GM seeks to Lower Lithium Battery Prices by Investing in Envia Systems

GM seeks to Lower Lithium Battery Prices by Investing in Envia Systems

Chevy VOLTBy John Addison (2/22/11)

General Motors with its Chevrolet Volt currently has the lead of Nissan, Ford, and others in delivering electric cars. The Volt is the first of many models in GM’s future.  The Voltec Propulsion System will be at the heart of a new GM crossover plug-hybrid SUV, the Opel Ampera in Europe, and probably a pure battery-electric car. Critical to GM’s competitive success will be reducing the cost, size, and weight of lithium battery packs.

To advance its lithium batteries, GM Ventures invested $7 million in Newark, Calif.-based Envia Systems to provide GM’s battery engineering team with access to advanced lithium-ion cathode technology that delivers higher cell energy density and lower cost. In a separate agreement, GM has secured the right to use Envia’s advanced cathode material for future GM electrically driven vehicles.

“Skeptics have suggested it would probably be many years before lithium-ion batteries with significantly lower cost and higher capability are available, potentially limiting sales of electric vehicles for the foreseeable future,” said Jon Lauckner, president of GM Ventures. “In fact, our announcement today demonstrates that major improvements are already on the horizon.”

Other participating investors in Envia are Asahi Kasei and Asahi Glass; as well as current investors Bay Partners, Redpoint and Panagea Ventures. The funding of the investor group totaled $17 million.

“With our high-capacity manganese rich cathode material, Envia is addressing two key issues in the next generation battery cells – higher capability and lower cost,” said Atul Kapadia, founding investor, chairman and CEO of Envia Systems. “We believe our battery materials have taken the technology lead that will help lower price points and unlock the market potential for our customers.”

Envia’s advanced cathode technology uses inexpensive materials that store more energy per unit of mass than current cathode materials. Since the cathode is a key driver for the overall battery cost, the more energy the cathode delivers, the lower the battery cost because fewer cells are needed.

“Our test results on small-format cells show that Envia’s high-capacity composite cathode material can increase the energy density of lithium-ion cells by up to one-third, at an equivalent level of reliability, safety and durability,” said Micky Bly, GM executive director for Electrical and Battery Systems. “We estimate this improvement in cell energy density and less expensive material will drive a substantial reduction in cell cost, leading to lower cost battery packs like the one in the Chevy Volt. Envia’s cathode technology also will offer benefits for other devices and applications where low-cost, high-energy density storage solutions are needed.”

U.S. Energy Secretary Steven Chu stated, “We are once again seeing the benefits for the American people that come with federal investments in science and  technology, originally developed at the Department of Energy’s Argonne National Laboratory, is making its way into the market. By supporting American innovation, commercialization and manufacturing, this partnership is helping to boost U.S. competitiveness and create the jobs of the future.”

Not participating in the Envia investment is LG Chem, the current supplier for the Volt with its manganese spinel lithium-polymer prismatic batteries. Intense competition continues between LG Chem, Panasonic, Sanyo, Samsung-Bosch, NEC-Nissan, GS Yuasa, BYD, EnerDel, and dozens of other major innovators. Competition is intense to lower lithium pack prices down from $1,000/kW 3-years ago to about $500/kW today to $250/kW by 2020. GM and Envia just made the competition hotter and the sale of millions of electric cars more feasible.

Oil Price Soars – Electric Car Sales Zoom

Oil Price Soars – Electric Car Sales Zoom

Egypt CelebratesBy John Addison (2/15/11)

People dance in the streets of Cairo. A dictator has fallen. For a few months, Constitutional rights are suspended, but a new election is promised. In recent weeks, a world dependent on oil has watched to see if a cascade of Mideast unrest would stop the flow of petroleum necessary for gasoline, diesel, and jet fuel.

Barron’s interviewed long-time oil analyst, Charles Maxwell, to gain insight into the future of petroleum. The article was titled “Whatever Happens in Egypt, Oil Will Hit $300 by 2020.”  Maxwell based his forecast on long-term supply and demand forces. Oil production is peaking; demand is not. From today’s $85-plus per barrel, Maxwell forecasts $95 by 2012, $115 by 2013, $140 by 2014, $180 by 2015, and $300 by 2020.

The United States is the world’s largest consumer of oil. Over 95 percent of our transportation depends on oil. Over 80 percent of our U.S. transportation spending makes us more dependent with taxpayer money focused on widening highways and airports. Shifting more dollars to electric transit connected with electric high-speed rail would greatly reduce our oil dependency. Yet the same members of Congress that encourage subsidies to oil companies block improved transportation. If some members of the U.S. Congress get their way, they will either shutdown the EPA, or they will shutdown our government by refusing the increase the debt ceiling.

It will be the American people, not Congress, that free us from oil dependency. We survived oil prices peaking at $147 per barrel in July 2008. It is argued that the shock waves are still rippling through our economy. When consumers are stretched, the demand for oil is elastic. Vehicle miles traveled have peaked. Americans reduced their car ownership by 3.5 million vehicles. We are at record use of flexible work, car-pooling, car sharing, and transit use. More fuel-efficient cars are bought. The success of hybrid-electric cars is paving the way for electric cars.

Fortunately, as oil prices rise, lithium battery prices fall. Ford forecasts that by 2020, ten to 25 percent of its car sales will include lithium batteries and electric motors. Ten to 25 percent will be hybrid, plug-in hybrid, and electric cars. Next year, Ford may be the first car company to sell 100,000 lithium battery packs as it brings out new hybrids, plug-in hybrids, and electrics all using lithium battery packs. Or the first to sell 100,000 may be Nissan or General Motors. As demand increases, better chemistry and volume manufacturing have lowered the price of automotive lithium battery packs from $1,000 per kilowatt-hour to $500.

Prospects for electric vehicles are boosted by efficiency. A gasoline engine drive system is only about 15 percent efficient. Using natural gas a bit less. Using E85 ethanol, even less. A diesel engine drive is often about 20 percent efficient. A hybrid drive system can be 25 or 30 percent efficient. An electric drive, 80 percent efficient.

Although electric cars currently are more expensive than the average gasoline car, that may change in this decade. Many automakers project that when battery packs fall to $250 per kilowatt-hour electric cars will be less expensive than gasoline cars to own and operate. The precise tipping point depends on the price of oil. If Mr. Maxwell’s forecast is correct, EVs will be the winner in this decade.

Keep your eye on the ratio of battery pack kW price to gasoline price. The current ratio is around 500/3 = 166:1. In two years, it might be $400 kW packs and $4 gasoline at the pump for a 400/4 =100:1 ratio. $250 packs and $5 gasoline is 250/5 = 50:1 ratio. Be on the watch for a 50:1 ratio as the tipping point where electric car sales begin to dominate.

Breakthrough innovation may also accelerate the tipping point. Next generation biofuels could fuel hybrids. More efficient inductive electric motors could be free of rare earths like neodymium and dysprosium. Electric cars could have their range extended with fuel cells, solid-state batteries, ultracaps, or new battery chemistries.

As oil becomes more challenging to extract from troubled regions, deep oceans, and frozen tar sands, we see increased use of natural gas power plants, renewable energy, and efficient hybrid and electric vehicles. Welcome to our electric future.