Era of the Muscle Car is over

dad

Snatching the car battery biz from Asia
Ener1 aims to fuel the car of the future and bring jobs to the Midwest. But the jury is still out on whether or not it can compete against its larger, more established rivals.


INDIANAPOLIS (CNNMoney.com) -- Thousands of jobs are riding on Ener1's efforts to build the best car battery in the world.

The start-up firm is the only U.S. company able to mass produce batteries on American soil for an automobile industry poised to make a monumental shift from gasoline to electric power.

Many say whoever controls the battery industry will control the auto industry and the thousands of jobs that go with it.

Ener1's newly opened production facility near Indianapolis could employ 3,000 workers. Like other renewable energy companies popping up in the Midwest, people are hoping Ener1 can replace some of the fast-disappearing auto and other manufacturing jobs.

Its lithium-ion battery technology is praised for being one of the best available. But Ener1 must compete for big contracts against larger, mostly Asian firms with much more experience in this field.

"Things will be difficult," said Brian Sponheimer, an analyst at Gabelli & Co., the research arm of GAMCO Investors. "There's a lot of optimism about their chemistry, but they haven't been tapped for a major program yet."

The race to develop a suitable electric car battery is exciting and Ener1 is certainly fighting hard to win.

Its employees have a desire to usher in a game-changing technology for not only the auto industry but the entire energy sector.

"This should be the dream of all battery engineers, to replace oil," said Naoki Ota, the firm's chief science officer.

The company's spotless Indianapolis production facility is buzzing with activity. Workers in white suits scurry about, trying to hide proprietary technology from our camera.

The company has applied for a $480 million government loan to expand its facility and hopefully allow it to land a big contract. If that happens, Ener1 says it will go on a hiring spree.

"We're talking about a serious growth in people," Ulrik Grape, head of the company's car battery division.

The company could then start making batteries on a large scale. Still, its lack of experience in manufacturing remains a problem.

Many of its competitors, including Japan's Panasonic and NEC, South Korea's LG, and a joint venture between U.S.-based Johnson Controls (JCI, Fortune 500) and the French company Saft, have been making batteries in high volumes for decades.

If Ford or General Motors are going to buy batteries for an electric car, they need confidence the company they're buying from can deliver.

"They need to illustrate their competitiveness," said Sponheimer. "They need to find someone that trusts them."

The company is working on it. They've been supplying the Norwegian firm Think Automotive with batteries for over a year, and recently announced a preliminary deal with upmarket California carmaker Fisker.

These are good starts, analysts say, but the company still needs to prove itself on a larger scale. The lack of experience may be one reason why GM decided to go with LG when choosing a battery supplier for its much-hyped Volt.

Manufacturing know-how aside, analysts are generally upbeat on the firm.

That Ener1 actually has a production facility in the United States gives it an immediate advantage, said Michael Lew, an analyst with Think Equity. Car batteries are heavy and expensive to ship, and it can take up to two years to build a new facility in the United States.

Lewis also noted that while Ener1 competitors may have experience making other types of batteries, the lithium ion field for cars is still a new game for everyone.

"They have as good a chance as anyone else," said Lew, but he also noted the company's ability to perfect large-scale manufacturing as its major challenge.

On the technology side, Ener1 is thought to have some of the best ideas going.

The chemicals it uses in coating the lithium strips that make up the battery are said to be top-notch. Unlike some of its competitors, the chemicals allow the company to produce different types of batteries for different types of vehicles. That's a competitive advantage, said Banc of America Securities-Merrill Lynch alternative energy analyst Steven Milunovich, who has a buy rating on the stock.

And the design of the battery itself, which allows several cells to be stacked on one another reducing the chance it will catch on fire, is also praised.

The company's technical prowess is how Charles Gassenheimer, the company's chief executive, responds to questions about whether it can compete in this global battery race.

"We are the first people to provide this breakthrough in terms of the flat, stacked design and work with revolutionary new chemistries," Gassenheimer recently told Fortune, CNNMoney's sister publication. "We may have as much as a two year advantage over our competition."

Another good sign for the firm: After doing much research into the company's business plan, the government is still considering giving it the $480 million loan.

"If they get the money, the government thinks it has a fighting chance," said Milunovich.

Ener1 may be the only U.S. company making batteries in America now, but they probably won't be for long. The privately held A123 Systems, which already makes batteries in Asia, may have a plant stateside in the next few years.

And smaller firms like Maxwell (MXWL), Valence (VLNC) or the scores of other entrepreneurs aspiring to make a cheap, light, fast-charging, long-lasting car batteries will likely enter the fray with Ener1.

It remains to be seen though, if any of them can stand up to the competition from Asian giants.


http://money.cnn.com/2009/06/15/news...ion=2009061506

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Not in America anyway.

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benfiji

No offense to you or anyone else, but in regards to #4, anyone who believes this is simply uneducated or easily influenced by the oil companies million dollar marketing efforts to say it is BS.

fly yellow

I have never seen one piece of marketing by any oil or energy company claiming that global warming is BS. I have read and listened to many scientists that simply do not believe that global warming exists, and if it does then it is more than likely due to natural cyclical changes in the planet and not carbon emissions. I have also heard interviews with scientists claiming that they are strong armed into perpetuating this "global warming" phenomenom in order to receive any government funding for other research projects. The earth has already survived one ice age and that was millions of years before any soccer mom decided to drive an SUV. Man didn't cause that one. Maybe dinosaurs were really gassy.

I don't want to turn this into a political debate, but please don't try to say that I am uneducated or influenced by marketing that just doesn't exist. If anything oil companies will make more from this global warming scare. Gas prices need to skyrocket for the whole thing to work, and not everything can be battery operated, and even if it was we would need some kind of carbon fuel to charge the batteries. If anything the millions in marketing is being spent by those that are propogating global warming, and perhaps it is you who is so easily influenced.

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FricFrac

Agreed. Esp about being uneducated about such things. I personally believe that there is far too little data in our hundredish years of data to make assumptions about the last 6,000 or 6 trillion billion years (another debate) has any correlation between global warming and natural cycles..... regardless most believe that there is global warming which I personally believe is a good thing because it makes the mindless a little more mindful of the environment. ...and like you said not to make it a political debat but to infer someone is uneducated.... that's just wrong...

Regardless - long live the Z!

L3mming01

imo we simply take this global warming thing too far. It's there of course it is, because if it wasn't how are we not still in that ice age i've heard of? We might be speeding it up a bit, but the world is going to heat and cool as time goes. If you don't believe me then explain how there has been multiple ice ages and periods in between them when the earth was much WARMER.

Srenity

The only propaganda involved in the global warming debate is from the side that push it. The scientific community get grant money from it, the liberals get that warm and fuzzy feeling that they crave so much, and dirty politicians get money from it by selling carbon credits ala Al Gore. Is the world heating up Yes, is it caused by green house gasses partially, does the amount of green house gasses produced by people even remotely compare to the natural green house gasses created by nature NO! The oh so green rain forrest, and ocean, and animals, ect create more green houses gasses than we as Humans even think about creating.

jakoye

I would say that it is you who do not understand the scientific method. Global warming is a scientific theory, not a proven, scientific fact. It is certainly a theory that has been adopted by a majority of scientists and perhaps even by a majority of the public, but popularity has nothing to do with scientific truth.

We should be skeptical of anyone who claims that they "know" human activity is causing global warming. Many may suspect it, but no one knows it.

Even if you are one of those who believes that humans are causing global warming, the question then becomes what, if anything, is to be done about it. To bring this back to the Z, what we do will directly affect the availability and the affordability of sports cars such as the Z (and perhaps even the performance). With some of the current proposals that threaten to raise the price of oil, I could certainly see the Z becoming less of an everyman's sports car and, more like the Porsche, a car out of reach to the majority of the car-buying public.

I, for one, think that would be a crying shame.

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benfiji

I agree Global Warming is a theory not a fact...

Most people when they feel their home town is having a cool summer, etc. think global warming is a myth but 2009 temparatures recorded as of March were the 8th HIGHEST ever recorded. However when talking about global warming earth temperatures are measured in 30 year averages, not single year.

Earth's temperature 8th-warmest on record so far in 2009 - USATODAY.com

As far as the scientist who claim it doesn't exist, have you have looked to see who is paying the? Yes, it is the oil companies! Oil companies want us to purchase as much oil as possible to increase there margins. All the 'marketing efforts' since many have not seen them include paying these scientists and all the commericials saying how they are 'green' and doing research for renewable energy.

Oil Companies and Greenwashing - exxon bp shell chevron oil


Lastly, sorry all for turning this into a political thread. I do think sports cars will always be around a long as people keep buying them. They may have different technologies than today, but as consumers we can still dictate what the automotive industry creates.

SiXK

yeah, OK. since I am neither easily influenced by oil companies nor uneducated I am just going to let this one slide. its called an opinion. people besides you can have them. deal with it.

IMO Global warming is BS. Its a myth. Unfortunately Al Gore is real.

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bluzman

Off topic but...I get a major dose of nostalgia when I think of what "was" vs. what "is" regarding muscle cars. I had the great good fortune to be able to drive a new dark blue, white convertible topped, Hurst floor shift equipped, 389 CID GTO (the first muscle car, some may argue) for an extended period. It belonged to a buddy who was a midshipman at the Naval Academy who left it with my roommates and me in Annapolis while he was on cruise before graduation. It was 1965, I was 21, unencumbered and invincible, and god how I loved to take that car on the back roads in southern Maryland and let it all hang out. The experience hooked me forever. Recently I happened to see several GTOs of that vintage being sold for staggering amounts at a Mecum auction. It was no surprise that the buyers looked like guys from my generation. Ok, back on topic.

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lovethe370z

Haha, I live on those roads. I love driving them.

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OldGuy

Good days inhabited by a good generation of cars and guys and girls. I know---I was 18 in 1965.

fly yellow

The government has too much authority over the car industry now, and there are too many people that have given a ton of money to politicians to make sure we all buy into this unproven global warming deal.

Sports cars will still exist, but they will be harder to get in the states. Someone mentioned the CTS-V. It is an amazing and beautiful car. It also carries a $7,000 gas guzzler tax. That isn't a lot of money for a Ferrari or a Lambo, but for a $70,000 car it can be. The United States will no longer be the primary target market for car makers. Countries like China and India are embracing capitalism while we are moving away from it. Those countries have far more population than we do and they sure aren't concerned about global warming. China is buying up oil reserves at a record pace.

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Maxima09

I don't see it as 'over' but perhaps limited in terms of how many power V8s are out there to choose from.