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Plugin Electrics vs All Electric Battery EVs, Epic Throwdown?

I get this every time I discuss EVs.  Something along the lines of oh, you shouldn’t be including PHEVs in with EVs, they don’t count, or are not real EVs, just a stopgap etc.

I tend to think PHEVs may be better product.  At least for now.  And I follow the GM’s Chevy Volt vs the Nissan Leaf with interest.

The main arguments on each:

Plug in Hybrids

  • No range anxiety
  • Still need gasoline
  • Can fuel up at either electric charging station, your home or gas station
  • Depending on driving patterns, may not need MUCH gasoline at all
  • Expensive because:  need both gasoline and electric systems, and batteries are still pretty expensive, even with a fraction of the amount that’s in an EV
  • Get all the torque and quiet and acceleration punch of an EV without the short range hassle
  • But not really an EV, after a few miles it’s “just a hybrid”
  • Future is just a stop gap until EV batteries get cheap? Or just a better car with all the benes and no cons?

 

Electric Vehicles

  • No gasoline at all (fueled by a mix of 50% coal,20% gas, and the rest nuke and hydro with a little wind :) )
  • Amazing torque and acceleration
  • Dead quiet no emissions
  • Fairly slow to charge compared to gas
  • Lack of charging stations is getting solved, but still somewhat an issue
  • Switching one fuel for another, no extra flexibility on fuel
  • Expensive because lithium ion batteries are still pricey and way a lot
  • Future is cheaper better batteries?  Or they never get there and the future never arrives?

I tend to think the combination of plugins and EVs has actually worked together solved range anxiety.  As a consumer, I get to pick from a full basket when I buy, Leaf, Volt, Prius, Model S, lots of pricey batteries to deal with range anxiety, a plug in that gets me almost there with zero range issues, or a Leaf in between.  Whatever range anxiety I had disappears into consumer choice, just like it should.  I don’t think pure EV is any better or worse than a plugin, just a different choice.  They work together in the fleet, too, plug ins help drive demand for EV charging stations that are critical to electric car success, and EVs drive the cost down on the batteries that brings the plugin costs into line.  Unlike with the Prius over a decade ago, it’s not a single car changing the world, it’s the combination that’s working well for us.

Batteries Are Hot! (Just Ask Boeing)

Boeing (NYSE: BA) may soon be on the verge of renaming its new 787 the Nightmareliner…

After a prolonged development program and costly production delays, Boeing started delivering its latest state-of-the-art airplane just 15 months ago, three years behind schedule.  Although the company has a lucrative backlog of nearly 800 787s on order, worth roughly $200 billion in revenues, production rates have been limited, as only 50 units have been delivered in a little over a year.

Alas, opening the production floodgates is not likely to happen just now.  In early limited service with a few airlines, the 787 is causing Boeing and its customers major headaches.  Thankfully, no-one has been injured, but a number of high-profile malfunctions have caused significant operational issues.

None has been worse than last week’s emergency landing in Japan, prompted by a burning smell in the cockpit.  This followed closely on the heels of an on-the-ground fire in Boston the previous week, upon which one aviation observer noted:  “Onboard fires on airplanes are as bad as it gets.”

These two incidents in close sequence produced a “That’s It!” moment, wherein all the aviation authorities worldwide put their collective feet down and issued orders to ground all 787s until the deficiencies have been identified and resolved.  There hasn’t been any similar draconian action in over 30 years, since the grounding of all DC-10s after the disastrous American Airlines 191 crash on takeoff at O’Hare in May 1979.

The most critical problems for the 787 all seem to relate to the batteries on board the plane.  The 787 design uses lithium-ion batteries made by GS Yuasa (6674) for many more functions than most airliners in order to maximize fuel efficiency.

Used in consumer electronics and electric vehicles, lithium-ion batteries are desirable because of their high energy/power density.  Simply put, they are very powerful for their size and weight — and in an airplane, size and weight matter a lot, especially when fuel efficiency is the goal.

Unfortunately, directly related to their high energy/power density, lithium-ion batteries are known to get hot.  Thermal management is critical, or else lithium-ion batteries start bulging and leaking electrolyte, which is highly corrosive.  Moreover, if the batteries don’t start bulging and leaking in response to increasing temperatures, a far worse fate could potentially arise:  explosions and/or fires.

This is not news.   A few years ago, Hewlett-Packard (NYSE: HPQ) settled a class action lawsuit involving burning laptops caused by lithium-ion battery fires.  Indeed, these experiences with lithium-ion batteries caused some to wonder if their use should be banned from airplanes for safety reasons.

Given this history of potential concern, you would think that Boeing would have moved heaven-and-earth to ensure that any lithium-ion battery on the 787 couldn’t experience a comparable problem.  Indeed, according to this article, Boeing engineers attest that the battery design now in use in the 787 was tested for a cumulative 1.3 million hours without failure.

It may not be easy to diagnose and solve a problem that hadn’t surfaced in 1.3 million previous hours.  Worryingly for all involved, GS Yuasa thinks it may take months to get to the bottom of the issues.

Two dissimilar reports over the weekend offer some hope for the principals that the solution will be sooner rather than later.  One story hinted that the battery problems may be confined to one batch of production.  Another story indicated that the two toasted batteries had been fed excessive voltage by their power supply system — a problem that perhaps could be resolved more easily.

Even if it’s a short hiccup, this is exceptionally costly to Boeing.  Not only is Boeing likely to have to cease new 787 production causing further delivery delays, face compensatory payments to airlines for their hardships, and incur increased costs in implementing whatever fixes are necessary on completed and already-in-the-queue units, but the potential credibility damage is enormous, even if unquantifiable.

For a company rooted in commercial aviation, nothing is more important than its safety reputation, which Boeing has built so superbly for nearly a century.   (“If it ain’t Boeing, I ain’t going.”)

At least three implications emerge from this escapade for the cleantech world:

  • Early adopters of new technologies in mission-critical application with large attached liabilities will be highly risk-averse.  The economic advantages afforded by improvement have to far outweigh the possible consequences of failure.
  • Lithium-ion batteries take another kick in the stomach.  As this posting by John Voelcker suggests, it will also hit the cause of electric vehicles, rightly or wrongly.
  • Battery technology still needs a lot of work — either to improve lithium-ion batteries or to develop commercially-viable substitutes with similar energy/power density.  Here is a recent posting by GigaOM blogger Katie Fehrenbacher entitled “13 Battery Startups to Watch in 2013.”

A Dose of Lithium

For those who want an overview of the current state of the lithium-ion (Li-ion) battery sector, the fall 2012 issue of Batteries International is just the thing.

It’s not a pretty picture that’s painted.  Beyond the well-publicized bankruptcies of A123 and Ener1, the general sentiment espoused is that players in the Li-ion sector face tough days ahead.  The technology is not improving rapidly enough, its costs are not coming down fast enough, and markets for its adoption are not growing as robustly as expected.  Meanwhile, too much capital has been invested in too much manufacturing capacity.  Inevitably, one must conclude that further shakeout is ahead.

The most data-laden article in the issue concerns the prospects for Li-ion batteries in electric vehicles (EVs).  In “The Battery Revolution That Stalled”, author Lynnda Greene summarizes four recent research reports – from McKinsey & Company, Pike Research, Lux Research, and Bloomberg New Energy Finance – that all provide projections for a long and slow (rather than short and steep) glide path of cost declines.  For EVs to make good economic sense, it is generally held that batteries need to be in the $150/kWh range.  It had been hoped that Li-ion would reach those levels by 2020, fed in part by the considerable funding frenzy the Li-ion sector received from private investors and government subsidies in recent years.  Alas, the shared perspective of the four research reports is that those cost levels won’t be achieved for well more than a decade, and perhaps two.

The near-term prospects for Li-ion in grid-scale power storage are not much more promising.  This is partly also because of costs, but also because of reliability – some of the Li-ion grid-scale test programs have resulted in fires, and risk-averse utilities are not keen on adopting a technology until it’s been thoroughly proven to work well under almost every conceivable set of conditions.

The challenges facing Li-ion cause some observers to wonder whether too much attention is being paid to Li-ion and not enough on other battery chemistries – including the old-fashioned lead-acid battery extensively used over the past century.  Some of the commentators that Battery International quoted are more subdued in their criticisms, offering modest glimmers of optimism here and there.  But, the inescapable sense from the issue in its totality is that li-ion won’t see happy days for quite awhile – if ever.

In a lengthy profile of his views, battery blogger John Petersen compares lithium-ion batteries to centerfold models:  “They’re glamorous, sleek, sexy and hot; the building blocks of pubescent dreams and mid-life crises.  But they’re expensive, temperamental, potentially dangerous and scarce.”  As several pages more of his analysis and quips indicate, Petersen is very pessimistic about li-ion – and about EVs in general, for that matter.  He thinks that the case for EVs based on li-ion technology has consistently been oversold, and never had the chance of achieving the naïve promises that were made.

MIT Professor Donald Sadoway may sum up the long-term fate of li-ion best:  ”It shocks me that 99% of the active battery community is working on lithium-ion improvements.  We’re not getting there though.  It’s like looking for your car keys underneath the street lamp because that where the light is shining.  But you didn’t drop your car keys there!  What’s next is beyond lithium; in fact, it’s a lithium-free chemistry, which has to date received almost no attention.”

It used to be that “lithium” was known primarily as a treatment for depression.  For those in the cleantech sector, lithium may be coming to be known better as a cause of depression.

A123 Goes 3,2,1,0

On October 12, the lithium-ion battery maker A123 (NASDAQ: AONE) essentially ran the white flag up the pole:  filing for Chapter 11 bankruptcy, agreeing to sell its automotive-related assets to Johnson Controls (NYSE: JCI), and fielding bids for its grid-storage business.

This is a big come-down from a company that not long ago had a market capitalization of over $2 billion, and was viewed as a high-flyer in the cleantech sector, having been one of the few VC-backed cleantech companies to achieve an IPO.

Alas, the markets for A123’s batteries — both in electric vehicles and on the electricity grid — didn’t grow as rapidly as many had anticipated.  Frankly, that isn’t terribly surprising, given how risk-averse and conservative the automotive and electricity industries are in adopting new technologies.  Not to mention, the economics just aren’t there yet, and while battery costs have come down and battery performance has gone up, continuing subsidies on fossil fuels makes the breakeven point challenging.

A few months ago, A123 had announced plans to obtain financing from Wanxiang, a Chinese manufacturer of auto parts, that would have kept A123 afloat (although may have only postponed the inevitable).  The proposed deal produced a din of objections that American-funded battery technology shouldn’t end up in foreign (especially Chinese) hands.  So, now it won’t, though I’m sure that holders of A123 equity aren’t particularly happy about the consequences.

As noted in this reportage by Forbes, the demise of A123 as a company doesn’t mean the demise of its technology — or of the benefits to American customers from using its technology or American employees in making products based on its technology.  This point is no doubt lost on those who bitterly complain about A123 having received U.S. government financial support as yet another bad investment and more evidence that the public sector is lousy at and therefore ill-advised to “picking winners and losers”.

As is often the case, only time will tell.  It will be interesting to report in a few years on how much value Johnson Controls will have been able to generate with A123’s technology.  And only then can a true reckoning be made of the cost-benefit of U.S. public financial support for this technology.

EV Companies Need to Douse the Fire Issue

Long a dream of environmentalists, and long a laughing-stock among car enthusiasts because of lame designs (e.g., GM’s EV1 and a long litany of goofy looking vehicles that look like a cross-breed between golf carts and toys), electric vehicles (EVs) are finally starting to make a real impact in the mass-market auto marketplace. 

Of all the electric vehicles, the most prominent is the Chevy Volt, which is a really good looking car with pretty impressive performance (range, acceleration and fuel economy). 

However, a negative news item about the Volt is starting to gain a little momentum:  that the batteries are prone to fires.  Over the summer, a Volt caught fire at a National Highway Transportation Safety Administration (NHTSA) facility a full three weeks after a crash test.  And, more recently, a Volt being charged in a home garage in North Carolina was involved in a fire.

Notwithstanding the possibility of misinformation — it now seems that the latter fire was not caused by the Volt, but started elsewhere in the garage, according to the local fire marshal — nevertheless there’s high potential for the Volt and all EVs to be stained and tarred with the perception that they are unsafe fire hazards. 

This stems from the use of lithium-ion batteries — which offer high energy and power density as is critical for non-stationary applications, but also have a propensity to burn.  Indeed, this was a serious issue a few years ago for laptop computers — and while that concern largely faded away, it came back into focus last week after an iPhone caught fire on an Australian commercial flight, and now threatens the EV sector before it can gain solid market traction.

Of course, no-one’s claiming that gasoline-powered vehicles aren’t prone to fires either.  Indeed, between the flammability and the toxic nature of the fuel, it’s hard to imagine the gasoline-powered auto we have taken for granted for decades being approved by regulators now if it were just being introduced today. 

However, gasoline vehicles have not been generally known to spontaneously combust when standing still, either.  

The last thing that the EV sector needs is a Hindenburg image.  The car makers and the battery makers in the EV arena need to tend to this issue, immediately.  The quicker-than-normal response of GM, offering loaner cars and the possibility of buy-backs to Volt owners concerned about safety issues, indicates how urgent the situation is.

Assaulting Batteries

A radical breakthrough in energy storage has long been considered the “holy grail” of cleantech.  With ubiquitous, scalable, reliable and (most importantly) low-cost energy storage, two main thrusts of cleantech adoption will be debottlenecked:  much deeper penetration of zero-emitting and limitless but intermittent solar and wind into the electricity generation mix, and significantly reduced needs for fueled internal combustion in vehicles.  Either of these is gargantuan in scope and implications.  As I like to say, whoever solves just one of them in a commercially-attractive way will make Bill Gates look like a pauper.

Of course, the primary energy storage technology in use now, and for the past century, is batteries.  The current state of battery technology has well-known performance characteristics that are generally satisfactory for present applications (e.g., starting automobiles, power quality management in uninterruptible power systems (UPS), portable consumer electronics), but not for the two above-noted game-changing applications.

And so the cleantech innovation and investment world has been searching near and far, high and low, for better energy storage solutions.

Some trailblazers are pushing entirely new technological platforms for energy storage.  About a decade ago, flywheels were especially in vogue.  As the name implies, this is a mechanical device that stores energy in a spinning mass.  However, several issues – notably frictional losses for stationary applications and weight and containment (you do NOT want a flywheel disintegrating into a hail of shrapnel in an accident) for mobile applications – have been difficult to overcome.  The two most well-known flywheel developers:  Active Power (NASDAQ: ACPW) continues to make a go of it, whereas Beacon Power (NASDAQ: BCON) just announced bankruptcy last week after a very long slog.

Supercapacitors and ultracapacitors also horn in on battery territory.  Like batteries, both supercaps and ultracaps are electrochemical devices.  However, unlike batteries, they typically charge/discharge more quickly, thereby allowing rapid surges and refills of power.  In truth, supercaps and ultracaps may be more of a complement than a threat to batteries:  batteries being generally pretty good in slow/long energy flows but not strong in fast/short energy flows (i.e., high energy density and low power density) and super/ultracaps being the opposite (i.e., high power density and low energy density).  Of course, if super/ultracaps can be matured to provide both high power and high energy density at attractive economics while meeting other key performance criteria (reliability, temperature tolerance, weight, etc.), then batteries will truly be under siege.  Indeed, as one recent article on GreenTech Media suggests, Ioxus claims to be developing an ultracap that really begins to intrude on the battery space for electric vehicles.

Even so, don’t underestimate the challenges these upstart technologies face in penetrating the energy storage market.  There’s a reason why batteries, as suboptimal as they may be, dominate the energy storage space:  nothing else has been able to do better, consistently, at low cost.

Accordingly, a lot of attention, effort and money still flows to the battery space – to make improvements to the reigning energy storage technology champion.  Of course, batteries can be improved on just about every possible dimension imaginable:  energy density, power density, weight, cost, depth of discharge, speed of recharge, number of lifecycles.

Battery technology innovations can generally be lumped into two categories.  One is better materials for the electrodes or electrolytes, to improve the performance of individual battery cells.  Second is battery management systems (BMS), which aim to improve the way multiple cells interact and affect overall battery performance. 

Both types of innovations were on display at last month’s unimaginatively-named The Battery Show in suburban Detroit.  It was a modest exhibition, as cleantech shows go. 

With few exceptions – LG comes most to mind, with a demo of its lithium-ion battery-based whole-home UPS that it will be unveiling in the next year or two – most of the booths showed the wares of small little-known companies seeking to get a toehold in the battery space, selling to battery manufacturers or gaining the enthusiasm of battery users who can then apply pressure on the battery manufacturers themselves.

Among manufacturers of batteries, most of the biggest companies such as C&D Technologies (OTC: CHP), East Penn Deka and Exide Technologies (NASDAQ:  XIDE) did not have visible presences.  Although disappointing, it’s not surprising:  the battery industry has consistently been characterized to me as sleepy and resistant to change, focused more on manufacturing and cost-minimization than technology advancement.  The one company probably most shaking up the battery sector – A123 Systems (NASDAQ:  AONE) – was in good force, although perhaps that should be discounted somewhat, since many of their employees are located just a few miles from the show venue.

While the battery sector may have largely been “fat, dumb and happy” for decades, I see that characteristic fading away in the coming years, perhaps quickly.  Many staid management and operating teams of the big guys are nearing retirement, and there’s so much at stake in the future of energy storage that highly-disruptive and well-capitalized global players will no doubt be increasingly entering the market and stirring the pot.  For instance, a recent article in The Economist mentioned the battery ambitions of Samsung (KSE: 005930), a formidable entrant-to-be.  

Increasing dynamism will be uncomfortable for the battery incumbents, but then again, no-one said the cleantech market was easy.