Germany's largest electric utility is looking for a U.S. partner to help produce and commercialize a new type of battery for electric cars that it has spent four years developing.
The company, RWE AG, has retained Baring Brothers of London and its U.S. partner Dillon, Read Co. to help in its search. "We want a strong industrial U.S. partner who will be given substantial say in essential aspects of the project," said a senior RWE executive. Germany's eighth largest company, RWE lacks experience in mass production of complex industrial goods and has no contacts with the U.S. automotive industry.The advanced sodium-sulfur battery that RWE has refined through its Silent Power GmbH subsidiary was originally pioneered by the U.K. Electricity Council in the 1970s. In total, over 200 million dollars has been invested in the research, and RWE is one of three companies leading the race to bring an electric-car battery to market.
With legislation in California and a number of East Coast states requiring that 2 percent of vehicles sold be "zero-emission" vehicles beginning in 1998, battery research has turned into a multimillion-dollar industry. At the moment, a rival from France and one from the U.S. are neck-in-neck with Silent Power. France's Alcatel-Alsthom SA is working on a nickel-metalhydride battery through a U.S. subsidiary, Saft America. And Ovonic Battery Corp. of Troy, Michigan, in conjunction with General Motors Corp., also is working on a nickel-metal hydride battery. The three projects are viewed by the U.S. Advanced Battery Consortium as being most likely to develop a workable advanced battery by the end of the decade.
While Silent Power hasn't yet been able to prove its new battery will have a sufficient life span, currently it is the leader, said John Wallace, chairman of USABC and head of Ford's electric-vehicles division. USABC is a consortium of the U.S. Big Three auto makers, the Department of Energy and U.S. electric utilities that aims to identify and develop the most promising advanced-battery technologies for electric cars.
RWE officials say their sodium-sulfur battery already can propel an electric car farther and faster than today's current conventional lead-acid batteries. And while no one has come up with a battery anywhere near meeting the U.S. auto industry's price target of $150 per kilowatt hour, the low price of the raw materials for the sodium-sulfur batteries puts it closer than the competition at present, industry observers say.
But the technology is controversial. Driven by a chemical reaction between molten sodium and sulfur, the battery operates at a temperature of around 300 degrees Celsius. Such "hot batteries" are more complicated for car makers to integrate into the vehicle than room-temperature batteries. They also have a reputation for tending to cause fires.
Switzerland's Asea Brown Boveri AG two months ago abandoned its $200 million sodium-sulfur battery program after the batteries had caused fires in experimental electrical cars. The German Postal Service recently opted for a cool zinc-air battery rather than a sodium-sulfur one for its electrical-vehicle pilot project, because "I would never use a time bomb under my car," said Guenter Tumm, a board member. "I'm not prepared to take the risk of a hot battery as someone responsible for other people's lives."
Silent Power's battery, however, was designed specifically to avoid the problems ABB encountered. It already has survived a slew of safety tests, high-speed collisions and crush tests without leaking chemicals or causing a fire. German Certification Authority and the Federal Authority for Materials Testing have given their unrestricted approval for the batteries on German highways.
Bayerische Motoren Werke AG, Fiat SpA, Volkswagen AG and VW's luxury unit Audi AG are among the European makers who have requested the new battery to test in their electric vehicles. Volkswagen has designed its new electric Golf specifically to accommodate the battery, according to a senior RWE official. And a contract is currently being finalized to supply the battery to a "major German auto maker," the official said.
For all the problems involved, rich rewards could await the company that succeeds in being the first to produce a reliable and low-priced battery. The U.S. electric-car market is estimated to swell from virtually nonexistent today to well over 600,000 vehicles a year by 2003. The market for electric cars in Europe is expected to grow to nearly 150,000 cars in 2003, according to the Motor Industry Research Association.
RWE's top priority now is to get a U.S. partner on board. The ideal partner, officials say, is a company with experience in precision manufacturing and good contacts in the U.S. auto industry, such as an auto-supply company, a high-tech ceramics producer, or possibly an aerospace or defense company looking for new business areas. Baring Brothers has identified a couple dozen U.S. companies that it will begin contacting shortly.