Now We’re Cooking With … Batteries

The world's $71 billion battery market, once an old-tech backwater, is becoming a hothouse for innovation. The flow of U.S. venture-capital dollars into battery development has grown from $4.3 million in 2002 to more than $200 million this year, according to Dow Jones VentureSource. Even major players like General Electric and ExxonMobil are investing in the battery business. The hybrid- and electric-car-battery market alone is on course to grow nearly fivefold by 2015, to $3.7 billion, according to consultant Menahem Anderman.

I am glad to see that battery research is getting more funding, as I think it is a crucial technology for the 21st century. It is necessary for the transition to electric vehicles as well as allowing for better portable electronics.

Computer chips double in speed every two years—your current BlackBerry is as powerful as your desktop computer once was—but the batteries powering those devices are improving by only about 8 percent a year.

I am not quite sure what value they are measuring, but energy density has been improving by 11.6% for the last 15 years. Maybe they are looking at capacity per dollar.

Despite their work, the U.S. battery makers don't stack up well globally. U.S. automakers' enthusiasm for electric vehicles died a decade ago, when GM's allelectric EV1 proved to be a flop. Since then Toyota and Honda have come to dominate the hybrid-car market, which is why Asia leads the world in advanced-battery production, for both cars and gadgets. "The U.S. missed out on a great deal of the advanced-battery business over the last 10 years," says A123's CEO, Dave Vieau. "The next 10 years will see a significant increase in battery use, and it would be a mistake for us not to participate in that." While U.S. battery makers play catch-up, the Japanese battery industry is consolidating: Panasonic, Toyota's battery supplier, is in talks to acquire Sanyo, Honda's battery maker. South Korea has also demonstrated battery savvy, as does China, where the iPhone batteries are assembled. For some observers, this is a cause for concern. "Are we trading our dependence on foreign oil for a dependence on batteries built in foreign countries?" asks Chrysler vice chairman Jim Press.

While I think battery technology is a key technology for the 21st century and would like to see American companies competing, I am not nearly as concerned about importing batteries as I am about importing oil. Importing natural resources like oil leads to larger geo-political issues than importing manufactured goods that are knowledge intensive. Also, countries that are exporting natural goods are likely to see their economies worse off than if they had no natural resources at all, a phenomenon known as the oil curse. There is no 'battery curse' that I am aware of.

via Newsweek

Update: Looks like that 8% is price performance from this quote in the NY Times:

Elon Musk, the chief executive of Tesla, said his company would benefit from what he called “a weak Moore’s Law,” referring to the 8 percent annual improvements in the price performance of lithium-ion batteries. But 8 percent, compounded, would bring too few benefits, too late to Tesla: it would take nine years to halve the price of its battery pack.