Daimler knows something..

Daimler Investing $543M to Expand Battery Production – http://wp.me/p4kUAt-6zO0

Most of us are oblivious to this fact: the shift to EVs is well underway in Europe. EVs will also take hold in North America over the next few years, as EV battery prices continue to drop with the arrival of much cheaper and safer next gen Li-Polymer Batteries.

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As pictured above in the Smart EV, Daimler is committed to vertical integration of the supply chain for batteries, which is a rare strategy in the ICE “Internal Combustion Engine” auto industry these days. Vertical Integration of the supply chain for non-core competency components is considered uneconomical and non-competitive to spend R&D $$$ beyond the motor and electronics technology effort, even then, some of the Big Auto companies share the cost of such efforts for high volume vehicles.

Now in 2016, with Li-Ion batteries being central to EV price/performance, durability and safety, we see Big Auto Industry R&D and Capex spend behavior and strategy embrace the notion of Vertical Integration of the Battery Supply Chain as the early leaders like Tesla and Daimler (Smart) become “Battery Builders”, adding value with regeneration and charging control.

Daimler, which produces Mercedes and Smart EV automobiles, has had early success using Electrovaya’s leading Li-Polymer batteries in over 20,000 Smart Cars produced in the past few years.

electrovayalogo  Electrovaya Battery Cell

It’s interesting to note in the above article Daimler’s full commitment to vertical integration as a battery builder, not just for the EV but also to charge the EV.

Tesla may have created the market over night with their huge order log, however it will be early movers like GM and Mercedes, along with Toyota, Nissan and others which will successfully roll their installed base into EV Sales in big volume. Those who hesitate in this space, with multiple false starts and luke warm commitments, will resign themselves to thinner and thinner margins in the ICE market which will reach its Zenith in 2020, and thereafter decline in terms of real growth as EV rapid growth overtakes the ICE market in terms of annual growth.

The real challenge for battery cell manufacturers like Electrovaya moving forward is to win future business with Daimler and others in the face of  legacy Li-ion  battery price drops which will be sold at very tight margins, given the traditional manufacturing methods employed ie- expensive solvent tanks, extra staff and plant equipment safety measures and hugely expensive to buy and operate drying ovens, all of which Tesla employs via their battery cell supply relationship with Panasonic and soon Samsung.

Will the new Price/Performance Advantage of Li-Poly usher in and new era of Legacy Li-ion Battery Cell, Below Cost, Product Dumping?

What this means to EV Battery Pricing and Supply in the short and medium term, is we could also see a period of  legacy Li-on cell “product dumping” by the Japanese and Koreans, “a la” the memory chip  dumping (below cost)  strategy and fiasco employed by NEC and Fujitsu  which nearly sunk Intel in the early 1980s, a strategy we can probably expect from legacy Li-on cell manufacturers used to buy time as they switch over to vastly better performing Li-Poly technology which has the vastly cheaper manufacturing methods necessary to stay competitive in the potentially lucrative EV Auto and Charging  battery market segments.

For EVs, the EV manufacturer shift to battery builder and the switch to Li-Poly battery technology from Li-ion favouring a company like Electrovaya is only the beginning. On the horizon looms Zinc Air battery technology, which on average scales better and will grab business which is larger than the moving EV batteries  Li-Poly will dominate. Zinc Air will start to compete for large EV Charging Station business in 2018 and possibly also win large truck battery business as well, as we move into a third wave of EV battery change and innovation, a third wave which promises to push Li-Poly battery technology into a more focused role of main supply for EV moving batteries and small/home  EV charging stations by 2020.

Any way you shake it, the future is bright for the automobile as EV Charging functions will be distributed everywhere in the home, around the corner at the shopping mall or strip, at traditional gas pumping stations and at work, where next gen Li-Polymer batteries will be leading the way in this first wave of of high volume production EV battery innovation for the next 4 to 5 years.

At Starwind5, we will also play a small but important role in EV Charging Stations, where you will find us where ever the low mount, semi-turbulent wind blows in your neghbourhood, helping to top up Li-Poly battery based EV Charging Stations, also being charged with Solar, where the public grid is only used as a charging method of last resort.

Starwind5 data sheet logo

It’s all good!

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