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Battery Demand Exists, But Pricing, Capability Must Improve, Industry Execs Say

Panasonic is especially bullish about the future of lithium-ion batteries, predicting explosive growth in global sales across all industrial sectors from $6 billion in 2009 to $32 billion in 2018.

The need for better, cheaper batteries is coming, say industry experts attending the inaugural International Rechargeable Battery Expo in Tokyo, although how soon and how much remain big questions.

As global demand for energy expands exponentially and petroleum reserves shrink, 40 speakers and more than 200 exhibitors on hand for the exhibition last month agree batteries, especially lithium-ion types, are becoming an extra-special fuel for a wide variety of products, including electric vehicles and hybrids.

“Faced with depleting natural resources, we must diversify energy sources and shift to alternative energies,” says Panasonic Corp. Executive Officer Naoto Noguchi, noting “a paradigm shift has begun, from oil-dominated to clean-energy sources, that includes the introduction of electric vehicles.”

Chung Jeon, vice president of Samsung SDI Co. Ltd., cites a recent Deutsche Bank study forecasting demand for conventional hybrids, plug-in hybrids and extended-range EVs to grow to 17.3 million units – 20% of global car sales – in 2020, when Europe’s carbon-dioxide emissions target falls to 95 g/km from 140 g/km today.

Other demand forecasts are less optimistic, ranging from 7.6 million units by 2018 to 8.5 million by 2020.

Toyota Motor Corp. is following dual strategies, says Hideki Iba, general manager in charge of the auto maker’s 2-year-old Battery Research Div. One is to reduce vehicle weight and size. The second is to pursue more hybridization.

“Conventional hybrid and plug-in hybrids are transitional technologies until we reach 100% EVs and fuel-cells,” he says, cautioning that electric vehicles, to be viable, must be able to cover more than 155 miles (250 km) per charge.

He notes Toyota's ultimate development goal is “all-solid” and “metal-air” batteries, pegging the timeframe to the year 2030.

Another Toyota researcher, Taiyo Kawai, general manager-fuel-cell system development, estimates the crossover point for battery-electric and fuel-cell vehicles is a driving range of about 90 miles (144 km) and expects the two powerplants to co-exist.

“EVs are suitable for shorter ranges," he says. "Fuel-cell vehicles are a better alternative for mid-to-long ranges.”

Kawai says range is no problem for Toyota’s latest FCHV (Fuel Cell Hybrid Vehicle) prototype, which already has a range of 375 miles (600 km).

To reach Toyota’s internal target of ¥1 million ($11,000) per fuel-cell system, Kawai estimates production must reach 40,000 units per month. For EVs, he says, battery costs must come down to ¥20,000 ($216) per kilowatt hour and “this won't be an easy target to reach."

Takeo Kikuchi, senior chief engineer-Technological Research Div. at Honda R&D Co. Ltd., says EV demand will be influenced strongly by climate and daily driving patterns.

For example, studies indicate 70% of drivers in Tokyo and London consider a range of 25 miles (40 km) per charge to be sufficient for daily commutes, whereas those in Los Angeles believe at least twice that distance is necessary.

Moreover, because cold temperatures lower battery performance and those below freezing lead to battery degradation, Kikuchi suggests “cold-temperature operations may require a larger battery pack.”

“More efficient energy storage and improved battery technology are critical,” says Panasonic’s Noguchi.

Panasonic is especially bullish about the future of Li-ion batteries, predicting explosive growth in global sales across all industrial sectors from $6 billion in 2009 to $32 billion in 2018. Nearly 60% of total sales, an estimated $19 billion according to the forecast, will be for conventional hybrids, plug-in hybrids and EVs.

This month, Panasonic will begin making Li-ion batteries at its new Suminoe plant in Osaka, which features integrated production from electrodes to battery cells. Capacity is 300 million cells per year.

“The biggest obstacle facing Li-ion battery manufacturers is cost,” Samsung SDI's Jeon notes, citing the mid-1990s IT boom and the ensuing drop in costs estimated at more than 80%. "That's the direction we hope to move.”

Samsung SDI's joint venture with Robert Bosch GmbH, SB LiMotive Co. Ltd., will supply cells for BMW AG’s Megacity Vehicle EV next year and, by the end of 2012, expects to produce more than 600,000 kWh-worth of cells for hybrid and electric vehicles.

Geun-Chang Chung, general manager and principle research scientist in the Battery R&D Div. of Korean rival LG Chem Ltd., puts the current cost of Li-ion batteries at about $800/kWh. By 2020, Chung believes the cost can be lowered to $150/kWh and range extended from about 90 miles (145 km) at present to more than 155 miles (250 km), using a 440-lb. (200-kg) battery.

LG Chem, ranked third in global sales of small Li-ion batteries, is working on alternatives to carbon-based anodes, currently the only practical anode material, says Chung, who adds the company's main future interest is in silicon oxides, silicon alloys and nanopro-silicons.

LG Chem is close to commercializing a battery with a silicon-based anode for consumer electronics, Chung says.

Toshiyuki Nukuda, general manager of GS Yuasa Corp.’s R&D Center, reports development and testing of a prototype lithium-iron-phosphate battery module with more than 90% capacity remaining after 1,000 cycles.

“Regardless of arguments that electrical vehicles are greener, may help the environment and might extend petroleum reserves, consumers won’t buy them until prices come down to acceptable levels,” warns Hazunori Haraguchi, Mitsubishi Motors Corp. general manager-EV/Powertrain Component Research Dept.

This, he says, will take more than 10 years and require innovation to reduce the cost of Li-ion materials to less than half current levels, a 10-fold increase in the speed of production and battery recycling to extract and reuse rare metals.

Mitsubishi launched its i-MiEV electric car in July, and since then has sold an estimated 1,700. By 2030, the auto maker hopes to shrink battery costs to 1/10th current levels, achieve 550 Wh/kg, extend driving range to 500 miles (800 km) and increase sales significantly.

Tomohide Kazami, a senior consultant at Nomura Research Institute, expects fuel-economy requirements worldwide to drive hybrid demand to 8.5 million units by 2020, 10% of forecasted global vehicle sales. He estimates automotive battery sales will increase nearly four-fold by then from an estimated ¥250 billion ($2.7 billion) in 2009 to ¥950 billion ($10.3 billion), 54% of which will be for pure EVs and 46% for hybrids.

Looking into the future from a different angle, Hideo Okamoto, a senior research executive in Honda Motor Co. Ltd.’s fuel-cell program, says the auto maker plans to introduce a fuel-cell vehicle to the mass market around 2015.

He adds that cost and all performance features must be on a par with those of gasoline-powered vehicles, but that point will not be reached until “full-fledged mass production begins in 2025, after a hydrogen refueling infrastructure is in place.

The refueling infrastructure he refers to will be in Japan, although by then Honda hopes to be selling fuel-cell vehicles around the world.

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