GigaOM » Valence Technology

There’s a severe oversupply of electric car batteries comin’

Katie Fehrenbacher — Tue, 12 Jul 2011 20:44:20 +0000

The supply of batteries for electric vehicles could far surpass the demand for electric vehicles over the next few years, estimates Lux Research. Lux calls it a “severe mismatch,” and one that will cause consolidation, the need for increased partnerships between battery makers and auto manufacturers, and the need for new markets for battery makers to sell into.

Part of the reason for the oversupply of EV batteries is simple: The market for electric cars is looking like it’s going to be a lot smaller than predicted, at least in the short term. The crunched market is something battery maker Ener1, which had a deal with electric car maker Think, and Johnson Controls, which has a battery partnership with Saft, have discussed publicly. Johnson Controls is looking to end, or expand, its deal to work on EV batteries with Saft, because it wants to pursue the power grid battery market. And Ener1 cut its losses on its investment and partnership with Think, partly because the EV market was looking slower than expected. Think eventually went bankrupt.

At the same time that the EV market is looking tiny, battery makers have been expanding capacity substantially for making EV batteries and new battery makers have been moving into the EV market. But Lux says even if oil prices jump to $200 per barrel, which could cause the EV market to grow substantially by 2020, five of the leading battery makers — LG Chem, GS Yuasa, SB LiMotive, AESC, and Sanyo — would have enough capacity to manufacture far more than needed to cover that market. That means there will be dozens of battery makers with way too much supply, particularly if gas prices remain low.

In fact, Lux predicts there will be only a few winners in the EV battery market, and some of the ones already ahead include LG Chem, SB LiMotive, and Chinese makers China BAK, China Aviation Lithium Battery (CALB), and BYD. Lux also gives Envia Systems props for its innovative technology and GM backing — there will be room for small, innovative tech developers to do licensing deals and be acquired, says Lux.

On the other hand, Lux says A123 Systems and Ener1 face “an uphill climb” — marking both of them as “caution.” Lux also issued caution takes for International Battery, K2 Energy Solutions, Valence Technology, Leyden Energy, Electrovaya, and gave a “strong caution” to Altair Nanotechnologies (ouch).

There are a few ways for these battery makers to survive the coming market crunch and consolidation. One is to find new partnerships — because the market is so immature, the partnerships that are already in place are relatively tenuous. Another survival method will be to find battery markets outside of pure EVs, like hybrid vehicles, e-bikes, and the power grid.

But there will be a significant amount of losers in the market. As an anonymous president of a battery material company says in the Lux report:

“If someone wants us to build out capacity, what happens if no one use it? If we return to just phones and laptops, then my investors are looking for new management because we’re bankrupt.”

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Sequel Pro 0.95 Released

Andrew Bednarz — Fri, 01 May 2009 21:00:05 +0000

Back in Feburary I took a look at the open-source database tool Sequel Pro and compared it against the commercial tool, Querious. Querious had the winning edge at the time, despite being for MySQL 5 only and costing money. It was only Sequel Pro’s support for MySQL 3 and 4 that provided any feature advantage. However, Sequel Pro 0.95 was released yesterday, and this release continues the steady pace at which Sequel Pro is catching up to the features and polished nature of Querious.

The version of Sequel Pro I previously looked at was 0.93, and in the two versions since then the whole feel of the application has lifted from a ‘rough open-source app’ to that of a ‘polished professional tool.’ They have added and enhanced functionality that was previously lacking, and tweaked the UI here and there to give a smoother user experience — which makes the important difference between an app that is functional, and an app that is enjoyable to use.

The general look and feel of the application is polished in the details and has more of the Mac sleekness that we have come to expect from great OS X software. The buttons on the main interface have all been tweaked, both in terms of style and the icons used to depict the action. The preferences dialog has also been redesigned and offers many new customizations and time saving options. There are lots of other little UI tweaks that help the application look like it belongs in OS X.

There is also finally a much improved query editor, with line numbers, full syntax highlighting and expanded code completion (press escape to bring this up). You can also right-click on keywords (such as WHERE or INSERT) and look up the MySQL documentation for that keyword in your browser with just one click. Editing query favorites is also easier with an improved favorites editor.

The output console log can now be hot-filtered with a live search term, making finding what you want easier than ever, too.

Just as importantly, there are many more tweaks and changes behind the scenes that results in a better user experience, including performance improvements and lots of bug fixes. With the speedy rate of development going on, the Sequel Pro team have their sights set on a 1.0 release with improved printing, user privileges management functionality and an enhanced Import/Export interface. This is exciting to watch — when open-source software gets solid momentum behind it, awesome things can happen. You can download Sequel Pro 0.95 from here, while the full release notes documenting all changes can be found here.

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Here Come the Electric Trucks: Move Over T. Boone?

Josie Garthwaite — Wed, 18 Mar 2009 14:00:18 +0000

Energy baron T. Boone Pickens has been loud and clear with his message about fuels for commercial fleet vehicles and heavy-duty trucks: Natural gas is the way to go. “A battery will not move an 18-wheeler,” he’s wont to say. But the Pickens Plan isn’t just about big rigs. It also calls for switching over delivery trucks and municipal fleet vehicles, or as he puts it, “Any vehicle which returns to the ‘barn’ each night where refueling is a simple matter.”

On that front — lighter duty fleet vehicles used for in-town treks — Pickens has a new challenger. Rolling into the Mid-America Trucking Show in Louisville, Ky., on Thursday will be electric and plug-in hybrid models from the company Electric Vehicles International. Although it was founded in 1989 and launched in Mexico several years ago, EVI is a newcomer to the U.S. market.

EVI’s two models, launched earlier this month at the Work Truck Show in Chicago, can be customized according to fleet managers’ specifications and delivered in 60 days, according to an announcement from the company today. Variations can include the number of battery packs (lithium-phosphate made by Valence, or lead-acid by Trojan) and leased over several years, depending on the range needed for a particular fleet. With one pack, EVI spokesperson Luka Keck tells us, the all-electric range will be about 40 to 60 miles. Two packs would do for 120 to 125 miles — enough for in-town deliveries, but certainly not for a cross-country haul.

They’re not pretty, but for the fleet market, they don’t really have to be. More important is the fact that they meet federal requirements for on-road driving, so they aren’t limited to campus shuttling. Keck said fleets “could feasibly have as many battery packs as you want, but it would take away from your payload with each pack.” For longer distances, EV1′s hybrid option (which has an engine fueled with liquefied or compressed natural gas or propane as backup) would be more practical. For now, Pickens can keep using his 18-wheeler sound byte. But depending on how U.S. companies and municipalities respond to EVI — and in what direction, and far, diesel prices go — the race for fleet contracts could get more interesting.

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Valence Mulls U.S. Battery Plant, Ranks Big Three Region Dead Last

Josie Garthwaite — Tue, 10 Feb 2009 23:00:18 +0000

When more than a dozen companies got together last year to form a U.S. car battery consortium, Valence Technology said no thanks. Now the Texas-based battery maker — which does most of its manufacturing in China — is considering building a battery plant in the U.S. — and has pitted itself against potential rivals for stimulus funds.

While consortium members would need money for R&D, Valence President and CEO Bob Kanode estimated the company could get a plant up and running — and employing people — in the U.S. in less than two years for just $500 million. (Legislators aren’t necessarily against earlier-stage investment: The House version of the stimulus bill includes $1 billion specifically for battery research grants; the Senate version includes $2 billion for advanced battery manufacturing.)

Valence, which released a rather grim quarterly report yesterday, is hardly alone in jockeying for federal funds. And with the ballpark estimate offered by Kanode, it’s not really undercutting competitors on price. A123Systems has requested $1.84 billion to build multiple battery plants in Michigan and other states, and EnerDel has applied for $480 million to double its production capacity for hybrid vehicle battery packs — both under the $25 billion DOE loan program for advanced vehicle manufacturing (separate from the stimulus bill).

But unlike rivals such as A123, the company would rather avoid Motor City and the surrounding region. States with drier climates — and so-called “right to work” laws — such as Texas (where Valence is headquartered), Nevada (where the company has an R&D facility) and Southern states are more likely candidates, according to Kanode.

Why the South? Besides the climate and weaker protections for labor unions, the region has European automakers. Kanode likes the EU’s “deliberate” approach to developing a market for electric vehicles, and he expects companies based there to lead the electrification of the automobile. “This isn’t just a Big Three situation,” Kanode said. “European OEMs are larger than the Big Three, larger than the OEMs of Asia.”

Building a factory in the South would give Valence a leg up if BMW, Mercedes or Volkswagen (which have plants in South Carolina, Alabama and Tennessee, respectively) start shopping around for battery suppliers. Vehicle battery packs are heavy and long-distance shipping costs add up — that’s why General Motors opted to assemble packs in Michigan for its Chevy Volt, though the lithium cells will be made in South Korea.

All of this is still very much up in the air, however. Kanode said Valence is still studying whether it could make a U.S. operation profitable after stimulus funds run out. And before it goes whole hog for stimulus funds, the company wants to know what the audit process will look like. Kanode asked, “Will it be a burden for us to administer, or will it be reasonably be done?”

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Daily Sprout

Josie Garthwaite — Tue, 10 Feb 2009 20:24:20 +0000

The Indium Problem: Doping silicon photovoltaic cells with indium can push efficiency up to around 40 percent — but the metal is rare enough that the world’s reserves would be exhausted within a decade if we continue using it at current rates. — Fast Company

How to Succeed in a Recession: If you want to change the world with clean technology, start by saving people money. That’s the key to startup success these days, according to Mohr Davidow Ventures partner Josh Green. — NYT’s Bits Blog

Post-Shakeout Solar: Wafer and silicon producers are likely to fare better during the looming solar shakeout than cell and module makers, which are suffering from low prices and oversupply, according to a new report. — Reuters

Fuel Cell Baby Steps: Medis Technologies hopes to soon manufacture a fuel cell big enough to run a laptop computer, and later one that could run a whole house. For now, it’s working on a version that ranges from 1 to 4 watts and is more suitable for phone chargers and flashlights. — NYT’s Green Inc.

Texas Battery Maker Might Come Home: Valence Technology, which currently produces lithium-ion batteries, mostly in China, is considering building a battery plant in the U.S. or Europe. At least one electric vehicle maker has expressed interest in the U.S. plant. — The Austin American-Statesman

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Will Valence's European Bet Win It a Profit?

Jennifer Kho — Fri, 02 Jan 2009 20:00:32 +0000

Valence Technology has been working to bring phosphate-based lithium-ion batteries to large-format applications such as vehicles since 1989. In other words, it’s essentially been waiting for the electric-car market to take off for nearly two decades.

But the company thinks its waiting period is over. It says it has found a real – not potential – market for electric vehicles across the pond. And company officials are betting that Europe, not the U.S. or Asia, will be the ultimate winner in the race for the electric car.

Valence makes lithium-iron-phosphate and lithium-iron-magnesium-phosphate batteries for hybrid and electric commercial vehicles. It claims its batteries can fully charge and discharge more often than regular lithium-ion batteries, and also are less likely to catch fire (phosphate is a key ingredient in fire extinguishers).

Valence began to focus on Europe about two years ago, when it realized that automakers there already were launching electric delivery vans and hybrid buses, CEO Bob Kanode said. “We were looking for a market where we could sell and we found Europe, with its incredible designs and very strong government and public support,” he said. “[Europeans] are absolutely dedicated to alternative-energy solutions and view this [electric vehicles] as maybe their last opportunity to make a difference in the automotive sector.”

Among other customers, Valence this year signed sales deals with Smith Electric Vehicles, a UK maker of electric commercial vans and trucks; PVI, a French manufacturer of electric buses and other vehicles; and Oxygen SpA, an Italian company that makes an electric scooter called Cargoscooter. Companies such as Modec, a UK-based supplier of electric delivery vans, and Wrightbus, a UK Wright Group subsidiary that makes double-decker buses, also are testing Valence batteries. Through these relationships, Valence is building connections to large automakers, such as Renault, which is a PVI partner; Peugot, which is an Oxygen partner; Volvo, which is a Wrightbus partner; and Ford and Isuzu, which are Smith Electric partners.

The company has already grown large in size — it has the capacity to make 100 metric tons of cathode material per month and about $20 million worth of battery packs per quarter. Valence plans to eventually expand from commercial vehicles into consumer cars, and also is working with UK and Spanish utilities to bring backup batteries to the electrical grid, Kanode said.

Still, Valence’s success in Europe has yet to translate into a profit. The company in November posted a second-quarter net loss that grew 26.5 percent to $6.2 million, or 5 cents per share, from $4.9 million, or 4 cents per share, in the year-ago quarter. At the same time revenue rose 3.5 percent to $5.8 million from $5.6 million in the same quarter in 2007.

And the company faces several challenges. For one thing, battery limitations mean that electric vehicles have shorter ranges than their gasoline counterparts, and that could limit the market. For example, most of Valence’s partners get ranges of more than 100 miles, Kanode said. Automakers such as GM and DaimlerChrylser have previously said they are aiming for alternative vehicles that can travel at least 300 miles before refueling, to be comparable to gasoline cars. Drivers are accustomed to being able to drive long distances on a single tank, and range could be even more of an issue with electric cars, which can take hours to recharge.

Electric car advocates argue that most drivers don’t need long ranges. After all, most European commuters travel less than 60 kilometers (about 37 miles) daily, or less than 19 miles each way, with 80 percent of German car owners driving 50 kilometers (about 31 miles) or less each day, according to GM. “We often give people that are testing us surprisingly more range than they want,” Kanode said. “It’s not a problem.”

Also, Valence is developing more efficient lithium-vanadium-phosphate and lithium-vanadium-phosphate-fluoride batteries, he said. Higher efficiency could increase the batteries’ runtime (and the vehicles’ range).

Meanwhile, the economy could slow the hybrid- and electric-vehicle market. In November, U.S. hybrid sales fell 50 percent from the same month last year. Earlier this month, Norwegian electric-car maker Think Global halted production, and in October, Menlo Park, Calif.-based Tesla Motors announced layoffs and the delay of its next model.

The uncertain economy could make it more difficult for Valence to raise more money to expand and also could hinder some of Valence’s customers from attracting funding to buy its batteries, Kanode said. “Nobody knows what this market is going to do,” he said.

Nonetheless, Valence expects support for electric vehicles will stay strong in Europe, regardless of the economy. “People view it as an absolute necessity to reduce dependence on foreign oil and everyone is very concerned about the environment and determined to reduce their footprint,” Kanode said. “We don’t see any slow-up at all. It’s a very different environment from the United States.”

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