Brad Berman of hybridcars.com has just posted a very substantive roundup/evaluation of battery technology. It's at http://www.hybridcars.com/­lithium-ion-hybrid-batteries.html and at his new column at Business Week online, titled there "Pursuing New Power for Hybrids" http://www.businessweek.com/­autos/­content/­jan2006/­bw20060105_388416.htm

You can look at responses and post your views on the subject at hybridcars.com http://www.hybridcars.com/­discussion/­discussthread.php?thread_id=614 (I've just added a comment there giving CalCars' views and describing what the Electric Power Research Institute has been saying.)

Lithium Ion Hybrid Batteries

A Laptop in Every Garage The emergence of small lightweight long-running lithium-ion batteries has helped create a market for notebook computers, cell phones, and other portable devices from the iPod to the BlackBerry. Now, efforts to scale that technology for use in car batteries could do for the automotive industry what it did for computer and phone companies. The benefit for consumers could be revolutionary: hybrid or pure electric cars with great efficiency, acceleration and range-at the same price or cheaper than today's conventional cars.

CAPTION: Why a Lithium Economy? Keep in mind that lithium and hydrogen are energy carriers, not fuels. Now, take a look at the periodic chart of elements. Hydrogen (H) is perched on top. With only one proton and chemical weight of the three, it's the lightest element, which makes it an obvious candidate for use as an energy carrier. However, it doesn't naturally exist on its own, and requires a large output of energy to make it useful, commonly by splitting water (H20). Helium (He) also has a chemical weight of one, but it's inert. The next lightest element is lithium (Li) with a chemical weight of three. It's very light, exists as a solid that you can carry around, and it's cheap. The laws of nature and economics have chosen a winner.

On Dec. 16, Toyota announced that they would accelerate development of lithium batteries for use in their hybrids. That's a clear sign of how important battery power may become for the auto industry. For Toyota to achieve its goals of selling one million hybrids globally per year and offering hybrid versions of all their popular vehicles, they'll need to reduce the incremental cost of their hybrids. Earlier this year, Katsuaki Watanabe, Toyota's president, articulated that goal as reducing "the cost difference of hybrids to one-half the current levels." According to Dave Hermance, executive engineer of environmental engineering at Toyota, batteries are the single most expensive element in the hybrid system. "To make a big leap forward with hybrids," he said, "we'll need a new battery technology."

The current crop of hybrid cars, like the Toyota Prius and the Honda Civic Hybrid, use a combination of gasoline and nickel metal hydride (NiMH) batteries. NiMH is a major step up from the lead acid battery most drivers recognize under their hoods. Battery formulas with nickel, while more powerful than lead acid, have not provided the breakthrough and the long-term cost benefits that battery engineers had hoped. The power of nickel batteries comes from the raw material, which is getting more expensive due to increased demand, while the benefits of lithium batteries are derived from the the mass processing, which can scale to the high volumes required for the rapidly growing hybrid market-without a corresponding jump in price.

The emergence and adoption of advanced lithium batteries could shake up the auto industry. To better understand the changes ahead, several auto companies, including Subaru, Nissan, and Mitsubishi, have produced concept cars that use lithium batteries. Toyota became the first to use lithium ion batteries in a production vehicle when it placed a four-cell lithium pack in its Vitz CVT4, a Scion-looking small boxy vehicle only available in Japan. The Vitz's battery pack powers the lights, heater, air conditioner, and radio while the car is stopped, allowing the gasoline engine to shut off.

PHOTO: The Volvo 3CC concept car relies exclusively on 3,000 lithium ion cells, each one approximately the size of a common "AA" battery, to provide the equivalent of 105 horsepower with absolutely zero emissions.

By far, the boldest vision of the lithium future is the Volvo 3CC concept car. Unveiled in 2004, the all-electric vehicle relies exclusively on 3,000 lithium ion cells, each one approximately the size of a common "AA" battery, to provide the equivalent of 105 horsepower with absolutely zero emissions. "We were forced by the current marketplace to use the small format batteries. If we could have done it with less than 3,000 cells, it would have made my life a lot easier," said Ichiro Sugioka, science officer at Volvo's Monitoring and Concept Center in Camarillo, Calif.

Sugioka was unable to use larger lithium ion batteries more suitable for cars because they don't commonly exist in the market today. Battery companies trying to create larger lithium batteries, which use cobalt in their formula, quickly encounter a problem known as thermal runaway-which means the batteries can easily catch fire or explode. Not a good idea for cars. However, two enterprising companies, Valence Technologies and A123 Systems have had better results by replacing cobalt with other metals, such as phosphate. The result is inherently less powerful; however, these two companies' proprietary technology is working like magic to produce energy storage and charging power similar to cobalt, while avoiding the safety and longevity issue. Yet, the technology still has a way to go-perhaps three to five years-before car-sized lithium batteries are powerful enough, cheap enough, and most importantly, reliable enough to go into mass production vehicles. Pinpointing a date when the first carmaker takes the risk on the new batteries is tough. "The crystal ball on this is real cloudy, but we'll get there. Lithium ion has too many advantages," said John German, manager of Environmental and Energy Analyses for American Honda.

Business Chemistry Dozens of smaller companies are racing toward a lithium payday. Some say that their lithium batteries will solve all our transportation problems, and make hydrogen fuel cells immediately irrelevant. The major car companies are not taking the wild claims very seriously, but some battery companies have attracted wider attention. In Nov., A123 Systems, a private company in Watertown Mass., unveiled a lithium battery that earned them $32 million in funding from big name investors, such as Sequoia Capital, Motorola, and the Massachusetts Institute of Technology. The company is working with Department of Energy on the development of lithium ion batteries for hybrid vehicles. Lithium iron phosphate batteries from Valence Technology, a publicly traded company based in Austin, Tex., are being used in Segway electric scooters and a much publicized converted plug-in Prius.

PHOTO: EnergyCS used Valence Technology Saphion U-Charge large-format phosphate-based lithium-ion batteries for its plug-in Prius.

Toyota has spent millions of marketing dollars to make sure that consumers know that current hybrids don't need be plugged in. But many industry insiders predict that a hybrid with the option to plug in not only represents the next generation of hybrid vehicles, but a major shift in automotive technology. Using a standard home electric plug and outlet, a driver could recharge a car overnight during off-peak hours, and wake up with a vehicle ready to travel 50 or 100 miles without using a drop of gasoline. This can't happen without more robust batteries (among other things), and the entire industry is looking at lithium batteries as the solution. EDrive Systems, a joint venture between EnergyCS Inc. and Clean-Tech LLC, has created a number of plug-in hybrid prototypes in its effort to commercialize the new technology. EDrive used Valence's lithium batteries.

The right chemical formula does not necessarily produce a winning business formula. In the first quarter of the 2006 fiscal year, Valence pulled in $3.4 million in revenue, a 20 percent increase from a year ago. But the company, which was founded in 1989, has never recorded a profit. Valence, A123, and other smaller battery makers, could greatly benefit from a partnership with a major car company. Dean Bogues, president of worldwide sales, marketing, and product development for Valence, said that commercialization of their lithium car batteries is not likely to occur overnight via a brand name car company, but will "unfold over time" through partnerships and distribution in commercial fleets. Saft, a battery maker based in France, has entered into such a partnership with DaimlerChrysler by deploying its lithium batteries for use in the car company's plug-in hybrid Sprinter Van, currently being tested but with no clear plans for production.

Bogues added, "If there was interest from a major OEM [original equipment manufacturer], we wouldn't turn it down." He explained that it commonly takes 10 years to commercialize new battery chemistry, and places Valence at about three years into that product development cycle.

Small battery companies generally lack experience with auto manufacturers, who can be very demanding from their suppliers. The G.M.s, DaimlerChryslers, Hondas, Fords, and Toyotas of this world want a battery company to deliver a finished integrated system, not just the component cells, electronics, controls, etc. That problem trickles down to another set of players, like Altair Nanotechnologies, who serve the small battery makers with raw materials.

Progress from Within Toyota, with big hybrid dreams, is not waiting for the small players to deliver. The Japanese maker of the Prius and Highlander Hybrid recently spent $740 million to establish a nine percent ownership stake in Fuji Heavy Industries, which makes advanced hybrid batteries (and Subaru vehicles). In October, Toyota also increased their equity in Panasonic EV Energy from 40 to 60 percent. PEVE, the world's leading supplier of nickel metal hydride, will act as they key player in Toyota's recently announced venture to develop a lithium ion battery for hybrid cars.

Johnson Controls is also making a play in the hybrid battery market. In 2002, Johnson Controls acquired Varta, a major European automotive battery manufacturer. In Sept. 2005, they launched a $4 million lab to accelerate work on lithium batteries, and in Oct. signed a memorandum of understanding to work with Saft. Johnson Controls could emerge as the only major U.S.-based hybrid battery maker. The United States is the world's largest hybrid car market, and all the car companies who manufacture hybrids in the U.S.-Toyota begins production of the Camry Hybrid in 2006-would benefit from having a domestic supplier. If Johnson Controls develops lithium expertise, they will be even better positioned.

Lithium and Gold The average driver has little or no knowledge of battery chemistry. Small battery companies and large auto companies know exactly what it means: a critical step towards transforming hybrid cars from a niche curiosity to a major revolution in automotive technology. Lithium batteries could be the key. One day not too long ago, we woke up and found ourselves suddenly surrounded by cell phones and laptops. We're getting closer and closer to the day-probably just beyond the end of this decade-when one or more battery companies hit the right formula and lithium batteries for cars are produced in the millions. Engineers in those companies are like modern day alchemists, trying to turn base materials into gold. If they succeed, they could indeed be very rich.

But the historical alchemists had deeper aspirations. They sought personal spiritual transformation. And the modern day battery alchemists also aspire to loftier goals: a world of personal mobility without auto pollution, global warming, and oil wars.