Batteries

I'm a longtime fan of electric vehicles (EVs) as well as Plug in Hybrid Electric Vehicles (PHEVs), in all their variations.  When it comes to investing, I think the best way to invest  in on the growth of electric transportation is batteries, partly because pure play battery companies exist (although my top battery pick, Electro Energy (EEEID) , has been one of my poorest performers, in a classic case of a cheaply priced company getting even cheaper. Given these interests, I was speaking to the President of Porous Power Technologies, a private battery components firm a couple weeks ago...

John Petersen On September 26, 2011, Bernstein Research and Ricardo plc published a 450 page analytical report titled, "Global Autos: Don't Believe the Hype – Analyzing the Costs & Potential of Fuel-Efficient Technology," which combines best in class securities research from Bernstein with the deep automotive expertise of Ricardo, a global leader in engineering, product innovation and strategic consulting. The result is the most comprehensive, detailed and eminently reasonable forecast of short-, medium- and long-term trends in advanced automotive powertrain technology that I've had the pleasure to read. It's devoid of axe grinding or cheer-leading and...

John Petersen One of the most seductive and dangerous stock market myths is the immensely popular but demonstrably false notion that the rapid cost reductions and performance gains we enjoyed during the information and communications technology revolution will be repeated in the age of cleantech. The persistence of the mythology is astonishing when you consider that the entire history of alternative energy proves that cost reductions and performance gains are extraordinary events, rather than common occurrences. Investors who buy into economies of scale mythology without carefully considering the fundamental differences are in for a world of disillusionment and...

John Petersen On March 4, 2011 the Pacific Northwest National Laboratory published a comprehensive review of "Electrochemical Energy Storage Technologies for Green Grid" that is a must-read for serious investors who want to understand the technical and economic intricacies of the energy storage sector. It explains why storage is a key enabling technology for wind and solar power, the smart grid, efficient transportation and a legion of high-technology manufacturing and service enterprises that can't survive without reliable power. It also explains why energy storage is an investment mega-trend that will endure for decades. While I normally try to...

John Petersen In 1883 Thomas Edison said, "The storage battery is one of those peculiar things which appeals to the imagination, and no more perfect thing could be desired by stock swindlers than that very selfsame thing. ... Just as soon as a man gets working on the secondary battery it brings out his latent capacity for lying." The problem isn't so much the batteries, which haven't improved all that much over the last century. Instead, the problem lies in the fertile imaginations of scientists, engineers, politicians, ideologues, analysts and investors who focus on new energy...

John Petersen Since I'm frequently chastised for holding old fashioned views when it comes to vehicle electrification, I'll start this article by quoting one of the oldest known versions of a common English proverb, "A byrd in hand - is worth ten flye at large." While this theme is not always clear in my writing, it's never far from my thoughts. In fact it's the foundation of my conviction that manufacturers of cheap energy storage products are better investments than developers of cool energy storage products and batteries are great at minimizing waste but miserable at replacing fuel...

John Petersen Many of my regular readers know I'm a working securities lawyer, a humble scrivener who writes reams of deathless prose that private companies use to raise money from investors, and public companies file with the SEC in the form of registration and proxy statements, and annual, quarterly and current reports. I've spent a couple years as an oil company executive and a few more as board chairman of an advanced lead-acid battery technology developer. The balance of my 30-year career has been devoted to natural resource and technology-based businesses that needed somebody elses' money to pursue...

John Petersen I have a new favorite word AGGREGATION! At the risk of sounding like a reporter, I’m going to summarize a pre-holiday news story you might have missed but need to know about. In late November the PJM Interconnect, the largest of nine regional grid system operators in the US, announced that it had begun buying frequency regulation services from small-scale, behind the meter, demand response assets in Pennsylvania. The first resources brought on-line by PJM were variable speed pumps at a water treatment plant and a 500 kW industrial battery array...

by Debra Fiakas CFA Earlier this year, we added metal air batteries and the companies who are working to commercialize the technology on our list of promising acts to follow.  The Israeli battery developer, Phinergy, was added to our Mothers of Invention Index.  Back when I wrote the post “More in the Air than Spring” back in April 2013, Phinergy had attracted a bit of attention for a road test of Citroen C1 car outfitted with a technology far different than conventional lithium ion.  No one knows Phinergy.  It is too small and too foreign to impress...

John Petersen I frequently observe that market valuations in the energy storage sector have been wildly distorted by electric vehicle hype that has nothing to do with business fundamentals. Last February I wrote an article that compared Exide Technologies with Ener1, but obviously didn't quite get to the meat of the matter. Since both companies reported earnings on November 4th, this seems like an opportune time to be more direct in the comparison and present a brief primer on valuations in the energy storage sector. Since a lot of investors never get beyond stock price movements, the...

I woke up this morning with a dreadful case of writer’s block and feared that I might have to take a week or two off while awaiting the end of the current SEC reporting cycle. Mercifully, one of my readers sent an e-mail message that asked some pointed questions about lead-carbon battery technologies and the relative strengths and weaknesses of the principal lead-carbon battery developers. So instead of dashing off a quick reply, I thought it might be interesting to share both the message and a detailed response. Besides, it seems like a great way to kill two...

John Petersen I'm often critical of public lithium-ion battery manufacturers based on objective investment metrics including their financial condition, their results of operations, their potential markets and the fundamental soundness of their business plans, but I don't usually drill down into thornier issues like technical merit and business execution because those questions are out of my depth and in the words of Harry Callahan, "A man's got to know his limitations." Every once in a while, however, organizations that are competent to evaluate those issues publish analytical reports that can help investors cut through the hype...

John Petersen On April 1st the National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency (EPA) announced a joint final rule establishing fuel economy standards for all light duty vehicles sold in the United States. Since the existing standards don't apply to light trucks, I used vehicle sales forecasts from the Energy Information Administration's "Annual Energy Outlook 2010" to estimate a current baseline fuel economy of 19.6 mpg. The new rules will be phased in over a five-year period beginning with the 2012 Model Year and are certain to drive rapid evolution in the auto industry....

by John Petersen America’s love affair with the automobile has always been based on the freedom of the road and the ability to hop in the car and drive wherever we want to go; be it to the corner store to buy a loaf of bread or out to the lake for a long weekend. Even though most of our trips are short, people invariably want the flexibility to go for a long drive when the open road beckons. Unfortunately, that mentality is disastrous when it comes to EV economics. I’ve been writing about energy...

John Petersen Last week Societe Generale published a thematic research report titled "A new world order, when demand overtakes supply" which examines the macro-economic and demographic trends that will transform the global economy over the next 20 years. It mirrored the theme of Jeremy Grantham's April 2011 quarterly letter titled "Time to Wake Up: Days of Abundant Resources and Falling Prices Are Over Forever" and did a great job of summarizing an issue I touched on in "How PHEVs and EVs Will Sabotage America's Drive For Energy Independence." In the words of Societe Generale: "So, while...