The following report details plans for producing a lithium-ion power train by Continental, the large European auto parts company:

Continental plans lithium-ion cell production

• Reuters
• , Wednesday July 30 2008

By Arno Schuetze and Christiaan Hetzner

FRANKFURT, July 30 (Reuters) - German car parts group Continental aims to expand its lithium-ion battery business in the coming years by settling on a long-term cell supplier and acquiring production capacity for cells, a senior executive told Reuters.

Soaring fuel prices have spurred many carmakers struggling to keep up with more efficient combustion engines to speed up development of cars running in part or fully on electrical energy.

Among the first to recognise the importance of this emerging technology, Continental will supply the lithium-ion batteries for next year’s “mild” hybrids — ones that still need power from conventional engines — from Mercedes-Benz and BMW.

Its expertise in reducing exhaust emissions with next-generation battery technology for hybrids is a key reason why rival Schaeffler is bidding for the company.

“Hybrids could become a billion-euro business for Conti in five years time perhaps,” said Karl-Thomas Neumann, head of powertrain and chassis operations at the world’s fourth-largest automotive supplier.

For the moment, Continental is keeping its options open by partnering with various cell suppliers such as A123 and Johnson Controls-SAFT on different car projects due to the rapid advances in cell technology, but down the line it looks to narrow its focus.

“At some point we will likely decide on a partner,” Neumann said in an interview, adding that either an acquisition or — possibly more promising — a partnership would be necessary for cell production capacity.

Continental’s battery packs cool and electronically manage the cells, looking at diverse aspects such as flow of current, the state of charge and their lifecycle.

DISPOSAL

Most often carmakers stipulate which cell provider they want, such as A123 in the case of GM’s Volt, due in part to the performance requirements.

Early last month, Continental took an initial step towards expanding its share of the value chain by purchasing a 16 percent stake in former Sony unit Enax, which specialises in cells for lithium-ion batteries but can only supply prototypes in small series.

Enax cells use a non-flammable ceramic membrane developed by Evonik unit Degussa that separates the anode and cathode, helping to prevent a short circuit that could escalate into a possible danger for passengers.

The main problem for widespread acceptance of lithium-ion batteries, Neumann said, was the high price.

But he believes the technology could trace a similar development once charted by antilock brakes that cost hundreds of euros before eventually becoming standard feature for cars.

“The learning process and economies of scale will certainly allow us to considerably reduce the cost of manufacturing the batteries,” Neumann said.

When asked about plans to sell the powertrain division’s fuel supply business, Neumann said he expected a disposal this year. (Editing by Paul Bolding)

Tags: peak oil energy investments

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