Beyond the Breakthrough: Finding Killer Apps for Battery Tech

There’s one major reason that the prospects for the electric car market are brighter this time around than they were in the days of General Motors’ (s GM) EV-1, when the plug-in car biz came and went faster than a Tesla Roadster: a decade of battery tech advances. That’s according to Nancy Gioia, Ford’s Global Electrification chief, who expressed the sentiment on a panel Tuesday at the Plug-in 2010 conference in San Jose, Calif.

The upcoming generation of electric vehicles will mainly use lithium-ion battery technology, which can typically pack more energy for their weight than the types of batteries deployed in the electric cars introduced a decade ago.

Maurice Gunderson, a senior partner for CMEA Capital’s Energy and Materials group, describes the progression of battery tech from one chemistry family to the next (i.e. lead acid to nickel cadmium, to nickel metal hydride and, most recently, to the lithium-ion batteries powering laptops and plug-in cars) as “quantum leaps.” With each “leap,” new opportunities arise for entrepreneurs and investors working with energy storage as well as electronic devices.

But major breakthroughs in energy storage technology don’t flow out of research labs all that often. And when they do, turning that breakthrough into a sustainable business presents another challenge, said Gunderson. The team, he said, needs to “define what’s the killer application? Who’s willing to pay for it?”

Over on GigaOM Pro (subscription required), Gunderson has walked us through some of the key steps in CMEA’s process of getting to know and ultimately backing battery startup Contour Energy Systems (previously named CFX Battery). We’ve also taken a look at Contour and CMEA-backed battery maker A123 Systems’ (s AONE) hunt for these killer apps.

A123 sold its first products for the consumer market in the first quarter of 2006. A year later, it followed that move with sales into the transportation market. While electric grid services have made up a growing portion of A123’s revenue during the last few years, the company has only recently shipped its first products for the electric grid services market, according to regulatory filings.

Contour’s chemistry, meanwhile, is particularly well suited to withstanding high heat, so the company is pursuing applications in specialized instruments used in oil wells. For military applications, Gunderson said Contour’s battery meets the demands of light-weight and long run times for devices that soldiers would carry in the battlefield.

Contour is still at a relatively early stage with what are called primary lithium carbon fluoride battery systems (which can’t be recharged) and working on rechargeable carbon fluoride battery packs. The company’s first revenue shipments are slated to begin around September, said Gunderson, and deliveries of rechargeable batteries are still at least a year and a half away.

What will be the killer app for the next generation of battery tech?

For the full article on going beyond the breakthrough to build a better battery business, check out GigaOM Pro.

Image courtesy of ReVolt Technology