Imagine your daily commute in the age of the electric car: on Monday, you charge your car in minutes by plugging it into your garage outlet. The total cost comes to about $8. The charge lasts the whole week, and still handles a 200-km drive to the cottage on the weekend. You’ve long forgotten about the frustration of soaring gas prices, and the kicker is, your car was the one of the cheapest on the market.
That’s the promise, at least, being held out by a new array of super-batteries for cars. Thanks to a sudden surge in research funds—including US$2.4 billion in stimulus grants for the electric vehicle industry just announced by U.S. President Barack Obama, and a $16.7-million investment in battery research announced by Ontario Premier Dalton McGuinty—new developments are happening at a heady pace. This has lead to a spate of amazing new battery claims from a handful of bleeding-edge start-ups. But are they credible? Venture capitalists familiar with the field say a little skepticism may be wise.
Some of the claims are extraordinary. There’s the “UltraBattery,” which Australian company CSIRO says integrates a super-capacitor with a lead-acid battery and costs 70 per cent less than current hybrid battery systems. There’s Ontario-based Next Alternative’s CNT Battery technology, which the company says can power a car for up to 660 km per charge—six times as far as the average electric vehicle on offer now. Then there’s the granddaddy of the newcomers: a ceramic ultra-capacitor recently announced by EEStor, an eight-year-old company based in Cedar Park, Texas (which has an exclusive contract with Toronto-based Zenn Motors to supply mid-sized passenger cars). The device has no hazardous materials, and EEStor says it holds several times the energy of lithium-ion batteries (which are used to power hybrid cars right now), while keeping its charge for months.
All of these technologies sound revolutionary, but there’s one problem: none of them have been proven to be commercially viable yet. “Most of the claims that are pushing the edge of reality are probably not true,” says Tim Woodward, an investor at Nth power, a venture capital firm based in San Francisco. “There’s a long history of battery engineers being notorious for embellishing the performance.” Woodward says that the majority of data provided by battery start-ups is conducted under optimal conditions making it difficult to tell fact from fiction. Firms skew results for charge time, cycle life or range—and often omit safety hazards incurred by the volatile chemical ingredients.
For example, many companies claim their battery will charge in minutes. Which may be true—technically. But to do that, a typical car would need a power supply able to provide 500 kilowatt hours, far beyond the capacity of a regular electrical outlet. “You can’t find that kind of power anywhere,” explains Jeff Dahn, a leading Canadian lithium battery researcher out of Dalhousie University. “Being able to charge rapidly is problematic for battery-based vehicles.”
And while many start-ups dream of striking it rich with a technological breakthrough, experts warn that some of those companies may be a bit naive about how the industry works. Car manufacturers will almost always purchase only from established partners, and several co-operative agreements are already in place between car companies and battery technology suppliers, such as those between Toyota and Panasonic, Volkswagen and Sanyo, and Bosch and Samsung.
On top of that is the cost factor. Even if a claim is true, if it costs $50,000 per battery to manufacture them, they’re a non-starter. “You have to look at who the customers are—the auto companies—who are very, very good at driving costs down and forcing their suppliers to take a deal with very, very low margins,” says David Berkowitz, a partner at Vancouver venture capital firm Ventures West Management. “To me, that’s what the game is,” he says. “It’s not about having a marginally better battery, it’s more about who will have the cheapest product.”
A report conducted by the Boston Consulting Group (BCG), a global management consulting firm, also pointed to cost as the deciding factor, and, in fact, a potential Achilles heel for the whole electric car industry. It concluded that the costs of creating an automotive market dominated by electric and hybrid cars are “prohibitively high, at least in the foreseeable future.”
The authors admit the playing field could change if there are true breakthroughs affecting the cost and safety of batteries—and indeed such a breakthrough may take place. But a more realistic scenario is one that sees government subsidies slowly pushing down costs. Only then will electric cars be an economically attractive option for consumers.
“The hybrid is a nice technology for the interim,” says Dahn, who believes that the rising costs of gas will slowly encourage a shift to electric cars. But, “if you think you’re going to be charging electrified cars in a few minutes just like a gas tank—I think that’s a pipe dream.”