Tuesday, 3 February 2009

Micro-Level Trends – Powertrain Engineering – Battery Technology's Opposite Poles.

Batteries typically operate via the conductivity 'charge flow' between +ve and -ve poles, thus the technology requires the existence of polar opposites to create power. But whilst necessary within technology itself, it is debatable as whether such polar opposite stances hold true for the development of the battery industry itself, and so the development of (Series & Parallel) Hybrids, PHEVs and full EVs.

And that has been the case for many years as different R&D houses, battery-manufacturers and automakers battle to distinguish which 'technology-play' would be most advantageous. The array of options have been spawned by the spectrum of vehicle types that exist and by the alternative battery (chemistry & structure) possibilities that exist, created from 150 years of research and from a plethora of applications. Of course the consumer electronics industry has been the prime client in recent decades requiring hi-performance, compact powerpacks that evolved the battery's own R&D efforts down a particular path that leading to the broad adoption of Lithium-Ion (L-ion) technology.

Historically different 'powerpack' solutions have been born from different requirements, even in the auto-industry, ranging from the tried and tested Lead-Acid re-fillable type to the sealed L-A type to latter-day lightweight but limited - life compact Gel-Pack types used for motor racing.
As we've seen over the last 5 years or so, the 'holy grail' is the viable use of L-ion in vehicles, and its spin-off derivative Lithium Polymer (Li-poly). Thus Labs have been trying to both extend the innate advantages of the tech and reduce the endemic disadvantages. To summarise the +ves and -ves of L-ion are:

Positives: a) the ability to configure battery layouts as necessary within given package b) lightweight c) high open-circuit voltage possibilities d) no 'memory-effect' e) low self-discharge rate

Negatives: i) very poor 'shelf-life' – quick loss of potency if not immediately used ii) irreversible capacity loss at median-high temperatures (such as under-bonnet environs) iii) high-internal resistance limits 'high-drain' loads such as power-tools and full EVs iv) safety features required adding cost, utility & warranty issues.

The indisputable 'real-world', high-production tech leaders of the automotive arena are Toyota and Honda with the respective Prius (Gen 3) and Insight (Gen 2). They have opted for the known 'tried and tested' Nickel Metal Hydride (Ni-MH) battery option to actually put series-hybrid cars on the road. That option may not be as sexy as L-ion, or offer the theoretical panacea of possibilities, but viability won-over as a preferred route back in 1998 to: actually create the new 'eco' segment, produce cars that would meet the high reliability standards that are core to brand values and allow incremental performance, weight-reduction and cost-down improvement to the chosen battery technology.

In contrast western auto-producers have chosen to endeavour to work on a fast-track route towards the L-ion solution, whilst proffering 'inter-mediate' (relatively low-volume) Ni-MH hybrid vehicles. GM in particular has vaulted the L-ion Volt concept for some time and recently announced it had chosen LG Chem as its preferred development/production partner (over Canada's A123 Systems) relying on the creation of a 'Manganese Spinal Cathode' to help overcome some of the major L-ion disadvantages. Daimler are pseudo-testing the battery via the niche produced S-class Bluetec [NEC and Samsung doing likewise]. Advances in Nano-technology such as those at MIT and Stanford are progressing the cause, but barriers are still yet to be overcome.

Thus the auto-industry has and continues to remain split regards the routes for adoption of battery technology. And that is because the matter is complex indeed, the number of technology, business and user considerations and variables means there is no simple answer, and that we suspect was much of the reason as to why these Japanese auto-makers effectively went down the evolutionary route for Prius and Insight, playing safe to further differentiate themselves – into possibly an unsalable position - within the mainstream sedan segments they had fought hard to own. (After all, 'Disruptive Tech' has created little disruption in 100 years of ICE-based cars, even the small-step of the Wankel-Rotor engine only ultimately used as a periodic product story for Mazda). However, that doesn't mean Toyota and Honda are not exploring non-Ni-MH alternatives.

But of course Nissan, with Renault parentage, is co-opted to align itself with French industrial policy that propagates nuclear-sourced electricity, and so the raison d'etre for pushing all the way to full EVs. Thus Nissan, largely via Renault and its efforts with the Israeli government and Project Better Place, is Ghosn's 'Disruptive' bete noir for his No 1 & 2 ranked counterparts in Japan; the newly re-appointed Toyoda and Fukui at Toyota and Honda respectively.
Of course that commitment toward truly clean-energy supply chains has been ongoing since Japan held the Kyoto Summit, itself taking on the mantle to live-up to the high ideals of the accord. Although the accord was legally non-binding, participant countries including the US were castigated for not doing more sooner.

In comparison Japan and a commercially 'shadowing' S.Korea elected to re-strengthened their own industrial prowess to lead the world in eco-tech. For Japan, much of that drive was undertaken as a dual initiative between government and industry, utilising a mix of tax-gathered monies and buoyant corporate balance sheets; themselves created as hostile take-over defense mechanisms during an era of Japanese economic stagnation. (investment-auto-motives has long believed since 2005 that the the lessons learned from the Japanese 'precursor-model' would be instructive for the west – as has come to pass). In contrast, S.Korea was able to predominantly ride the previous global growth and utilise to good effect its own capital markets (including PIPE allocations), FDI and a portion of public funds to climb the manufacturing value-chain and equal & better Japan in certain tech arenas – as LG Chem's apparent progress in L-ion has shown.

However, although the technical complexities and ultimate ROI levels of the 'L-ion Battery Race' are still to be truly ascertained, the event of the global financial melt-down and subsequent global provision of national stimulus packages (with aligned private funding initiatives) have prompted Electronics Corporations and Battery R&D Companies to demonstrate their conviction in growth plans with the recent spate of M&A and new plant announcements. No matter whether a relatively new L-ion tech-leader – scaling-up consumer electronics capabilities – or a traditional low-tech Lead Acid or Ni-MH commodity-battery producer, none wish to not be seen at least in the running; so important is the rhetoric around L-ion.

Hence GS Yuasa's alliance with Honda, NEC's joint venture with Nissan, Toshiba's tie with VW, Panasonic’s Y807bn takeover bid for Sanyo and even Toshiba's re-entry into the L-ion's denizen with its proprietary SCiB variant.

The race is of course based upon demand forecasts that premium battery tech will be required to power continued and voracious new demand across:

1. consumer electronics (phones, laptops, net-books, mp3s, e-books etc)
2. integration into vehicle powertrain systems
3. use as storage devices for clean tech energy systems (solar, wind, wave etc)

Forecasts (as ever) are the impetus behind the systems, and whilst exact volumes are debatable, the apparent future demand does indeed look conducive to at the very least be seen to be proactive in the arena to satiate investor confidence and maintain perceptions of brand progress.

Research agencies (with arguably vested interests) state that “We are on the cusp of mass production now – that is why there is a sense of urgency,” but it seems that the core issues 'ghosts' of technical and production scale-up issues have yet to be fully exorcised. Instead there is a sense that companies are prepared to deal with arising problems as they emerge, a consequence for many feeling compelled that they have to run before they are truly comfortable walking. And importantly, the industry's tech-speak with raft of scientific formulae and algorithmic control jargon can be used to bamboozle and convince the majority of non-techies in government and investment circles who hold the developmental purse strings. Rather like the web-based tech-boom of the late 1990s, much apparent promise may lay in intendedly heavily science-laden business plans.

For today, within an environment of stalled and limited liquidity, commercial enterprises that are currently enjoying sector limelight appreciate the intense level of intra-sector competition to access monies from the national public purse and from aggressive private financing sources; themselves under pressure to sweat dormant funds.

Never in recent history will those business plans be so important. Let us hope that the recent era of creative accounting in the ethereal financial sector is not replaced by overtly creative business planning in what is supposedly a conservative sector.

And lastly, perhaps instead of a possible irrational dash for cash that could fragment the sector and its efforts, the critical importance of the power storage industry 's products to society may call for a more holistic approach between government(s) and the investment community. One that ascertains a possibly more plausible, viable R&D and productionisation framework for L-ion+ and other next generation technologies.

If the Green Call is to be answered powerfully and rationally, it makes sense that the apparent polar opposite concerns of Lord Stern and Lord Lawson for unhindered technical exploration versus rational investment thinking be ultimately combined in a dual-aspect approach. And that the apparent polar opposite +ves and -ves of Ni-MH vs L-ion be fully appreciated and appropriated.