Greg, I've read your posts and I guess I believe you are working backward. If we assume 1,800 laptop batteries per day and each battery can produce 30 watt hours per day, and the going rate in the market for li-poly sales is $ 2.50 per watt hour, then the battery should sell for $ 75 apiece. This is not unreasonable - you can go into a retailer now and get a good li-ion replacement battery for $ 200 - $250, so I would guess that $ 75 is not an unreasonable manufacturing sales price, even including subsequent packaging costs.
Now if Valence produces a laptop with > 30 watt hours each, and sold the batteries for $ 75, then they would be selling for < $ 2.50 per watt hour. 1,800 laptops per day on a 300 day year is 540,000 per year or about $ 40 mm of revenue, and on a 360 day year is about $ 48 mm of revenue.
Now I would bet that gross manufacturing margins are at least 50%, not the 35% that has been depicted, which would yield roughly $ 24 mm, covering current cash burn rate. Clearly the devil is in the assumptions, and as I indicated before, I think line 1 will produce > 1,800 laptop batteries per day. Back when it was originally delivered, it was supposed to produce > 4 mm cells per annum, and I believe someone at the company early on commented that 1,200,000 laptops was a reasonable feasible production rate, certainly less than the 5 per minute that Lev mentioned in the earlier conference call.
I'll grant you that if you assume 1,800 laptops is the production ceiling, and assume a 35% gross margin, then you can't get profitable with one line. That's what makes a market, though. |
