May 2, 2008 (From the CalCars-News archive)
Here's a roundup of news about two conversion companies (Hymotion and Hybrids Plus) and two battery makers (A123System, including reports of a possible IPO, and Compact Power), plus, immediately below, welcome news that Toyota is softening its public warnings about conversions' impact on Prius warranties.
After years in which Toyota said no more than "modifying your car may void your warranty" (overlooking the fact that such modifications would in fact only 'potentially affect' the emissions system warranty (one of four warranties for the car)), cooler heads appear to have prevailed. Now Toyota's spokesperson, Bill Kwong with far more caution says, ``We don't recommend customers modify our vehicles,'' said Bill Kwong, a spokesman for Toyota's U.S. sales unit in Torrance, California. ``It wouldn't automatically invalidate the warranty, but if they put this in and it fries the electrical system, for example, obviously that would not be covered.''
In the Bloomberg story below, as we just discussed in talking about the Wall Street Journal story, here the headline conveys a message that's much more alarming than the story.
Toyota Says A123's Batteries for Prius May Nullify Warranty
By Alan Ohnsman in Los Angeles at aohnsman@...
Bloomberg News April 29, 2008
http://www.bloomberg.com/apps/news?pid=20601101&sid=aMCS2ME8EIlo&refer=japan
Toyota Motor Corp. said A123Systems' planned lithium-ion battery packs for the automaker's Prius to boost the hybrid car's all-electric driving range may nullify warranties for owners who install them.
A123 said in a statement today that it's taking orders for the $9,995 L5 battery module to convert a standard Prius into a plug-in hybrid that may get 100 miles per gallon of gasoline when driven in a range of 30 to 40 miles. Initial installations are to start in July, the closely held battery maker said.
``We don't recommend customers modify our vehicles,'' said Bill Kwong, a spokesman for Toyota's U.S. sales unit in Torrance, California. ``It wouldn't automatically invalidate the warranty, but if they put this in and it fries the electrical system, for example, obviously that would not be covered.''
<snip>
HYMOTION'S FURTHER COMMENTS ON WARRANTY
At blog at http://www.a123systems.com/blog/hymotion/
by Sanjeev Choudhary, General Manager, PHEV Systems
Since our L5 PCM product availability announcement, Toyota has officially stated to the media that the Prius’ factory warranty will not be automatically voided due to installation of the L5. Toyota has further said that if the L5 creates a problem with a warranted system then Toyota may refuse to provide warranty service if the L5 is the source of the problem.
These statements from Toyota are consistent with our own position on how the Toyota factory warranty will be affected by installation of the L5. We have consistently said that Toyota can’t automatically void the Prius’ factory warranty simply because an L5 is installed. We have also noted that if the L5 causes a problem that would otherwise be covered by Toyota’s warranty then Toyota may refuse warranty coverage. Rest assured that in this event, A123 will pay for the cost of the otherwise warranted repair for our customers.
Also see other comments at Hymotion's blog after launch
http://www.a123systems.com/blog/hymotion/?p=4#comment-20
FURTHER COVERAGE ON HYMOTION'S ANNOUNCEMENT
Our comments were included in an analysis at Greentech media:
Can Hymotion Convert the Auto Industry?
http://www.greentechmedia.com/articles/can-hymotion-convert-the-auto-industry-846.html
The A123Systems subsidiary starts accepting orders for a kit that turns Toyota Prius hybrids into plug-ins. If it's successful, it could drive car manufacturers to roll out their plug-in hybrids more quickly, an analyst says.
by Rachel Barron April 29, 2008
CAPTION: The U.S. only has about 150 plug-in hybrids today, and most of them including this Pacific Gas and Electric Co. car -- belong to utilities and research institutions. But if Hymotion's conversion kit is successful, everyday drivers also will have the chance to plug in.
The first commercial plug-in hybrids are on their way, and they might not be coming from General Motors or Toyota.
Hymotion this week began taking Web orders for a conversion kit, called the L5 Plug-in Conversion Module, that will enable Toyota Prius owners to recharge their hybrids at electrical outlets.
By replacing some fuel with electricity, drivers will be able to get more than 100 miles per gallon, the company says, well over the Prius’ 46 miles per gallon.
Of course, orders aren’t the same as deliveries, and Hymotion - which was bought by A123Systems in May -- hasn't said when it will produce and deliver the kits, which cost $9,995, including installation, plus an extra $400 “destination” fee.
And once customers receive the kits, they still will need to have them installed by one of a network of certified installers, the company says.
But the news is significant because it marks the first plug-in hybrids for the consumer market. And even though it’s unclear how large the production numbers will be, industry watchers say the move could have an impact beyond the number of conversions it puts on the road.
After all, taking orders - and $1,000 deposits -- is a way to test market demand, and major car manufacturers likely will keep watch to assess consumers' appetite for their own plug-in products.
Felix Kramer, founder of CalCars.org and an advocate of plug-in hybrids, said the news is a landmark for the electric-car industry and that it marks the first time an aftermarket conversion company is targeting the consumer market in large volumes.
About 150 plug-in hybrids cruise U.S. roads, Kramer said, adding that most of the vehicles are owned by utilities, research institutions and a handful of early adopters.
<snip>
MAJOR STORY ON HYBRIDS PLUS CONVERSION
In IEEE Magazine (the publication of the electrical engineering profession), John Voelker has a long story about a customer of Coloraddo's Hybrids Plus, including photographs of the installation.
Plugging Away in a Prius
http://www.spectrum.ieee.org/may08/6174
Audio Slideshow: The Steps in a PHEV Conversion
http://www.spectrum.ieee.org/may08/6185
Web-Only Sidebar: Automakers' Plug-In Plans
http://www.spectrum.ieee.org/may08/6174/priussb1
Or read them all on one page at:
http://www.spectrum.ieee.org/print/6174
A123SYSTEMS (HYMOTION PARENT CO) BATTERY STORIES
More about A123 and batteries at Popular Mechanics, which has been running "Future Car Week"
http://www.popularmechanics.com/automotive/new_cars/4261451.html
http://www.technologyreview.com/read_article.aspx?ch=specialsections&sc=batteries&id=20570&a=
An Electrifying Startup
By Kevin Bullis
Technology Review May/June 2008 A new lithium-ion battery from A123 Systems could help electric cars and hybrids come to dominate the roads.
RUMORS OF A123SYSTEMS IPO
Finally, all the interest in PHEVs means that business prospects for the companies supplying components may become big financial winners. The buzz is beginning about an Initial Public Offering by A123Systems (which in addition to its automotive business, is already delivering large volumes of its batteries to the power tool industry). In addition to the story below, see also
http://earth2tech.com/2008/05/01/a123systems-preparing-ipo/
and http://gm-volt.com/2008/04/30/get-ready-for-the-a123-systems-ipo/
Wednesday, April 30, 2008
The A123 Systems IPO: Signed, Sealed ... But Not Yet Delivered
http://www.innoeco.com/2008/04/a123-systems-ipo-signed-sealed-but-not.html
Two unnamed sources with close ties to A123 Systems, the Watertown maker of next-gen lithium ion batteries for Black and Decker cordless tools and plug-in hybrid cars, tell me that the company's IPO filing is essentially complete. Once the first quarter numbers are finalized, an S-1 is likely to arrive in the SEC's inbox sometime in the next month or so. The offering could value the company at more than $1 billion. Road show is planned for September; Goldman, JP Morgan, and Merrill are underwriting, I'm told.
A123 Systems has raised more than $150 million since it was founded in 2001. Among the biggest winners from a successful IPO would be North Bridge Venture Partners and Sycamore Networks chairman Desh Deshpande. (North Bridge has a cool video case study on A123.) Sequoia Capital and General Electric are also investors.
Will Wall Street have an appetite for a battery IPO in September? We'll see...
A123 Systems' PR rep, Keith Watson, says, "The company can't comment on anything related to an IPO."
(In the photo is George W. Bush with A123 CEO David Vieau, standing next to a plug-in hybrid Prius that A123's Hymotion division converted. White House photo by Paul Morse.)
COMPACT POWER IS ALSO CONFIDENT
There's a huge horse race in batteries; for the GM Volt contract, A123 is competing with Compact Power, and GM has said it could pick both. Here Compact Power says it's optimistic about meeting GM's specifications, and citing its ability to deliver high volumes of batteries.
Prabhakar Patil: Charging Ahead on Chevy Volt Battery
By Dale Buss, Contributor Apr 28, 2008
http://blogs.edmunds.com/GreenCarAdvisor/420
Prabhakar Patil is used to taking the battery and running with it.
The company he heads, Compact Power, is one of two suppliers of the lithium-ion batteries General Motors is testing to outfit its hyper-critical Volt plug-in hybrid project. But the high-pressure task before him only reminds Patil of a decade ago, when he was Employee One in Ford’s crash initiative to develop the Escape Hybrid.
"At the time, I was manager of electrical and electronics for Ford production vehicles," recalls Patil.
"Alex Trotman was [Ford] CEO, and Toyota had just introduced Prius. I got my assignment in the back seat of a Prius when he and I were being driven around, and [Trotman] said 'Develop a hybrid for Ford.'"
Patil began immediately to build his Escape Hybrid team. He had a crew of about a half-dozen within a month and the team peaked at an enterprise of about 300 people before Ford introduced the vehicle in 2004 as the first hybrid SUV on the American market.
Patil came to Compact Power, a unit of the Korean chaebol LG Group, in late 2005, again as Employee One of what promised to be an ambitious enterprise to produce a market-leading lithium-ion battery and powertrain for the burgeoning U.S. hybrid market.
"This is something that I have personally believed in," said the Indian-born Patil, 58, who earned a doctorate in aerospace engineering from the University of Michigan and then spent 27 years with Ford.
"When I was doing the Escape Hybrid, I came to realize that the battery was the key enabler or disabler of these projects. So when the opportunity came to do something about that, I came to this company."
Troy, Mich.-based Compact Power begins with the huge advantage over other companies in this derby: LG's existing, high-volume operation for manufacturing lithium-ion batteries in Korea. The company uses a manganese oxide chemistry
Patil believes that was one key in GM's selection of Compact Power as one of two finalists for supplying batteries for the Volt, which GM has said will debut in 2010.
That's an aggressive schedule, dependent on battery development as well as GM's ability to successfully handle all the other challenges of developing what would be the world's first high-volume extended range plug-in hybrid car.
While Patil is sure his company can do the battery work, GM is taking no chances and has contracted with a joint venture of A123 Systems and Continental Automotive to develop another battery system using its nanophosphate chemistry.
If both teams succeed, it is likely that GM will use both, meaning some Volts will use one type of battery, and some will use the other.
Compact Power also is negotiating development pacts with other auto makers.
In addition to leading the team developing the Volt battery pack in the U.S., Patil also supervises a team at LG in Korea that is helping develop the individual battery cells.
"The miraculous part of doing this battery in the required time period was that, at first, we didn't even have a cell" of the proper size, Patil said.
"There was a great degree of difficulty: We literally had to double the energy capability of the cell that we had developed for hybrids prior to Volt." Compact Power’s work on the Volt system "is by no means a slam dunk - we’ve had our challenges."
At the same time, Patil said, "There is no 'show stopper' that we're aware of that would make us take a step back. There are engineering challenges, but so far we have been working through them. And the packs we've delivered to GM have worked very well line on line with how we said they'd perform."
Compact Power, which now has about 55 employees in Troy and is one the way to 100 by year's end, didn’t get its contract from GM until a year ago and only really kicked off the Volt project last June. But it delivered the first batch of test batteries to GM in October.
"It doesn’t matter what it says on the calendar we’ve been working. We’ve had meetings at 6 a.m. with some of the GM folks. It's a marathon being run at a sprint pace," Patil said.
He insists, though, that and his charges at Compact Power are up to the enormous challenge.
"What keeps people going is that they relate to this not just as a job, but it has become a cause bigger than themselves," he said.
"They’re doing something specific for the country and for our technological reputation, as well as for the environment. And rarely do you get a chance to be associated with something that is literally a game changer in the auto industry."
