Battery startup K2 Energy Solutions has just signed on a big partner — Universal Power Group, or UPG (s UPG) — to help sell its lithium-ion batteries. UPG, which distributes batteries and chargers for industries including automotive, consumer electronics and solar power (it counts Energizer among its partners) plans to market, distribute and sell the startup’s full line of lithium iron phosphate products.
The duo is also coming to the Consumer Electronics Show this week (check out our Green Guide to CES 2010). UPG plans to display a “high performance” electric vehicle equipped with K2 batteries at the show. And while K2 has also pursued lower-hanging fruit in the energy storage business (such as power tools), the application slated for promotion at CES is indicative of where UPG is hoping to go with this deal.
Quietly working on rechargeable battery systems since 2006, K2 Energy made the ambitious projection back in 2008 that it would see revenue grow to $30 million in 2010, up from just $2 million that year. We’re not sure if the company is on track to reach that target this year, but large partners could certainly help the company grow.
Lithium iron phosphate — the chemistry used in A123Systems (s AONE) batteries — represents one alternative to the lithium cobalt batteries typically used in laptop computers, and also in Tesla Motors’ Roadster. As Technology Review explains, lithium iron phosphate is less costly than metal cobalt, and while it, “stores less energy than some other lithium-ion materials, lithium iron phosphate is safer and can be made in ways that allow the material to deliver large bursts of power, properties that make it particularly useful in hybrid vehicles.”
According to a statement in today’s release, UPG President and CEO Ian Edmonds sees the agreement with K2 as a way for his firm to gain “exposure to the emerging market for electric vehicles,” an area that he expects to become “another platform for future growth.”
Both companies are hoping to expand their reach in some way through this multi-year agreement, and potentially a longer term deal down the road. UPG will essentially become the sales and marketing arm for K2 products, while K2 will provide manufacturing engineering and technical expertise. Among the services that UPG can provide are procurement, warehousing, inventory management, distribution, custom battery pack assembly and coordination of battery recycling efforts. At this point K2 does its manufacturing in Nevada and China.