunity from current customers at $1.5 billion by 2013 – a huge target.

The lithium-ion battery market holds great promise. With electric cars and trucks starting to go on sale in significant numbers this year and next, there is great potential for growth. Late last year, Pike Research said lithium-ion battery sales to the transportation market could reach $8 billion by 2015.

But the expense of building factories is high, and concerns have begun to emerge about industry-wide over capacity.

A123 doesn’t seem alarmed. The company said on a conference call that projected demand from its current customers could present it with a $1.5 billion opportunity by 2013.

To prepare, CEO David Vieau said the company is considering expanding production capacity another 30 percent by the end of 2011. The company also announced capacity expansions when it released first- and fourth-quarter results.

The present plan is to reach 760 megawatts of production capacity by the end of 2011. A123 is now considering raising the target to 1,000 megawatts. Vieau told analyst he would take three to four months to make a decision.

He also announced a deal with AES Energy Storage to deploy 44 megawatts of lithium-ion battery storage on the electric grid. By mid 2011, as much as 70 megawatts could be deployed worldwide by the AES, making it the largest lithium-ion battery storage deployment, he said.

A123 said second-quarter revenue came to $22.6 million and its loss widened to 33 cents a share. Wall Street analysts had been looking for sales of $25.5 million and a loss of 27 cents a share.

A123 stock fell to $9.95 in after-market trading. The shares are down about 26 percent from their IPO price last September.

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Lithium Ion Battery Prices On Slow Decline

July 28, 2010

Nissan Motors will offer an 8-year, 100,000-mile warranty for the lithium-ion battery in its electric Leaf hatchback.

General Motors has a similarly generous 8-year, 100,000-mile guarantee for its Volt hybrid, which it announced just days before Nissan unveiled its warranty on Tuesday.

Carmakers are becoming increasingly comfortable with the capabilities of batteries they once considered risky and unproven.

But they say it will still be years before price declines permit electric cars to compete effectively with gasoline-powered models without subsidies. Several said at the Plug-In 2010 conference prices could fall 50 percent to 75 percent – but only over the next five to 10 years.

Lithium-ion batteries prices today are generally said to be between $500 and $1,000 a kilowatt-hour. Consider then an average price of $750.

Observations from the conference suggest:

*Prices could drop to between $350 and $400 a kilowatt hour in five years – a projection from Ron Iacobelli, chief technology officer at Azure Dynamics, a supplier of drive technology for commercial electric and hybrid vehicles.

*Forecasts looking further see price declines to $250 by 2020 (even as energy density improves 30 percent to 50 percent). Asked if the target is conceivable, Ford’s Director of Global Electrification Nancy Gioia says: “That’s what everyone is shooting for.”

*At prices below $300 a kilowatt-hour, carmakers see an electric car competing effectively with gasoline vehicles without subsidies.

Perhaps most surprising is that the Chinese cost advantage seems to be disappearing as lithium-ion battery production expands in the United States and elsewhere.

Eighteen months ago, Chinese manufacturers touted costs that were lower, even if their prices didn’t include delivery. Since, they have risen slightly and are comparable – or between $500 and $1,000 a kilowatt-hour, says Haresh Kamath, a project manager at the Electric Power Research Institute.

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Posted by Mark Boslet

Lithium Battery Over Capacity Debate Rages

July 27, 2010

Lithium Energy Japan, a Mitsubishi joint venture, decided in April to build a new lithium-ion battery factory in Japan. The plant is to supply 50,000 cars.

Several months earlier, A123 Systems said it would use a $249 million government grant to expand its manufacturing capacity. The company calculated its total could supply 320,000 hybrid cars. Then in May, it decided to add another 200 megawatt hours of production, bringing its total to 760 megawatt hours – a 350 percent increase since the end of 2009.

Early this year, EnerDel of Indianapolis unveiled its own plan to more than double U.S. production. The cost: $237 million.

Makers of lithium ion batteries are rapidly expanding their factories in anticipation of a ballooning market for electric cars. The trouble is none of them can be sure what the demand will be.

Carmakers have big plans for electrics. But it could take years for the industry to reach the production levels battery makers appear to be preparing to supply. General Motors, for instance, will make 20,000 Chevrolet Volts in 2011 and increase the production run to 30,000 in 2012.

Nissan has 17,000 pre-orders for its electric Leaf in the United States, suggesting that production is already sold out for the year. The company will accelerate this modest start with ambitious plans for 500,000 cars worldwide starting in 2013.

For many battery makers, the consequence of long-term oversupply could be catastrophic. A flooded market will push down prices and send profits tumbling. Start-ups with innovative technology could find it hard to survive.

With electric cars starting to reach consumers later this year, the supply-demand debate was a key focus of the first day of the Plug-In 2010 conference in San Jose. The conference brought together some of the leaders of the business: A123, LG Chem’s Compact Power, Electrovaya, Applied Materials and the Johnson Controls-Saft joint venture – and there was little agreement.

At this point, demand is not clear, says Roger Lin, director of product marketing at A123. The adoption of electric cars may be faster than the pessimists believe.

At A123, the company’s capacity is sold out through 2013 and 2014, Lin said.

(EDITOR’S NOTE: The following statement is from Andy Chu, vice president of marketing and communications at A123: “Any statement that A123’s battery production capacity is sold out through 2013 and 2014 is inaccurate. We are sold out through this year and into early 2011.”)

On the other hand, some projections suggest worldwide lithium-ion battery supply could be three times greater than demand. “The upsurge in domestic manufacturing has been a surprise for us,” says Kevin Chen, director of business development at manufacturing-equipment supplier Applied Materials.

Recovery Act funds have played a big role in the build out. One company to benefit is Johnson Controls-Saft. Without stimulus funds, the company would have built a factory in Asia, says John Schaaf Jr., vice president of market development at Johnson Controls.

John Gartner, a senior analyst at Pike Research, says oversupply is possible. He projects that by 2015 the installed price of battery systems (including thermal management gear and other finishing equipment) will be cut in half.

There is the chance for at least a temporary glut, he says. “I think there is a potential for that.”

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Posted by Mark Boslet

Renault DeZir Electric Concept Car (Think Tesla)

July 9, 2010

Car is said to go from 0 to 50 in two seconds and have a top speed of 112 mph. No production dates.

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Posted by Mark Boslet

Tesla Targets 50 Stores, Hires Former Apple Retail Exec

July 8, 2010

Tesla Motors said Thursday it hired George Blankenship, the former architect of Apple’s successful retail store rollout, to lead an ambitious retail expansion that targets 50 showrooms over the next few years.

Blankenship, 57 and a 20-year GAP veteran, is to build out the carmaker’s global network of stores to coincide with the launch of the Model S sedan in 2012.

The Palo Alto carmaker, which last month launched a $211 million IPO, presently has 13 showrooms with eight located in the United States. Its retail strategy has not been widely reported. But the strategy is an ambitious effort to control its own sales and service operations and capture the revenue and customer feedback that traditional auto manufacturers cede to a network of dealers.

Tesla's Newport Beach store opened this month. The company hopes to have about 20 stores by the end of the year and about 50 over the next several years

Tesla said Blankenship should be a crucial piece of the puzzle. He comes to Tesla from Microsoft, where he landed last year to emulate Apple’s retail strategy. His service with Apple began in 2000. As vice president of real estate, he started to identify and acquire retail locations. A year later, the company opened its first store.

Prior to that he was responsible for opening more than 250 stores a year at the GAP.

At Tesla, Blankenship’s  first job will be to open stores in Tokyo, Toronto and Washington, D.C. That is the tip of the iceberg. The company’s plan is to have about 20 showrooms in operation by the end of the year and about 50 in place over the next several years. Tesla stores today are in major metropolitan areas, including Los Angeles, New York, London, Chicago, Monaco, Munich and Menlo Park.

The company claims its retail strategy is one of efficiency. “We believe we will…be able to better control costs of inventory, manage warranty service and pricing, maintain and strengthen the Tesla brand, and obtain rapid customer feedback,” it says in a recent filing with the Securities and Exchange Commission.

“Further, we believe we will avoid the conflict of interest in the traditional dealership structure inherent to most incumbent automobile manufacturers where the sale of warranty parts and repairs by a dealer are a key source of revenue and profit for the dealer but often are an expense for the vehicle manufacturer,” the filing continues.

Because Tesla does not need to carry a large inventory, the stores don’t have to be large or include extensive floor space. That by itself will be a major departure from the traditional model. Still, they aren’t cheap. In 2009, the average cost was $500,000. Costs could rise to between $500,000 and $1 million. This should give Blankenship plenty of room for creativity.

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EV Standards Advance Goal Of Consumer Simplicity

June 30, 2010

On the surface, the move to electrify the world’s transportation system seems a straightforward replacement.

Plug your vehicle into an electrical outlet instead of fill it with gas, and substitute one form of energy for another. Below the surface, the switch is anything but simple.

That’s why the evolution of smart-grid standards is so critical and why it needs to be followed closely. This is especially true of the deliberations at SAE International, where in May the first in a series of five communications standards for electric cars was published in draft form.

SAE International is developing five related communications standards for electric cars

The standard is among the first to help dictate how power will flow from the electric grid to EVs. Specifically, the proposed J2836/1 standard will govern network communications as cars plug into charging stations at home, work and during travel. The goal of the standard is to enable utilities to handle new demands for power, especially during peak-load periods, and to encourage consumers to charge off-peak when power is cheap and plentiful.

Rich Scholer, HEV E/E systems engineer at Ford Motor Company, said the draft standards incorporate basic techniques for load balancing and demand response, such as temporarily turning off an air conditioner to balance the draw of a quick, middle-of-the-day, peak-load charge at home.

It also will support the delivery of consumer pricing tables, so cost savings can motivate charging decisions.

Scholer, chair of the SAE International’s hybrid task force, says the committee’s goal is to keep behind-the-scenes complexities hidden from consumers. The interface at a home charging station might offer the choice of a fast or slow charge and leave the network to handle the details. “We’re trying to make things so they are relatively intuitive and simple,” says Scholer.

More than 200 companies are working with the hybrid task force, including carmakers General Motors, BMW and Honda, and the utilities PG&E, Southern California Edison and Progress Energy. The entire series of standards could take as long as three years to evolve. The first, the J2836/1, is targeted at utilities while future standards will address off-board charging, diagnostics, two-way energy flows and other topics.

Until then, vendors will need to develop workarounds for their products and incorporate agreed-upon technologies when they become available.

One challenge facing the task force is in coordinating with standards efforts taking place in Europe and Japan. Scholer says the task force is meeting with the International Organization for Standardization and the International Electrotechnical Commission for that purpose.

“We’re all trying to harmonize,” he said, adding that this goal of integration is “doable.”

A second thrust is to keep the finished product from becoming too complex, especially with the number of companies involved. It is an objective Scholer says he intends to achieve.

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Posted by Mark Boslet

Shares Of Tesla Pop But Fisker’s Karma Is On Hold

June 29, 2010

Wall Street’s love affair with Tesla Motors got off to a romantic start on Tuesday. The company’s newly issued stock advanced 10 percent in a decidedly negative market that saw the Dow Jones Industrial Average sink 270 points.

Meanwhile Fisker Automotive’s Karma went negative. The company has acknolwedged a second delay in the release of its plug-in electric sports car.

Tesla’s IPO went out of the blocks at $17, above the expected $14 to $16 share price, an indication that demand was strong. And strong it was. The stock climbed to $19 before settling back to $18.73, up $1.73. The question, of course, is how long the good feelings last. Tesla will post losses for several years as it spends mightly to get its more affordable (and yet still $50,000) Model S sedan to market.

Fisker Automotive has a different job to do. Volume production of the sleek Karma is now expected to start in the first quarter of next year, not this summer as the Energy Department promised when it awarded a $529 million government loan to the company last year. Fisker is blaming financial, not technical, difficulties for the slip.

Despite the delay, the muscle-bound Karma casts a long shadow. We ran into a Karma prototype last weekend at a car show in Silicon Valley (seee pictures below). The four-door luxury has two, 201-hp electric motors and a top speed of 125 mph. After 50 miles, a gasoline-powered generator kicks in to recharge the lithium-ion battery pack. The car will sell for between $88,000 and $115,000.

Karma’s profile is sleek and curvy. It boasts a top speed of 125 mph and will accelerate from zero to 60 in 7 seconds. An optional solar panel built into its roof runs a fan.

For a sports car, the Karma’s interior is roomy and the dashboard uncluttered. The car’s center console includes a display screen The back seat, however, is tight.

The car is anything but boring to look at. A cutaway side panel stands out from behind. The trunk has room for two golf bags.

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Posted by Mark Boslet

Tesla’s IPO, Slated For Tuesday, Looks Hot

June 28, 2010

Tesla Motors is gushing money like a Gulf of Mexico oil well, but its IPO looks like a big strike.

The upstart electric car company on Monday said it would launch its first public shares on Tuesday at between $14 and $16. It also raised to $211 million the amount of cash it hopes to make from the deal, the second time it has lifted the target.

Tesla Motors' IPO is said to be over subscribed, meaning there is more demand than shares. Tesla makes the electric Roadster.

The confidence suggests demand for the shares is high, despite losses at the company that will extend for several more years. The target was initially $100 million and was raised to $178 million two weeks ago.

According to a Monday filing with the Securities and Exchange Commission, Tesla will now sell as many as 13.3 million shares to the public in the first offering of a car company since Ford went public in 1956.

Investment bankers told MarketWatch that the offering is broadly over subscribed, meaning that more people want to buy shares than there are shares available. Speculation is the stock will be priced closer to $16 than $14.

Once the shares begin trading, Tesla will sell $50 million of additional stock to Toyota as part of a deal that has Tesla buying Toyota’s Fremont, CA, manufacturing plant for $42 million. Toyota agreed to the investment in Tesla to secure a joint development arrangement.

Tesla’s first electric car, the $109,000 Roadster, has done only modestly well since it was launched in 2008. Just 1,063 of the cars have been sold in 22 countries. Another 110 orders remain unfilled.

Instead the bet on Tesla is on the success of its more affordable second car, the $49,900 Model S sedan. The price includes a $7,500 federal tax credit.

A third-generation electric car with an even lower price is expected after that. Here is an analysis of its per-car losses.

Tesla says its long-term aim is to build a business model that can be profitable on a low volume of cars. But it also cautions that it expects losses to increase significantly in coming years as it designs the Model S, equipments the Fremont factory and expands it sales force.

Investors seem to be looking beyond all that.

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