Start-up promises to slash the costs of plug-in hybrids

EnerDel says it will come out with a lithium-ion battery for plug-in hybrids that will cost $1,500, a development that could go a long way to making these cars palatable in terms of price.

The Indianapolis-based company, which recently received a $6.5 million grant from the United States Advanced Battery Consortium (USABC), hopes to deliver the battery to car manufacturers for their 2010 lineups, according to Charles Gassenheimer, vice chairman of the company. The 2010 model cars will start coming out in September 2009, he said.

By then, there will probably be 65 hybrid cars on the market, he estimated. Right now, there are 15, he said. No major manufacturers currently make plug-in hybrids. Plug-ins have larger batteries than conventional hybrids, can be charged through a socket and get better gas mileage. However, they cost a lot at the moment. Converting a hybrid to a plug-in costs about $15,000, money that even plug-in hybrid proponents admit is nearly impossible to make up for with better fuel economy.

"You're not going to spend thousands of dollars to save $600 to $700 at the pump a year," Gassenheimer said. "Until you make this a positive return on investment, you won't see these (plug-ins) at 50 to 80 percent penetration."

EnerDel will mostly aim at selling batteries to manufacturers to incorporate into cars coming off the line and not aftermarket modifiers.

How much cheaper will an EnerDel-energized plug-in hybrid be compared to a regular one? It's hard to say. Gassenheimer, though, asserts that the company's batteries will cost half as much or less as nickel-metal hydride batteries, which are used in some plug-in retrofits these days. The price the company is quoting is fairly cheap. The National Renewable Energy Lab has put out reports estimating that the battery price should be able to come down to $2,500 or more. So if EnerDel could hit its goal--and it's an if--it could help. The grant will be used to drive costs down further.

The company's basic technology was coined by Peter Novak, a scientist and former member of the Russian Academy of Sciences. The batteries also rely on technology from Japan and packaging know-how from Delphi.

The battery is a lithium titanate battery. Competitor Altair Nanotechnologies uses a similar chemistry. Meanwhile, A123 Systems, which has received millions in venture funds, builds a lithium potassium battery. Gassenheimer stated that his company's lithium titanate batteries run at lower temperatures than potassium ones and thus are more safe. Lower operating temperatures also mean that car manufacturers won't have to include additional cooling systems for the battery alone. (Notebooks use lithium cobalt batteries, which run hotter.)

The technical and marketing issues for EnerDel, and the plug-in industry in general, still need to be fine-tuned. But customers are receptive to the idea, according to Gassenheimer.

"This is a major supply problem, not a demand problem," he said.