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Lithium-ion Batteries and How Cheap Beat Cool in the Chevy Volt

Since November of last year, I’ve argued that cheap will beat cool when it comes to the commercialization of battery chemistries. As details on the design and construction of the Chevy Volt battery pack emerge and are publicized on sites like Green Car Congress and Popular Science, it’s clear that cheap Li-ion chemistry has already beaten cool Li-ion chemistry and many of the concerns I’ve expressed about using Li-ion batteries in cars have been considered and resolved by thoughtful automotive design engineers. It bodes well for the introduction of PHEVs as long as the tax incentives remain in place, but the long-term impact on developers of high-cost Li-phosphate and Li-titanate chemistries may be devastating.

Battery Cost The Chevy Volt will use Li-polymer batteries manufactured by Korea’s LG Chem. While Li-polymer batteries have had a spotty safety record in cell phones and laptops and do not begin to approach the extreme cycle-life of Li-phosphate and Li-titanate chemistries, they are far and away the cheapest variety of Li-ion batteries with prices in the $600 to $700 per kWh range as opposed to the $1,300 to $2,000 per kWh range.

Passenger Safety To resolve the basic safety issues associated with Li-ion batteries, GM has designed a T-shaped battery pack that sits in front of the rear axle and runs forward through the space that used to be taken up by the driveshaft. At first glance, the battery pack looks like it comes out of a battle tank instead of a passenger car. The topside of the battery pack looks far stronger than the bottom side of the battery pack and it’s clear that the basic geometry has been designed to deflect the potentially explosive force of a battery failure down and away from the passenger compartment. The absence of any visible deformation in the 35 mph crash test photos of the battery pack confirm that GM thinks armor plate is more cost-effective than exotic chemistry. Overall, GM’s battery pack design is a cheap but effective way to avoid potential personal injury risks.

Cycle Life Performance Li-polymer batteries are not renowned for the extreme cycle-life of their more glamorous and expensive cousins like Li-phosphate and Li-titanate. To optimize the cycle life of the batteries in the Volt, GM has chosen to install a 16 kWh battery pack in the Volt but only use 55% of the theoretical capacity to power the car. By limiting the maximum state of charge to 85% and switching to internal combustion when the state of charge falls to 30%, GM believes it can get a 10-year life out of batteries that would die much more quickly with a wider cycling range. Once again, GM has chosen a cheap but cost-effective way to balance battery capacity and cycle life.

Weight and Energy Density The final weight of the Volt battery pack is about 175 Kg. This works out to an energy density of roughly 50 Wh/Kg for useful battery capacity, about the same value as a high quality lead-acid battery.

Recycling While the Chevy Volt battery pack will be built to European recycling standards, those standards only relate to safe disposal of potentially toxic materials and do not get into issues like recovering materials of sufficient purity that they can be used to make new batteries. This is good from a pure disposal perspective, but suboptimal if one’s environmental sensitivities extend beyond landfills to include the environmental damage caused by mining and other resource extraction activities.

In the Chevy Volt, cheap has already beaten cool like I predicted it would. Since GM has established battery cost reduction as a primary goal for future generations of PHEVs, I would not be at all surprised to see GM and other auto makers paying particular attention to advanced lead-acid and lead-carbon chemistries over the next few years because the widely heralded energy density and size advantages of Li-ion chemistry evaporate when the technology is reduced to safe commercial practice. For investors, I think the lesson of the Chevy Volt is that premium priced energy storage stocks like Ener1 (HEV) and Valence Technology (VLNC) are likely to see lower market valuations while bargain basement energy storage stocks like Axion Power International (AXPW.OB) Exide Technologies (XIDE), Enersys (ENS) and C&D Technologies (CHP) are likely to see higher market valuations.

Disclosure: Author holds a large long position in Axion Power International (AXPW.OB) and small long positions in Active Power (ACPW), Exide (XIDE), Enersys (ENS) and ZBB Energy (ZBB).

John L. Petersen, Esq. is a U.S. lawyer based in Switzerland who works as a partner in the law firm of Fefer Petersen & Cie and represents North American, European and Asian clients, principally in the energy and alternative energy sectors. His international practice is limited to corporate securities and small company finance, where he focuses on guiding small growth-oriented companies through the corporate finance process, beginning with seed stage private placements, continuing through growth stage private financing and concluding with a reverse merger or public offering. Mr. Petersen is a 1979 graduate of the Notre Dame Law School and a 1976 graduate of Arizona State University. He was admitted to the Texas Bar Association in 1980 and licensed to practice as a CPA in 1981. From January 2004 through January 2008, he was securities counsel for and a director of Axion Power International, Inc. a small public company involved in advanced lead-acid battery research and development.



was posted on AltEnergyStocks.com.


       

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Comments

John, great article. I have followed you from seekingalpha - will you be publishing this article there as well?

More importantly, do you know anything about the batteries used in the new electric Ford Focus that Magna has built? I'm wondering if cheap beat cool there too.

Also, you say that the weight and energy density of the li-ion battery used in the Volt is about the same a high quality lead-acid battery. If this is the case, would a lead-carbon battery not be a superior option? Or is the size of lead-carbon batteries prohibit for such a function?

Thanks.

Seeking Alpha should pick this one up tomorrow.

I just did a google search and found an article that says the Ford Magna venture will use Li-ion, but it doesn't get into which "flavor." My bet would be Li-polymer but that's only a guess.

I think the lead-carbon will do real well in HEVs but worry that size and weight may be issues for PHEVs and EVs. Until Axion puts out detailed specs, I won't have a better answer. All things being equal, however, the DOE sees a much larger market for hybrids without plugs than it does for hybrids with plugs. So in keeping with my preference for the middle of the bell shaped curve, being less competitive in the PHEV and EV market wouldn't bother me a bit.

Until I hear reasons why getting into battery investments is anything other thna a crap shot, I'll keep investing in CDs. This technology is way way too new and volatile to put any money into. The recent advances from MIT (which make titanate an also ran - look for collapse of Altair) have changed everything. And the technology doesn't appear
protected by patents, since probably many doping compounds will work, perhaps even better than those used by MIT. Investors - a word of warning - don't believe anyone who claims to know the science. NOBODY knows the science, mainly because no one is talking. Taka a look at EEStor. If that technology works, gooodbye eveybody else. And worrying about future landfill problems is so premature I have to wonder why this person worries about events highly unlikely to come to pass. And the GM Volt did NOT build an armor plated battery pack
from any worry about explosions. That's total nonsense.

I think CD's probably make sense for your particular situation, but wouldn't hold my breath for EEStor.

You really think there's enough lithium in the world to satisfy the needs of electric cars?

I am not at all comfortable that lithium supplies will keep up with demand. The carbonates they're using today are pretty efficient. When they have to shift over to ores like spodumene the prices will skyrocket and the environmental degradation from massive processing of low grade ores will be horrendous.

Great article about the Volt battery. John, I have heard through the business grapevine that this battery does not perform well at elevated temps. Have you heard anything about its cycle life at normal and elevated temps?

CSL, as I understand it, the Volt batteries have thermal issues that require cooling systems and also don't perform well at very low temperatures. In other words, I don't know how reliable they'll be in a Canadian January. From my perspective, the Volt is more than a PHEV, it is what we would have called an EV (experimental vehicle) a few years ago. I don't think anybody has a real idea of how the car will perform over the years in a variety of environments. But a bunch of willing guinea pigs are going to pay a monster price premium to find out.

Hi, good post. I have been wondering about this issue,so thanks for posting.

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