THE BETTER BATTERY

The Electric Car Battery War; U.S. and Asian rivals are rushing to hone lithium-ion technology. Should the feds get involved?
Pete Engardio (w/Kenji Hall, Ian Rowley, David Welch and Frederik Balfour), February 12, 2009 (BusinessWeek)

"…Most experts agree that lithium ion, which can be used to create batteries that weigh far less and store more power than those in today's hybrids, will be the dominant [battery] technology…The big question is whether [any]…U.S. battery maker will be a major player by the time a mass market develops for electric cars, which could take a decade. The field is already crowded…U.S. companies claim to have prototypes…They include [Ener1], A123 Systems…and…Johnson Controls-Saft, which has snared contracts with Ford Motor, BMW, and Mercedes-Benz…But the Americans face Asian rivals with deeper pockets and far more lithium-ion experience…

"…Whoever prevails, some lithium-ion batteries will likely be assembled in America. The bigger stakes are over which companies will control the key technology—the lithium-ion cells stacked inside the batteries and the design of the car power system…Asians are counting on their dominance in lithium-ion devices for computers and appliances and on their ties with the hybrid programs of Toyota Motor and Honda Motor…"

Li-ion schematic (click to enlarge)

"Should Uncle Sam provide billions in loans and grants to a promising but unproven business? Or should the government wait for the market to sort things out before it backs a U.S. company? The risk is that by then another major industry could go the way of memory chips, digital displays, the first solar panels, and the original lithium-ion batteries used in notebook PCs and cell phones. American scientists, funded by federal dollars, were at the forefront of each of those. Yet the industries—and the high-paying manufacturing jobs that go with them—quickly ended up in Asia. U.S. labor costs and taxes drove many operations abroad, but often industries fled simply because Asian governments, banks, and companies were more willing than Americans to risk big capital investments.

"This time federal help could be on the way…Lithium ion is regarded as a core enabling technology for plug-in hybrid vehicles, which, unlike most current hybrids, can be recharged with normal household current and run much longer on electricity before a gas-powered engine takes over. Lithium-ion cells can store up to three times more juice and generate twice the power of the nickel-metal hydride batteries used in today's hybrids. The T-shaped lithium-ion battery for the Chevrolet Volt, due in 2011, will contain 200 such cells…

"General Motors and Ford both assert that a domestic lithium-ion industry is vital if the U.S. is to be a major player in green cars…Besides, lithium-ion technologies can be used to help electric utilities manage their grids more efficiently—a potentially bigger market than cars…"

Li-ion batteries being tested for GM's Volt. (click to enlarge)

"Panasonic supplies 90% of the nickel-metal hydride batteries used in today's hybrids…China has more than 10 manufacturers—Beijing has declared lithium ion a strategic industry. Mainland battery giant BYD Auto, in which Warren Buffett holds a 10% stake, turned heads at the Detroit car show with a small plug-in hybrid sedan…

"Analysts say no U.S. or Asian contender has solved all of the challenges of producing lithium-ion car batteries that are safe, reliable, and affordable…The U.S. is still in the race…Lithium-ion car batteries are an exciting technology. Whether they will generate an exciting U.S. industry is anyone's guess."