Energy Storage

John Petersen On Wednesday A123 Systems (AONE) announced the execution of a Non-binding Memorandum of Understanding with the Wanxiang Group that will, if successfully implemented, restore A123 to a sound financial footing. Since the basic deal terms are a good deal more complex than the reports one reads in the mainstream media, I think a drill down into the detail may be helpful for investors who want to understand what a restructured A123 will look like. The critical document for this analysis is the MOU included as Exhibit 99.2 to A123's recent report on Form 8-K. The...

John Petersen July has been a ghastly month for stockholders of A123 Systems (AONE) who've watched in horror as the stock price collapsed from $1.30 on July 5th to $0.49 at Friday's close. While there was unfavorable news of a director resignation yesterday, all the other news over the last month has been positive, at least at first blush. In my view the market activity was both predictable and directly attributable to recent toxic financing transactions that will have A123 printing stock faster than Ben Bernanke is printing dollars for the foreseeable future. I'd love to be able...

John Petersen Today is the fourth anniversary of my blog on investing in the energy storage and electric vehicle sectors. Over the last four years I've penned 275 Articles and 45 Instablogs on topics ranging from technical minutiae to broad macroeconomic trends. Since most of my work focuses on challenges and risks instead of lofty and optimistic goals, I'm often derided as a curmudgeon who doesn't understand the dream. Truth is I've been a guide in the Valley of Death for over thirty years and while I love panoramic scenery, I can't overlook the dangers of old mine...

by Debra Fiakas CFA   Diagram of a battery with a polymer separator. Lithium ion batteries make it possible to recharge your smart phone, camera and a multitude of other have-to-have-with-us-every­-moment devices.  Yet the average person knows very little of the inner workings of something so important to our daily lives.  One little item in a battery is a highly specialized membrane that fits neatly between opposing electrodes  -  the positive and negative poles that make an electrical charge.  This membrane manages the charge and discharge process. ...

John Petersen While I jumped the gun last week and published my third quarter outlook for the energy storage and vehicle electrification sectors early, it's worthwhile to take a look back and see how my tracking list of companies performed over the last quarter and examine the past to see what the tea leaves in the bottom of the cup portend for the coming quarter. So without further delay I'll present my price performance table for the second quarter that ended on Friday. Q-2 was a dreadful quarter for Maxwell Technologies (MXWL) and ZBB Energy...

by Debra Fiakas CFA In my last post Paper Power I outlined the attempt to develop a battery using carbon nanotubes and paper.   The materials seemed a bit unbelievable and it sent me into the history books to look at the battery.  In the mid-1700s Ben Franklin may have been the one who first coined the term battery to describe the capacitors had strung together for his experiments.  We all know about the scientist, turned politician.  What is less well known is that the ancients may have also attempted a battery-like instrument now called the “Baghdad Battery.” ...

Tom Konrad CFA  A123 Systems battery cell products (Source: A123) A123 Systems′ (NASD:AONE) announcement of a new battery technology able to operate at both extremely high and low temperatures has the  headline writers dreaming of cheaper electric cars. Electric cars may be dreamy, but they are just one application of the technology.  There are at least two more, with significant near term potential. 1. Is it really about electric vehicles (EVs)? Sure, it would be nice to be able to trim $600 of the price tag of a Tesla (NASD:TSLA) Model...

by Debra Fiakas CFA A comment left recently on one of my earlier articles mentioned Vendum Batteries, Inc. (VNDB:  OTC/BB), a developmental stage company working on battery power solutions.  When looking into Vendum I expected the usual flowery promises investors hear from every other battery developer  -  some new metal alloy for the electrodes, an alternative electrolyte, or maybe a creative form factor.    However, Vendum is not just any battery “wanna-be.” Ok, Vendum does have an alternative electrode, but it is not just a tweak of the usual metal mixes.  It also has an alternative form factor,...

Tom Konrad CFA Since Maxwell Technologies(NASD:MXWL) lowered guidance in their first quarter conference call at the end of April, the stock has fallen by 58%, and is currently trading at $6.65 compared to $15.80 before the earnings call. This fall has been considerably more dramatic than the lowering of analysts’ price targets.  These now stand at an average of $16.40, down about 20% from two months ago. Insiders have been actively buying the stock since it hit $10, and continue to do so.  Such active buying reflects conviction that the stock is trading well below fair value. With both analysts and...

John Petersen I usually write a quarterly recap to summarize what happened in the energy storage and vehicle electrification sectors, but Q2 was a tough enough period that I don't see much sense in dwelling on the bloodletting. So instead of focusing on the past, I'll offer a quick summary table with lots of red ink and turn my attention to Q3, which is shaping up as a time of bright opportunity for some companies and profound risk for others. I expect three companies in my tracking group to perform very well in Q3 –...

John Petersen Last week the stock of A123 Systems (AONE) soared 52% in a day after it announced that an enhanced chemistry would improve the cold and hot weather performance of its LiFePO4 batteries, reduce the need for ancillary temperature control systems and make them more competitive in a rapidly evolving micro-hybrid battery market that's dominated by lead-acid battery manufacturers like Johnson Controls (JCI) and Exide Technologies (XIDE). Investors seem to understand that micro-hybrids will generate several billion dollars of incremental annual revenue for battery manufacturers by 2015, but they haven't quite figured out who the winners will...

Tom Konrad CFA Exide's Sundancer Electric Car.  Photo by Frank Lodge, EPA.  Public Domain NOTE: Since this article was first published, Exide Technologies (NASD:XIDE) stock has risen 22% from $2.31 to $2.82, but much of that rise was due to media confusion about a positive Credit Suisse research report on the unrelated Indian company Exide Industries, Ltd.  Details here. Exide Technologies (NASD:XIDE) is shutting down its battery recycling plant in Frisco, Texas, and selling the surrounding 180...

Tom Konrad CFA Nightmare or business opportunity?  A Lishen-branded Ultracapacitor, with Maxwell electrode.  Photo credit: Wedbush On May 25,  research firm Wedbush released the green stock investor’s worst nightmare.  That is the specter of Chinese competition. Why are solar stocks down 75% (as measured by the Guggenhein Solar ETF, NYSE:TAN) since the start of 2011?  Chinese competition, leading to overcapacity and an industry where most companies are losing money, even on greatly increased volumes. Why are wind stocks down41% (as measured by the First Trust Global...

John Petersen Despite billions of dollars in private investments and public subsidies, lithium-ion battery technology has progressed at a snail's pace for years and battery developers have recently started to emphasize the importance of baby steps. For the first time in memory, anti-hype is becoming a dominant theme in stories about lithium-ion batteries. Examples from this month include: An interview with Wards Auto where the business manager of the DOE's Kentucky-Argonne Battery Manufacturing Research and Development Center explained that it takes about ten years to put a battery innovation into production and all of today's...

John Petersen Last week Johnson Controls (JCI) released the results of a nationwide survey that found that 97 percent of Americans are ready for micro-hybrids with stop-start idle elimination, the most sensible automotive innovation in years. A micro-hybrid turns the engine off to save fuel and eliminate exhaust emissions when it's stopped in traffic and automatically restarts the engine when necessary. While the overwhelmingly positive consumer response didn't surprise me, JCI's short-term growth forecast for micro-hybrids did. I've been writing about the rapidly evolving micro-hybrid space since 2008 and during that time the market penetration forecasts have...

Tom Konrad CFA Confusion reigned following Maxwell Technologies’ (NASD:MXWL) earnings call Thursday night.  What would be the impact of the company’s reduced sales growth guidance on the stocks value? The Bulls At below $10, I thought the stock was “a steal” and it would quickly rise by the end of the day. CEO David Schramm and three other insiders apparently agreed with me, since they bought 48,000 shares at prices between $9 and $10.20 early the following week.  Also on the bullish side was Needham & Co analyst Micheal Lew,...