HYBRID OUTREACH: U.S. automakers join lithium-ion battery project

Detroit Free Press
BY JASON ROBERSON
FREE PRESS BUSINESS WRITER

September 6, 2006

Detroit's automakers are investing in Johnson Controls Inc. to develop a lighter and less expensive hybrid battery expected to be in vehicles by 2010 and able to compete with today's top-selling, Japanese-made hybrid batteries.

The Milwaukee-based supplier will be up against a Toyota Motor Corp. joint venture called Panasonic Electric Vehicle Energy, which makes batteries for Toyota and has 74% of the hybrid battery market. Sanyo has a 13% market share, making batteries for the Ford Escape and Honda Accord, and an independent Panasonic battery operation making hybrid batteries for the Honda Civic has a 13% market share.

Sales of hybrid vehicles, which increased from 84,000 in 2004 to 205,000 in 2005, show no signs of slowing down. But prices of nickel, the main element in nearly all hybrid batteries today, have increased from $7 a kilogram (2.2 pounds) in the mid-1990s to $25 a kilogram today, and automakers are considering alternatives.

"Johnson Controls, because of their joint venture, is in a leadership position for lithium-ion," said Dave Hermance, Toyota's executive engineer of advanced technology vehicles. "The big advantage with JCI is they have a historic relationship with the automotive industry."

A year ago, Johnson Controls, the world's largest manufacturer of conventional lead-acid auto batteries that has automotive headquarters in Plymouth, formed a joint venture with Paris-based Saft Advanced Power Solutions to develop lithium-ion batteries.

General Motors Corp., Ford Motor Co., DaimlerChrysler AG and the U.S. Department of Energy -- members of the U.S. Advanced Battery Consortium -- awarded Johnson Controls and Saft a two-year contract Aug. 14 to develop lithium-ion batteries.

The automakers and the Department of Energy signed a $125-million agreement July 14 to split the cost of hybrid battery development projects. Johnson Controls also is fronting money and contributing equipment, expertise and employees to develop the batteries.

The goal is to make batteries for $500 each.

Alan Mumby, vice president and general manager of Johnson Control's hybrid battery business, said the company, with more than 100 employees devoted to the project in Milwaukee, is on target to meet its goals by the end of its contract.

Johnson Controls has been working on hybrid batteries since the 1970s, though they were first made of lead acid. The company began exploring nickel-metal hydride in the early-1990s and lithium-ion in the late-1990s, Mumby said.

"This is just a logical extension of our business," Mumby said.

Lithium-ion describes an energy transfer method of harnessing lithium, a plentiful material with three times the energy density of nickel.

More than 50% of the manufacturing costs for lithium-ion and nickel-metal hydride batteries are for materials. Lithium-ion batteries will be cheaper than nickel-metal hydride batteries because it takes less lithium to deliver the same power as nickel, said Menahem Anderman, founder of Total Battery Consulting in Oregon House, Calif.

The consumer electronics industry is the primary user of lithium-ion batteries, most of which are found in cellular phones and laptops. But the popularity of the battery with consumer electronics could pose a problem for automakers, which would have little leverage with battery manufacturers to develop the battery they need.

"If you want a specific battery, you have to do it yourself," Hermance said. "And so that's what companies are doing. All of the auto companies have development programs, either internally or in partnerships with battery developers to come up with these high-power batteries."

Toyota uses a limited-volume lithium-ion battery in its Toyota Vitz, the Japanese version of the Yaris. But it often is not considered a true hybrid since it only uses the lithium-ion technology for its automatic start-and-stop system.

Lithium-ion battery manufacturers are working through safety concerns. One of the most critical manufacturing processes is the making of electrodes, the positive and negative poles of the battery, said Klaus Brandt, executive vice president of Lithium Technology Corp. in Plymouth Meeting, Pa. That process is typically done by a solvent-based coating process.

"There's a safety risk, but there are also all sorts of environmental burdens in handling large amounts of solvents," Brandt said.

Lithium Technology, which has a patented process for addressing environmental concerns, has a joint venture with ThyssenKrupp to develop battery systems for nonnuclear submarines. This battery system enables propulsion four times longer and safer than lead-acid powered vessels.

The company also offers a battery system that powers a hybrid vehicle up to 50 m.p.g. Lithium Technology already has a contract with an undisclosed automaker to develop a high-power battery management system designed to run a four-passenger hybrid vehicle capable of 60 m.p.g. with zero emissions.

Another challenge in developing lithium-ion batteries is finding a market that Japanese manufacturers are not already dominating, Brandt said.

"In general, Japanese battery manufacturers have made alliances with Japanese car manufacturers," Brandt said. "We believe that there is interest in getting access to this type of technology rather than going to Japan for joint ventures or other licensing deals."