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DETRIOT - A subsidiary of Korea's LG Chem Ltd. expects a still-emerging market for electric cars to broaden demand for its lithium-ion batteries and generate up to $US1 billion in sales over the next decade.
Troy, Michigan-based Compact Power Inc is one of two groups bidding for a contract to supply advanced battery packs to one of the most important development projects at General Motors Corp, the plug-in hybrid Chevy Volt.
GM is designing the highly anticipated Volt to run 65kms on battery power alone, reducing or even eliminating the need for drivers to fuel up an on-board gas-powered engine that can be used as a backup power source.
As GM races rival Toyota Motor Corp to offer the first such mass-market electric vehicle, LG Chem's Compact Power unit is ready to supply all of the lithium-ion battery cells needed for the planned 2010 production of the Volt, the company's chief executive said.
"There's a lot of momentum now behind the electrification of the vehicle," Prabhakar Patil, CEO of Compact Power, told Reuters in an interview. "If it succeeds, it's going to be a game-changer."
Environmental advocates have been pressing automakers to roll out "plug-in" hybrid vehicles that would be capable of running on electricity for short distances and recharging at a standard electric outlet.
A study released last week by the National Resources Defense Council and the Electric Power Research Institute said the widespread use of plug-ins has the potential to cut greenhouse gas emissions without overtaxing the power grid.
In addition to GM and Toyota, Ford Motor Co is also working on a plug-in vehicle it expects will be ready in the next five to 10 years, the automaker's chief executive said earlier this month.
Patil said he expected potential lithium-ion battery sales for LG Chem to the emerging transportation market of between $US500 million and $US1 billion over the next five to 10 years.
That would include sales to plug-in hybrid vehicles, like the GM Volt, commercial trucks used for stop-and-go city deliveries and two-wheelers, he said.
Patil said lithium-ion batteries -- long used in computer laptops, cell phones and digital cameras -- would be ready to power cars in the next several years.
Compact Power is one of two companies selected by GM to work on parallel battery development programmes for the Volt, in a high-profile announcement made at the automaker's shareholder meeting in June by CEO Rick Wagoner.
Under the programme, Compact Power will test a suitcase-sized lithium-ion battery pack it has designed to power the Volt, integrated several hundred individual paperback-sized battery cells supplied by its parent company LG Chem.
On a separate competitive track, a division of German auto supplier Continental AG is working to integrate batteries supplied by Massachusetts-based A123 Systems.
Patil said LG Chem's existing Korean battery plants could supply all of the cells GM will need and would set up a parts supply operation at a GM assembly plant as needed.
"I've told GM that production would not be a constraint," he said. "We have the ability to supply whatever volume they need, even if its 40,000 or 50,000 units."
Patil said Compact believes it has cracked one of the major technical problems for past generations of lithium-ion batteries: the risk of overheating or catching fire.
Compact plans to supply a liquid cooling system for the Volt battery pack and has a proprietary separator built into the pack intended to prevent overheating.
Patil also has an idea for marketing the batteries, which are likely to add to the up-front cost of the Volt. He is encouraging GM to lease the battery pack to consumers, reducing the initial price and encouraging recycling.
In addition, he said the Volt battery pack Compact has designed would have the potential to be used to send power back to a driver's house when parked and plugged-in.
Advocates say such "vehicle-to-grid" technology could reduce household electric costs by sending power back into the grid at peak demand times and provide back-up power in the event of bad weather, earthquakes or brownouts.
"The battery doesn't care which way the power is flowing," Patil said. "With our battery, you could take care of a few neighbors' houses too."
- REUTERS
