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IMS Research Analyst Blog
Battery Innovations Might be the Cure for Electric Vehicle Market Malaise
Date: 22 November 2011
Electric vehicles, be they hybrid or battery, are a reality – they have been for 100 years. However, they are moving to the forefront of awareness and are now being taken very seriously by consumers, governments, and technology developers alike. However, another reality is that the hybrid and battery electric vehicle market is currently hobbled by high prices, concerns over performance and range, and concerns over battery safety.
Yet another reality is the mixed messaging coming from vehicle manufacturers. Most major vehicle manufacturers now have hybrid and battery electric vehicle programs; however, at the same time these vehicle manufacturers are releasing fuel efficient ICE models with low CO2 emissions. Understandably, vehicle manufacturers want to maximise their investments in powertrain development (and factories and tooling); furthermore, vehicle manufacturers have an astute eye on their bottom line – most people are going to buy internal combustion engine vehicles for the foreseeable future. But isn’t this causing a dilemma for consumers? With one hand, consumers are being encouraged to ‘go green’ and save money by switching to a partial or fully electrified drivetrain. However, with the other hand consumers are being shown that they can drive economically and ‘green’ without any of the hassle of relinquishing their usual driving habits or the additional expense of buying an electric vehicle.
What can be done to overcome these apparent contradictions?
Well, the automotive industry is a vast, multi-billion dollar business – old habits die hard. It’s highly unlikely that it will give up its ‘bread and butter’ overnight and it is unrealistic to expect this. However, it could do more to push the ‘electric’ agenda.
Recently, I’ve seen two companies whose technologies might help. The first, Nanosys, is a Palo Alto based nanotechnology firm. It develops technology for LED backlighting and energy storage. The reason Nanosys piqued my interest is its new anode material that better manages volumetric expansion of the anode silicon – in short, improving the energy density of the battery. Nanosys has received funding from the DoE to the tune of US$11m to commercialise its anode material for automotive applications. Furthermore, Nanosys’ other technology for LED backlighting is starting to garner commercial success. Whilst being some way from a commercial product for the automotive industry, these two factors can help secure Nanosys’ long term commercial success.
The second company is Leyden Energy, another California based technology firm. Leyden Energy’s solution for the Lithium ion battery market is a new type of cell electrolyte – lithium imide (Li-imideTM) – that is able to provide higher energy density, longer cycle life, and longer calendar life, all at higher operating temperatures. The benefits of this technology are clear: lower cost batteries, batteries that can be charged more often and last longer, and safer batteries that are easier and cheaper to monitor. Like Nanosys, Leyden Energy has recently received US$20m in funding (although in this case, it’s from VCs) and is gaining some commercial success with its technology for mobile applications.
The technologies from Nanosys and Leyden Energy should help electric vehicles be made more cheaply, have better range (or comparable range to internal combustion engine vehicles), and be safer. My advice to Nanosys and Leyden (and others) would be to license their technology or partner with an automotive Tier 1, battery manufacturer, or vehicle manufacturer. Licensing is the short to mid-term way of penetrating the automotive market effectively. A partnership would be more costly upfront but might guarantee longer term commitment and protection from competing suppliers.
The technologies from Nanosys and Leyden are just two of countless examples of investment in developing and improving electric vehicle performance. Clearly the automotive industry won’t change overnight. However, with continued investment of this type the EV industry will continue to make inroads into the commercial car market.
Alastair Hayfield, Research Director, Automotive and Transport Group
+44 (0) 1933 40 22 55
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