By KEVIN CAMERON
THE battery maker A123, a producer of lithium-ion cells for hybrid cars made by General Motors and Fisker Automotive that was founded in 2001 by MIT scientists, filed for bankruptcy on Oct. 16. ReVolt Technology, a maker of zinc-air batteries with a North American headquarters in Portland, Ore., called it quits last week. Another battery company, Ener1, went bankrupt in January.
Companies fail all the time, of course, for various reasons, and the incidence is bound to be high among start-ups in fledgling industries. But bankruptcies of companies that have received millions of dollars in government grants and loan guarantees — in the cause of promoting electric vehicles and independence from foreign oil — are another matter, especially in the cauldron of an election year.
Beyond the inevitable birthing of new targets for political point-scoring, the failures contribute to the doubts that have arisen from lethargic sales of plug-in hybrids like the Chevrolet Volt, which recently took a four-week vacation from manufacturing because of excess inventory, and electrics like the Nissan Leaf. In an avalanche of new hybrids, plug-in hybrids and battery-only models — 21 fresh models by the end of 2015 from Toyota alone — industry executives have been faced with questions over whether there will be sufficient production capacity to meet the demand. China has shut down some battery makers who have violated environmental standards, and popular consumer electronics like the iPad and latest iPhones corner a lot of battery production.
“We do not see any supply difficulty,” said Anand Sankaran, executive technology leader for energy storage and high-voltage systems at Ford Motor. “There is no shortage of raw materials but there is a time frame to capacity,” he added, referring to the time lag in achieving production capacity.
More critical in the long term is the question of whether the crucial lithium ion cells will become cheap enough, at a fast enough pace, to make pure electric and plug-in hybrid cars economically practical. After a rapid rate of price declines in the 1990s, the rate has slowed.
“Our view is that battery costs are coming down,” Mr. Sankaran said, adding that there is consensus that by 2020 battery prices will have reached an economically practical level — in the range of $200 to $250 a kilowatt-hour. That is a significant decline from the $1,000-a-kilowatt-hour cost that was the auto industry’s rule of thumb until recently.
To understand the effect that price drop would have on the window sticker of a new electric car, keep in mind that the Ford Focus EV has a 23-kilowatt-hour battery. Tesla’s new all-electric Model S sedan is offered with battery packs as big as 85 kilowatt-hours, which gives the car a range of 265 miles according to its official rating by theEnvironmental Protection Agency.
Battery prices are not a one-size-fits-all matter, Mr. Sankaran explained, but vary according to vehicle type and intended use. He made a distinction between so-called power batteries that can be discharged rapidly to give great acceleration, as might be used in sports cars, and energy batteries, which would be better suited vehicles whose priority was frugal operation and long driving range. This specialization affects the cost of lithium-ion batteries, because the differences require tailoring the production process to each type.
Battery experts caution against the oversimplification of battery price into dollars-per-kilowatt-hour of storage capacity because there are additional necessities, including the assembly of individual cells into a single large battery pack and the cooling and heating provisions. The more densely batteries are packaged to minimize how much space they take up in the vehicle, the more they need a method of extracting the heat they generate while in use.
The electronic control systems that regulate the motors can also be a costly part of vehicle electrification. Batteries deliver direct current electricity — the familiar positive and negative connections of flashlights are a good example — but efficient drive motors need alternating current, the kind that household appliances use. Power supplies convert the one into the other using large transistors, while delivering power according to the driver’s demand.
For the moment, Mr. Sankaran said, the highest volume of batteries will go into hybrids. Plug-in hybrids, because they are driven greater distances on battery power alone, typically require three times the battery mass (and cost) of a hybrid. Electrics must carry much more.
As a result, Mr. Sankaran said, “Ford’s approach is what we call power of choice. People have different needs.
“We are not dictating one solution over another,” he said. “Hybrids will be more appealing to most customers.”
In other words, Ford will let the market decide.
Mr. Sankaran noted that a prime source of sales resistance to hybrid or electric cars has been an impression that performance or amenities must be sacrificed in exchange for the new green technologies.
In an effort to counter this, Mr. Sankaran said, “We try to give a complete package, with no sacrifice.”