Lithium-ion Battery Technology Is Starting Out At The High End For Mercedes And GM, Because Of Its Cost.

Implications: The announcement by GM at the Geneva Motor Show that it will be offering for sale, next year, a high end SUV with a lithium iron phosphate battery equipped two mode hybrid power train followed the announcement the day before by Daimler of a high end Mercedes S-class hybrid to be introduced next year with, I believe the same lithium ion battery system. This leaves only BMW to be heard from with regard to whether or not it will offer a hybrid vehicle with the same type of battery. The three OEM car companies, GM, Daimler, and BMW have been running a(n), apparently, successful strategic development alliance based in suburban Detroit for the last few years to produce a safe(r), reliable, long lived, lithium technology battery. GM and Daimler are now voting with their checkbooks to bring the still very expensive battery, apparently developed far enough to be tested by consumers, to the market place. But these new hybrid cars and SUVs may still not yet be ready for the European market.

Analysis: GM's Bob Lutz made a very informative statement at the opening of the Geneva Motor Show, where he said that full hybrids only make sense today in large vehicles such as GM's two-mode hybrid sport-utility vehicles, where the vehicle is already expensive. 

This rationale also explains why Daimler is introducing Continental's lithium ion battery first in its high(est) end S-class sedans, which typically cost up to twice as much as GM's expensive large SUVs to start with.

I believe that I know why GM has chosen Hitachi of and in Japan to manufacture their version of the lithium iron phosphate battery rather than Continental.

To be sold into the EU market a car must be 100% recyclable at the time it is offered for sale there. This means that before the car is on the market Continental and Mercedes must have an EU Environmental Commission approved recycling plan in place; I am not aware that this has yet been done, but it must be under way with a definite finish time.

The USA does not yet have such a legal mandate on recycling automotive components, so perhaps in order to avoid the additional costs entailed by combining with Daimler to buy from Continental GM has I believe chosen Hitachi to manufacture its lithium batteries, in Japan, to where they can be returned for recycling or disposal without GM needing to wait for any regulator's approval. 

Keep in mind that lithium, iron, and phosphoric acid (the source of phosphate ions) are not at all expensive raw materials; in fact, they are all very cheap. The cost of this battery arises from the difficulties of mass producing 'packs' of the batteries carefully wired together by hand in special containers with cooling systems that must run independently of whether or not the car is operating so as to keep the batteries in the optimal temperature range. In addition the battery packs will have their own internal computer controlled management system to make sure that they are kept in a narrow range of charge capacity, because otherwise their ability to 'take a charge' and to be recharged a large number of times may be fatally compromised.

Large expensive cars and SUVs are normally only serviced by an authorized dealer. This will be critical for the, according to Lutz, 100,000 or so hybrids to be made by GM and Daimler each year.

Dealers who deliver these expensive vehicles in the USA will have special training given to their mechanics and have access to hot lines and also maintain special parts inventories such as precharged battery packs in case of the need to switch out a failed battery.

Failed batteries will be replaced and trucked back to GM, Daimler, or the manufacturer for study to determine if there are unexpected failure modes.

This is going to be a long term trial. Until and only if a lithium battery pack becomes as reliable as nickel metal hydride and lead-acid batteries have become the lithium battery will be only an item undergoing a long trial.

GM, Daimler, and BMW are not going to share their lithium technology with others. If it works and mass production can bring down the manufacturing costs then the use of these batteries will be extended to lower cost cars and trucks. 

The race is on. Toyota is not going to manufacture a 100,000 high end Lexus hybrids using lithium batteries; it, Toyota is on another track, it is seeking a cheaper lithium battery to start with, so it can equip a second generation of Prius with lithium batteries. Toyota will manufacture its own lithium batteries as it now manufactures its own nickel metal hydride batteries currently used in the Prius.

A large scale trial of the lithium iron phosphate battery will be underway next year.

Even lead acid batteries are guaranteed for three years, so the lithium iron phosphate types will have to go at least three years before they can be considered successful. If so, then at that point, in 2012, at the earliest, the lithium iron phosphate battery will be assessed for cost effectiveness. Then and only then can a decision be made for mass production for mass produced mid-sized cars with them.

In the contest to bring to market a cost efficient lithium technology battery for hybrids and all electric cars only GM, Daimler, BMW, and Toyota are now in the running. The wild cards are Nissan and the Chinese who, the Chinese that is, already have lithium battery powered hybrids on the road in China with batteries developed and manufactured in China.

In the category of hybrids and battery powered cars companies like Ford and Chrysler are already out of the running.

If the cars announced by Daimler and GM do not come to market in the announced time then the lithium battery is probably out of juice permanently; it's now a very high stakes game.