A123 Delivers on Nanotechnology Promise
By Bill Moore
A123 Systems, based in Watertown, Massachusetts, has been operating under the radar for the last four-and-a-half years, quietly raising some $62 million in capital, perfecting its chemistry, and building factories in Asia to supply an advanced, nanotechnology-based lithium-ion battery to electric power tool giant, Black & Decker.
Within the next month or so those batteries will begin appearing in Dewalt portable power tools at tool distributors and retailers near you and when they do, it likely will mark a major shift in the direction of not only portable tools and personal electronics but also the automotive industry.
The secret inside A123's battery is a nanophosphate material discovered by M.I.T. professor Yet-Ming Chiang. Thousands of times smaller than the micron-sized materials used in first generation lithium-ion batteries, A123's chemistry enables it to have twice the power density of competitor products, said Vice President of Business Development, Ric Fulop.
"In batteries for EVs or hybrids, you want very quick kinetics. You want to discharge power and regen power really quickly. You want to be able to have very good [material] packing densities… pack as much material in a tight space as you can, so we put a lot of engineering around those things to deliver performance that can really change the way people design products."
Also, unlike other lithium-ion battery hopefuls, A123 chose to not make any public announcements until it actually began shipping commercial product, which it is now.
Their business plan also has set them apart from some of their competitors. Instead of licensing their technology or supplying materials for others to use make nano-based batteries, A123 decided early on to actually manufacture their own components and batteries.
"We make our own active materials, unlike other battery makers who buy whatever is on the market," Fulop explained. The company now has two wholly-owned factories in China, plus operations in Korea and Taiwan. China BAK also provides additional manufacturing capacity in China.
The first commercial product is a 26650-type cell, but the company also plans to introduce others in the future, including larger format cells "targeted at the automotive business." Those batteries are still in research and development, however.
The 26650 cell is similar in size to a standard C-type alkaline. Because of its dense chemistry, it is rated at being able to accept a power pulse of 100-times its rated capacity, compared to other "advanced" batteries which are rated at only 20-times capacity. It is specifically engineered as a power battery able to supply short burst of electrical energy, as opposed to an energy battery designed for longer, slower power drains found in an electric car. This makes it ideal for use in hybrid-electric cars, Fulop said, as well as other applications including lawn care and garden equipment.
He also intimated that more announcements will be forthcoming about other companies who have decided to use their battery. Early investors in the company include Sequoia Capital, Motorola and Qualcomm. Most recently, General Electric also became an investor.
I asked Fulop how difficult it would be to switch from making batteries for power tools to making them for hybrid cars.
"It is not a trivial matter," he replied. He estimated that given the company's current manufacturing capacity, it could produce about 45-50,000 packs for a car like the Prius annually.
"Automotive is a business that takes a long time to develop, a long sales cycle of years, multiple years to design a car around your lithium technology, and it also requires very high levels of quality."
Because A123 chose to focus on the power tool market first, Fulop believes this will enable it to develop the necessary high-quality manufacturing and quality control skills necessary to eventually produce lithium-ion batteries that will meet the exacting standards of carmakers.
"We are focused on commercial markets that are very high volume, and once automotive is ready for our technology, we can enter it; we will have already have economies of scale, statistical process control, and all those things that you need to be qualified by an automaker.
"Our business model allows us to cross a chasm because we have a nice, profitable, high-volume business that allows us to get economies of scale, and then enter the automotive market where volumes are even larger."
Fulop doesn't see any issues ramping up production at some future date to meet carmaker demands. He thinks it would take automakers longer to actually design the car around his battery, then to expand the company's manufacturing capacity. More daunting is the engineering necessary to meet carmaker cost and calendar life targets, he admitted.
"Making batteries for hybrid electric vehicles for the cost targets and calendar life targets are clearly not trivial exercises. There are real issues in terms of engineering scale up, but I think we have a chemistry that is quite robust and we are able to make batteries that are larger size."
He thinks it feasibly to make a larger battery specifically for use in hybrids, though "we would have to put in place a modification of the production line…" He estimated it would take 12-to-18 months to come up with a larger, customized battery designed specifically for use in a hybrid-electric car.
Although the technology behind the A123 battery was developed at M.I.T., like many other manufacturers, A123 has chosen to manufacture its products in Asia. Fulop explained that in the new product "game" it's not enough to have great technology, you must also have high quality mass production capabilities at competitive prices. He doesn't rule out setting up American production plants some day, especially if large carmaker orders require it, but for now, to be competitive with other Asian rivals, they have to rely on Asia's production capabilities.
Because of its nanophosphate chemistry, A123 asserts that it's battery is the first "intrinsically safe" lithium-ion cell on the market.
"There is no risk for thermal runaway," Fulop claimed, which has been a concern with older lithium chemistries. "This is the first high-power lithium chemistry to offer that benefit."
He said that the combustive-potential of early lithium-ion batteries was like building a bomb, although a better analogy might be setting off a volcano because the materials in the battery would self-ignite and melt at the temperature of molten lava. Not a good thing to happen to your laptop or cellphone, especially on airplane at 37,000 feet.
Thermal runaway has hindered carmaker adoption of the chemistry, favoring instead more stable NiMH batteries, which are what currently help power all of today's modern hybrids.
Assuming A123 -- and other lithium-ion manufacturers like Valence -- have tamed the thermal beast, how does the Watertown, Massachusett company's battery compare to the competition?
Fulop contends that if you place their battery next to SAFT's lithium-ion cell at the same power rating, A123's battery has twice the energy density. In addition, to also being "intrinsically safe", it also offers "twice the life." And it's also already in high production and it's a "green" chemistry without any cobalt, a rare but toxic element.
On the subject of sustainability and recycle-ability, Fulop noted that A123 is one of the first truly environmentally safe batteries. Both its anode and cathodes can be safely deposited in landfills without environmental consequences. He also pointed out that because cobalt is such a rare, strategic metal, that there simply isn't enough of it in the world to put it in batteries for electric-drive vehicles.
EV World asked him how he thinks federal government research dollars like those proposed in the recent State of the Union address should be spent. He replied that he believes the US Advanced Battery Consortium is probably the best organized entity of its type and has a world-class program for developing better automotive battery technology.
"Obviously, the more funding they receive, the faster this is going to happen."
He also mentioned that it was a grant from the government that got A123 Systems going in the beginning.
Clearly, that now appears to be money well spent. He pointed out that if you replaced the current NiMH battery found in a modern Toyota Prius with A123's battery, you could cut the weight of the battery a dramatic 80 percent.
And the race isn't over yet. Fulop says there is still room for improvement and steady advancement in the company's products. But don't expect to call or write them to get batteries for your pet EV project. Since the company made its announcement last year, it's been swamped with inquiries, which it has had to largely ignore. Instead, A123 is focusing exclusively on working with large original manufacturers like Black & Decker; and Fulop hinted there are other OEM announcements coming soon. He hopes that at some point, the company can get far enough ahead to "seed" some new product development with its batteries, but for now their entire first year's production is largely sold out.
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