re Delphi 'vs' USABC
The 'Delphi/Valence relationship' was 'mutually' terminated in 1997, as you know. However, Delphi is still a potential licensee for both the Saphion technology and the lithium-polymer battery production technology (which may or may not fall under the 'Saphion' umbrella... I think it does, but in truth I see two independent aspects, potentially separble). The original agreement between Delphi and Valence allowed both sides to use the co-developed technology in the respective areas of automotive (Delphi) and consumer electronics (Valence). If I remember right, after 5 years the restrictions come down, so Valence could sell products and/or license anything developed during the D/V relationship period (through '97) into the automotive market. That *may* be part of the reason for the timing of the onset of the USABC review of the Valence technology, or it may merely be coincidence.
I believe Valence and Delphi parted ways not because the lithium polymer technology developed as an extension of the original Bellcore process was unworkable (the N-charge product should finally be proving the viability), but because there was some internal dispute as to which other technology co-developments should be shared. Delphi may have wanted to tap into future developments w/o being required to pay royalties, and Valence may have thought that the small sums being spent by Delphi to support Valence were insufficient given the potential royalty streams that would extend far into the future. But this is sheer speculation. I simply note that Delphi continued the development and testing of lithium-polymer cells for the automotive market, and still holds it front-and-center as part of their business plan. In the past we continued to look for capex spending by Delphi towards a production facility, but didn't find it in th eUS, suggesting the market penetration was some time away yet. Now I am inclined to believe that the production will come from overseas facilities, and have no idea as to the state of any investment there (and initially would expect production to involve less-than-fully automated techniques, given the low labor costs).
My current interpretation of the timing of the separation of Delphi and Valence is that Delphi would NOT have to pay royalties for the manganese spinel development, but *would* have to pay royalties for any lithium-polymer production that involves techniques since patented by Valence, as well as for use of the phosphate-based materials.
The USABC is explicitly interested in the Saphion technology, which certainly includes the phosphate materials but ultimately may or may not involve the use of the lithium-polymer technology (at this point I believe it does), as these materials could be used in place of cobalt-based cathode materials for liquid-electrolyte cells (resulting in cells that are 'safe,' i.e., not explosive or flammable under impact, etc, while current 'li-ion' cells are not safe for use in vehicles, IMHO).
Valence appears to have passed the first tier of technology review, and now USABC is interested in obtaining some number of cells (the PO you refer to) for additional testing.
Actual use in commercial fleets is likely a few years away, and certainly any sizeable revenue is further out still. However, the interest from the USABC is long overdue. If I recall correctly, other firms promoting lithium-ion cells that were not cobalt-based have had modest funding from USABC for some time (I'm thinking it was LITH, who claimed an alternative to the Bellcore process). One also wonders why Delphi has not had or accepted funding from USABC for promoting their 'LiPoTek' technology... perhaps suggesting they were not interested in developing any production technology upfront?
At this point, Valence shareholders are thirsting for ANY good news even remotely suggestive of interest from the commercial marketplace. This can't hurt, and modest revenue from limited production runs can't hurt, either. However, this is just a first step and not a guarantee. Valence shares are still just a lottey ticket, priced like an undated option on potential success some years down the road. There's going to still be losses for many Qs to come, and additional dilution, until recurring POs arrive ('if ever,' the shorts will say... hence the reason I stated the 'lottery' nature of the share value).
Maybe a small relief rally will ensue here. |
