An in-depth look at how Envia failed to bring its new battery tech to GM

Not long ago, Envia Systems' innovative battery looked like it would break barriers. The "High Capacity Manganese Rich (HCMR)" technology was supposed to provide General Motors with an affordable battery that could power the next-generation Chevy Volt and move other, pure EVs at least 200 miles on a single charge. Now, though, the Silicon Valley-based company looks more like the latest cautionary tale for anyone trying to successfully enter the lithium battery and electric vehicle space.

This 7,600-word feature article could serve as a paper in university courses in public policy, engineering and global economics. Steve LeVine, Quartz's Washington correspondent, spent two years writing it after studying legal documents and interviewing dozens of Envia staff members.

This epic tale starts in late November 2012 at a Mexican restaurant in Palo Alto.

This epic tale starts in late November 2012 at a Mexican restaurant in Palo Alto, CA, organized by, at the time, Envia CEO Atul Kapadia and CTO Sujeet Kumar. They'd been hoping to tell staff about a major deal signed with GM giving Envia the rare opportunity to become a supplier to a global automaker. That moment happened a little while later as Kapadia drove away and took a call from GM that the deal was signed. Back at Envia's office in nearby Newark, the CEO made the announcement to employees and the room erupted.

A year later, the company is still in operation but it's basically hanging on the edge of a cliff. The deal with GM has fallen apart and the automaker has accused Envia of misrepresenting its technology. Critics of US government funding for cleantech are waiting with zeal for more arguments to cast out in Washington, as Envia was awarded government funds. Envia has its own battle in courtrooms as Kapadia and other recently fired colleagues have accused Kumar of fraud and intellectual property theft. Nanotech startup NanoeXa Corporation filed a suit earlier in the year against Envia alleging intellectual property theft of its battery cathode technology.

For students, there's a great deal of information to process in the article, some that goes well beyond the company in question. It touches on policy and global economics, for example, and looks at how the Obama administration choose EVs and lithium batteries as a strategic tool in its competitive battle with China. The US Department of Energy's APRA-E program received about 3,700 requests for funding, but only one percent made the cut. Envia was one, receiving a $4-million grant that was to be jointly carried out with the federal government's Argonne national laboratory. Anyone who wants more details can study tables and read all about Envia's cathode intellectual property, ownership of which is still being contested in the NanoeXa lawsuit. Read the whole thing here.

News Source: Quartz

Navigating the Electric Car Pricing Maze

Always read the fine print. That's a lesson every car buyer should take to heart.
Especially since Nissan, Chevrolet, Tesla, and Mitsubishi all now engage in a pricing practice of which they should be ashamed.
It's so-called "net pricing" of their electric cars, in which the price appearing in their marketing and on their websites is $7,500 lower than the actual list price.
While electric-car advocates and fans may understand the practice, the broader public doesn't.
And the sticker shock at dealers can be substantial when a buyer, prepared to spend $27,700 for a brand-new 2012 Nissan Leaf suddenly learns that in fact the price is $35,200.
What's the difference? It's the $7,500 Federal income-tax credit for purchase of an electric car (with a battery pack of 16 kilowatt-hours or more).
First, it can take up to 16 months to realize the savings: A Leaf owner who bought her car this past January won't realize the $7,500 savings until she gets her 2012 tax refund--sometime in April or May 2013.
The credit can be realized immediately by leasing the electric car rather than buying--the lease issuer claims the credit and reduces the monthly cost accordingly--but not everyone wants to lease.
Second, not every buyer will qualify for the tax credit (though most people with the means to buy a $35,000 to $85,000 electric car probably will).
And third, buyers incur an extra $900 in financing costs over a typical 60-month loan term to finance that extra $7,500.
Showing how the lower-than-list price is prominently featured, here are pages with the four companies' electric-car prices in large, distinct type:

• 2012 Tesla Model S: "$49,900" (it's actually $57,400, or 15 percent higher--though we give Tesla a bit of credit for noting "After $7,500 Federal Tax Credit" in tiny silver type at the side)
• 2012 Chevrolet Volt: "MSRP As Low As $31,695" with two separate footnotes (it's actually $39,195 before delivery, or 24 percent higher)
• 2012 Nissan Leaf: "Starting at $27,700" plus an asterisk (it's actually $35,200, or 27 percent higher)
• 2012 Mitsubishi i: "As low as $21,625 net value, after tax saving" with a footnote (it's actually $29,125, or fully 35 percent higher--though its pricing detail page spells it out nicely with the credit deducted at the bottom)

Yes, they all have asterisks or daggers that indicate there's fine print to be read.
Yes, even gasoline cars have mandatory delivery charges (usually $600 to $1,000) that aren't included in the base price.

Sleazy Car Salesman

And, yes, we get that it's "effective pricing after Federal incentives."
We still think net pricing of electric cars is deceptive, duplicitous ... and, frankly, counterproductive.
And electric-car advocate Chelsea Sexton goes even further.
"While tempting, the practice of net price quoting is misleading," she says, "and all but guarantees sticker shock when buyers are asked to hand over or finance the full amount at time of purchase"
Rather than this bit of pricing trickery, "it would be far more useful for automakers to engage in the third-rail conversation of actually reforming the tax credit," Sexton suggests.
"There are a handful of ways that would make all of their vehicles more affordable, and support increased plug-in sales, while also saving taxpayer money."
Sexton is referring, among other ideas, to converting the Federal tax credit into a purchase rebate.

Barack Obama

Under that plan, rather than waiting up to 15 months, buyers would get a rebate check in the mail within weeks--as is now the case for the $2,500 California incentive for buying all three cars.
President Barack Obama said more than a year ago that he's in favor of that change, and proposed in his 2012 budget to raise the incentive to $10,000.
Neither change has happened, and we suspect that all of Washington will stay as far away as possible from electric-car incentives until after the November election.
The outcome of that election will likely affect those incentives--for good or for bad.
Meanwhile, we urge automakers to post the actual list price for their plug-in models, not some hypothetical "effective net price" that differs radically from the check buyers must write.
It's simply called honesty and transparency.


Source: Green Car Reports

DOE report finds some materials for EVs and other clean energy technologies at risk of supply disruptions in the short term; risks decreasing in mediu

Materials in clean energy technologies and components. Source: DOE. Click to enlarge.

Several clean energy technologies—including electric vehicles, wind turbines, PV thin films and fluorescent lighting—use materials at risk of supply disruptions in the short term, with risks generally decreasing in the medium- and long-terms, according to the newly released 2011 Critical Materials Strategy report from the US Department of Energy (DOE).

According to the report, supply challenges for five rare earth metals (REEs)—dysprosium, terbium, europium, neodymium and yttrium—were found to be critical in the short term (present–2015). These five REEs are used in magnets for wind turbines and electric vehicles or phosphors in energy-efficient lighting. Other elements—cerium, indium, lanthanum and tellurium—were found to be near-critical. Between the short term and the medium term (2015–2025), the importance to clean energy and supply risk shift for some materials.

Short-term (left) and medium-term (right) criticality matrices. Source: DOE. Click to enlarge.

The new report updates the 2010 Critical Materials Strategy (earlier post), which highlighted the importance of certain materials to those clean energy technologies. The 2011 Critical Materials Strategy includes updated criticality assessments, market analyses and technology analyses to address critical materials challenges. It was prepared by the US Department of Energy (DOE) based on data collected and research performed during 2011.

Market analysis. Demand for almost all of the materials examined in the report has grown more rapidly than demand for commodity metals such as steel, the report nots. The growing demand for the materials comes from consumer products such as cell phones, computers and flat panel televisions as well as clean energy technologies. Findings in this section of the report include:

• In general, global material supply has been slow to respond to the rise in demand over the past decade due to a lack of available capital, long lead times, trade policies and other factors. For many key materials, market response is further complicated by the complexities of coproduction and byproduction. In addition, for some key materials, the market’s lack of transparency and small size can affect its ability to function efficiently.

• Some universities and other institutions are preparing the future science and engineering workforce through courses, research opportunities and internships. Important topics for research include material characterization, instrumentation, green chemistry, manufacturing engineering, materials recycling technology, modeling, market assessment and product design.

• Businesses at various stages of the supply chain are adapting to market dynamics. Some are taking defensive measures to protect themselves from price volatility and material scarcity while others are proactively responding to market opportunities by offering additional sources of supply or potential substitutes.

• Many governments recognize the growing importance of raw materials to economic competitiveness and are taking an active role in mitigating supply risks.

Technology analysis. The 2011 report features three in-depth technology analyses, which concluded:

• Rare earth elements play an important role in petroleum refining, but the sector’s vulnerability to rare earth supply disruptions is limited. Lanthanum is used in fluid catalytic cracking (FCC), an important part of petroleum refining. However lanthanum supplies are less critical than some other rare earths and refineries have some ability to adjust input amounts. Recent lanthanum price increases have likely added less than a penny to the price of gasoline.

• Manufacturers of wind power and electric vehicle technologies are pursuing strategies to respond to possible rare earth shortages. Permanent magnets (PMs) containing neodymium and dysprosium are used in wind turbine generators and electric vehicle (EV) motors. These REEs have highly valued magnetic and thermal properties. Manufacturers of both technologies are currently making decisions on future system design, trading off the performance benefits of neodymium and dysprosium against vulnerability to potential supply shortages. For example, wind turbine manufacturers are deciding among gear-driven, hybrid and direct-drive systems, with varying levels of rare earth content. Some EV manufacturers are pursuing rare-earth-free induction motors or switched reluctance motors as alternatives to PM motors.

• As lighting energy efficiency standards are implemented globally, heavy rare earths used in lighting phosphors may be in short supply. A projected increase in US demand for CFLs and efficient LFLs corresponds to a projected increase in global CFL demand, suggesting upward price pressures for rare earth phosphors in the 2012–2014 timeframe, when europium, terbium and yttrium will be in short supply. In the future, light-emitting diodes (which are highly efficient and have much lower rare earth content) are expected to play a growing role in the market, reducing the pressure on rare earth supplies.

DOE strategy. In the past year, DOE has developed its first critical materials research and development (R&D) plan, provided new funding for priority research, convened international workshops that brought together leading experts, and participated in substantial new coordination among federal agencies working on these topics.

DOE’s strategy for addressing critical materials challenges rests on three pillars:

• Diversified global supply chains;
• Development of substitutes; and
• Recycling, reuse and more efficient use.

DOE’s critical materials research and development (R&D) plan is aligned with these three pillars. The fiscal year 2012 spending bill includes $20 million to fund an energy innovation hub focused on critical materials that will help to further advance the three pillars of the DOE strategy.

Source: Green Car Congress