Elescalade LiftOff and the A123 LiFePo4 Cell Puzzle

It's almost peaceful at EVTV. The EleCobra project is done and gone and by all accounts from Granby quite a hit points west and south.

This frees up room and time and we are at the end part of November when it is appropriate to stop and give thanks for our really crummy miserable weather of this time of year. Steel grey skies, spitting half-hearted precipitation and chill damp temperatures in an uncertain wind.

It makes the man cave kind of cozy with our enormous gas heaters filling the shop with the homey smell of my money going up in flames of natural gas.

As you know from last week's show, we have taken on a small project for Lee Morehead with the Swallow. We're finding a spider under each rock but have the chassis bare and on the lift and Brain is in more familiar territory with VW brakes and clutches and so forth. We're ordering a lot of little inexpensive piece parts and should receive both batteries and boxes this week.

We've also put Elescalade on the lift and we are carefully beginning the tear down process We had sent Elescalade to Slingblade for a hydroboost ectomy. Many GM vehicles have diesel motors of course and so they have developed a power brake and power steering system based on a hydraulic pump rather than vacuum. We already had a pump for the power steering on the Elescalade but for some reason they had a vacuum brake system on the vehicle. We have never done a car with the noisy intermittent vacuum pump and reservoir and I frankly do not want Elescalade to be the first. So we had Slingblade convert Elescalade to the hydroboost brake system.

This was a bit more involved than I thought. I had been told all we had to do was swap out the hydroboost unit. As it turns out there is a SEPARATE master cylinder and reservoir that also has to be replaced and in fact, the system uses a different pump with more fittings for the hydroboost. I have actually seen conversion photos where they use the same pump and simply hose it up differently. But there might be some advantage to stock hoses from GM. As the pump will be placed on the front of our 34 and 3/4 inch long motor assembly anyway, we might have to redo the hoses. But we START the conversion with a power steering and brake system that works off a quiet pump we can run with the electric drive motors and it should all work just fine.

The system did provide a couple of vacuum sensor inputs to the engine control unit. Hopefully, our HP Tuners system will let us turn off that fault code permanently.

The other area where I've taken some time to examine and burned down a few of the cells of course has been the A123 MD-H1 20Ah prismatic cell. This is kind of an interesting area, but fraught with new challenges I'm afraid.

Essentially ALL the OEM's have opted for these small form factor soft pouch cells with tabs OR in the case of Tesla, an even more challenging small cylinder of the 26550 variety and in vast numerical quantity. The implications of all this keeps me awake nights.

For one thing, the residual value of electric cars has historically been, and most likely will be, very different from ICE cars and not in a positive sense. As most of the components SHOULD be more durable than the ICE version, the cars should last longer and so depreciate more slowly, than ICE vehicles.

That said, the history is that they become near valueless on delivery. This is because most of the cars are orphans, with either bankrupt parents or an abandoned product line. In any event orphans.

But behind every electric car lies a battery and too soon and too often a dead battery. And while the American public is not acculturated at this point to living with an electric car, we ALL know ALL ABOUT batteries. From our first penlight flashlight to our latest cellphone or laptop, we have all paid the price for portability, over and over and over.

If you warranty the battery of a car for 8 years and 100,000 miles, then you have defined the life of the battery, all laws of physics thereafter held in abeyance. In ADDITION to the normal depreciation of the average car, you are also down whatever fraction of that 8 years and 100,000 miles you have used. And the ASSUMPTION we can make in looking for a total pack replacement after 8 years is that you will be screwed into the WALL by whomever sells it to you and TREBLE screwed if it is a proprietary pack.

Long term, I think this is the OEM equivalent of pouring gasoline over their own heads and lighting a BIC. By insisting on a proprietary cell module design and setting a warranty period, they pretty much PROMISE plummeting values the minute the car leaves the showroom floor. How does THIS work for anyone?

In addition to the usual software knots in the car's computers to make sure it is a Mr. Goodwrench approved battery pack, Tesla has actually gone to the trouble of PATENTING a totally nonsense module connector SHAPE. You can't really patent shapes. But by patenting the CONNECTOR for the individual modules, they pretty much assure themselves a proprietary pack forever. Third parties MIGHT be able to rebuild these modules, but no new ones could be made by third parties. The shape of the connector is nonsense. It has no merit AS a connector. It just IS a connector with a unique and unusual shape and so patentable. Someone at Tesla I'm sure is celebrating their brilliance on this one. Someone at Tesla should actually be promoted to "street status" and provided a final paycheck over it to my way of thinking. Long term this will haunt them for generations.

In any event, A123 is a battery maker and a MOST peculiar case. In any new and disruptive field there is an urge, certainly by the more advanced players to sort the world out into "good" customers and "bad" customers and the 80/20 rule being what it is, we would all like to focus on the 20. It almost never works that way, and won't here again. But particularly among the LEAST advanced, it is a mantra. I just had an e-mail conversation with a new electric drive company that is just absolutely FLUSHED with the glow of success from a SEMA showing that caused them a LOT of attention for an exciting NEW product that at this point I think we can rest assured does not exist and never will exist, and he's already sharpening his pen over which "well funded OEM effort" they will deign speak with. We can assume UNOBTAINIUM forever there.

A123 has a somewhat longer and more gorey history. But it's actually quite interesting. The company was formed by three people and a scantily garbed fish in 2001. A professor, Yet-Ming Chiang of MIT's Department of Materials Science and Engineering, an engineer, Bart Riley of American Superconductor, and a serial entrepreneur, Ric Fulop, met for dinner at the Naked Fish restaurant in July 2001. Professor Chiang had been working with a novel set of materials that appeared to self assemble into a very powerful battery.

The three agreed to launch an effort and by December, North Bridge Venture partners had turned their head and coughed $8.3 million. This further inspired Motorola and Qualcomm to join the party at $4 million and the company was off and running.

Along the way, Professor Chiang had also applied for a DOE Small Business Innovations Research grant and was awarded $100,000 for development of a nano phosphate cathode material. The group licensed both the self organizing battery and the nano phosphate chemistry from MIT on an exclusive basis.

As it turns out, the self assembling battery worked. But the batteries lasted a few dozen cycles and died. This was not promising. But the nanophophate material licensed as an afterthought showed unusually high power density. Professor Chiang published a paper on this and it actually caused quite a stir in the battery industry on a wide front.

So the company repurposed for the power cell. Batteries are generally described in two ways of interest - energy density and power density. We tend to be interested in energy density. Energy density is how much total power can be contained in a given weight and volume - the storage capacity if you will. More capacity, more range.

Power density is quite different. Power density has to do with how much INSTANTANEOUS power output can be derived from a given weight and volume. We talk of this as momentary or pulse power and it is often 5C or 10C - meaning 5x or 10x the amp hour capacity. A 100Ah cell that can put out 500 amps momentarily has a 5C power output rating.

This is the central tradeoff in Lithium batteries. More active material on the cathode gives you greater ENERGY density, but it slows the diffusion of lithium ions into and out of the cathode structure, severely limiting the power delivery capability. Thinner cathode materials provide more instantaneous power, but energy density suffers.

Chiang's nanophosphate cathode material had good energy density, but VERY high power densities of up to 100C. So a 2 Ah cell could momentarily put out 200A. Of course, it couldn't do that very long as it ran out of capacity very quickly at 100C. 60/200= about 18 seconds.

And where would this be most useful? Power tools like drills and screwdrivers tend to need a lot of power for a few seconds, after which they are often lain on the bench for minutes. A123 showed some cells to Black and Decker and in 2005 the company contracted for some cylindrical cells for their DeWalt Power Tool line. Later they added the main Black and Decker line to the mix as well. As an interesting aside, Black and Decker/Dewalt hold a very interesting patent for BOTTOM BALANCING lithium ion cells.

This gave A123 instant gravitas in the battery world and they were off and running. They eventually raised $131 million in venture capital BEFORE a very successful Initial Public OFfering.

In 2008, they did have a little hiccup. A company in Boulder Colorado had converted a Toyota Prius to an extended range electric by replacing the Prius battery pack with a pack designed by Davide Andrea. The company was Hybrids Plus with Carl Lawrence CEO at the time.

The car had been developed for a utility company and had burst into flames and burned to the ground while driving on the Internstate highway system. The battery pack was removed and sent to A123's headquarters and a third party company came in to do the forensics and determine the cause of the fire.
It was eventually laid off as an improper hardware assembly of a fuse and cable in the report. But it caused A123 to issue an entire document on proper module design in stellar cover your ass fashion.

The full A123firereport is here.

Davide Andrea went on to design the Elithion Battery Management System and wrote a book that could be titled "Jack is Wrong and you should send me money for my BMS and here is why."

A123 subsequently refused to sell cells to any conversion shops, one off car builders, custom cars, or hobbyist enthusiast and actually post a derogatory and very nearly actionable description of this on their web site. We questioned them about it and received an answer from the highest levels of management that they believe the incident contributed to their loss of the Chevy Volt contract to LGChem.

Which IS indeed interesting in a way. LG Chem provides GM with an intrinsically LESS safe Lithium Manganese Oxide Spinel cell that the A123 LiFePo4 cell just beats in all directions including life cycle and safety. IN any event, A123 just won't sell us or any conversion guys batteries.

But snubbed by Chevrolet, and worse, publicly noted as the LOSER in the OEM battle, A123 was desperate to get into electric vehicles. They invested $30 million dollars in Fisker Automotive, and would you believe Fisker found A123 cells to be the PERFECT answer to their battery needs. And so A123 announced they DID have an OEM car maker contract and others should look at their cells as well.

Fisker had promised a very sexy hybrid car. But like many startups, delays were the rule and the car didn't come out as scheduled. Worse, when they did finally begin shipping a few, it appeared that their all electric range had shrunk to 50 miles and in fact the EPA declared it to be 32 miles - LESS than the Chevy Volt. To suffer insult on indignity, they also found it got 20 MPG on the hybrid engine - worse than almost any economy car. So it isn't really very green. It isn't really very electric. And it IS very expensive - originally $95K but now north of $100K. And so beyond a few celebrity movie stars it has placed the cars with, there are no sales of Fiskers. They are currently trying to recast it as some sort of greenish tinted Bentley but there is really no place for this car to go.

So A123 has been working furiously to ramp up production to support Fisker, and now Fisker doesn't need very many batteries. SINCE we shot this video, A123 has announced layoffs of 125 workers in Michigan of about900 who were working there on the modules. In 2009, when receiving U.S. tax dollars of $259 million and state of Michigan grants and local tax abatements, they had promised 5000 jobs.

This isn't going well. And worse, it comes on the heals of the Enerdel meltdown. Also publicly traded, Enerdel had invested $59 million in THINKCITY, who miraculously found their ENER1 to be JUST THE TICKET for the THink car. Think didn't make the cut and has since gone bankrupt and is now apparently the property of a Russian entrepreneur. ENERdel was delisted from the NASDAQ last month.

We would predict Fisker is months away from also turning turtle on A123.

A123 has in the meantime been selected for the Chevrolet Spark program. But this is likely a year or two out in time for actual production - nothing in the next few quarters.

Which is a bit confusing. The company saves about $6.25 million per year by laying off this 125 people - assuming they are costing $50K per year each. They were obviously already trained to make the battery modules. The company has the $259 million in federal money. Why are they risking public ire and parody to save the $6.25 million? I would have probably had them garden, and work with the plants around the building or what not, sit around and train each other instead of cutting them loose. They promise to "call them back later." They most likely will be in another state later.

In any event, it appears the actual A123 A20MD-H1 prismatic 20Ah pouch cell is manufactured in Korea. The company also does have factories in CHina. And these cells are normally printed MADE IN THE USA incredibly, even though they are NOT made in the USA at all.

We originally bought 16 of these from a company called OSN Power at $50 each. They indicated they could do these in 500 quantity at $46.

We kind of posted a query on Alibaba that would alert us to these cells if they came up. And subsequently we heard from Richard Zhang at Shenzhen VictPower Technology Company They would sell A123 cells for $30 each in sample quantities and take PayPal for payment. AND in quantity 600 they quoted us $23.80 per cell.

$23.80 per cell for 20 Ah cells starts to look competitive. And Like OSNPower, Victpower is just a trading company. They sell birthday candles, flowers, tennis shoes, whatever you want to buy is kind of what they were wanting to sell. So we still haven't tracked down the SOURCE of these A123 cells, or found the real price for that matter. But it appears A123 is either backdooring production output to Asia, or they have lost control of a Korean factory that is simply selling the cells A123 isn't taking, anywhere they can.

It's an interesting problem. ANd an interesting opportunity.

But it goes right back to the original problem that A123 and Hybrids PLus faced, how do you package these pouch cells into a module that is safe and effective at driving a car. We would propose just buying the modules from A123, but it appears they would rather LAY OFF 125 workers than sell us the modules, and we have to guess if they DID, it would be at a ridiculous price to make us go away. So no rational world to deal with here.

So we think a module to use the A123 pouch cell might have life.

And packaging is probably my WORST area of non talent. In this video, I comically and ineptly describe how to make an A123 bomb for your car.

What I would LIKE to do is sponsor some sort of a design contest - something a LOT less work than last year's battery contest, where we get YOU guys to design the thing rather than ME designing something and all of you elegantly and with such charm e-mailing me about how I SHOULD have done it.

Perhaps we'll SELL you the cells at $50 each - 20 cells. You then send us the 20 cells in a module. Winning module gets something - 500 cells or something. ALL the cells that entered maybe. And we just buy module hardware from the winner. And of course encourage our viewers to do so as well. Ideas on how to structure this design contest are welcome.

Jack Rickard