Nano-enabled batteries drive their business -- and yours
You want to talk about acceleration? Electric cars have gone from the research lab to the showroom in record time. The power they needed to get ahead? Nanotech-enabled lithium-ion batteries that have the high capacity to let electric cars off their power-cord leash.
Just over a year ago I was writing here in IndustryWeek about companies that were on the cutting edge of development for these nanotechnology-powered batteries. This month, Car and Driver Magazine is including two electric vehicles in their Best Cars of 2011 coverage. The Chevy Volt earned a slot on the Ten Best list. The Nissan Leaf got a nod for having the best observed fuel economy, with bonus points for reaching an 80% full charge in only 30 minutes.
So where did the jump start for battery technology come from? The free market. Yes, there has been plenty of government seed money, but the real horsepower came when science got down to business -- that is, when General Motors and Nissan partnered with the nanotech battery companies. In fact, GM worked with five companies to find their winner. Better yet, they continue their relationships with all five contenders even thought the Volt has launched. That's the business savvy it takes to become the market's technical leader.
The free market also drove the economies of scale necessary to charge the lithium-ion battery market. In May, Nissan announced its battery would cost about $9000, which translates to about $375 per kilowatt hour (kWh) of energy in Leaf's 24 kWh battery. That blows the doors off the Japanese national target of $1000 per kWh. It beats Ford's forecast that $700 per kWh was reasonable. And, it even surpasses the GM prediction that they could reach the $500 per kWh target in 2011.
How did the cost drop so far so fast? Simple supply and demand. Estimates in 2008 anticipated the market for nanotech-enabled batteries to reach $9.1 billion by 2015, based on their use in small electronics and the military. Companies that saw the big-picture opportunity started building plants. Financial analysts suggest the dropping prices may be due to over-capacity --- maybe as much as 200% of market need. I think that's a myopic point of view. I prefer to call it visionary investing. He who gets to market fastest and biggest usually wins.
Here's a troublesome sidebar to consider. Currently, 98% of the lithium-ion auto battery manufacturing capacity is in Asia. But the U.S. is gaining ground thanks to the Federal Recovery Act. The U.S. Government is supplying funding to 20 battery plants, which could get us to a 20% market share in a few years. And, already there are factories on the map for Nashville and Detroit.
So that's the story on nanotech-enabled batteries. And here's where you ask, "Yes, but what's in it for me?" Just this: the race is on in the battery-powered world. If you make anything with a power cord, it's time to think about batteries. Or ask yourself what tools or systems in your factory would be more efficient if they were unplugged? If electric vehicles are any indication, your idea will be reality sooner than anyone expected. So get going -- or your company may end up stalled by the side of the road.
Send me your questions. Right now, we're working on helping a reader find ways nanotechnology may improve the tensile strength of steel wire. What's on your mind?
Scott E. Rickert is chief executive of Nanofilm, Ltd., located in Valley View, Ohio.