By John Addison (10/26/10)
You may be reading this article thanks to the lithium battery in your notebook computer, smartphone, or other mobile device. Demand for lithium is forecasted to double in this decade thanks to a wide range of applications for this metal that is half the weight of water: materials, glass, pharmaceuticals, mobile electronics, power tools, hybrid cars, and electric cars.
Currently, electric cars cost more to purchase than many gasoline-powered cars, but less to fuel. Electric charging is equivalent to fueling with gasoline at 75 cents per gallon in many situations. Nighttime charge rates are even lower.
In 2012, Ford will deliver about 100,000 lithium battery packs in its electric vehicles, new plug-in hybrid, and in all hybrids. Nissan will bring on-line a new battery plant in Tennessee that can make 200,000 lithium battery packs annually for its LEAF and hybrids. These volumes, improved battery chemistry, and streamlined supply chains will drive down the cost of lithium batteries. Automotive lithium battery packs currently cost about $700 per kilowatt-hour. By the end of the decade, automakers are optimistic that they will lower the cost to $250/kWh, at which point electric cars will be less expensive to buy than most gasoline cars.
What do the financial markets make of lithium? To find out, I interviewed Bruno del Ama, CEO of Global X Funds. His exchange-traded fund, Global X Lithium ETF (NYSE: LIT), was launched on July 23, 2010, at 16. It has already soared to 20. For some investors, lithium is the new gold. 10 of the fund holdings are in lithium mining and processing companies; 10 in lithium battery makers.
The fund is dominated with large mining firms such as Sociedad Quimica y Minera de Chile, FMC Corporation, and Rockwood Holdings. The fund is not a dream for environmentally and socially conscience investors. These companies mine a range of metals, using energy intensive processes, chemicals, and put miners in harm’s way.
The fund’s largest lithium battery company holdings include Saft, Ener1, ABT, GS Yuasa, and A123. Saft in a joint venture (JV) with Johnson Controls supplies Ford for the Transit Connect Electric and Mercedes hybrids. GS Yuasa supplies the current Japanese EV leader, Mitsubishi; GS Yuasa is well positioned to be Honda’s supplier for new electric and plug-in hybrids. Ener1 is betting on the Think. A123 is supplying Fisker and non-automotive applications.
The fund does not include the battery companies most successful in lithium: NEC, Panasonic, Samsung, and LG Chem. These diversified giants are excluded because their lithium battery business is less than the 15 percent minimum to be included in LIT. NEC is in the AESC joint venture with Nissan. Panasonic supplies Toyota and Tesla. Samsung is in a JV with Bosch to supply makers such as BMW. LG Chem’s Compact Power is supplying lithium batteries for the Chevrolet Volt and the Ford Electric.
Scientific American reports a 500-year supply of lithium, compared with only decades of available cooper. Demand for lithium will increase as we expand from devices that only need one battery cell, to notebook PCs needing the equivalent of 8, to hybrid cars that use the equivalent of 125, to the Nissan LEAF, which uses the equivalent of 3,000. Reuters Lithium Facts
It would take 60 million cars to use the current annual production of lithium. Although there is plenty of lithium, prices will increase to keep up with the growing demand. Since a typical electric car battery pack only uses 4 pounds of lithium, the price will have little impact on the total battery cost.
There is no guarantee that today’s lithium ion batteries will be the leaders in future decades. Labs to start-ups are working on lithium air, zinc air, fuel cells, ultracapacitors, and hybrid energy storage. It is challenging to overcome lithium ion’s cost and scale advantages. More energy can be stored in an ounce of this metal than any practical metal alternative.
By 2020, the California Energy Commission forecasts 1.5 million plug-in cars on California roads. Clean Fleet Report forecasts 10 million for the USA. Cars, mobile electronics, and many applications will fuel the demand for the lightest of metals and create growth opportunities for the leading battery suppliers.
Disclosure: author owns shares of LIT.
By John Addison (10/19/10)
California is World’s Third Biggest Oil Consumer
Over 95 percent of California transportation is fueled by petroleum. Electric light-rail, CNG buses and trucks, ethanol blended in gasoline make up the rest. No other state is more addicted to oil. By comparison, only two nations use more oil – China and the United States. California uses more oil than India, Japan, or Germany.
California wants to be more energy secure, have cleaner skies, lower healthcare costs for asthma, and reduce its own contribution to the global warming that threatens water shortage and failed crops. In 2006, a Republican Governor signed the nation’s most comprehensive climate legislation, AB32, shaped by both parties in the State Assembly and Senate. The law would increase refinery costs and encourage a reduced use of petroleum.
California’s efficiency and climate solutions are creating over a million cleantech related jobs as use of fossil fuel declines. According to recent scenario’s from the California Energy Commission, “Between 2007 and 2030, staff estimates total annual gasoline consumption in California to fall 13.3 percent in the low-demand case to 13.57 billion gallons, largely as a result of high fuel prices, efficiency gains, and competing fuel technologies. In the high-demand case, the recovering economy and lower relative prices lead to a gasoline demand peak in 2014 of 16.40 billion gallons before consumption falls to a 2030 level of 14.32 billion gallons, 8.5 percent below 2007 levels. CEC Report
Reducing the use of petroleum, of course, would cost oil companies billions. Texas oil companies are buying TV ads to encourage Californians to vote “yes” for Proposition 23 this November. The proposition would require the State to abandon implementation of a comprehensive greenhouse-gas-reduction program that includes increased renewable energy and cleaner fuel requirements, and mandatory emission reporting and fee requirements for major polluters such as power plants and oil refineries, until suspension is lifted.”
Prop 23’s biggest backers, Valero and Tesoro, are responsible for 16.7% of California’s emissions, according to the California League of Conservation Voters. Prop 23 will allow California oil refineries to avoid paying over one billion dollars for carbon emissions. Prop 23 is promoted as a jobs creation, but it’s a job killer. A recent UC study reported that California’s successful efforts to become cleaner have already created 1.5 million jobs with a total payroll of over $45 billion.
California leads the nation with 25,000 electric cars on the road and thousands of new electric charge stations scheduled for installation. By the end of the decade, California is forecasted by the CEC to have 1.5 million electric cars on the road. California’s Electric Transportation Report
66 leading investors representing $400 billion oppose proposition 23 as harmful to jobs and investment
Proposition 23’s opponents include 66 asset managers, venture capitalists and other investors collectively managing over $410 billion who issued a joint statement today opposing Proposition 23, the statewide ballot initiative to stop implementation of the state’s landmark clean energy law, AB 32.
Tesla electric cars, Better Place, and Bright Source Energy would not have achieved their success without the investment and guidance of VantagePoint Venture Partners, who has invested $1.5 billion in a portfolio of over 25 leading clean technology companies. Vantage CEO, Alan Salzman, sees a trillion dollar future in clean transportation, energy, water, lighting, and materials. On today’s conference call he stated, “We don’t want our cleantech future high-jacked. Is California going to stay in the game, or cede to China, India, and Russia?”
The oil industry attack on California carbon pricing will not stop cleantech, but it may stop the next 500,000 cleantech jobs from being in California. At stake is whether the next Google or Tesla is in the U.S., or in some other country. When asked whether putting a price on carbon would cost consumer’s money, Salzman responded, “This is about using technology to modernize ancient technology, such as the light-bulb. “ He sited that new LED only uses 15 percent of energy of old bulbs. We have cheaper and better technology. Flat screens that cost $15,000, now cost $400 due to learning curve and scale.
Kevin Parker, Deutsche Bank Climate Change Advisers has over $1.5 billion of their $8 billion invested in cleantech. He stated that a billion dollar wind or solar project only happens when investors or lenders have TLC– transparency, longevity, and certainty. A predictable price on carbon could make the next utility scale wind farm a good investment. No TLC, no renewable energy, no thousands of jobs – only consumers stuck with coal and gas generated electricity. If Prop 23 is defeated, major clean energy projects can move forward. He sees the stakes being much bigger than California. With our failure to support clean energy in the U.S. Senate, other states will either follow California’s cleantech lead, or they will give up on climate legislation. The U.S. will fall behind other nations, unless investors have reason to invest in U.S. cleantech.
Chris Davis, a director of Ceres and director of the Investor Network on Climate Risk, a network of 90 investors with assets exceeding $9 trillion focused on the business impacts of climate change agreed that investors could easily move money and jobs globally. He stated, “Cleantech is a major economic engine. Trying to repeal the future will not get us there.”
The U.S. can win or lose in a future that includes energy efficient materials, LED lights, electric cars, high-speed rail, wind power, solar power, smart grids and smart apps. If Californian’s defeat Prop 23 on November 2, Texas may be a few hundred jobs lighter and California a few hundred thousand jobs richer. California Cleantech Jobs
By John Addison (10/12/10)
AT&T (T), Xcel Energy (XEL), Johnson Controls (JCI), Southern California Edison (SCE), and New York Power Authority have all ordered Ford Transit Connect Electric. These pure battery-electric vans have an electric charge range of 80 miles and are a great fit for many fleet, small business, and delivery applications. Although Nissan and Chevrolet are the center of EV attention, fleets are the early adapters of new vehicles.
In the United States, fleets control some 14 million vehicles. Some fleets placed initial orders for 10 or 20 Transit Connect Electrics; bigger orders could follow in 2011. JCI has ordered 20 Transit Connect Electrics to be part of its global fleet of 19,000 vehicles.
At the heart of these compact Ford electric vans are 28 kWh lithium battery packs made by a joint venture of SAFT and Johnson Controls, #1 maker of automotive batteries, a tier 1 auto supplier, and leader in building efficiency. The other day, I interviewed Mary Ann Wright, Vice President of Global Technology and Innovation Accelerator for Johnson Controls, to better understand the future of electric vehicles and advanced batteries. Johnson Controls is one of the 100 largest corporations in the U.S., with over 60,000 employees.
Partnerships are critical to success in electric vehicles. As the world’s largest manufacturer of lead-acid batteries, Johnson Controls (JCI) works closely with its material suppliers. To accelerate development of lithium batteries, R&D and manufacturing is a joint venture of Johnson Controls – SAFT (JCS).
For speed to market, Ford has partnered with Azure Dynamics (AZD), who integrates their drive system and the Johnson Controls – SAFT (JCS) lithium batteries into the Transit Connect chassis, which is also available in gasoline and CNG versions. My test drive of the Ford Transit Connect Electric demonstrated that it is practical for many fleet applications. JCI owns over 3% of AZD.
Since 2007, Ford and Johnson Controls have worked with leading electric utilities and EPRI. In 2007, Ford announced a partnership with Southern California Edison, the electric utility with the nation’s largest and most advanced electric vehicle fleet. The partnership is designed to explore ways to make plug-in hybrids more accessible to consumers, reduce petroleum-related emissions and understand issues related to connectivity between vehicles and the electric grid. For the 3-year study, Ford Escape Plug-in Hybrids have been heavily used. It will not be until 2012, that consumers can order plug-in hybrids from Ford.
Vice President Wright told me that driving lithium battery packs down in price from industry numbers like today’s $700/kWh to a future of $200/kWh would price electric car on par with cars powered with internal combustion engines. Progress is being made at every level. Manufacturing volume will be a key driver.
The drive for cost reduction will greatly benefit consumers and fleets; cost reduction initiatives will be a mixed blessing for battery suppliers. Last year, Ford had announced that JCS would supply the lithium batteries for its 2012 Plug-in Hybrid which Clean Fleet Report forecasts will be a new Ford Focus PHEV. Now JCS will not be the supplier. Ford has decided to make its own battery packs, and have different manufacturers compete to supply the cells. JCS is the winner for the Transit Connect Electric; LG Chem’s Compact Power is the winner for the Ford Focus Electric; competition has been intense for the PHEV. It appears that Ford has selected the PHEV cell supplier, but has not yet made the announcement.
In this decade, Nancy Gioia, Director Ford Global Electrification, told me that she would like to see Ford reach $250/kWh and have hybrid and electric vehicles represent 10 to 25% of total Ford sales. Ford is making no guarantees for such an ambitious program. Ford lithium cell providers are dealing with a tough customer that could deliver high volumes and continuous improvement.
For $28 billion Johnson Controls, Ford is an important customer, but only one customer. BMW and Mercedes are already using JCS lithium batteries in hybrids. In this decade, JCI sees the biggest opportunity in advanced start-stop, mild, and full hybrid vehicles; with pure battery-electrics being a smaller opportunity. By 2025, Ms. Wright only forecasts 3% of cars being full hybrid and electric.
Look inside a hybrid car and you will see two types of batteries: advanced nickel metal or lithium batteries for the electric motor and a 12V lead-acid battery for the auxiliaries. Lead-acid batteries will continue to be used in hundreds of millions of vehicles including hybrid and those with only an ICE. Johnson Controls continues to advance lead-acid batteries with new VARTA Start-Stop technology. These new batteries are optimal for the micro hybrids now on the road in Europe in over a million cars and coming to the USA. Turning off an engine reduces fuel consumption up to 12% when a vehicle is stationary, such as red lights and rush-hour gridlock. BMW was first to use the micro hybrid approach, now Volkswagen, Audi and others are including start-stop in some models.
When I toured Johnson Controls in Milwaukee, Wisconsin, last year, advancements in both lead-acid and lithium batteries were conspicuous. JCI told me that 98% of the materials in both battery technologies are recycled. As a world leader in energy efficient buildings, Johnson Controls will have the opportunity to repurpose lithium batteries in stationary applications before materials recycling.
Improved battery technology will continue to enable vehicles to use less fuel per mile, show us bluer skies with less air pollution, and reduce our current 97% dependency on petroleum as the only way to fuel a car.
By John Addison (10/7/10)
Energy efficiency, renewable energy, and information technology are all helping the U.S. overcome a severe recession and keep more people from losing their jobs. From our San Francisco roof deck, I am encouraged to see energy efficient homes, solar roofs, and electric buses gliding by. I am also discouraged to see massive ships from Asia sail into the harbor ladened with hundreds of rail cars full of Asian goods, then leave for distant customers with much lighter loads.
As trillion dollar industries are disrupted, he stakes are high for jobs and economies. The U.S. can win or lose in a future that includes energy efficient materials, LED lights, electric cars, high-speed rail, wind power, solar power, smart grids and smart apps.
Clean Tech Job Trends 2010 Details U.S. Growth
As the economy officially pulls out of The Great Recession, clean energy continues to fuel the plans of many cities, states, nations, investors, and companies as they look for the next wave of innovation and growth. In its second annual look at the state of clean-tech jobs in the U.S. and globally, Clean Edge published its Clean Tech Job Trends 2010. The report looks beyond green job evangelism to provide key insights and a sober analysis of the most important employment trends globally. I was particularly interested in my home state; cleantech is particularly important to California’s economic future. The Report states:
“Not surprisingly, the San Francisco Bay Area/Silicon Valley repeats as the top area for cleantech jobs, with Los Angeles second. Even in its challenging economic times, California continues to see fairly robust job activity in clean-tech startups and established players, with the state’s high-tech giants like Cisco, Intel, and Google aggressively expanding their smart-grid initiatives. San Diego (seventh) and Sacramento (15th) give California four cities in the Top 15, but the Golden State faces an uncertain clean-tech future if the state’s voters pass a November ballot measure, Proposition 23, that would suspend the state’s landmark greenhouse gas reduction laws.”
Tesla Motors provides a good example of job creation. In 2012, it plans to reopen a shuttered plant owned that was owned by a Toyota – General Motors JV. The plant will create about 1,000 jobs as two exciting new electric vehicles roll-out: the Tesla Model S premium sedan with a electric range that far exceeds the Nissan LEAF and Ford Focus Electric; and the new Toyota RAV4 EV, long an SUV favorite of EV enthusiasts. In the new world of global “co-opetition,” Tesla is 2% owned by Toyota and 5% owned by Daimler. The two auto giants admire Tesla’s innovation, first to market speed, and battery-pack technology.
Northern California is also rich with smart grid leaders including Silver Spring Networks, Cisco, and EPRI. Solar energy innovators abound including Bright Source, Sun Power, and MiaSole.
Southern California is rich innovators making gasoline and diesel not with petroleum, but with algae, waste, and cellulose. In San Diego’s biotech research center, surrounding the University of California at San Diego and the Salk Institute are over 40 companies working on biofuels from algae. Sapphire Energy and Synthetic Genomics both have received over $100 billion from private equity investors to expand their research and production of algal fuels.
These are a few examples from my home state of California. The Clean Edge report covers exciting opportunities nationwide, the dynamics of U.S. – China competition, and 3 million jobs globally in a variety of billion dollar cleantech sectors. Clean Tech Job Trends 2010 is recommended reading for everyone. The free report can be downloaded at www.cleanedge.com.
By John Addison (10/5/10)
I settled for a test ride in the CODA, not a test drive. CODA was taking people for rides at the Santa Monica Alt-Car Expo, but not letting them drive, in contrast to hundreds of potential buyers test-driving the Nissan LEAF.
Sorry, but CODA did not appear to be worth $44,900 in contrast with the more sexy, more fully appointed Nissan LEAF priced at only $32,780. Both pure battery-electric cars are targeting 100-mile ranges. CODA with 33.8 kWh lithium battery pack is likely to have a better real world range than Nissan with 24 kWh battery pack. You can also charge the 2011 CODA twice as fast at 6.6 kW/h, instead of 3.3 kW/h with the 2011 LEAF. With the 2012 LEAF both will have the same charging speed.
Riding in the CODA felt like being in my Civic Hybrid, a nice but an ordinary 4-door 5-seat sedan. OK features, but nothing special. The ride felt like a conventional sedan, but nothing special. The legroom was a little more cramped than in the LEAF and Chevy Volt. With CODA you get an off-the-shelf chassis and assembled drive system; with Nissan you get a car built from the ground-up to be a unique battery-electric, right down to the ECO mode and driver telematics. At least CODA is using respected drive system suppliers such as Borg Warner, UQM electric motors, Energy CS, Delphi DC-DC, and Lear on board charger.
CODA currently has batteries made in China in a joint venture with Lishen Power Battery. The CODA sedan is sub-assembled in Harbin, China, and shipped to the US for final assembly in California. CODA is trying to secure DOE loans for at least $400 million to build a battery and vehicle assembly plant in Columbus, Ohio, for production starting 2014. The company’s pitch is that this could create 2,000 jobs in the U.S., although these might be at the expense of 2,000 Nissan LEAF battery and assembly jobs in Tennessee, or 2,000 Ford electric car and battery jobs in Michigan. Competition will get intense. The good news is that more lithium batteries and electric cars will be built somewhere in the U.S.
VCs and private investors such as former Secretary of Treasury Hank Paulson are making $100 million bet on CODA getting fed funding and having an IPO. Tesla’s market cap of $2 billion has encouraged investors. But without fed money the limited vehicle warrant of 3 years or 36,000 miles might be safe, but customers may have doubts about the company being there for the 8-year or 100,000 mile battery warranty.
Buyers who can afford to pay $45K for an electric car with extra range are more likely to step-up to the Tesla Model S at $57,000 and get more range, upgradeability, premium features, and a certain wow factor. If car drivers want extended range, and balk at $45K, then they may go with a plug-in hybrid.
CODA needs to weigh its strategy options. It’s pricing demonstrates that China partners will not help it win the cost battle with companies that make cars by the millions such as Nissan, Ford, and soon Toyota and Honda. The range issue may get CODA a few thousand buyers, if it can deliver much better range than the LEAF, Ford Focus Electric, and other EVs coming to market at savings of $12,000. CODA needs to be more distinctive for consumers, or to deliver custom vehicles for fleets like taxis and emergency responders, to justify the big price premium. There will be multiple winners in the electric car market. The race is on.
- Vehicle range 90 to 120 miles
- Top Speed 80 mph (electronically limited)
- Charge Time 6 hours from 220V (30AMP) 2
- Occupancy 5 passenger
- Limited Vehicle Warranty 3 years / 36,000 miles
- Limited Battery Warranty 8 years / 100,000 miles
- Battery Chemistry Lithium iron phosphate (LiFePO4)
- Battery Configuration 728 cells (104s7p)
- Battery Energy 33.8 kWh
- Nominal Battery Voltage 333V
- Motor Power 100 kW/134 hp
- Motor Torque 300 Nm /221 lb-ft
- Single gear transmission
- Drive Ratio 6.54:1
- DC:DC Converter 2.2 kW @ 13V output
- Charger 6.6 kW / 240VAC input or 1.3 kW / 110 VAC input (back-up charging)
- Air Conditioning 2.0 kW cabin cooling
- Steering Four-wheel independent with front and rear MacPherson struts
- Wheels 17-inch 5-spoke wheels with 205/45/RF17 tires
- Rack-and-pinion with electric power steering
- Turning Radius 17.5 ft (curb)/18.6 ft (wall)
- Wheelbase 102.3 inches
- Headroom (front/rear) 38.7/36.6 inches
- Shoulder Room (front/rear) 53.0/52.0 inches
- Legroom (front/rear) 42.3/31.7 inches
- Overall Length 176.1 inches
- Trunk Space 20 cubic ft
- Overall Width 68.5 inches
- Passenger space 82 cubic ft
- Overall Height 57.6 inches
- Curb Weight 3,682 lbs
- Entertainment Standard features = satellite-ready AM/FM/XM radio with MP3, iPod,® iPhone® and USB connectivity
- 8-inch color touch-screen featuring turn-by-turn navigation with available real-time weather and traffic updates
- GreenScreenTM system that monitors driving efficiency
- Bluetooth® hands-free phone system
- vehicle security system