Lithium Battery Expert Interview: Jennifer Smith

This is a series of interviews I am presenting over the next few weeks.  I am asking serious experts in Lithium Ion batteries their thoughts on the state of our business.  This should be fun, and enlightening to anyone interested in getting involved in this strange, bizarre, but always exciting industry.  —Joe Istre

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This week, we speak to Jennifer Smith (pseudonym), who I have known for several years.  

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What caused the market failure of large format lithium batteries? 

This is just my opinion; I don’t have any hard data to back up these statements.  I think that the initial market that companies funded by the Department of Energy programs was full electric vehicles to be sold to individual consumers.  Consumers did not perceive a benefit that was in line with the cost of the vehicles, which was high, even after Federal and State tax credits.  Further, consumers were comfortable with the longevity and warranty of internal combustion engine-based vehicles, and there was (and still is) a question of how long an electric car will last and what warranties are offered.

Was there anything different that large format lithium companies could have done better in order to succeed given the mass bankruptcies and acquisitions between 2010 and 2012? 

Partially due to the influx of Department of Energy funds, companies manufacturing lithium ion cells expanded too quickly and planned for a volume of sales that did not quickly materialize.  I think that companies focused on the technical aspects of lithium ion cell research, development, and manufacturing, but did not pay as much attention to performing market research to determine where the batteries could be successful in the marketplace.  There was such enthusiasm and exuberance during the expansion phase of lithium ion battery companies, but when the DOE funding ended, the volume of sales needed to support mass production of large format lithium ion batteries did not happen, with the ensuing mass bankruptcies and acquisitions.

How long have you been in the lithium battery business? 

7 years

What needs to happen before large format lithium batteries become economically feasible (i.e., no subsidies)? 

This is kind of a chicken-and-egg situation, since lower prices depend partially on mass production.  However, one strategy is to sell batteries to utilities, government entities, and large businesses, which typically have deeper pockets and a longer outlook than individual consumers.  Establishing a pipeline will help drive mass production and lower costs.

Are there any technical problems associated with large format lithium preventing their successful marketing against strong incumbents like lead acid? 

Price seems to be a big factor in many applications.  It would help if recycling streams were set up for lithium ion cells, as they are for lead acid batteries.  Lithium ion batteries also may require more complex battery management systems than lead acid batteries.

Can you describe any strategy of market penetration of large format lithium batteries into markets without mass subsidies or similar non-market support? 

One strategy is to find market segments in which the energy density/smaller size of lithium ion batteries justify the cost.
Would you be willing to personally invest money into large format lithium companies? How much? What criteria would you require before investing? 

I would not be willing to personally invest money into large format lithium ion battery companies at the present time.  Before investing, I would want to see a more widespread acceptance of large format lithium ion batteries in at least one major commercial sector.

Under what scenarios would you think large format lithium batteries could compete against lead acid and nickel cadmium in the marketplace? 

I think that large format lithium ion batteries can compete against lead acid and nickel cadmium batteries in cases where energy density is important.  Also, there are a lot of different chemistries in the lithium ion battery universe, so the performance of a lithium ion cell can be adjusted to meet the specific requirements of a given application.

Are there any niche markets emerging for large format lithium batteries? 

Niche markets that are emerging for large format lithium ion batteries include hybrid trucks and buses, as well as stationary and mobile power units that interface with diesel generators, solar power, and wind power.

What would you like to say about Tesla?

It is widely known that Tesla’s current car models utilize lithium ion cells in the 18650 format, which is the same size of cell used in laptop computers.  There are thousands of cells in a Tesla car battery, due to the small energy of each cell compared to the energy needed to run the car.  The main advantage of using 18650s is that they are produced in very large numbers, which allows manufacturing optimization and low cost.  Disadvantages include the large number of interconnects that are needed in the pack, the necessity for thermal management by liquid cooling, and the inherent shorter lifetime of cylindrical, as pointed out by Andreas Gutsch of the Karlsruhe Institute of Technology in a study presented at a recent conference.

Read more: http://www.pv-magazine.com/news/details/beitrag/kit-test–some-battery-cells-last-five-times-longer-than-others_100018517/#ixzz3jPJePDJD