EEStor: Are We There Yet?

Does yet another announcement about a successful test from secretive ultracapacitor developer EEStor mean a step closer to actual production? Yesterday, EEStor announced that it received third-party verification of the energy storage capacity of a key material used in its technology. The test, which was conducted by Texas Research International, exceeded expectations, according to Cedar Park, Texas-based EEStor.

That’s good news for Zenn Motor, a Toronto-based electric car maker that’s invested in EEStor and plans to use the technology in its upcoming highway-speed vehicle — and eventually package it into an ubiquitous drive system. Zenn CEO Ian Clifford told us at the Fortune Brainstorm Green conference this week that he envisions the company following the “Intel Inside” model, supplying a range of automakers and grid operators with energy storage technology. As part of their agreement, the test also triggers a milestone payment to EEstor from Zenn, spokeswoman Catherine Scrimgeour confirmed via e-mail this morning. It’s a small payment, just $700,000, but is in addition to $1.3 million in previous payments to EEstor. Zenn can also invest up to another $5 million for a bigger equity stake now that EEStor has hit the milestone.

EEStor has yet to come out with an actual product, but over the past year has announced a successful purity test and claimed a production capacity milestone. Clifford told us this week that this permittivity test — a verification of performance characteristics under extreme temperatures — represents the third of four milestones set up (as we’ve noted before) as part of Zenn’s investment agreement. The fourth milestone is the delivery of a commercial product, Clifford said, as opposed to a lab-built demo.

So this latest milestone could help ease the concerns of investors (shares of Zenn trade on the TSX Venture Exchange in Canada). EEStor was previously set to come out with its ultracapacitors last year, but it’s running behind on that original timeline. Zenn has had to delay its car as a result of waiting on EEStor and doesn’t expect an initial introduction of the vehicle until late 2009, with commercial availability in 2010.

For Zenn to make its new timeline, it clearly needs to get its hands on an actual ultracapacitor from EEStor soon. But according to Zenn’s Scrimgeour, “No timeline has been announced” for the delivery of an energy storage unit from EEStor. So whether the successful test will actually bring the company closer to production remains to be seen.

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