Zenn Says Lithium Off the Table, Still Bets on EEStor

zenn-logoIf Canadian electric vehicle maker Zenn Motor Co. once saw lithium-ion batteries as a possible alternative to devices from its controversial investment in ultracapacitor developer EEStor, the more standard technology is now officially out of the running for its future cars. According to Zenn’s third-quarter results release, out today, the company’s engineering group “re-evaluated a number of lithium-based power-packs for inclusion in its solutions” between April and the end of June. But those efforts, in the context of what Zenn calls “the progressed state of development” of EEStor’s technology, have brought the company to teh following conclusion: Lithium does not offer “an economically viable power source for its offerings.”

In essence, Zenn is saying that if everything goes well with EEStor’s tech, it will be more economical than currently available lithium-ion offerings. It seems to have already evaluated the lithium-ion technology gaining support from the U.S. government and being used by other automakers, such as General Motors for its Chevy Volt and Toyota for the trial versions of a plug-in Prius. Taking lithium off the table seems, in part, like a vote of confidence for EEStor.

But it’s also interesting that Zenn chose to reevaluate an alternative to EEStor in these last few months. Zenn has invested millions of dollars in EEStor for an approximately 10.7 percent stake in the company, and now says it has only one remaining milestone payment (pending delivery of a production-quality energy storage unit). Well, when technology like EEStor’s is so new, it doesn’t hurt to have a Plan B.

Plus, there are plenty of risks associated with the investment. As Zenn explains in its filing, EEStor’s technology is still under development and “may not be successfully commercialized at all, in a manner providing the features and benefits claimed…or on a timely basis.” And even if EEStor manages to deliver on its promise, Zenn “may not be able to successfully incorporate the technology into its current or proposed products.” You can read the full analysis from Zenn here.


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