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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Posted by Mark Boslet

Nanosys Unveils $30M In Funding, Strikes Solar Deal With Samsung

August 10, 2010

Nanosys strengthened its competitive standing in the clean-tech market by securing as much as $30 million in new funding and striking a deal to have Samsung use its solar technology.

The Palo Alto start-up that became a poster child of the nanotech craze six years ago, has been steadily remaking itself into a supplier of technology to electronics and green-tech companies. The heady days are gone, as are the plans for a 2004 IPO.

But the company has built a respectable portfolio of technologies that boost the capacity of lithium ion batteries and improve the quality and efficiency of LED displays and solid-state lighting.

Now it has received validation of its solar technology in the form of a licensing agreement with Samsung. As part of the deal, Samsung Venture Investment Corp. will take a $15 million equity stake in Nanosys – on top of the millions more the company will pay for the license.

Previous Nanosys investors Arch Venture Partners, El Dorado Ventures, Polaris Venture Capital and Venrock will join the funding round, contributing $10 million. Nanosys expects to add another $5 million to the round by October.

CEO Jason Hartlove says the Samsung money will allow Nanosys to build a Silicon Valley plant and ramp production volumes.

But more importantly, Samsung will license Nanosys’ nano-particle coating technology and nano-inks to improve the efficiency and lower the cost of its thin-film solar cell production.

Samsung, a relatively latecomer to solar, announced earlier this week that it would more than quadruple solar cell production by the first half of next year. The company kicked off a 30 MW solar pilot last September and now has set its sights on 130 MW. It is reportedly working with both crystalline cells and thin film technologies.

Hartlove says his nano-particle coatings shift the infrared and ultraviolet wavelength light that thin film can’t process to colors the cells can absorb. Efficiency goes up. Meanwhile, nano-inks are quicker and cheaper alternatives to the chemical vapor deposition reactors that thin-film producers often use.

Samsung also will work with Nanosys on Nanosys’ quantum dot technology for LED chips.

“This is a very important deal for us,” says Hartlove.

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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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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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Boston-Power Raises $60 Million, Seeks Stimulus Money In China

June 24, 2010

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.”

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Posted by Mark Boslet

Western, Chinese Electric Car Companies Forming Bonds Of Convenience

May 27, 2010

EnerDel joined the parade of U.S. and European electric-vehicle companies striking deals with Chinese competitors, announcing on Thursday a joint venture with Chinese auto parts supplier Wanxiang.

The two companies will jointly manufacture lithium ion batteries with an eye on selling to the explosive Chinese car market, now the world’s largest.

Daimler is driving to China, but so is EnerDel, which announced a joint venture Thursday to manufacture lithium-ion betteries in China.

The deal is the most recent in a string of joint ventures underscoring the attractiveness of the rapidly growing Chinese market and the desire of Chinese companies to gain access to advanced Western technologies. By some measures, Chinese technologies trail those in the West and Japan by as much as a decade.

Among the Western interlopers is Germany’s Daimler AG, which early Thursday launched a $88 million joint venture with Chinese battery maker turned car developer BYD to build an electric car for the Chinese market.

Earlier this week, CODA of Santa Monica said it planned to open a Columbus, Ohio, lithium-ion battery factory. Lio Energy Systems, a joint venture between Coda and Chinese company Lishen Power Battery, will operate the plant.

The sometimes surprising bedfellows highlight the bond now forming between otherwise potential adversaries – largely to take advantage of the manufacturing muscle available from Chinese companies. “Our new joint venture is well positioned to make the most of the vast potential of electric mobility in China,” said Dieter Zetsche, Damiler’s chairman.

EnerDel, the battery-making arm of Ener1, said it expects its joint venture to produce 20,000 battery packs annually by year’s end and 40,000 by the end of 2011. The capacity will greatly expand production at the Indianapolis company, which now makes 20,000 battery packs at a facility in Korea and anticipates an additional 30,000 at a soon-to-open Indianapolis plant. A second Indianapolis facility operates at a comparatively modest level.

But does more than raise the company’s global capacity, according to a spokesperson. It gives EnerDel access to the high priority Chinese market. The company did not say what it will invest in the joint venture.

Wanxiang, China’s largest auto-parts supplier, is the majority stakeholder in domestic carmaker Guangzhou Automobile and has supply relationships with vehicle makers SAIC, Chana, Haima and Yutong – all of which are potential battery customers.

Daimlers says its alliance is designed to combine its expertise in electric cars with BYD’s command of battery technology and drive systems. BYD has 3,000 engineers working in Shanghai, with plans to hire more.

The new vehicle will be marketed under a yet unannounced brand. BYD, which counts Warren Buffett among its backers, already has built two electric cars: the hybrid F3DM and the soon to be released e6.

Coda says it is scouting sites for its plant. It also will apply for a manufacturing loan from the Energy Department. The company’s joint venture produces 20,000 battery packs a year in China, but will close the facility when the Ohio operations begin.

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Posted by Mark Boslet

Gm Snuggles Up To Google, Shows Off The Electric Volt

May 19, 2010

General Motors snuggled closer to Google on Tuesday by announcing it will use Google Maps to add location-based features to its Chevy Volt mobile app.

The carmaker said that with the release of version 2.0 of the app running on Google’s Android software, the smart-phone application will pinpoint the location of cars, even transmit voice-guided directions.

GM offers test-drives of the Chevy Volt. The verdict: largely favorable, with peppy acceleration and tight handling

GM unveiled the mobile app in January at the Consumer Electronics Show. In its present form, it allows owners of the upcoming Volt electric hybrid to check battery charge levels, unlock doors and start engines.

The joint development with Google is clearly a feather in the cap of GM’s OnStar, which is developing the app. Mobile apps are among the hottest trends in technology, and location-based services make a great deal of sense in cars.

But the real news Tuesday was the Volt itself. GM has been guarding details of the car’s feel and handling, and it cast aside the curtain to offer test-drives to a handful of San Francisco journalists. The verdict: largely favorable.

The Volt is GM’s first foray into the emerging electric car market, and instead of a tiny lightweight two seater, it is a roomy-enough mid-sized vehicle in keeping with the majority of cars on the road today.

It boasts respectable economy, with a 375-pound lithium ion battery from LG Chemicals capable of a 40 miles range. The 16 kWh battery has 220 cells and a GM designed heating and cooling system to preserve performance in cold and hot weather. Both heat and cold weather can rob a battery of its charge.

When it drains, a 1.4-liter, 4-cylinder gasoline powered generator kicks in to provide juice to the electric motor.

The car has a comfortable feel on the road. Its shocks are soft enough to absorb the ride and its steering is tight. Like many cars with high-efficiency electric motors, the vehicle has pep and is responsive.

GM is fond of say, it feels like a car, and it does, with the exception that it is quiet. The pleasure of leaving a parking spot with little to no noise is hard not to appreciate.

GM created uncertainty about the Volt by warning the production model, expected before the end of the year, will differ from the prototypes it is showing off. But Tony Posawatz, vehicle line director, put some of the questions to rest.

“The (exterior) look is pretty much representative of what you’ll see in production,” he said. Some small interior changes could take place.

But Posawatz did not solve the biggest mystery: the price. GM has suggested the car could cost about $30,000 after a $7,500 federal tax credit. But late summer is when the sticker will be finalized, he said. “We’re still working through some details.”

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Overdrawing Electric Car Batteries Without Damaging Them

April 2, 2010

Range anxiety is the biggest drawback to electric cars. When the battery is dead, so are you, perhaps miles from the nearest charger.

What if you could miraculously find extra miles in such a situation? Such a possibility is theoretically possible, says Indian electric carmaker Reva Electric Car.

Reva hopes to provide an emergency power system with its next generation electric car

According to the company, electric cars hold a certain amount of battery power in reserve to protect electrical systems, such as electrodes, and extend the life of the battery. This reserve can be as high as 30 percent of capacity.

So how do you draw on this extra juice in an emergency? An interesting post on the IEEE Spectrum blog explains how Reva is working on just such a system to give consumers access to their power reserves. It is not the only carmaker doing so. Daimler is testing a similar system, and Honda has one as well.

Reva says the procedure is complicated and needs to factor in numerous variables, such as daytime temperatures, a battery’s age, its recharge history and how aggressively a car has been driven.  No algorithm can be easily adapted for every car.

Reva says its system (REVive) will remotely communicate with cars to retrieve operating data, store it for three years and compare it to the 84 million miles of driving data it has from other electric cars. When the need arises, the system checks the data and calculates how much power is available. Then it puts the car in a slow “limp” mode and a driver can drive to a charging station.

The danger is in draining a battery too frequently. Deep discharges can shorten battery life. But the damage is minimal if batteries are depleted only once in a while.

However, if this helps alleviate range anxiety and the fear of being stranded miles from home, it will do a wonderful service to the electric car industry. It will also fill up our airways with reams of routine operating data and give a boon and headache to cellular service providers.

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Posted by Mark Boslet

Clean Tech Investing Bounces Back With Electric Cars Deals Leading The Way

March 31, 2010

Venture capitalists returned enthusiastically to clean-tech investing in the first quarter, increasing their spending. But they shun solar companies for electric cars and backed away from the smart grid. To hedge their bets, they spread their money more broadly than in the past, putting smaller sums in more companies.

Clean-tech venture investing rose in the first quarter after a soft fourth quarter. Source: Cleantech Group and Deloitte

Clean-tech start-ups globally received $1.9 billion during the three months, an 83 percent boost from the first quarter of 2009, when the depths of the recession brought investing to a stand still. Investments rebounded 29 percent from a soft fourth quarter, which perhaps is a more telling sign of the renewed vigor in the sector.

The number of deals in the quarter – 180 – set a record, edging out the 165 of the fourth quarter, according to a investment survey released by the Cleantech Group and accounting firm Deloitte.

In North America, VCs turned in their largest quarterly investment total in a year and a half. Venture firms in the region accounted for 81 percent of total dollars.

Perhaps the most disappointing news from the quarter was that venture investors continue to feed their portfolios, pouring most of their money into existing companies instead of new start-ups.

The transportation sector, including electric cars, was the quarter’s largest category. The electric car battery-swapping venture, Better Place, took in $350 million and electric carmaker Fisker raised $140 million. Battery maker Coda Automotive added $30 million to its bank account.

The greatest number of deals took place among energy-efficiency start-ups, including LED lighting companies.

Overseas, venture investing in Europe and Israel was down compared with the fourth quarter.

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Utilities Remain Paralyzed On Grid Storage Decisions

March 11, 2010

Grid storage is universally thought of as a good idea. But utilities don’t yet have a clue which technologies to choose and where to deploy them.

"We all agree it's a good idea," says Paul De Martini of Southern California Edison. But "we're at 50,000 feet."

The uncertainty could delay the spread of renewable energy, particular solar and wind energy, as executives evaluate options and wait for clear winners in the market. Both solar and wind create intermittent power streams making the ability to store energy for when the sun goes down or the wind stops blowing critical.

This dilemma is apparent to Paul De Martini, vice president of advanced technology at Southern California Edison, who spoke Wednesday afternoon at Stanford University.

“We’re at 50,000 feet” in terms of understanding the market, says De Martini. “We all agree it’s a good idea.” But the utility doesn’t know how much storage it needs and whether it should deploy it near homes, near transmission facilities or somewhere between.

De Martini says he has identified 40 different storage technologies that are under development. They range from lithium ion batteries, to uphill water pumps, flywheels and ice storage.

In discussions with the companies, it is difficult for Southern California Edison to describe exactly what its needs are, he said. And “there’s not a really good set of requirements out in the industry.”

Some say the short-term answer is all of the above. “We need to be thinking about storage in every form,” says Jim Detmers, vice president of operations, at California ISO, which runs the state’s electric transmission gird. “We don’t want to limit ourselves to just one type.”

And yet that will likely delay implementation and cost more, since more development money will need to be spent. In an address last week, Energy Secretary Steven Chu said his favorite is a technology that pumps water uphill, only to let it flow down again and spin turbines when the sun stops shining. Perhaps a high profile test project is in order.

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