Developer of PbC Batteries Lands $6.4M Manufacturing Flooded Lead-Acid Battery Contract to Jump Start Revenue
|Indexed values comparing different energy storage options. Axion says that the PbC technology strikes a balance between price, energy and power. Click to enlarge.|
Axion Power International, Inc., the developer of PbC batteries—multi-celled asymmetrically supercapacitive lead-acid-carbon hybrid batteries (earlier post)—has received a purchase order for 92,250 flooded lead-acid batteries that it will produce over the next 11 months under a toll-manufacturing contract with a major North American battery manufacturer.
Axion’s primary business focus is developing new manufacturing processes for energy storage devices based on its proprietary PbC technology, which promises to deliver more advanced battery performance at a price that approaches lead-acid. The PbC is a hybrid device that uses the standard lead acid battery positive electrode and a supercapacitor negative electrode that is made of activated carbon. However, the company notes, bringing currently mothballed flooded battery lines to production will not interfere with Axion’s PbC activities and should give rise to significant economies of scale and training opportunities for new hires.
The purchase order is the first phase of a relationship that could expand to 50,000 units per month by mid-2009. The product will be manufactured on previously mothballed assembly lines in Axion’s New Castle plant. Axion will begin work and will ship product this month. This Phase 1 purchase order segment will generate $6.4 million in revenue over the next year.
The original New Castle battery manufacturing equipment that Axion bought in 2006 was configured into two flooded battery lines, and a third line for sealed absorbent glass matt (AGM) batteries. The plant has always had a total permitted capacity of 3,000 batteries per day and Axion has the potential to apply for a permitted increase to 5,000 per day.
Over the last three years, Axion made all of its PbC battery prototypes and specialty racecar and collector car batteries on the AGM line. The flooded battery lines remained in place but unused. When the opportunities for toll contract manufacturing first arose in 2007, Axion began to slowly rehab the flooded production lines, and in some cases upgraded and replaced existing equipment with battery manufacturing equipment obtained at auctions for a fraction of its real value. This process continued into the first 9 months of 2008.
Axion’s CEO Thomas Granville said the new purchase order will help put under-utilized sections of the New Castle plant into production and provide an important source of new revenues to finance ongoing R&D and future growth. The order, along with anticipated follow on orders over the next several months, also serves to complete the terms of the final Quercus Trust investment made in June of 2008.