AES Corporation Makes Strategic Investment in Altair Nanotechnologies
05 March 2007
AES Corporation, the global power company, has made a $3-million strategic investment in Altair Nanotechnologies, the manufacturer of lithium-ion batteries.
AES privately purchased 895,523 treasury shares of Altair common stock at $3.35 per share, the NASDAQ closing price of Altair shares on the day prior to closing. The purchased shares represent approximately 1.5% of Altair’s outstanding common shares.
Advanced battery technologies have the potential to transform both the electricity and transportation sectors. The batteries that Altairnano is beginning to ship, with their high power density and extended cycle life, offer great promise for powerful, fast charging electric vehicles and other applications.
—Robert Hemphill, Executive Vice President of AES
Phoenix Motorcars is using a 35 kWh Altair NanoSafe battery pack in its recently introduced Sport Utility Truck. Altair now has a multi-year purchase and supply agreement with Phoenix under which Phoenix has projected orders for 2007 between $16 and $42 Million for up to five hundred battery pack systems. Altairnano also received a 16.6% ownership in Phoenix as part of the transaction. (Earlier post.)
AES is one of the world’s largest global power companies, with 2005 revenues of $11 billion. With operations in 26 countries on five continents, AES’s generation and distribution facilities have the capacity to serve 100 million people worldwide.
(A hat-tip to Rick!)
So obviously, Altair Nano is a pump and dump scheme right guys? [please note the sarcasm].
AES has large operations in the US as well.
Posted by: Patrick | 05 March 2007 at 07:49 AM
AES is company making business in high risk emerging markets. Currently their integrated power generation/distribution business in Venezuela was nationalized. They have big operations in countries with shaky economies such as Cameron, Al Salvador, and Ukraine.
No wonder they are the first among big players to take a chance with Altair.
Posted by: Andrey | 05 March 2007 at 07:54 AM
Andrey,
AES is just the first Electric Utility to take an equity position in Altair. But they are not the first Big Electric to buy the Phoenix truck with ALtair's battery on board. Big Electric sees themselves as the biggest beneficiary of the electrification of the auto with the opportunity to become the Exxons of the next generation of automobiles.
As far as AES's offshore investments, there is always political risk. But they actually SOLD their stake in Venezuala(albeit with a gun to their head and at a reduced price) but their stock only went down 10% even with the global stock market selloff recently. They're fine.
They will also be a huge buyer of this battery technology to refleet with electric cars. Why wouldn't they? You will also begin to see hybrid and all electric utility bucket trucks making service calls, replacing poles, etc. Big Electric can make the new generation happen all by themselves but they won't have to.
To reiterate their claims:
1) Top speed 95mph--all electric
2) Range--130 miles--all electric
3) Recharge time-10 minutes with 440 electric
4) Battery life 12 years. Actually 15000 cycles with 85% capacity left at teh end.
This battery satisfies the needs of 80% of all automobile drivers in the US, maybe the world, but it's a little expensive right now. Altair is a research company not a manufacturer. They're building this battery in a 30,000sf converted warehouse in Indiana. When they purchase some manufacturing know-how with this cash infusion, you will see the cost of this battery drop dramatically. It is probably the premier battery format for manufacturing scaleup out there since it already has every characteristic an automobile manufacturer is looking for.
Posted by: Rick | 05 March 2007 at 09:06 AM
Rick -- EXCELLENT POST -- written in a clear and concise format -- it sounds like you know your stuff. I can't wait til the "Area 51 Conspiracy Theory" crowd begins to post on how AES will shut this battery operaiton down by putting it in a closet, locking the door and throwing away the key!!! Taking all bets -- have at it Area 51 crowd -- this is prime time stuff -- post away -- be sure and mention Al Gore and how he invented the Internet and will save the world.
Posted by: JJ | 05 March 2007 at 09:49 AM
Is that why Al Gore's electricity bill is so high? I mean, if you invented the internet, you must have a pretty large server farm in your basement and those things just suck down the KW-hrs like there is no tomorrow.
Posted by: Patrick | 05 March 2007 at 10:10 AM
I am actually not going to say that AES, or anyone, will shut down Altair. In fact, I wouldn't be surprised if AES increased their position in Altair over the next few months.
The battery company I'm suspicious of is A123 (which is partially owned by cobasys, which has ties to Big Oil).
Big electric has NO REASON WHATSOEVER to try to shut down the EV. In fact, they have a great deal of incentive (financially) to encourage the EV. We spend $800,000,000 a day on foreign oil. If companies like Altair keep progressing, it won't be long until WE KEEP that $800,000,000 per day in this country.
Posted by: John | 05 March 2007 at 10:33 AM
First, I own Altair stock. So far, so good.
The lack of firm news about the smaller technology efforts is a problem. The press releases create a lot of buzz which is then trashed by people who may be right but really can't know one way or the other.
AES is voting with money. And at least some batteries are being delivered and some vehicles sold. Very low volume.
Any efforts this size (Phoenix and Altair) can go either way. And with $3m AES isn't making an earth shaking investment. The interesting fact is they bought at the market price. Assuming they paid cash that is a favorable sign.
Posted by: K | 05 March 2007 at 11:38 AM
If someone develops a car using these batteries that has a range of 250 miles, I'm sold.
Posted by: Cervus | 05 March 2007 at 12:39 PM
Cervus,
You're in luck! AltairNano has on that will be out the end of '07. Go to Phoenixmotorcars.com and watch the ktla news video. They mention it there.
Posted by: Rick | 05 March 2007 at 03:11 PM
This is very good news. More $$$ from the right place. All electric power firms should invest heavily in Altair Nano + other similar high efficiency battery producers. It would be to their advantage = higher night time electricity consumption.
Oil companies will also see the opportunity and will soon switch part of their investment into clean electric energy production + storage units.
Producing batteries + control systems + chargers for 30+ million new PHEVs and BEVs a year will be an excellent business opportunity ($200+ billion a year).
What portion can be economically produced in North America? That is the question? Producing the design and raw nano-materials here will not create that many jobs and return on investment. We need a few (10+) highly automated, high efficiency battery pack assembly plants to compete with China and other low labour cost nations.
Could some of the surplus Big-3 plants be spurchased for $1 each, converted and equipped to produce 20+ million battery packs and associated sub-systems a year?
Posted by: Harvey D. | 05 March 2007 at 04:30 PM
This is sooo obviously a conspiracy by the CIA and Bushco to bring down oil prices by inventing such a superior battery in order to continue their war on Islam and the poor of the world. Why would Americans want to have cheap running cars that can be filled with $2 worth of electricity? Only because they want reduce demand for oil and thereby attack Islam, the religion of peace, submission, and respect for women and gays, and loot the oil from the middle east when its price drops. Oil is worth $200 a barrell, even though it costs only $3.00 to extract it in Saudi Arabia and ship it to the west. Paying $61 for $3 oil is stealing the oil, and is better known as imperialism and colonialism.
Posted by: Hamidzade | 06 March 2007 at 02:28 AM
The price of a Phoenix truck would be even higher without dollars derived from carbon offsets. This means that other companies are able to emit more carbon by paying dollars to Phoenix. I hope this all turns out well, but isn't it the case that one is emitting carbon indirectly by driving a vehicle manufactured by Phoenix?
In the long run, maybe this is all too the good, but for now, it seems as though we are going around in circles, robbing Peter to pay Paul. I'd rather just flat out subsidize electric vehicles and force the auto companies, for example, to reduce the emissions from their vehicles independently of what others are doing.
Posted by: tom | 06 March 2007 at 06:47 AM
I endorse getting rid of carbon offsets for car makers as mentioned by Tom.
Electric vehicles already receive some advantage each time gasoline is sold and various taxes, usually including a road tax, are paid.
And that suits me fine. I have no problems with higher gasoline taxes. But it sends the money to government. And that gives government a strong incentive to boost E85 and biofuels rather than straight electric.
Posted by: K | 06 March 2007 at 10:48 AM
@Tom - that is quite a rationalization. And the carbon credit applies to producers of energy, and not to consumers of energy such as Pheonix.
One electric vehicle will replace one fossil fuel vehicle. That is real reduction in GHG emissions.
The carbon credit will result in a carbon emittor to raise its price, while a carbon-neutral producer will lower its price. This will move the market towards carbon-neutral producers.
Pls. back up the rationalization with some numbers.
Posted by: Hamidzade | 06 March 2007 at 11:20 AM
John, A123Systems is not partially owned by Cobasys. A123 investors include GE, Motorola, Qualcomm, MIT and a handful of venture capital firms. AFAIK none of these are tied in with big oil.
A123Systems did sign a deal recently that names Cobasys as a tier one distributor. The deal is not exclusive. Cobasys will build battery packs using A123 cells for use in GM hybrids (including possible PHEVs such as 2009 Saturn Vue and future models based on the Volt platform). Cobasys already supplies battery packs to GM, has a large technical center in Michigan and knows how to deal with behemoth automakers like GM, so they were a logical choice to be a distributor.
Posted by: doggydogworld | 06 March 2007 at 12:50 PM
I notice that Phoenix is projecting $16 millon to $42 million in orders for up to 500 battery packs. That's between $32,000 and $84,000 per battery pack. This is not something that consumers are going to be willing to pay. At this point, these batteries are more of a demonstration of what may someday be available. Or maybe a PR stunt.
Posted by: Steve | 12 March 2007 at 05:51 AM
<>
A PR stunt? Do you really think these doctors have spent all of this time developing this technology so they could fool everyone in to thinking it's real?
OMG I'm not reading this.
Posted by: Boggle | 14 March 2007 at 08:36 PM