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Forecast: Li-Ion Batteries to Have <5% Share of Hybrid Market by 2009

7 February 2007

Although lithium-ion will become the preferred battery technology at some point in the future, there are still important risks and challenges in the short term that will keep overall penetration of the chemistry to less than 5% of the hybrid vehicle market by 2009, according to Menahem Anderman, president of Advanced Automotive Batteries.

Anderman was speaking at the SAE Hybrid Vehicle Technologies 2007 Symposium in San Diego to provide an overview of the opportunities and challenges for li-ion in the hybrid electric vehicle market. Last week, Anderman testified before the US Senate Committee on Energy and Natural resources in a hearing on Transportation Sector Fuel Efficiency.

Lithium-ion batteries offer higher power and energy per unit weight and volume, and better charge efficiency than NiMH batteries. Thus, if they can maintain performance over life, smaller and lighter batteries can be used in given applications. These attributes allowed them to capture a major part of the portable rechargeable battery market—which requires a battery life of only 2 to 3 years—within a few years of their introduction, and to generate global sales estimated at $5 billion in 2006. Nevertheless, the reliability of lithium-ion technology for automotive applications is not proven—unfriendly failure modes, for example, are a concern—and its current cost is higher than that of NiMH.

Cost is a major concern of the industry, and one expressed by other speakers at the Symposium. Anderman listed four primary challenges for lithium-ion batteries for the HEV market, all coming back to cost: cost of the battery at initial manufacturing volumes, safety, manufacturing reliability and life.

There are four major questions that manufacturers need to address, according to Anderman: cathode material, cell structure, manufacturing, and pack design and application.

Cathode selection. While LiNiCoAlO2 is the most proven cathode material, it is also the most thermally unstable at high states of charge. LiNoCoMnO2 is gaining momentum, but there is not much durability data yet. The newer LiMn2O4 materials are better, according to Anderman, but the issue of life at elevated temperatures has not been solved. LiFePO4 materials are the most thermally stable, yet deliver lower voltage and lower energy. Cost and life are not clear yet.

The latest trend is to use blends of materials—more than 50% of new cathode materials emerging are using some form of blended material, Anderman said, hoping that 0.5 + 0.5 is greater than 1.0.

Cell structure. Cell makers use either a spirally wound cylindrical structure which offers the best manufacturability; a spirally wound elliptic structure, which is easier to package and to cool; or stacked plates, which enable uniform compression but require more handling.

In addition there is the packaging issue: hard can versus pouch (soft). There is some question, according to Anderman, as to the ability of pouch packaging to support the life required of the battery in a vehicular application.

Manufacturing. The latest concern among manufacturers has been metal impurities in the cell—the cause of the recent $450-million recall of li-ion batteries. To guarantee power, cell makers need to use long, thin electrodes. To guarantee safety, yield and reliability, manufacturers must be conservative in terms of coating specifications, thickness of separators, winding, welding, filling and closing. Furthermore, batteries for the hybrid applications are required to have a much longer life than batteries targeted at consumer applications. This all translates to high initial manufacturing costs.

Pack design and application. A number of questions emerge in this area, including cell balancing, overcharge protection, crush protection and temperature range.

What the automotive industry is looking for in a battery supplier, according to Anderman, is someone with large cell design competence, with high-volume production experience, a significant amount of life data available, automotive supply experience, and deep pockets.

All those attributes are not always found in a single provider. The auto industry’s experience with getting packs from cell makers has not been great, according to Anderman. As a result, some automakers are looking to partnerships between cell developers and pack developers.

A good recent example of this is the partnership between cell developer A123 Systems and pack developers Cobasys that is now supplying li-ion packs to GM for use in the Saturn VUE plug in work. (Earlier post.)

Anderman projects that some 783,000 hybrid vehicles will be sold in 2009, with more than 95% of those using NiMH battery systems—leaving about 38,000 units for lithium-ion. As a result, he projects that hybrid vehicle applications will represent more than 50% of the total NiMH battery market by then.

February 7, 2007 in Batteries | Permalink | Comments (31) | TrackBack (0)

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I do not know if the chemistry can be blended between the high power/long life type (A123/Altair)and the high energy density type (Electrovaya), but it sure looks do-able to combine a 3 or so KWH storage battery for high power draw and high power recovery (regen braking) with a high energy density battery (20 or so KWH storage) to provide an all electric range of 40 miles. So what is the hold-up??

Van,
IP and R&D&D.

Obviously that speaker based his words on technologies that don't incorporate the nano li-ion spectrum. There was no mention of the compound Li4Ti5O12. That is the nano material in Altair's NanoSafe battery. In his section "Cathode Selection", Li4Ti5O12 has a normal operating temp of -50oC to 75oC and has been tested up to 240oC. This is a statement from the Altair site...

"By using its nano-titanate material as the negative electrode, Altairnano has achieved a high powered battery that is thermally stable, and therefore can not exhibit thermal runaway. By removing the highly reactive graphite from the battery design, and instead using nano-titanate materials as the negative electrode material no interaction takes place with the electrolyte in the Altairnano batteries. This results in an inherently safe battery. In addition, Altairnano performed high-rate overcharge, puncture, crush, drop and other comparative tests alongside a wide range of graphite-based battery cells with, again, no malfunctions, explosions or safety concerns exhibited by the Altairnano battery cells. In comparison, the graphite cells, put to the same tests, routinely smoked, caught fire and exploded...."

"...Altairnano nLTO-based batteries can operate at temperatures as low as -50°C and as high as +75°C — again, with no unsafe characteristics. To put the NanoSafe batteries to the test, Altairnano performed “hot box” exercises on its batteries at temperatures up to 240°C — which is more than 100°C above the temperature at which graphite-based batteries can explode — with zero explosions or safety concerns."

http://www.altairnano.com/documents/NanoSafeBackgrounder060920.pdf

Regarding the speakers statements on "Cell Structure", his statements are true, but that doesn't mean that issued isn't being research. Altair has partnerned up with Electro Energy Inc. Their agreement was to incorporate Li4Ti5O12 with Electro's bi-polar battery w/cell wafer construction. The end result is to come up with a higher density nano bi-polar li-ion battery w/cell wafer construction. This will enable a battery to be molded to whatever shape to fit into "dead space" in a vehicle's construction. Cell structure isn't a concern on most automotive electric vehicles because by removing the engine and transmission... a designer will have more than enough room for battery placement. For hybrid vehicles, that's a different story. But only for hybrid vehicles that have the gas engine as the main sorce of propulsion. In the concept vehicle by GM, the "Volt", the battery system is primary and the flex fuel generator is secondary. His remarks on cell structure only apply to vehicle designs that still have the gas engine as the primary energy source.

Regarding his comments on "Manufacturing" and "Pact design and application", I'm not going to even go there. The link I provided above adresses 3 of the 4 concerns with the exception of cell structure and that is being handled as we speak.

His statement...

"What the automotive industry is looking for in a battery supplier, according to Anderman, is someone with large cell design competence, with high-volume production experience, a significant amount of life data available, automotive supply experience, and deep pockets."

It's obvious that this article is to ramp up A123/Cobasys/GM on their up and coming models such as the Saturn Vue and possibly the Volt.

As far as regular HEVs go, there is nothing particularly wrong with NiMH. It's PHEVs and BEVs that require improved technology. IMHO price is the only real barrier right now.

Jimmi you say "Altair has partnerned up with Electro Energy Inc." What is your source? I have not been able to find any confirmation of this on the websites of Altair or Electro Energy Inc.
I think that Anderman has some strong points and I hope Altair somehow is listening. There is much more to business success than an outstanding product like the one Altair might have. It seems to me that Altair is wasting precious time getting too involved with Phonix and UQM. Altair need to focuss on increasing cell production and make alliances with others that specialize in cell packing.
It is interesting to note that Altair sell their battery to Phonix for exactly the same price per kWh of battery as A123 is selling their batteries for use in DeWalt's tools. They charge $2400 per kWh. That price is competitive for the mass market for powertools and electric bikes but it is too expensive for a mass market for EVs HEVs or PHEVs. NiMH cost about $1200 kWh when packed for HEV use. In other words, as long as Altair and A123 can sell all of their production volume for $2400 per kWh (to powertools or electric bikes (china makes millions of these bikes already) they should do so. My advise to Altair would be to quickly find a producer of battery packs for electric bikes or powertools in order to create a cash cow before the year end. That will help them finance expanded production and also demonstrate to outsiders that they are capable of delivering in high volume and that they know their production costs. The point is, that for Altair to get a big customer like GM or Ford they must be able not only to demonstrate that they are capable of volume production but also that they make money on it so that they will be in business tomorrow also and therefore can be trusted as a dependable supplier.

Hi Hendrik, here is a link to support the partnership view: http://mae.pennnet.com/articles/article_display.cfm?article_id=249788

However, I thought that the rest of your post was on the money, the need for a cash cow to fund R&D&D, as illustrated by A123's approach, is a great insight. Thanks

Neil -

at the end of the day, pretty much everything comes down to dollars and cents. If traction batteries cannot be made to last for the full life of a vehicle, you *could* replace them every so often. Unfortunately, the cost would probably be prohibitive, plus you'd have to deal with much larger recycling streams.

An alternative approach is to pair up a battery with an ultracapacitor bank for peak shaving during acceleration boosts and recuperation. If the rated power of the battery can be reduced, it becomes that much easier to achieve the required longevity via more conservative design and charge management. Indeed, ultracapacitors alone are a viable concept for mild hybrids provided the customer doesn't live in the mountains.

The reasons batteries are preferred appear to be specific provisions in California's ZEV legislation that favors full hybrids and high all-electric range over the wide application of idle-stop and ICE downsizing. If these provisions steer the auto industry in a direction that will ultimately prove so expensive that unit volumes remain negligible, then perhaps this particular law needs to be reconsidered.

Politicians should define the outcomes society wants to achieve, in terms of the broad based metrics. Picking specific technologies is almost always suboptimal. Given the choice, auto makers would focus on the low hanging fruit first, e.g. idle stop as standard equipment on at least 50% of new cars and trucks. It might only improve per vehicle fuel economy and emissions by a 5%, but the sheer volume means the total benefit would be much greater than what you get from the 1% that are full hybrids. Besides, people will be far more willing to pay a small premium for the sake of the environment if they see most everyone else doing their bit as well.

NiMh batteries improve too. There were couples of hints from ECD that they have serious successes with “advanced Ni-Mh battery”, although they prefer to keep it quite so far. The most intriguing recent development is Sanyo/GE Eneloop Ni-Mh batteries: they developed batteries with very low self discharge. Batteries have shelf charge life of couple of years, and are sold pre-charged. Everyone who happened to use Ni-Mh batteries knows how frustrating is their self-discharge, especially at elevated temperatures. AA batteries are already sold on E-bay.

Henrik, A123 does not charge DeWalt $2400/kWh. Discounters sell DeWalt battery packs for $100. These packs have 10 cells rated at 7.59 Wh each (3.3 V, 2.3 Ah). That's about $1300/kWh. Cell cost to DeWalt is certainly below $1000/kWh, quite competitive with HEV NiMH cells.

Your advice to Altair about finding a high volume market is spot on. A123 is following the classic venture-backed company formula outlined by Geoffrey Moore in "Crossing the Chasm": before attacking a huge and uncertain new market (e.g. PHEVs) first build a successful business in a smaller niche where customers already exist.

Jimmi, the reason Anderman and other battery experts ignore Altair's Li4Ti5O12 chemistry is because Altair won't release anything for review. That doesn't guarantee Altair is a scam, but it makes it hard to take them seriously.

2009 is only two years away, that's not a very prophetic statement.

In his position I'm sure that he only reports what he knows is true, so he'll leave out information on Altair's new battery until independent testing can be done.

I hope Altair keeps right on doing what they're doing and focusing on EV's. I feel like A123 sold out. I know that business is business but a longer lasting drill won't help the world but a proven electric car could.

Doggydogworld I would like to see a link for someone selling DeWalt 36W battery for $100. This is a link for online resellers of the battery. http://www.dewalt.com/us/products/attachment_detail.asp?productID=14905. As far as I can see the minimum price is $169. That is the price I used for my calculation and I used 3.0 V per cell because that's what r/c hobbyists say the cells are good for when used for a while (I know a123 say it is 3,3). Otherwise 2,3 Ah 10 cells and 70g per cell.
A123 have said that they will be able to compete with the price of NiMH batteries for HEVs so I guess that you are right that they will be able to deliver for $1000 per kWh. It is going to be interesting to see how soon that will happen.

Henrick... sorry for not posting a link for the EEEI/ALTI agreement. It was actually at both the Altair and the Electro sites. You just had to dig a lil deeper. That agreement was made a while back. And all my comments can be verified at their websites. Concerning Anderman's comments...

"What the automotive industry is looking for in a battery supplier, according to Anderman, is someone with large cell design competence, with high-volume production experience, a significant amount of life data available, automotive supply experience, and deep pockets."

Regarding large cell design competency, I don't think Altair or A123 can qualify themselves as fully competent for LARGE cell design. Of the 2, I would lean toward Altair. With Altair's partnership with Advanced Battery Technology, Electro Energy Inc, and Alcoa, A123 may not be the only company to fit Anderman's comments. I hope the agreement with ABAT will allow Altair to have somewhat access to the Polymer Li-ion (PLI)Battery or its technology. And I hope the EEEI/ALTI partnership will bring us the high density bi-polar nano li-ion battery w/cell wafer design. Not to forget I hope the PHEV battery will come out soon in regards to the Altair/Alcoa agreement. BTW... anyone here live in the San Diego area that has access to the Hybrid Vehicle Technologies Symposium??? The reason that I ask is because there will be an Altair/Alcoa booth set up there. The event is on Feb 7-8 and is sold out. Would be nice to get some intel on what's happening with Altair/Alcoa. All in all I can only hope there will be ample competition in the nano li-ion segment in order to drive R&D to new heights. We are on the verge of slowly cutting down our oil dependancy.

I totally agree that Altair needs to concentrate on shear volume now. I'm glad to see that both A123 and Altair have the backing of majow Dow components...A123 has 3(GM, GE, P&G) and Altair has 2 (GE,AA) and both companies can be set up to mass produce rather quickly.

All I've been trying to say is that while Aderman's comments are somewhat true that this so called "battery company" doesn't exist... he doesn't ackowledge the fact that we are very very close to having one. Time is of the essence since ZEV credits will expire soon and this plays against Altair current California strategy. Let's hope to see our gov't structure has the insight to give more money to the battery sector and see the neccesity of extending the ZEV credits. These new batteries coming out have a good chance at making a big difference in a short amount of time... if given a chance.

Almost forgot... regarding battery costs. The price of the batteries... both the M1 and the NanoSafe are somewhat obscured. You can't derive the actual cost of the NanoSafe battery at $2400 kwh. I see the formula as to how you got that number... the $7.9 mil 75 battery order from Phoenix puts the charge of $84,000 a battery divided by the 35 kwh of the battery gives you $2400. There may be engineering costs, the exclusivity premium, ZEV credit consideration, and possible rapid charging stations built into the contract price. I also frequent "The Energy Blog" (thefrasierdomain) and I think a price of $400 kwh was mentioned from an interview from someone from somewhere of importance. I'll look it up and post the link when I find it. Like I said before... guys.. we are close =)

Regarding what I just said about "actual cost"... and I was trying to address sales price... uhh sorry. But if you kept reading I have some good numbers in there =b I think Altair has a lil cash cow. Not to the extent that we would like to see but ABAT has made some real progress with their PLI Battery... and the PLI battery is based on Altair's Li4Ti5O12 . I know what you're thinking... who the heck is Advanced Battery Technologies Inc? Do some research on ABAT... look at some of their recent news and agreements (site is kinda lame)... and this here is pure speculation but is has been rumored that ABAT might be providing the batteries for the new ZAP-X APX Lotus SUV.

ABAT is a Chinese battery manufacturer based in Harbin, China and already provides their PLI batteries to a company that makes scooters and has other agreements regarding other segments such as EVs... agreement with ZAP... they make batteries for mine laterns... all this is at the sites... just want to give you a lil bit of info.

A123 has more companies financing them then the ones you guys listed above.

As an example you can also add Motorola to the list...I believe they have invested several million dollars in A123 (for their cellphone and two-way radio businesses no doubt).

Now if only we could get Apple to get some of Altairnano's batteries for their iPods we wouldn't have to worry about ever cracking open the case to change those darn batteries.

I was just listing major Dow components... there are other companies and entities involved also and all you'd have to do is go to their websites to find out all these companies.

I don't see Valence mentioned anywhere here. There are the only large format safe lithiom ion chemistry in production and in quite a few test vehichles and I don't even see them mentioned here. I think there technology has a lot of promise.

Paul:

Phoenics motors tested Valence batteries and rejected them, choosing Altair's instead. Rumors were that Valence batteries have poor low-temperature performance, which is important to pure electric vehicle.

Jimmi:

GE is supporting Altair?! Do you have a link?

Andrew...

Very well done Andrew, regarding the Valence batteries. I've some stock in Altair and have been following them since winter 2004 on a huntch a friend of mine gave me. Not many people nowadays know the story about Valence and Phoenix Motorcars. About 6 months after Phoenix made the agreement with Altair... they made over their whole website... in doing so the started to limit their published news releases. They started to ommit press releases prior to the Phoenix/Altair agreement... thus deleting the news on Valence.

Regarding GE...go here...

http://www.altairnano.com/investors_partners.html

Toward the bottom, click "Commercial Partnerships" and there you go.

Altair has one direct partnership and one indirect partnership that I feel is more important than the one with GE. At that link above... click on "Government Agencies". The very first listing is the Defense Advanced Research Projects Agency (DARPA). I'm sure most of us here are aware of that agency. The indirect partnership i must mention and the one with the most potential is actually found at the Electro Energy Inc website in old press releases. We all know that EEEI/ALTI are going to come up with some new stuff, hopefully soon. Look at the chain of events concerning Li-ion research and more specifically bi-polar li-ion events. Prior to the Altair agreement, EEEI had already patented a bi-polar li-ion battery. I would expect news either to be coming out soon where Altair's NLTO is incorporated in that design or the news will be kept secret. Why??? Looking way way back into EEEI's news you'll find a company announced a stake purchase of EEEI. That company is In-Q-Tel. For those of you who don't know about In-Q-Tel, this a news release about that company and the event from EEEI's website...


------------

Electro Energy And In-Q-Tel Announce Strategic Relationship And Development Agreement For Bipolar Lithium Battery Technology

DANBURY, Conn. and ARLINGTON, Va., August 16, 2004 -- Electro Energy, Inc. (EEEI: OTCBB), a leading provider of advanced battery technologies and associated systems, and In-Q-Tel, (www.in-q-tel.org), a private not-for-profit venture group funded by the Central Intelligence Agency, today announced the establishment of a strategic relationship , including a technology development agreement.

The strategic relationship began in March 2004, prior to the company going public. This included In-Q-Tel funding of technology development for the application of Electro Energy's bipolar design to lithium battery chemistry and other advanced battery-power solutions to serve the national security community, as well as the issuance of securities.

"In-Q-Tel invested in Electro Energy because their unique battery technology promises better performance to both public and private sector users across a wide variety of applications," said Gilman Louie, CEO of In-Q-Tel. Martin Klein, CEO of Electro Energy, said, "Our partnership with In-Q-Tel funds the extension of our patented bipolar cell design to lithium battery chemistry, an important addition to the company's capabilities. We are very pleased with the confidence that In-Q-Tel has shown in our company, and we felt our shareholders would be glad to know about this relationship. We believe the resulting product will be superior to existing products for both government and commercial power applications."

Electro Energy's bipolar cell design provides superior performance in energy capacity, size and weight vs. current commercially available battery products. The design of Electro Energy's products is significantly simpler and less costly than conventional cylindrical and prismatic technologies. Among its advantages is the ability to discharge efficiently at exceptionally high rates, compact packaging and lower manufacturing costs. These factors can be critical in applications such as military communications, military aircraft, and space and medical applications, as well as power-consuming commercial applications such as hybrid electric cars, electric bicycles and scooters, cordless power tools, load regulation and stationary energy storage.

About In-Q-Tel

In-Q-Tel is a private, independent, enterprise funded by the CIA. Launched in 1999, In-Q-Tel's mission is to identify and invest in companies developing cutting-edge technologies that serve United States national security interests. Working from an evolving strategic blueprint that defines the CIA's critical information technology needs, In-Q-Tel engages with entrepreneurs, established companies, researchers and venture capitalists to deliver technologies that pay out in superior intelligence capabilities for the CIA and the larger Intelligence Community.

----------------------

I hope you enjoyed this reading... cheers!!!

Thanks a lot, Jimmi.

Good investment to you and your family.

If you want an omen of things to come... look at the Insider Trading information on EEEI. Funny... the CEO, Michael Reed, just bought about 14k shares at a price range of $1.35-$1.45 just in the last couple of months. It's still trading at that range... $1.42 currently. It's still a speculative investment but geeeez... talk about the stars aligning. This is the one to watch. I have my trigger finger on the "buy" button. I just need EEEI to flinch just a lil bit before I fire.

Cheers!!!

Jimmi nice story. I gess that promoting development in potentially revolutionary energy technology is one of the most peacefull means the CIA or USA could pursue to protect the US (indeed the world) from devastating energy crisis. Apart from that, I followed the link you gave to confirm Altairs 'partnership' with GE. I can see the GE logo but I can't find anything on Altair's or GE's webpage that explains the nature of that partnership. Could you help me find a link that documents the nature of that partnership?

I gess that promoting development in potentially revolutionary energy technology is one of the most peacefull means the CIA or USA could pursue to protect the US (indeed the world) from devastating energy crisis.

My inner cynic tells me that weening the world off oil would mean the US would be free to bomb the mideast back to the precambrian.

The relationship with Altair and GE dates back before 2005. I had to Google around a bit but I got you the info...

It's basically a colaborative agreement put together by DARPA...

http://www.findarticles.com/p/articles/mi_pwwi/is_200401/ai_mark3329834866

Altair got a European patent out of it all...

http://www.azom.com/news.asp?newsID=2637

I know... it's not NanoSafe related but it shows the bounds of technology that Altair gets into. I wish Altair would put back some of it's older news... they got into some intresting projects.

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