Automotive Battery Development


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Broad overview of the issues and opportunities in the development of battery technology within the automotive sector.

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Automotive Battery Development

  1. 1. Automotive Battery Development Risks & Opportunities By Phil Biggs April 2010 © One World Partners, LLC 2010, All Rights Reserved
  2. 2. Industry Performance Domestic Four Assessment Toyota’s quality issues are deeply affecting its brand. Honda’s once fashionable design looks bland compared to Ford, Nissan, and GM. GM has shed badges, needs to rid itself of government influence. Ford has made remarkable progress in design, electronic content, powertrain, and continues down a path of leading-edge quality and safety.
  3. 3. Industry Trends Gadget trends include focus on intuitive application and connectivity, which enable us to do more inside-the-car activities. Vehicles of the future will be able to drive themselves. In-vehicle ergonomics will continue to be prominent as Baby Boomers age. Continued emphasis on design, electronic content, and powertrain – safety and quality are “givens.”
  4. 4. Battery Segment Overview Advanced battery technology is the fastest growing technical field in the automotive space. Will be the foundation of electric vehicles which defines vehicle cost, range, performance and design characteristics. Recent rapid developments behind lithium batteries have provided promising and dynamic achievements in capacity and vehicle range. Future lithium technology and chemistries have the potential for energy values that allow for lighter and more powerful system solutions.
  5. 5. Market Limitations & Issues Currently, U.S. capital system is too restricted to sustain market growth in battery segment. Uncertainty of regulatory and compliance standards, need to communicate what standards do exist. Suppliers and OEMs must be operationally efficient and strategically nimble as this industry segment grows. Fire and explosion have presented acute safety concerns in other segments. © One World Partners, LLC 2010, All Rights Reserved
  6. 6. Raw Materials Issues and Sustainability Affect Capacity The U.S. contains only 3% of the world’s lithium reserves. Chile provides 61% of lithium exports to the U.S., Argentina sources 36%. Bolivia has an estimated 50% of global supply, by far the largest lithium deposits of any country. Waste batteries can be 90% recycled, which can help create a circular (sustainable) economy. © Bloomberg 2010, All Rights Reserved
  7. 7. The Need for Infrastructure Better Place Palo Alto, Calif.-based Better Place designs and builds charging stations, software and battery-switching stations, with car wash-like tracks where a vehicle would stop to have the battery switched out. Tennessee Valley Authority the Tennessee Valley Authority is working with Nissan and eTec to install public charging stations in Nashville, Knoxville and Chattanooga, and is installing solar-powered charging stations in a partnership with the Electric Power Research Institute and Oak Ridge National Laboratory. Southern California Edison Southern California Edison has been researching and testing electric vehicles since 1993. Its fleet of electric vehicles has logged 17 million miles. In 2007, Southern California Edison began working with Ford to test Ford Escape plug-in hybrids. Progress Energy Raleigh, N.C.-based Progress has a test fleet of plug-in hybrid electric vehicles that includes seven Toyota Priuses, two Ford Escapes and one of the nation's first plug-in electric service trucks.
  8. 8. Requirements for Success Must maintain robust quality systems as industry converts to electro-powered vehicles. Commercial proof points are needed. Product development expertise is critical. Must sort out warranty responsibilities between OEM and supplier. Must craft a workable R&D shared services model.
  9. 9. Key Regions of Battery Production in This Decade Battery Manufacturing & Development Locations North America: U.S. Europe: Eastern Europe Asia: China
  10. 10. Emerging Battery Suppliers Michigan-based technology hub… Johnson Controls-Saft, a joint venture between the Milwaukee- based auto supplier and French battery maker Saft has lined up Ford, BMW and Mercedes-Benz as customers, and is already operating a lithium-ion battery plant in France. Dow Kokam, through a joint venture last year with investment firm Townsend Capital, Dow formed Dow Kokam, which plans to break ground this year on a battery plant in Midland. Compact Power/LG Chem, South Korea-based LG Chem and its subsidiary Compact Power are behind the Volt's battery system-powering the nation's first mass-market extended-range plug-in electric vehicle. A123 Systems, having struck battery deals with Fisker and Chrysler, A123 has made Michigan its automotive hub and is building two plants in metro Detroit. EnerDel, a subsidiary of New York-based Ener1, has signed on with Norwegian electric vehicle maker Think and will supply to a pilot electric version of the Volvo C-30. Focus on European market.
  11. 11. Metamorphosis Strategies Develop deeper relationships with customers Build greater trust, loyalty Tap into new revenue streams Consider new and different business models, look at new innovation queues, survey your customer needs Reinvent your delivery channels Emphasize unique and brand-defining approaches Innovate with bolder branding, new products and pricing models Run cheap, quick tests to be sure you are on the right track © One World Partners, LLC 2010, All Rights Reserved
  12. 12. Differentiating Your Product Look for product attributes that “brand” your business. Ask customers where they find value in working with you… it may be surprising what you hear! Are there opportunities for brand acceptance beyond your traditional geography, distribution, or customer base? Which of your assets might be enhanced by co-branding them? Are there companies that would readily work with you as a joint venture partner for that purpose? Direct revenue ($$$) versus passive income (%) i.e. royalties © One World Partners, LLC 2010, All Rights Reserved