US Auto Industry Desperate For Better Batteries
FUTURE PUNDIT
A Wall Street Journal article reports how much Detroit car company attitudes have shifted on batteries. American car companies feel an urgent need for leading edge domestic lithium ion battery suppliers.
"Facing growing pressure to curtail greenhouse-gas emissions, U.S. auto makers are increasingly worried that the critical battery technology they'll need to compete is getting locked up by Japanese rivals who moved more quickly to develop gas-electric hybrid vehicles.
"It's important to have the knowledge base on advanced automotive battery technology and manufacturing capacity right here locally in the U.S." says Beth Lowery, GM vice president of Environment and Energy."
One of the biggest hybrid battery suppliers is owned by the most formidable competitor of the Detroit auto industry (Toyota). The American car companies finally figured out that's a problem. Fortunately for Detroit the Nickel Metal Hydride (NiMH) batteries used in Toyota Priuses are a technological dead-end. The future lies with lithium ion chemistries and perhaps nanotubes and other nanotech. On that playing field US venture capital start-ups stand a good chance of winning. But a larger effort at funding university research would produce more advances in electrochemistry suitable for spinning off into VC battery start-ups.
A123 Systems is among the start-ups that are suddenly getting lots of attention from both government and corporate interests.
"The U.S. Department of Energy, in collaboration with the U.S. Advanced Battery Consortium, which is made up of Detroit's three auto makers, last year awarded A123 a $15 million contract to develop its version of lithium-ion technology for hybrid-electric vehicle applications. In addition to the A123 contract, the Energy Department has requested $41 million this year to continue advanced battery research."
This is still chump change. Consider the benefits of battery advances. Sufficiently advanced battery technologies will some day enable cars to run 100 and more miles between recharges. This capability will end the use of liquid fuels for most local travel. Liquid fuels will continue to get used in longer road trips, air flights, and in ships. But for most commutes and trips to stores batteries will displace gasoline, diesel, and ethanol.
The ability to use batteries for transportation will, in turn, enable the use of nuclear, solar, geothermal, and wind power for transportation. Granted, today we are seeing a huge scaling up in the use of coal for electric generation. But that trend will end due to a combination of rising regulatory limits on emissions and dropping costs of cleaner competitors.
Smarter energy policies by governments could accelerate the development of next generation batteries and cleaner ways to generate electricity.
Milwaukee-based Johnson Controls, one of the biggest suppliers of lead acid batteries, has joined the growing list of groups attempting to produce next generation batteries. The race is on.
South Korea, China and the European Union also have government-supported advanced battery projects, according to U.S. and Japanese government officials and documents. And a joint venture between Johnson Controls and French battery cell producer SAFT, a €560 million ($751.9 million) a year maker of batteries for industrial and electronics uses, also is vying to supply GM.
A123 was founded in 2002 by Massachusetts Institute of Technology professor Yet-Ming Chiang, former American Superconductor executive Bart Riley and entrepreneur Ric Fulop. The company, which has 250 workers compared with about 1,000 at Panasonic EV, has raised $100 million in capital from investors, including Sequoia Capital, a Menlo Park, Calif., venture capital firm, and General Electric Co.'s commercial-finance unit.
If Toyota comes out with a cheap lithium ion battery usable in pluggable hybrids and does this a few years before Detroit automakers find a supplier for such a battery then Toyota's gains in marketshare will accelerate. Both the American and European auto industries face the very real threat that an East Asian win in next gen batteries will translate into a big East Asian win in the automotive marketshare.
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