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Captain Hybrid
Electric Car Battery Makers Face Shakeup Amid Soft Demand
9/8/2011

LG Chem, which makes the Chevy Volt battery shown here, is said to be well positioned for survival.  (Photo courtesy of GM)
LG Chem, which makes the Chevy Volt battery shown here, is said to be well positioned for survival.
(Photo courtesy of GM)

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melllowfelllow
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Gold
Re: Another thing
melllowfelllow   9/16/2011 2:37:13 AM
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I have heard this theoretical 'swap thing' many times with great skepticism. Proponents always dismiss the barriers with the simple phrase "all we need to do is standardize". The novice or 'ivory tower resident' acknowledges that it will be difficult to get everyone on the same page, but proclaim that 'if we all work together, we can do it'. I have never seen any indication that the problem was understood. Some of the concerns that I have are:

1. IMO, the very premise of swapping battery packs addresses the symptom and not necessarily the problem.

2. Pack swaps require support for a 'several year life cycle'. If it were magically implemented for 2013 models, those packs would have to be supported for 7-10 [??] years.

3. IMO, R&R an entire pack would not be technically feasible [even if mechanical issues are resolved]. A 1750 lb car and a 3700 lb car would have different requirements. This would mean that module replacement instead of pack replacement would be required - OR multiple pack part numbers would be required.

4. Replacing packs will reduce the MTBF. [using skilled technicians]

5. Replacing modules will reduce the MTBF even more. [using skilled technicians]

6. #4 & #5 will increase when performed by 'available warm bodies'.

7. Pack swaps will be an ideal way for used car dealers to resolve their weak pack problems.

8. Pack swaps will be an ideal way for new car owners to 'downgrade' to a used pack.

9. Pack swaps will be an ideal way for morons to keep replacing their packs after habitual abuse.

10. IMO, standardization + pack swap would slow the rate of battery technology advancement. Will folks have to standard on a single set of battery chemistries so that the pack can be charged??

11. Yes, we could have 'pack insurance', pack testing before swap, pack reservations, 'find-a-pack' services, built-in pack status/history implentation, x% depth of discharge autocutoff, etc for a fee. In spite of the 'gas fillup comparison', you are probably looking at closer to 2hrs typical for a swap.

12. Pack insurance/swap companies could be a significant portion of the 'auto battery market' and possibly influence automaker battery advancement [or foot dragging].

13. If packs are easy to swap, they are easy to steal.

I'm getting tired and I haven't even touched on BMS...

cvandewater
User Rank
Gold
Re: Lithium Battery Production costs
cvandewater   9/12/2011 7:36:16 PM
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Hi Dave (KingDWS),

The ROI of solar PV panels was quite stable and indeed in the order of 15 years for a long period, while the efficiency and price of the panels were very stable. However, since a few years the price has suddenly fallen from a plateau of $4/Wp to around only $1/Wp (!) with the Chinese and Indian solar manufacturers coming online and starting to produce cells at extemely competitive prices ($1.5 for a 6x6" cell of about 3.6Wp)

So, with the sudden price drop also came a sudden boost to solar installations so that even in the difficult market of today you see solar installers busy and the RoI time has shrunk to only a few years, more dependent on who installs and the cost of the other equipment, since the panel price is not so much dominating any longer.

Since a long time it has been possible to get a solar installation with zero money down and a lease price setup as a payment for the (solar) electricity supplied, this is a great way to start using green power without upfront investment by the customer and the terms have become much more interesting with the reduction of panel prices.

Note: for off-grid application you can actually buy laminates (unframed panels) for a price below $0.75 per Wp. I think the time to get into solar has never been easier or more attractive. Even from a financial point of view, which was usually the bottleneck.

cvandewater
User Rank
Gold
Re: cort of technology vs. cost of replacement
cvandewater   9/12/2011 7:01:56 PM
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Hi David & bronorb,

It depends ho many months or years you take into account to compare the case between your old van/truck and a new vehicle, combined with the amount of miles you drive it. Of course it also depends on whether you have saved for a replacement vehicle or that you need to completely finance it, but I will leave that as a separate exercise.

Regarding costs: as you said, gas is likely the biggest difference (insurance may be lower on a newer vehicle and definitely maintenance should be less, plus you don't need to smog it for several years depending which state you're in) so let's just look at the difference in gas purchase: If your vehicle is indeed a gas hog, it might get no more than 12 to 15 MPG in real life. Say it is 15 and you drive the average distance of 15,000 miles per year with it. That is 1000 gallons and at a price close to $4 (pretty consistent throughout this year here locally near SF) is $4000 per year.

Taking a modern vehicle that gets about 40 MPG will allow you to reduce the quantity of gas to only 375 gallons or $1500, a saving of $2500.

This means that over a period of 5-6 years you should easily come out ahead, depending on which type of vehicle you purchase and how much luxury you have and require in your vehicle. All the years after the first to recoup the purchase price, will allow you to continue to save, even compared to your existing already paid-for van/truck, simply because it is a gas hog. Of course YMMV.

BobGroh
User Rank
Platinum
Re: Battery Maker Shakeup Coming???
BobGroh   9/12/2011 5:55:35 PM
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Cvandewater, excellent writeup and a lot of interesting ideas and thoughts.

TimJones
User Rank
Silver
Another thing
TimJones   9/12/2011 1:19:13 PM
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Something else to consider: A lot of folks have been talking about battery exchange programs as an alternative to charging stations. There are a number of hurdles to get over in such a program, battery pack standardization probably the largest. But if an exchange scenario did play out, that would greatly increase the market for EV batteries, as the manufacturers would need to supply batteries for exchange inventory as well as for the vehicles on the road.

William K.
User Rank
Platinum
EV Battery manufacturer "shakeup"
William K.   9/9/2011 7:19:39 PM
You are correct, of course, Beth. It is quite early to say just what will be happening in 5 or 10 years. On the other side, it certainly did look like some glad talking promotors did pound a lot od sunshine, and it seems quite believeable, at least to me, that the purpose was to drive up stock prices. Not very honorable, but marginally legal. So that may have lead some investores "down a path". 

Whatever happens in the next few years certainly will be "very interesting", good, bad, or just plain ugly. But interesting for certain.

cvandewater
User Rank
Gold
Re: Battery Maker Shakeup Coming???
cvandewater   9/9/2011 3:07:35 PM
William,

Can you show where you got the certification that the new EV packs last on a few years? Even the old Hybrid NiMH batteries generally lasted 100k+ miles and the early data suggestes that Li-Ion batteries will last way longer, in fact most predictions are that they will outlast the life of the vehicle, so I am surprised and curious to hear who certifies EVs to need a new pack. That would be interesting data.

The study quoted here is limited to EV battery makers, but many of them have other market segments, for example for A123 the EV market is tiny - they may grow this segment, but at the moment they are very strong in power tools which is a huge market, so any nascent EV market fluctuations will hardly bother them.

Regarding grid backup power, this is indeed a very interesting area and I expect that utilities (if they have some smarts) will get into this market big time. Let me sketch some numbers to show how beneficial this market can be, even for me as consumer: ToU tariff that applies for anyone who pllans to charge an EV at their premise here in PG&E land is about 6c for off-peak, 11c for part-peak and 30c per kWh for peak usage. Peak is only applicable on weekdays half the year (May-Oct) so on average you see 5/14 times the peak/off-peak difference and 9/14 the part-peak/off-peak difference. On average this means almost 12c profit for each kWh stored at low tariff and returned at high tariff. For the PG&E tariffs, please see http://www.pge.com/tariffs/ERS.SHTML#ERS where I selected the E9 ToU tariff available to EV owners.

Now the cost: irrespective of size of the storage, the cost per kWh of battery bank is about $300 for the cells. There will be an additional cost for monitoring (BMS) and the bi-directional inverter but that is relatively minor compared to the cost of the cells as well as that the cost of cells will be lower for large volumes (this is the price in single cells). Since this kWh can earn an average 12c per day, this translates to about $44 profit per year per kWh. Now, this is when taking the inflated consumer tariffs into account. When we base it on the generator tariffs, where at many times during the night power must be burned off just to avoid under-loading the base load and where peak tariffs easily go north of 50c/kWh, then you understand how much more value such load buffering solutions can have as embedded buffers in the grid itself. Think about all the sites where a local distribution transformer is starting to overload and the utility needs to invest in putting in a heavier transformer just for the peak loads. If the buffer can not only earn back its own investment but also avoid or much delay upgrades of infrastructure then the possible gains for utilities are even much bigger.

There is another factor if you invest in a load buffer in your own home - you will be able to switch its operation from grid-tie to stand-alone, in other words: when the whole neighborhoods goes dark, your whole house stays up and running from the load bank. If necessary for days, without a noisy and smelly generator or concerns how to get gas...

The ultimate solution for the load buffer is by feeding your solar power into it, as the daily peak consumption is often later than when most of the solar power is produced. This means that your load buffer can cycle *twice* a day. First suck low priced power in the middle of the night and release it in the morning, then suck in your solar power from halfway the morning until 2 PM when the peak tariff starts and the afternoon grid load peak starts and release it again. If the grid-tie buffers become more prevalent, I am sure that it is possible to negotiate a good tariff for them, better than the usual ToU tariff, especially when they are more under utilities control, as to at what time to buffer or release their energy. I think there is a business case there, or there would not be a whole market segment of Smart Grid looking into storage, besides the obvious application of it for spreading renewable energy power availability.

herbissimus
User Rank
Silver
Re: High expectations
herbissimus   9/9/2011 2:35:04 PM
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for the few companies that are successful at batteries, there will be a fantastic amount of money to be made, and alot of financial and technological risks to be taken by these early companies before the flow of gravy rewards the few left standing. enjoy the show. hope you all pick the winners !

melllowfelllow
User Rank
Gold
Re: Battery Maker Shakeup Coming???
melllowfelllow   9/9/2011 2:03:19 PM
I need some help with the math. I am sometimes challenged when folks do not give me a cute table to reference. I think the numbers below are all on the low side, but since I have not seen the raw data...

1,500,000 [pessimistic hybrid number] x 10kW [avg ??] = 15gW

  300,000 [pessimistic plugin hybrids] x 12kW [avg??] = 3.6gW

  200,000 [pessimistic 'pure electric'] x 20kW [avg??] = 4gW

It would seem that the low end is around 22.6 gW and that the high end is beyond 30gW. IMO, the European and American performance and long range vehicles, plus a couple of dozen Rolls, will push the averages higher.

WRT the question "why would there be a shake up so early in the cycle??"

Many [all??] of the companies were started with borrowed money and a business plan to be profitable in 'n' years [5??]. If 10 'not yet in existence' companies [not aware of all of the other players] see the market opportunity and each believe that they can capture 20% of the TAM [Total Available Market] with 15% as the 'backup worst case' something will have to give. I would expect that early on that it would have been easy [relatively speaking] to raise VC$$. The design and manufacture of batteries is cheaper, easier, and lower risk that the design and manufacture of most technology elements [of course it always seems easier when one is not actually doing it and does not understand the details of the manufacturing process :-)

As far as I know [which is not very far], the wizards of Lux only looked at new automobile production usage. Off road vehicle, airplane, motorcycle, custom/semicustom automotive, UPS/backup power, and industrial usage was not considered. This is not a giant TAM, but it is a market of some size [??].

Any battery company worth its salt will seek out a market for its products.

WRT A123 Systems.

I find it odd that they are on the potential 'hit list'. A123 has been around a while and they already have a diverse customer and 'product usage' list. I do not know anything about their management or financials, but from afar it looks like the risk that they have is 'being dumped on by an auto manufacturer'. [ie, strung along as a potential vendor, spending $$ to setup to provide product, and then finding out that they were only being used to benchmark a cheaper far east knockoff]

 

 

 

David McCollum
User Rank
Gold
cort of technology vs. cost of replacement
David McCollum   9/9/2011 12:35:42 PM
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Like bronorb, there are many people who still find it is less expensive to keep running a less efficient device because it costs less to run it than to replace it. I have a van like his truck. . .mine still runs safely and costs me little more than gas, oil, and insurance. Replacing it would create a car payment, increased insurance and licensing costs, and many other hidden costs. I'd love an electric vehicle and many other new technologies, but the cost or replacement is not a good value for the dollar spent.

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