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Something interesting happened after A123 Systems filed for bankruptcy last week: the plug-in vehicle industry circled the wagons. AutoblogGreen received press releases and statements from a variety of electric vehicle (EV) players that, when taken as a whole, seem to indicate this particular bankruptcy filing hit a little closer to home than when, say, Think exited stage right. The main message would make Douglas Adams proud: Don't panic. Fisker, for example, gets all of its batteries from A123. But Fisker's chief commercial officer, Richard Beattie, told The New York Times, "I'm not concerned about matters of supply."

Forbes, unsurprisingly, took a negative view, but here's a sampling of the positive messages sent out after the news broke. Think Progress said the bankruptcy was a " a good opportunity for Obama to stand up and defend federal investments in clean energy."

Brian Wynne, the president of the Electric Drive Transportation Association said that the way Johnson Control will take over A123 is a "positive development." He said, "Consolidation is an expected market force in all emerging industries, especially one as dynamic as the global electric drive market. ... The electric drive industry is still in the early stages of market development - this is the second year of plug-in hybrid and electric vehicles availability on the mass market." Whatever happens, he said, "it is critical that the U.S. secure a position as the leader" in the EV industry.

Plug In America's legislative director, Jay Friedland, said in a statement that the bankruptcy is part of "the natural business cycle" adding that, "our country is experiencing tremendous success as we electrify transportation." Plug In America (PIA) also pointed out the way A123 helped the overall industry, such as the way a battery with a 100-mile range cost $33,000 before A123 got a $6 million dollar grant in 2007. "Because of technology improvements and the high volume manufacturing capability we have today, the estimated cost is down to about $17,000 and is expected to drop to $10,000 by 2015," PIA said.

The Union of Concerned Scientists (UCS) pointed out that, "It should also be noted that while there have been some high-profile failures of Energy Department loan recipients like Solyndra, the program still has a more than 96 percent success rate." The UCS also wrote about the situation here.

Atul Kapadia, the chairman and CEO of Envia Systems, the advanced battery technology company that is working with GM, used the occasion to promote his company's products, saying, "The drive to seek cost reduction in electric cars has accelerated since the advent of companies like A123. Carmakers want more than concept vehicles. They are now commercializing true mass-market electric cars. Envia's technology, available to select customers, more than triples the energy storage capacity of battery materials, causing a disruptive reduction in battery cost."

You can find more below.
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Statement from Atul Kapadia, the chairman and CEO of Envia Systems

"The drive to seek cost reduction in electric cars has accelerated since the advent of companies like A123. Carmakers want more than concept vehicles. They are now commercializing true mass-market electric cars. Envia's technology, available to select customers, more than triples the energy storage capacity of battery materials, causing a disruptive reduction in battery cost. This increased storage capacity will also reduce thickness of these cells making car batteries even safer than before. Innovation that reduces cost and improves safety is critical to bringing about a mass-market electric car revolution."


Electric Drive Transportation Association Responds to Johnson Controls Purchasing A123 Assets

Washington, D.C.-October 16, 2012-Brian Wynne, president of the Electric Drive Transportation Association (EDTA), issued the following statement in response to today's announcement about Johnson Controls purchasing A123 Systems' automotive business assets:

"Consolidation is an expected market force in all emerging industries, especially one as dynamic as the global electric drive market. Advanced battery technology powers the electric drive industry, increasing the fuel efficiency of the U.S. automotive fleet and reducing our reliance on imported oil.

"Johnson Controls' purchase agreement is a positive development for A123's U.S. operations and for the long-term growth of the advanced battery industry. The electric drive industry is still in the early stages of market development - this is the second year of plug-in hybrid and electric vehicles availability on the mass market. The U.S. has already seen tremendous growth throughout the electric drive supply chain and battery technology during this time. The energy storage market is projected to be a $50 billion global industry by 2020.

"Standing up an entirely new supply chain is a challenge to which industry leaders are committed. Strong private investment continues and manufacturing opportunities for advanced batteries and electric drive components are growing jobs and building market share. The global race in the energy storage market is competitive and moving rapidly - it is critical that the U.S. secure a position as the leader."

###

About EDTA

The Electric Drive Transportation Association (EDTA) is the preeminent trade association promoting battery, hybrid, plug-in hybrid and fuel cell electric drive technologies and infrastructure. EDTA conducts public policy advocacy, education, industry networking, and international conferences. EDTA's membership includes vehicle and equipment manufacturers, energy companies, technology developers, component suppliers, government agencies and others. For more information about EDTA and its members, visit ElectricDrive.org. For information about owning and operating electric vehicles, please visit GoElectricDrive.com.


Plug In America issues this response to the reported news that battery-maker A123 Systems Inc. may seek bankruptcy:

"Government can help facilitate innovation, but the natural business cycle remains - some failures in any emerging industry are inevitable," says Jay Friedland, Plug In America's legislative director. "Yet, our country is experiencing tremendous success as we electrify transportation. A raft of companies - Johnson Controls, Envia, Saft, GM, and LG Chem among them - are making great strides in driving down battery costs while creating a U.S.-based manufacturing sector for battery technology. This drives down the cost of plug-in vehicles while creating jobs and keeping at home the $1-billion per day we're currently sending overseas for oil, creating a better, safer America."

Other key considerations from the U.S. Dept. of Energy:

The advanced battery market is expanding dramatically in the United States and around the world -- from $5 billion in 2010 to nearly $50 billion in 2020, an average annual growth rate of roughly 25 percent.

A123's promising technology has a long history of bipartisan support. In 2007, the company received a $6 million dollar grant as part of the Bush Administration's efforts to promote advanced battery manufacturing,

Prior to this investment, a battery with a 100 mile range cost $33,000. Because of technology improvements and the high volume manufacturing capability we have today, the estimated cost is down to about $17,000 and is expected to drop to $10,000 by 2015. As costs come down even further, the market for hybrids and electric vehicles - which has nearly doubled in the U.S. since last year - will grow even further.

About Plug In America: Plug In America is the preeminent advocacy organization advancing the plug-in vehicle market. The nonprofit organization works to accelerate the shift to plug-in vehicles powered by clean, affordable, domestic electricity to reduce our nation's dependence on petroleum and improve the global environment. For more information: http://www.pluginamerica.org.


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    • 1 Second Ago
  • 23 Comments
      DaveMart
      • 2 Years Ago
      There is a quite informative article on the pressures on battery manufacturers here: http://evertiq.com/news/23106 'The report suggests that , in many cases, producers of large-formal Li-Ion batteries will not be able to generate sufficient earnings to cover their costs of capital, because automotive OEMs have forced significantly lower prices on their battery suppliers. According to the study, OEMs will be paying between EUR 180 and 200 per kWh for large-format battery cells until 2014/2015. "In this environment, battery producers can't generate sufficient cashflow to make vital investments in new and more efficient production systems and in the R&D needed for next-generation batteries. Yet this spending is important for driving down material costs," says Wolfgang Bernhart. The report predicts that, thanks to tight margins and a lack of investment, only a few of the big suppliers of Li-Ion batteries will survive, with players from Korea and Japan probably among them.' So that is around $250/kwh to the OEMs for the large format cells. That is not the price to the consumer, as they still have to be bundled into modules, a cooling and BMS added and so on. We might be looking at ball park $500 kwh as the price to the consumer, Daimler in their Smart where comparing the prices ex-battery in Europe and with it, where the battery seems to cost another $284kwh or so, are probably figuring that they need all the extra bits whether the battery is bought or leased, and so are pricing it out at the price to them from the OEM.
        DaveMart
        • 2 Years Ago
        @DaveMart
        @karlin: I made my sources, base price and assumptions clear, so others are free to extrapolate for themselves. I did NOT assume a 100% mark up, as you need, as I stated, the cooling system, module construction and battery management system. We don't have good figures, and so are doing the best with what we have. The lowest price I would find credible is in the $350 kwh range
        karlInSanDiego
        • 2 Years Ago
        @DaveMart
        Dave, this isn't Radio Shack How do you get from $250 kwh for OEM to $500 kwh as the price to the consumer when you're talking about a car? A manufacturer should not assume they need to make 100% profit on a part they FIT into a vehicle, especially when that part comprises 1/3 or more of the cost to produce the car. I can say if that were true and Nissan and Tesla made $5,000-20,000+ profit on each car through battery resale, they'd have a lot of room to negotiate at the dealerships. It's not a good assumption that auto manufacturers must leverage the single most expensive part ever found in any car as the golden fleece for producing EVs.
      brotherkenny4
      • 2 Years Ago
      Wanxiang might still try to outbid JCI. So, this terrible company (A123) that only existed because of government, has failed, but some companies want to buy it. You know, like as if there was a real market or something, and they expect to make money on it. I wonder what the scam is? I am sure the folks at fox can figure this one out.
        Grendal
        • 2 Years Ago
        @brotherkenny4
        You forgot the /sarc tag. Though this doesn't seem to be crossposted to the regular AB where that would be much more needed.
      raktmn
      • 2 Years Ago
      This shows a deep understanding of how business works. Why are these explanations only coming from green car companies, while the self-proclaimed "business" experts like Romney keep getting it all wrong?
        2 Wheeled Menace
        • 2 Years Ago
        @raktmn
        You expect someone in the 2 party system to get something right and give you a sensible answer that makes literal sense and not political sense? You have a lot to learn, raktmn.
        Spec
        • 2 Years Ago
        @raktmn
        Well Romney wants to bash Obama over the head with the green energy investments that failed in order to help himself politically. But he's been playing the game a bit crudely . . . he bashed wind energy hard and said he would kill the production tax-credit. Well, Iowa has become a huge wind energy generator, has gotten a lot of jobs from it, and it makes farmers extra money . . . it looks like Mitt is going to end up losing Iowa and his bashing of wind energy is probably a big reason.
      2 Wheeled Menace
      • 2 Years Ago
      A hundred mile pack would be about 32kw-hr. If that's going to cost $10,000, then that's 10,000 / 32 = $312/kw-hr. That would be cheaper than some of the crappiest chinese-designed and produced lifepo4 batteries ( thunderskys ). I don't believe A123 can ever hit that $/kw-hr figure because their batteries have been much more expensive than that in the past. Nonetheless, it would take a miracle in lifepo4 development to get it to where NMC is, in terms of volume and weight per watt hour. That's why Tesla can jam a 250-320 mile range into one of their cars using a cell that approaches 200whr/kg, whereas the A123 cylindrical equivalent is only in the 120whr/kg range. But in the meantime, you can go on A123's website and buy one of their 12v lead acid replacement batteries for >$2,000/kw-hr. Exciting?
        brotherkenny4
        • 2 Years Ago
        @2 Wheeled Menace
        The estimates for costs are always based on the assumption of a certain quantity of production which allows materials vendors to offer bulk pricing. It is fairly commonly known that most battery companies estimate based on quantity production that they can hit $350/kWhr. A123s battery should be less based on materials, because their cathode does not contain nickel or cobalt or manganese, which are often the limiting factor in low price accomplishment. A123 has been expensive because there was no one making large quantities of the cathode material, and they have done it themselves, which has a learning curve to the production.
          2 Wheeled Menace
          • 2 Years Ago
          @brotherkenny4
          I think you are right. A modern li-nmc battery uses far less cobalt than a li-co battery does though. Also, the RC Lipo batteries that use cobalt primarily are very cheap, down to $350/kw-hr already to the hobbyist ( i just bought 1.3kw-hr of that stuff, so i'd know! ), so cobalt can't be all that expensive if it is the primary ingredient. Mass production changes things for sure - that's why Panasonic's 18650 NMC cells that are in various laptops and mobile devices are so cheap to stick in a Tesla Model S.
      DaveMart
      • 2 Years Ago
      I think to be viable BEV cars need a reasonable margin of range over normal daily driving, and they need that throughout their lives. The Tesla apart, we haven't really got that at the moment. if we take around 30 miles as being the average daily mileage, then the Leaf is fine when new, but drops off too rapidly, and you are only supposed to normally charge it to 80% so it starts off with a normal use range of around 73*0.8 = 58 miles or so. The Smart starts off with around 60 miles of range on the EPA, and I have not seen the specified charging regime yet, they may instruct that it should only normally be to 80%. The battery should loose capacity more slowly than the Leaf though. The iMiEV is similarly limited. Now enthusiasts may be prepared to work around all that, but whether they think other people should be prepared to or not, they won't, and IMO will demand something like 90 miles of range if they can only normally charge to 80%, and for the decline to be much more moderate than on the Leaf over the lifetime of the car. Fortunately we have a number of PHEV vehicles coming, led by the C-Max Energi, which, some restrictions on boot space aside, seems like a great alternative. It is a lot cheaper, as long as your employers allow it, to fit another charger at work to charge up for the journey home than to increase the all electric range to 40 miles from 20. The Mitsubishi Outlander PHEV is also due in 2013, although they have not yet given regional release dates. So to me it looks like a PHEV world until there is considerable improvement, of the order of 30%, in battery capacity, with better durability than in the Leaf, either through alternative chemistries or better cooling.
        DaveMart
        • 2 Years Ago
        @DaveMart
        Since Nissan reckon the battery is only good for around 60,000 miles and 5 years down to 80% capacity, and that is on the lenient NEDC cycle, perhaps 45,000 on the EPA in temperate climates, and recommend 80% charging you would have to be very rich or very mad to reduce it's life even further by charging to 100% regularly.
        karlInSanDiego
        • 2 Years Ago
        @DaveMart
        Dave, you are normally supposed to charge a Leaf to 100%. Otherwise they'd reset the full mark at 80% and force the charging system to stop there. The Leaf is supposed to be QUICK CHARGED to a max of 80% infrequently, as in, not helpful for the long term battery life. It's true that as with most things in life, there's a penalty to pay for rushing it. Nissan did design the Leaf to be driven two full battery cycles (100%) in a day, if you have access to 8 hours charging (during an 8 hour work day for example) at 220V. It's not fair to describe the Leaf's range as 4/5 what it really is, or to start extrapolating its 80% quick charge limitations to all other EVs normal charge cycles. The MiEV takes a full charge in 7 hours at 220.
          karlInSanDiego
          • 2 Years Ago
          @karlInSanDiego
          Mustang, You are stating that Nissan is showing you how to get more life out of your battery. That's not the same as saying the range on a Leaf is now lower than it was when they spec'd the car. I can probably get more life out of my ICE engine changing the oil every 1000 miles, and keeping it under 35 mph for the entire life of the car, but that doesn't mean my car should now be operated at 35 mph. And if you charge to 100% and use the car (ie, don't leave it trickling at 100% for 10 days in a row without using it) then the 100% factor is not damaging the battery in any unusual way, it's using it the way it was designed to be used. Does that mean there is degradation? Yes. But it's not reasonable to write off the last 20% of the battery because a revision is encouraging you to set to 80% if you don't need 100%. They also suggest that you drive to less than 80% charge capacity for the same reason, because it helps the life of the battery. Future BMS systems will get better and better at helping you predict usage, and finish charging just in time for your morning commute. But let's not refactor all Lithium derived batteries as 80% (really less because they can't be drained to 0) useful.
          mustang_sallad
          • 2 Years Ago
          @karlInSanDiego
          Nissan has built in a feature to automatically stop regular Level 1 or Level 2 charging at 80%, and recommends doing so to maximize battery life. From page CH-22 of the Leaf user manual: "Long life mode NISSAN recommends charging the Li-ion bat- tery using the long life mode to help maximize the Li-ion battery useful life. Long life mode can only be set using the charging timer function. The long life mode is set by changing the [% Charge] to [80% Charge (Improves Battery Longevity)] using the following procedure."
        Ziv
        • 2 Years Ago
        @DaveMart
        Dave, I agree with your thoughts on BEV's needing a reasonable margin over normal daily driving. I had thought that for me that margin would be a BEV with range sufficient to drive two hours at 65 mph after I had fast charged back up to 80% of the batteries max range. So for me to look at a BEV as a full utility vehicle, I would need a pack that could take me (2 * 65) + 30 {to leave a few miles of range when you are forced to pull over to refuel} = 160 with a 20% buffer so the full pack range would have to be around 200 miles. Hmmm... That looks like a really confusing description, I guess saying that I want a 200 mile range BEV so that when I am down to 30 miles of range left, I will then be able to recharge to 160 miles of range quickly and hit the road for another two hours might be clearer. Tesla has already crushed that and now there are other players moving into the BEV market so I would bet that there will be real competition in the area of 200 mile range BEV's by the summer of 2014, and I bet that their prices will be much lower than what Tesla is charging for a 235 mile AER today. Early days. I think my first 'electric' car will be the Ford Fusion Energi, which kind of sucks because I spent 4 years following the Volt assiduously, but when I analyzed the Volt dispassionately, I realized that its front seat is nearly identical to the Honda Civic Sedan, but its backseat has much less space than a Civic. I carry clients in my car all the time. I just don't think a Volt is big enough for me, even though I love the design.
      Spec
      • 2 Years Ago
      It has definitely been a trying time for the EV biz. Aptera, Think, Enerdel, and A123 all went bankrupt. The Leaf is selling poorly. Fisker's Karma having some problems with fires, Atlantic delayed, and cut off from the ATVM program. Even the successes are not so hot. The Volt is the biggest selling plug-in car but it is selling half as many cars as the over-optimistic forecast projected. Tesla got the Model S out the door but is manufacturing them very slowly. I think people were a bit over-optimistic on sales projections. Gas prices leveled off and dropped down a bit. And battery prices are not dropping as fast as some believed they would. But all that said, I think the EV biz is here to stay. The PHEV model of car will probably be the gateway drug. As oil prices slowly keep rising and battery prices slowly drop, we will continue to get closer to a tipping point.
      Giza Plateau
      • 2 Years Ago
      Hmm, Jay Friedman should know battery cost better than that. It's 5000$ today, not 17. And I don't think it ever cost 33. The cells in the Tesla Roadster cost 20 and that's more than double the capacity. It's interesting that Fisker says they are not concerned. It would be nice to hear what Johnson Controls intend to do with the production and availability.
        DaveMart
        • 2 Years Ago
        @Giza Plateau
        We haven't got a clue how many kilowatt hours are in a '100 mile battery' as the one in the Leaf, for instance, at 24kwh is certainly not one, whatever Nissan said at first. So we can't say they are wrong in their costs, as they haven't really told us what they are talking about.
          brotherkenny4
          • 2 Years Ago
          @DaveMart
          Typically about 3 miles per kilowatt hour. So, a 100 mile battery will be about 33kWhr. Of course, it depends on weight and drag coefficient and other things, which is fortunate that it is complex, because it allows for huge amounts of disinformation and spin to be foisted on the public. Confusion is good for the managers and lawyers and politicians.
          EVSUPERHERO
          • 2 Years Ago
          @DaveMart
          My EV's weight 2750 lbs, for each Yari. 100ah kokam batteries. 80 and 88 cells respectively, each cell fully charged at 4.15 volts. These cars achieve 120 miles range at 55 mph. 100 miles at 75 mph would be nice. I think it would take a battery pack closer to that in the new Rav4 EV, and that is a Tesla 41 kwh pack.
        Spec
        • 2 Years Ago
        @Giza Plateau
        I'd love to believe that a '100 mile battery' costs $5000. But that just is not true. The only way that could be true is if you put that battery in an Aptera.
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