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Vinod Khosla on the Future of Lithium-ion Batteries

John Petersen

On Monday of this week, the treehugger blog published a guest essay from Vinod Khosla that clarified his stance on the future of next generation lithium-ion batteries. The essay was prompted by "blog chatter" about an article in Earth2Tech where he was quoted as saying that lithium-ion batteries are overhyped. Since the Khosla essay included a link to my article "Why Lead-Carbon Batteries Will Deflate the Li-ion Bubble," I think it's important to tell readers that Mr. Khosla has written his own essay on the subject and encourage them to get the full story straight from the source.

The essay from Mr. Khosla is available here.

While we use different terms to frame the issues, it's pretty clear that Mr. Khosla's views of the lithium-ion battery sector are not all that different from mine. We both question the ability of leading lithium-ion battery developers to move down the cost curve and up the performance curve over the next five years. We both believe that without disruptive advances in cell design, battery chemistry and manufacturing technology, the market for PHEVs and EVs will be limited to a small fraction of the potential market. We both hope ongoing R&D will lead to the disruptive advances the industry needs. And we're both a little skeptical about EEstor.

After spending a good deal of time analyzing the Khosla essay, about the only place we disagree is his suggestion that "Even the old lead acid battery suppliers like Firefly and other lead acid battery makers are making a play to reach the electric car specifications."

I've always been very careful to respect the difference between cars that use electric drive to supplement internal combustion engines and cars that use internal combustion engines to supplement electric drive.

That difference is a plug.

I firmly believe advanced lead-acid and lead-carbon batteries will be a dominant technology for micro, mild and full HEVs. I do not expect them to be the first choice for PHEVs and EVs where battery size and weight are mission critical constraints. The only clear exception to my general view is gas guzzler to dual mode EV conversions.

Last November I wrote "Alternative Energy Storage is an Investment Tsunami," which began with a Khosla quote that “500 million people on earth enjoy a lifestyle that 9 billion people will want in 2050.” This quote had a profound impact on my thinking and has gradually morphed into a frequently repeated theme that 6 billion people already know about the lifestyle that 500 million of us enjoy and every single one of them wants to earn his piece of the dream. The trick will be finding a way to raise the standard of living in developing economies without crushing the standard of living in developed economies. For that to happen without catastrophic conflict and horrific environmental consequences, the world must find relevant scale solutions for persistent shortages of water, food, energy and virtually every commodity you can imagine.

Since I admire Mr. Khosla, I deeply regret any trouble I may have caused by not spending more time discussing his vision of the opportunities in next generation lithium-ion batteries. A favorite theme of mine comes from William Martin's novel The Lost Constitution, “In America we get up in the morning, we go to work and we solve our problems.” Solving our energy and carbon emission problems is a daunting task that will take decades and probably never be complete. In the meantime, we need to go to work with the tools we have and be ready to embrace new tools when they're developed. I don't view advanced lead-acid and lead-carbon batteries as the be all and end all of energy storage. They are, however, key bridging solutions that can help us get from where we are to where we need to be.

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.



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Comments

Absolutely.

People often neglect to consider scale. After all, if we can make 10s of millions of ICE automobiles and IPods and..., why can't we just make lots of batteries?

I recently presented a college lecture regarding sustainable energy. One of the more interesting moments was having the students begin to understand scale. In one example I employed, if all electrical generation for the State of Florida was replaced with PV (no, I'm am not promoting that), it would require the entire world PV module output for some 10 - 40 years, depending on assumptions.

I didn't invest in the early biofuels in part because I felt they would not scale. I am hopeful that some of the next generation biofuel products can scale...although I have not yet found one in which to invest.

This is also part of the reason I have invested in AXPW...very scalable within my lifetime.

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