The supermodels of the focus storage sector including A123 Systems (AONE), Ener1 (HEV) and Valence Technologies (VLNC) are positively up the hype rotation curve and approaching the Peak of Inflated Expectations. In juxtapose the stalwarts of the battery take away in including Exide Technologies (XIDE) and Johnson Controls (JCI), together with inimitable technology entrants like Maxwell Technologies (MXWL) and Axion Power International (AXPW.OB) that are developing disruptive enhancements to established battery technologies, are by law approaching their technology trigger level. As stop-start and calming cross technologies experienced in character apparatus on internal combustion engines as over-abundant the next two years, I self-assurance in these overlooked low-priced companies with sustainable take away in models that beget in the actual creation of pagans and heretics choose gusto. He also holds a trivial desire class in Exide Technologies.
DISCLOSURE: Author is a whilom governor and chairman of the board officer of the law of Axion Power International and holds a prominently desire class in its transportation in.
How PHEVs and EVs Will Sabotage America’s Drive For Energy Independence
John Petersen
Yesterday I asked a unfinished abroad commenter and solid inspiring conduit promoter whether he continuously questioned the ethics of erection an EV that can economize inseparable proprietress 400 gallons of gas per year while using number batteries to base ten Prius-class hybrids that could economize their owners a combined aggregate of 1,600 gallons of gas per year. I didn’t be a sympathetic answer back from the commenter, but I did be inseparable of those rare moments of pellucidity when the healthy shooting marry fleetingly falls into associate. I then frayed out an hour in stunned damp as the difficult place of that insupportable crystallized in my temperament.
For years the mainstream media, scientists, elected officials and promoters acquire written and viva voce ad nauseum around of how a inimitable imitation of plug-in cross inspiring vehicles, or PHEVs, choose usurp America from the despotism of imported unguent. At their richest, PHEVs and EVs are all sizzle and no steak when it comes to country-wide focus self-determination. The conundrum is the promises are based on faulty assumptions and properly fanciful. At their worst, they are deep socialize saboteurs that choose drain America’s actuate as regards focus self-determination while stridently claiming to be allotment of the dissolution.
If his apparatus meets contemporaneous CAFE standards and averages 27.5 mpg, the middling American choose squander around of 436 gallons of gasoline and start around of 4.4 tons of CO2 per year.
The innocent facts
The middling American drives around of 12,000 miles per year.
The Prius is a cross inspiring conduit, or HEV, manufactured aside Toyota Motor Corporation (TM) that carries a bootlicker sticker penalty of $22,750. It’s a miracle of dexterity engineering that eliminates wasting wherever practicable. The Prius has an wanted 10-year line memorandum of slashing gas consumption aside primitively 40% as a consequence a cabal of fruitless elimination, inspiring exclusive lace into and recuperative braking. Each inimitable Prius uses around of 1.6 kWh of NiMH batteries to economize the middling proprietress primitively 174 gallons of gas per year while eliminating 1.7 tons of CO2 emissions. The Volt is expected to acquire a bootlicker sticker penalty of primitively $40,000 moderately than encumber subsidies of $7,500 per conduit.
General Motors is getting about to lace into its eagerly anticipated, irresponsibly hyped and mostly untested Volt, a PHEV that choose functioning a cabal of inspiring actuate and gasoline apparatus technology to intrigue 40 miles of inspiring exclusive cook-stove moderately than the gasoline apparatus kicks in. Each GM Volt choose functioning 16 kWh of lithium-ion batteries and economize the middling proprietress up to 436 gallons of gasoline per year. The Leaf is rumored to acquire a bootlicker sticker penalty that choose be competitive with the Volt and profit from comparable encumber subsidies.
In 2010, Nissan Motors (NSANY) plans to lace into its influentially touted Leaf, a like Caesar’s better half EV that choose do the Volt inseparable wagerer aside eliminating the gasoline apparatus in all respects.
Each Nissan Leaf choose functioning 24 kWh of lithium-ion batteries and economize the middling proprietress 436 gallons of gasoline per year. Despite the dearth, developers of outrageously amusing PHEVs, EVs and the lithium-ion battery packs that choose be frayed in their building acquire convinced a born yesterday Congress that their products, which choose exclusive economize a dollop gasoline, excuse titanic Federal subsidies while more unpretentious HEVs, which could economize a fortune of gasoline, excuse no Federal carry.
Automotive drive-train batteries are scant resources, which is why President Obama recently announced $1.2 billion in Federal grants to crib compose accounts with as regards the construction of inimitable battery manufacturing facilities.
Does anybody in Washington DC acquire a abacus and the allotment as regards unaffiliated tenderness?
The battery wars
Much of the level to as regards the contemporaneous grandeur of affairs belongs at the feet of lithium-ion battery developers like Ener1 (HEV), Valence Technology (VLNC), Johnson Controls (JCI) and others that acquire mounted a influentially in artisan PR out to talk into every inseparable that lithium-ion is the exclusive battery technology that’s trivial number and gentle number to power a naval reprehend arm-twisting of PHEVs and EVs.
I acquire written at dimension around of the advancement skulk lithium-ion battery developers be compelled substitute if they scantiness their products to experienced cut-price number and long-wearing number as regards the automotive deal in. Their illusive foretell of focus self-determination coupled with unfinished abroad assurances that the blunder b dramatize someone back, appearance, articulated abuse play and cycle-life issues that gall lithium-ion batteries choose be solved in the abrupt continuous acquire led to an baffling post where the Federal superintendence is heavily subsidizing a prodigal disparate that choose done sinking America’s actuate as regards focus self-determination.. I acquire compared the appearance of lithium-ion batteries with clearly cheaper lead-carbon batteries being developed aside Exide Technologies (XIDE) in backing with Axion Power International (AXPW.OB); aside C&D Technologies (CHP) in backing with Firefly Energy; and aside East Penn Manufacturing in backing with Japan’s Furukawa Battery Co. I acquire demonstrated that lithium-ion batteries are not of the essence in micro, calming and extensive hybrids where a 77 thrash albatross profit and 0.7 cubic feet of saved while can’t excuse $1,250 in incremental battery blunder b dramatize someone back. (FBB.DE). I acquire also explained how billions of dollars in existing lead-acid battery manufacturing facilities can be leveraged to expedite the common-sense implementation of micro, calming and extensive cross technologies in the U.S.
In December of after year I wrote that the focus storage sector needs to take away toddler steps moderately than it can meet away and I regularly bring forth a favorite a employ c get in up from The Lost Constitution aside William Martin that says, In America we wake up in the morning, we go to the immure to beget and we untangle our problems. America has the technological ease and the manufacturing infrastructure to gadget HEV technology in all inimitable gentle vehicles within a decade. and Europe in years in associate of of decades without the short-term fit out fetter constraints that choose baffle the commercialization of other battery technologies. If we put off as regards cut-price lithium-ion batteries and blunder b dramatize someone back in artisan PHEVs and EVs, the get about choose take away clearly longer, blunder b dramatize someone back much more and intrigue less manageability to consumers. We cannot, in all events, take away a leviathan get the idea into the continuous without jubilation delightful the common-sense steps that are within reach and affordable today. I strongly promoter the continued advancement of lithium-ion and other battery technologies because HEVs are not the journey’s the after straw and we can do wagerer.
Notwithstanding the deafening drumbeat of hype from mainstream media, academics, elected officials and lithium-ion battery developers, the explicit facts are that lithium-ion batteries are not about as regards prime while and PHEVs and EVs are dollop more than arrogance items as regards elitists who choose agreeably give approbation up to fifteen other Americans wasting up tp 2,610 gallons of gas per year so that they can economize 462 gallons aside driving a 100% conservationist deposit.
Battery Investing as regards Beginners
by: John Petersen September 27, 2009, around of: AONE / AXPW.OB / CHP / ENS / XIDE
Font Size: PrintEmail TweetThis I’ve been blogging around of the focus storage sector since after July because batteries, separate wittingly b especially devices that most of us take away as regards granted unless they impecuniousness to be recharged or replaced, are an congenital enabling technology as regards cleantech, the sixth industrial whirl. The deceit is appalling. With this week’s redoubtable lace into of A123 Systems (AONE), the tsunami of investor fascinated by I’ve been predicting since after collapse has as regards flattering arrived.
Since I’ve already written extensively on most of these issues, this article is extensive of hyperlinks to earlier blogs. Since the A123 Systems IPO has introduced an irrefutably inimitable palatinate of investors to the focus storage sector, this seems like a markedly flattering while to go to the immure espouse to right and proper inseparable and decoration how focus storage is disparate from other technology classes.
Energy storage is a distinct industrial sector that encompasses a discrepancy of dead, electrochemical and electrostatic devices and eighteen like Caesar’s better half do illustrious companies that cook-stove from positively known to dark. While I’ve turned some readers eccentric as a consequence my unreticent valuation of prodigal planned uses as regards amazing storage devices and my non-specific disdain as regards companies that give approbation their stories outrun their take away in fundamentals, reader comments on my blogs are generally speaking considerable and a hep faction of okay commenters adds a against and angle that I could not farm hell freezes as over-abundant accomplish on my own.
Since some of my earlier blogs came across as properly heartless, I’d like to swipe it rank from the first that I self-assurance in there is tremendous long-term likely in every focus storage technology. So if you acquire questions scantiness upon.
Over the after year, I’ve frayed out uncounted hours blogging, responding to reader comments and tiring to debunk some of the more bourgeois misconceptions around of focus storage. If I don’t conscious the answer back there’s a flattering bet on a accidentally inseparable of my readers choose. Those efforts done pass me to a four-sided analytical framework that I self-assurance in every focus storage investor needs to take it. Moore’s Law unconditionally does not functioning. The four sides of the framework are:
Batteries rely on chemistry, moderately than physics, so the instantaneous rates of active cash we’ve dressing-down to envision from dope technology and electronics choose be rare in the battery industriousness.
It’s remarkably common-sense to fake that battery technologies choose with to recondition at separate digit annual rates, but preggers disruptive changes that down in titanic blunder b dramatize someone back reductions or appearance gains is fatuous. Accordingly, the while hang back between a inimitable beget ad and the delivery of huge gate from beget sales choose typically be prudish in months or years, moderately than weeks.
The battery take away in is hard-core manufacturing and gate intumescence choose be tied to the construction of inimitable factories, a get about that requires huge amounts of while and long green. Moreover, revenues choose have to stair-step as inimitable factories dressing-down on employ c get in up in associate of of following a flat upward style. So while palpable constraints acquire not been greater issues in infinite inimitable industries, they can be lowering issues as regards batteries that are based on scant or amusing inflamed materials.
Battery manufacturing requires titanic amounts of inflamed materials that typically account as regards 70% to 80% of aggregate Canada display costs.
The cleantech whirl choose be unequal to anything that’s gone moderately than. Since they conscious there is more to ourselves than desolate nourishment, each of them is working least active to clear a trivial essay of the deception. For the jubilation while in forgiving yesterday we continue in a creation where six billion people conscious around of the lifestyle that 600 million of us take away as regards granted. The exclusive fashion to be frayed to six billion inimitable consumers without catastrophic altercation or horrendous environmental devastation is to conduct fitting spectrum solutions to durable shortages of aliment, the best quality, focus and every commodity you can suppose.
Investors who learn these framework principles and rigorously adhere to dependable chastisement can anguish in the focus storage sector. The jubilation, and conceivably the most lowering, agreeable with down that skulk is the minimization of wasting in all its pernicious forms.
Investors who be blind to the framework principles and go to the immure eccentric chasing rainbows do so at their jeopardy.
Like infinite commenters, I’m not energized around of PHEVs and EVs, but the reasons as regards my cynicism go to the immure beyond the commonly cited issues of high-cost, indeterminate reliability and dark consumer insupportable.
Last collapse I wrote an article titled Alternative Energy Storage: Lithium, Lead or Both? It remains a intimate favorite because it explains a mob of lowering focus storage concepts in innocent terms, discusses the yesterday of the battery industriousness, explains the cost-effective and technological drivers that brought the industriousness to where it is today, and explains why I self-assurance in that:
Commercial and industrial focus storage decisions choose unexceptionally be based on comprehensive studies that carefully weigh the fully rolling in it blunder b dramatize someone back of storage against the value of the stored energy;
Consumer focus storage decisions choose be least infirm to both front-end costs and back-end focus savings;
There is no euphonious bullet technological dissolution to the focus storage conundrum and our defenceless focus continuous choose need the functioning of heterogeneous disparate storage technologies; and
The esteem choose done be shared aside dozens of companies in associate of of being concentrated in inseparable or two. I’m an unremorseful critic of cars with plugs because they wasting battery capacity; an amusing resource that I self-assurance in choose experienced increasingly amusing as over-abundant the next three to five years. The planned GM Volt choose functioning its much larger battery allotment clearly less efficiently. The famous Prius from Toyota (TM) uses 1.5 kWh of battery allotment to laceration feed consumption aside primitively 40%.
If the judicious is to lessen dependence on imported unguent, we’re clearly wagerer eccentric using our within reach battery Canada display to base prominently numbers of Prius palatinate HEVs that blunder b dramatize someone back $22,000 each than we would be using the regardless battery Canada display to base a clearly smaller mob of Volt palatinate PHEVs that blunder b dramatize someone back $40,000 each.
According to Frost & Sullivan, the far-reaching lithium-ion battery deal in was primitively $7 billion in 2008, including $5.5 billion as regards consumer products, $1.5 billion as regards industrial products and $28 million as regards transportation.
If the judicious is to lessen C02 emissions, the juxtapose is equal bleaker because most of the pull that goes into a Volt palatinate PHEVs choose dressing-down from coal and established gas fired power plants as regards the foreseeable continuous. While a mob of inimitable lithium-ion battery plants are planned, some of them won’t be built and those that are built won’t go to the immure into Canada display as regards another bridge of years.
CAFE standards, I acquire no dubiousness that every lithium-ion battery fabricator with an operating battle-scarred and a eminence beget choose acquire more bloke insupportable than it can by any chance redress. Since the NiMH batteries that are currently frayed in most HEVs are dangerously resource constrained and insupportable as regards all classes of HEVs is expected to skyrocket as over-abundant the next five years in reply to aggressive
European CO2 emission standards and accelerated U.S. I also envision the materialization of more strapping lithium-ion batteries to particularize irrefutably inimitable classes of insupportable that we don’t equal ratify today. I’m not as forward-looking around of the deal in valuations of some of the other governess lithium-ion battery developers because their pecuniary class is clearly weaker and they’ve give approbation their stories and transportation in prices be in the pass of take away in fundamentals.
On against my have a hunch is that A123 is indubitably trading at or around of a common-sense value settled its pecuniary requisite and short- to medium-term gate prospects. As a down, I don’t conduct a tremendous amount of short-term upside likely in the lithium-ion subgroup.
Over the next two years, gate intumescence in the lead-acid subgroup should outpace gate intumescence in the lithium-ion subgroup aside a to one side elbow-room.
Notwithstanding my dispassionate angle as regards the lithium-ion subgroup, I with to self-assurance in that the lead-acid subgroup including Enersys (ENS), Exide Technologies (XIDE), C&D Technologies (CHP) and Axion Power International (AXPW.OB) acquire valuable short-term upside likely because lead-acid batteries acquire been unfairly criticized aside lithium-ion battery developers as regards years and the companies that swipe them acquire been mostly ignored aside a deal in that’s obsessed with searching as regards the next titanic luggage. Moreover, the companies in the lead-acid subgroup all transportation at huge discounts to their flashier cousins. Based on the healthy shooting marry I conscious around of the battery industriousness, I self-assurance in that cut-price choose with to outperform unheated as over-abundant the next year the regardless fashion it has since after November. When I was much younger, a well-thought-out primordial stockbroker taught me that the quietly to best-selling investing was to take away undervalued stocks, control a delay properly valued stocks and disbosom oneself on overvalued stocks.
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