(Photo by JustABigGeek on Flickr)
As the leading manufacturer of lithium-ion auto batteries in the United States, Ener1 and its subsidiary EnerDel stand to profit from an increased turn to hybrid vehicles. The Department of Energy and an unnamed OEM have decided to partner with EnerDel in an effort to increase lithium-ion battery production. This partnership will be funded by the DOE’s National Energy Technology Laboratory (80% of $1.25 million) with a minority stake (20%) coming from EnerDel.
The partnership’s goal is to make heavy-duty li-ion batteries more affordable for public transit, parcel delivery and construction clients. EnerDel will experiment with three battery chemistries to avoid putting its eggs in one basket. These chemistries include a lithium manganese/lithium titanate battery, a lithium manganese/hard-carbon unit and a NMC/hard-carbon combination.
EnerDel and the DOE have indicated that the first two chemistries are geared toward hybrid electric vehicles while the third may be used in other applications. The NMC/hard-carbon battery appears to be the least expensive chemistry to mass-produce though it may not produce enough power for buses, trucks and other equipment. All three chemistries will be tested in adverse conditions including extreme heat and extreme cold to determine their resilience. The National Energy Technology Laboratory will also determine which chemistries would work best in situations where a commercial vehicle has to run entirely on electrical power.
The commercial lithium-ion batteries produced by EnerDel will be shipped to markets demonstrating the highest demand. While EnerDel has invested heavily in manufacturing facilities in the United States, the Indiana-based company has also purchased facilities in South Korea to improve coverage in the high-demand Asian market. The meager investment made by the DOE and EnerDel indicates that these battery chemistries may not mean anything to American consumers.
The failure of the Big Three automakers to stay competitive with foreign automakers is highlighted yet again by this partnership. EnerDel’s role as the dominant li-ion battery pack producer in the United States would be a boon if the American auto industry had its act together. Imagine a financially prosperous Ford, Chrysler or General Motors working closely with the DOE and EnerDel to create hybrid electric vehicles.
Instead of a robust alternative fuel market in the North America, we are trying to tread water with legacy automakers while ignoring the free market reality that foreign automakers are a decade ahead in terms of new technology. If the EnerDel/DOE partnership is successful, companies in Europe and Asia will benefit greatly while North America tries to prop up an enfeebled industry. We can only hope that EnerDel does not leave the United States completely; otherwise, we may be set back further technically than we are currently.
This could be an interesting investment tip… I think this could be the future, but not within the next 5 years.