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Summary:

Like any emerging industry, the cleantech world tends to accuse newcomers of being interlopers, and that’s probably the initial thought many had when news hit that former Intel chairman Andy Grove is advising the company to move into the electric vehicle battery market. Realistically, what could […]

Like any emerging industry, the cleantech world tends to accuse newcomers of being interlopers, and that’s probably the initial thought many had when news hit that former Intel chairman Andy Grove is advising the company to move into the electric vehicle battery market. Realistically, what could the world’s largest chip maker, which makes the bulk of its revenues on digital communication technology, do to help transform our beleaguered car industry into an electric wunderkind?

A lot, actually. While the move would be risky, it could have a monumental effect on the slow-moving electric vehicle battery industry, particularly in the United States. Intel has already moved closer to the EV battery market with some recent investments through its venture arm, Intel Capital. The investment group has funded battery, energy storage and alternative energy companies including the solid-state battery startup Cymbet, fuel-cell membrane company PolyFuel and Chinese flow-battery maker Net Power Technology. Intel Capital’s solar investments – like SpectraWatt, SulfurCell and Trony Solar — are also tied to batteries, as solar production needs to store energy overnight when the sun doesn’t shine.

“We certainly consider battery technology important,” Intel spokeswoman Christine Dotts told us. “Whether we will do anything more in this area we can’t say at this time. However, it should be noted that battery technology developments for computer uses and for automotive applications are not necessarily mutually exclusive.” That means if Intel does put significant efforts into battery development, the company believes it could use those innovations for computing, mobile technology and networks (all industries where Intel already has a significant presence), not just transportation.

Intel certainly has the balance sheet to make large R&D bets. For the fourth quarter, Intel is expecting revenue of $9 billion, and for 2007, Intel generated $38.33 billion in revenue. Last year Intel spent $5.76 billion, or a whopping 15.03 percent of revenues for the year, on R&D.

At the same time, the market itself is crying out for an aggressive, smart company to solve some of electric vehicles’ fundamental issues. The battery is one of the most expensive and technically difficult aspects of EVs, and it’s one of the biggest reasons there are so few electric vehicles on our roads. As Rob Enderle from the research firm Enderle Group says: “Battery technology has significantly lagged,” while other technologies have advanced. Most of the next-generation battery technology from startups like A123 Systems and Altair Nano, or energy storage devices like EEstor’s, are still years away from commercialization.

With the right bets, Intel has the ability to become one of the largest U.S. electric vehicle battery makers. The big companies that are currently moving to dominate the battery industry — like Sanyo, LG Chem and Panasonic — largely come from Asian countries. Electric-car makers like Tesla have complained that the cost of transporting batteries from international producers drives up manufacturing costs, and Tesla said it has actively (and so far unsuccessfully) looked for a U.S. manufacturer. Many of the large U.S. automakers slowly getting into electric vehicles could also be interested in domestically-made batteries. U.S. electric vehicle battery production could also be ripe for U.S. subsidies or benefit from Obama’s green stimulus.

For Intel, moving into electric vehicle batteries could help the company diversify beyond chips for computing, which it has so far largely been unable to do successfully yet. Other chip companies have succeeded in diversifying through green tech businesses: Applied Materials diversified its chip equipment business several years ago with a solar gear bet and now is seeing solar as one of its fastest growing areas. Chip maker STMicroelectronics is working with LG Chem on battery packs for hybrid and electric vehicles.

That’s not to say it wouldn’t be a risk for Intel to make a substantial EV battery move. Clearly this isn’t exactly the best time to be making large, capital-intensive bets on new fields. Intel actually lowered its fourth quarter outlook from early expectations of $10.1-10.9 billion, citing in part “significantly weaker than expected demand in all geographies and all market segments.” Because batteries are a rather specialized field and one that Intel doesn’t know that much about today, moving into the space would likely be a very expensive play.

With vehicles contributing more than a quarter of the world’s carbon emissions, electrifying our cars could be crucial to fighting climate change. If the company that revolutionized computing could help put a small dent in global warming by producing a reasonably priced, U.S-made battery, it could potentially kickstart an era of cheaper electric-vehicles for the average consumer and establish a significant place for the U.S. in leading that market.

This article also appeared on BusinessWeek.com

  1. For heaven’s sake, why would you stoop so low as to go to Rob Enderle, that quote-whore “from the research firm Enderle Group”? I mean, really!

    Less frivolously, you ought to have mentioned the track record of Intel Capital.

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  2. Why haven’t people used some sort of magnetic energy harvesting as a power source yet? Has anyone seen the “Hummingbird Motor”? A project like this would change the way the world operated. Imagine powering the home and the automobile with this type of technology and the effect this would have on the world. No nation/country would have to rely on any other country for natural resources.

    Hummingbird Motor: http://tinyurl.com/pdes5

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  3. Adding a large solar plant to the electric grid does not use batteries. Natural gas (or hydropower) plants are turned up or down as needs change. Batteries are way more expensive.

    Solar power produced at the home might use batteries to store unused home-produced electricity. It avoids the cost of distribution and can be less expensive than buying power on the grid. Even so, efficiently regulated grids (not in evidence) would have excess power here sold to the grid and extra demand bought from the grid, so natural gas plants would play their usual role here, too.

    Unless we have a really radical change in technology, batteries are only for applications off of the grid: autos, other mobile devices, isolated fixed applications.

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  4. Alexander Ainslie Wednesday, December 17, 2008

    One has to look at this ecosystem from the bottom up (identifying cheap, abundant, sustainable and accessable material resources) and then apply the appropriate technological solution to take it downstream. Granted Intel has done this well using silicone but source material for energy storage (and production) is not so clear cut.

    The source material for batteries is key to keeping the cost of future electric and hybrid cars down to affordable levels for mass market adoption.

    The cost of Lithium has gone from $300 to $3000 per ton and, at current production levels, we will run out of supply of this resource by 2015. By then the cost of Lithium will be so high that the cars produced using Lithium Ion batteries will be to costly for the average consumer.

    The principal country that can fix this shortfall in Lithium resources is Bolivia who have the world’s largest untapped sources for the Lithium metal under their salt flats. The Bolivians, however, have been raped for so long by foreign mining companies that they are now taking the rightful stand that they do not want to allow the same thing to happen to their land and peoples all over again in relation to “developing” and not “exploiting” their Lithium riches. BTW, the French corporate raider and industrialist, Vincent Bollore (see: http://tinyurl.com/a5mqu3 & http://www.bollore.com ), is at present all over the Bolivians promising them the moon in exchange for the rights to “exploit” their Lithium resource for the benefit of his industrial battery/supercapacitor venture, Batscap http://www.batscap.com (he also bought the Canadian firm Avestor adding further production capacity in North America in 2007!), which will also benefit his nascent European electric car business, BlueCar, in partnership with design/engineering powerhouse, Pininfarina (see: (http://bit.ly/Z6FX) & (http://bit.ly/B8vk) & (http://tinyurl.com/8ok2zo) ).

    So the US is going to have to go and suck up to the Bolivians right quick if they intend to use Lithium as a source or identify another source or material. However, Bollore’s deal making talents in developing countries may make it hard for the US to match or beat the terms he is surely offering the Bolivians.

    In the short term the most carbon efficient car you can buy today is a used car – not new electric or hybrid car’s all of which use a lot of energy and produce a much bigger carbon footprint to manufacture than an existing used car (let’s call them pre-owned, sounds more palatable!).

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  5. Have to agree with kontra, Enderle is a disgraced informational source. Witness his performance in the SCO debacle. Why use him for a meaningless quote? Do you guys have a relationship with him?

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  6. It would be hard to find an article with more inaccurate info than this one. ALtair Nano is hardly a startup, and its technology is not advancing. Nor is A123 Systems, although it will get cheaper, which is just as good. Plug-in hybrids are all that’s needed to basically destroy the oil industry – they can easily eliminate over 95% of current demand – those who look to pure electrics are looking in exactly the wrong direction. Nor will Obama’s misleading
    (and typically fraudulent) “green subsidies” accomplish anything – his one million car dream is actually nonsensical – the US has over 265 million cars on the road. Eliminating 1 million will have zero effect (and cost many billions).
    Also misleading is the article’s claims of 25% of carbon emissions produced by autos – even if every car were electirc, the amount of reduced emissions would be nowhere near even half that 25% figure. One thing you can aount on when boosterrs of green technologies are speaking – lies, plenty of lies. Like the one about wind power being of any value. Ho, ho,ho. Merry Christmas. We all know that anti-nukes have caused global warming – if nuclear power had progressed the way it should have after Three Mile Island, any need for reducing carbon would be non-existent at this point. The greenies are universally brainless.

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  7. Stopped reading at the Enderle comment… and what pointless comment. Battery tech has lagged?

    Water is also wet.

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  8. [...] stage left —  a story from Giga today that Intel may be getting ready to invest heavily in the automobile battery business. More [...]

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  9. [...] the battery market, making it difficult to find battery options domestically — heck, even chip-maker Intel has been advised to look into the market partly because it’s so sparse. This morning, a group of more than a dozen U.S. tech companies [...]

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  10. Intel can do it, and it is about time that we take this lead and somehow encrypted some code on the new invention, so by the time the copy cat gets around to it, all R/D investments have passed on to retail market and got the return back for other futuristic R/D. We need the new type of battery now,just take a look at all the notebooks battery problem which we still can’t solve the short fuse problem until a new type of battery come around, then everything such as reasonable price EV and other electric gagets will follow.

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