Once again thank you for excellent remarks DDW. I see now that the problem with the prices I am using for cell phones $6, notebooks $100, and Dewalt Pack $169 is that they are consumer prices not the more relevant “out of factory prices”. I have been unable to find verifiable out of factory prices but the consumer prices are easy to find and verify. Pricing can be rather deceptive. For instance, Nokia’s list price of their most common cell phone battery is $49 indicating a whopping $16,333.3 kWh price which is obviously wrong. Nokia is not insane on the contrary they want to lure people to buy a new phone rather than a new battery for their old phone.

In any case I am now convinced that Anderman’s estimate of a $5 billion global market in 2006 for lithium batteries (see http://www.greencarcongress.com/2007/02/forecast_liion_.html) is correct and that my error is due to the fact that he is using the more correct out of factory prices. After all Anderson is an insider to this market and should know better than any outsider like me. However, I believe my quantity estimates for cell phone units and notebooks are correct. Assuming that these cell phones and notebooks make up 80% of the total global market for lithium batteries these quantities should sell for $4billion. The implied kWh is 3,600,000 kWh for cell phone packs in 2006 and 2,500,000 kWh for notebook packs in 2006. That is 6,100,000 kWh in all or $655 /kWh. That is not that far from the $400-500/kWh in quantity that DDW say is the right price. The difference to the $2000 kWh price that I found at the consumer level is simply costs associated with packaging, distribution, marketing, liability cases etc. What a waste.

I may have an idea for predicting whether the cost of the a123 type of cells (LiFePO4 cathode material) could drop significantly in mass production. Here it is: We know cell phones and notebooks cells are already mass produced at $400-500/kWh. The cathode chemistry they use is predominantly LiNiCoAlO2 and LiNoCoMnO2. When comparing that with LiFePO4 it strikes me that there are no truly expensive materials (apart from lithium) in the LiFePO4 formula. The other chemistries contain cobalt which cost about $200 / kg which is very expensive (see http://www.metalprices.com/FreeSite/metals/co/co.asp). My intuition (wild guess) tells me that when LiFePO4 production reaches the equivalent of 6,100,000 kWh a year then these a123 kind of cells will cost significantly less to manufacture than the $400-500/kWh we see for conventional lithium chemistries. If you know whether my reasoning makes sense please speak up. It is rather important, because if the out of factory price of these batteries could go below $400 /kWh the era of fossil fuel is certainly about to be finished.

About the kWh production capacity of a123. As you argue DDW I may have put it way to high by guessing that it is about the same as same quantities as Phostech doing 900 tons of LiFePO4 or 450,000 kWh per year right now. I believe A123 have increased production by about 200% from primo to ultimo 2006 indicating that production during 2006 could have been as high as about 270.000 kWh. That compares to 3,860,000 units of the DeWalt power pack or 40 million M1 cells or sales of $380 million in 2006 if we assume the out of factory price for the pack is $100. The best information I have to substantiate the guess is the quote from the MIT article to quote “A123 is already producing millions of its batteries for use in professional power tools” (see http://www.technologyreview.com/Energy/18054/page2/). Not very informative I admit. It means at least 26,000 kWh if 4 million M1 cells. Indeed the A123 are rather secretive about production volume and cell chemistry and for good reasons given the current court case. I like your reference to CBAK implying about 42,500 kWh per year. Very convincing argument but a123 may (and I stress may) have other manufactures of the material to quote from a123’s web “A123 Systems has multinational manufacturing capability. In addition to the main headquarters, which is located in Watertown MA, A123 operates a combination of wholly owned, state-of-the-art tier one manufacturing plants and subcontractor facilities in China, Korea, US and Taiwan comprising of more than 100,000 square feet. These facilities meet the stringent quality requirements of Fortune 500 companies.” (see http://www.a123systems.com/html/company.html ). Time will tell.

Henrik,

I like that; $40 for a 36V DeWalt Pack.

As usual, it seems obvious now that you point it out!

Thank you for your efforts.

Just digged up a little more info to paint the picture of how far a123 and Phostech are with regard to production volumes of their nano coated LiFePO4 lithium batteries. In a may 2006 announcement by Phostech (see http://www.phostechlithium.com/nouvelles/Phostech_Moving_May15th.pdf) they describe that their pro anno capacity was 100 metric tons of LiFePO4 in primo 2006 and that they expected to reach 600 tons of pro anno capacity by ultimo 2006. Now we know from the new announcement (see http://www.sud-chemie.com/scmcms/web/content.jsp?nodeId=6885&lang=fr ) that they reached 900 tons capacity by ultimo January 2007. Not bad at all. Another interesting thing about the old announcement is that it relates pro anno production capacity with the square-feet production site. In particular, 600 tons compares to a 27000 square-feet production site. A123 say on their web site they now have I quote “state-of-the-art tier one manufacturing plants and subcontractor facilities in China, Korea, US and Taiwan comprising of more than 100,000 square feet.” A very rough estimate would then suggest that a123 actually is ahead of Prostech and presently is able to produce about 2400 tons of LiFePO4 pro anno right now which we have calculated equals 1.200.000 kWh when using 2kg of nanocoated LiFePO4 cathode per kWh of the Phostech battery. That is obviously a much larger capacity than needed to supply the sales of Dewalt’s packs since it could make 17,100,000 powertool packs (using 0.07kWh like the Dewalt 36V battery). If it nevertheless is somewhat true it would imply that a123 is shipping large volumes of their batteries to other customers than Black & Decker. The question is who could be their unannounced customers? Could it be Bosch powertools they also sell a 36V lithium power pack but they have not announced the battery manufactory (I can’t find it). Could it be some Chinese e-bike producers? Of cause, we need to find a credible motive for a123 not to announce other mayor customers of their cells. That could be for marketing reasons. They want to be known as a company that focuses entirely on the potentially biggest market of all the battery markets: the potential $480bill a year market for PHEV batteries.

Another interesting info in the announcement from Sud-chemie is that thay say that it cost only $35 million to build a 1500 ton facility. That is about $56 million for 2400 tons of capacity. A123 has been capable of investing that kind of money in the past two years especially if they have got a little co-finance from banks and partners. I also read recently that president Bush now regularly ask about how it is going with the battery industry in particular these nano coated batteries we are talking about here. I am sure it is the first time ever a US president has cared to know anything about the battery business. I interpret it as just another indication that this time we are truly close to have found a permanent replacement for fossil energy. The question is not whether it is going to happen but how quickly this energy transition will happen.

Henrik, you are absolutely correct about wholesale vs. retail pricing. The gap can be especially large for small consumer durables such as cell phone batteries. As you note good wholesale/factory pricing is hard to come by. I have found EBay to be a surprisingly good source of wholesale price data. You have to exclude one-time sellers (e.g. the guy who buys a DeWalt 36v drill and breaks it and then puts the used battery on EBay to recoup some of his cost). But if you can find a couple sellers who repeatedly sell the same new-in-box item it's a pretty good bet they're buying wholesale and marking it up 20%.

Your $655/kWh wholesale estimate for tiny cell phone batteries sounds right to me, and is consistent with my $400-500/kWh estimate for larger cells. I also agree that LiFePO has a raw material cost advantage over cobalt chemistries. In fact much original research into alternate lithium chemistries was driven by cost issues. Whether LiFePO's raw material cost advantage will eventually translate into a finished product cost advantage remains to be seen. A123 has hinted as much, so there is hope.

Very good point that A123 may have other suppliers besides C-BAK. I don't know if the Taiwanese and Korean plants make batteries or merely subcomponents. I don't think it's valid to compare square footage for Phostech and A123, though. Phostech only makes LiFePO material, A123's manufacturing partners are building the entire battery.

Toolmakers try to get exclusivity for a year or two, so each tends to have a different supplier for recent models. DeWalt uses A123, Milwaukee uses E-Moli and I think Makita uses Sony. I don't think Bosch uses A123, this writer says it has 20 3.6v/1.0Ah cells (Saft??):

http://blogs.toolbarn.com/brianm/2006/06/interesting-battery-insides-v28.html

...if the out of factory price of these batteries could go below $400 /kWh the era of fossil fuel is certainly about to be finished.

I don't know if I'd go that far. After all, most electricity comes from fossil fuel. But it would certainly mark the beginning of the end for OPEC. And it would give us a path toward fossil-free cars if we simultaneously move electricity toward renewables and/or nuclear.

Hello, everyone!
I have a good message. Now I have synthesized high energy density lithium ion phosphate cathode with a novel methode. The carbon in the final sample is less than 0.2%, and the discharge specific capacity is over 160mAh/g. For the absence of carbon in the final product, the sample had good physical properties such as bulk density, less specific surface area etc. Mow I believe I will make further progress in it.

Thanks for the nice post!

Free PS3