Saturday, October 20, 2012

A 123 Kaput

For several years I have been blogging that A 123 Systems and their lithium ion battery would fail.  A 123 was an investor in Al Gore’s wonder car company, Fisker. Not only was it an investor, but it was also the battery supplier to the Fisker Flop.  

Steven Chu, our brilliant Secretary of Energy supported both A 123 and Fisker with our taxpayer money. He had this naïve belief that plug in battery cars would become a big player in the auto market and that A 123 as wells as Ener 1 would be able to compete with Asian manufacturers of lithium ion batteries in his dreamed-for massive market for electric cars.
Today A 123 joins Ener 1 in bankruptcy.
The lithium ion market has been brutal for US manufacturers. Several months back, Ener 1 went bust. They received Department of Energy (DOE) money. Then Valence Technology followed into bankruptcy (fortunately, they did not receive DOE money.  Now A 123 is bankrupt, and they did receive a pile of money from the DOE. Two other US players in the lithium ion battery business are also in trouble.  Boston Power just fired its US CEO, and the company is becoming almost fully Chinese. The Michigan factory of the Korean company, LG, that received DOE money has workers on furlough and has yet to provide a single US made battery to GM for its Chevy Volt.
Nissan has yet to assembly a single Leaf in Tennessee after having been given over a billion dollars by Secretary Chu. Ford has all but given up on plug-in cars and Toyota has basically decided that traditional hybrids are its best bet.
Why are all these lithium ion battery companies bankrupt and why are there so few plug-in electric cars on the road? The fools among us will again claim some sort of conspiracy to kill the electric car. The correct answer is that heavy, expensive, and weak batteries killed the electric car.
Secretary Chu, writing recently in the prestigious journal Nature, is quoted as saying: “The current production cost of a vehicle battery is estimated to be $650 per kilowatt hour of usable energy storage.”  (Nature, Vol 488, 16 August 2012, page 295).
Yes, even Dr. Chu now agrees that lithium ion batteries are very expensive to produce.  Three years back, the cost of these batteries was essentially the same--and in three more years, the batteries will still cost the same. It was ridiculous to believe that the cost of the batteries could be reduced--but as we know, the Obama administration believes “hope is a strategy.”
Tonight we have the second presidential debate, and tonight Gov. Mitt Romney should again bring up that Solyndra, Fisker, Tesla, and Ener 1 are failures that the administration bet its hopes and our money on--and lost. Romney can add a fifth example to his list, and that is A 123.
Perhaps the company should not have taken the name of a popular steak sauce, as lithium ion batteries are a hamburger that is an empty bun. 
In a previous Democrat presidential candidate debate, Vice President Mondale asked Senator Gary Hart: “where’s the beef?”  In tonight’s debate, we should have the line: “Where’s the money?”
Lindsay Leveen blogs at and has written a book on energy and sustainability entitled Hydrogen Hope or Hype?.

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