The Next Generation of Lithium-Ion batteries could come from Sakti3, a start-up from the University of Michigan and partner General Motors Co.

The company, founded by U-M professor Ann Marie Sastry, is working on making solid-state batteries that could double the energy density of current cells.

Li-ion will be the chemistry of choice for the next two decades, say battery makers, because you can't go any higher on the atomic table except for hydrogen.

“Lithium is a low-atomic-mass material with a high voltage,” Sastry says, and new lithium technologies could double energy density up to 140-220 kWh/kg.

High volume will drop the price of Li-ion batteries. At 400,000 HEVs a year, the price of Li-ion could fall below that of nickel-metal-hydride, the current choice of most hybrid-electric vehicles.

For EVs, the industry goal calls for battery costs of about $150 per kWh.

Already, costs have come down by a factor of 14 in the past 15 years, says Compact Power Inc. CEO Prabhakar Patil. “They will come down more, but not as fast.”

His company, which will supply batteries for the Chevrolet Volt and other General Motors Co. HEVs, is building a plant that could make up to 20 million cells a year, beginning in 2012.

Big advances in cost will come as battery makers take out non-energy weight.

“Only 25% of the weight is storing energy,” says Ric Fulop, founder and vice president-business development at A123Systems Inc. The rest is the separator, electrolyte, various additions and packaging.

“There are so many approaches to increase energy density in Li-ion. Separators were 50 microns thick, now they are 10 microns.”

Taking 35%-50% of non-energy material out in the next decade will double the energy density of batteries and cut costs in half, he says.

Working on new anode materials that will allow fast charging without sacrificing energy density also will improve current batteries, and a third area will be developing new, more efficient manufacturing processes.

Cost will come out as volumes and business models change.

“Many of our suppliers operate at high margins,” Fulop says. “As volumes take off, there will be margin collapse.”

He says A123 is buying some of its suppliers to become more vertical and drive out cost.

In addition, big battery packs, like those for EVs, are made with 16 kWh of power but use only 8 kWh because of cycling issues. If they were cycled all the way down in use, like current cell-phone and laptop-computer batteries, they would not last 10 years. But if improvements can be made on cycling, the same performance can come from smaller batteries.

Work on the next generation will increase rapidly because of federal grants designed to allow the U.S. to catch up with Asia on Li-ion battery technology.

The U.S. had plenty of intellectual battery property, but manufacturing took off in Asia in the last decade because that is where most HEVs are produced.

Federal support will bring cell manufacturing to the U.S., but the first projects will be battery packs.

GM will make the packs itself for the Chevrolet Volt, says Bob Kruse, executive director-global vehicle engineering for hybrids, electric vehicles and batteries.

“Our strategy is to be a smart cell buyer and a pack maker. Doing it ourselves controls the value chain.”

There are 150 parts in the Volt's battery pack, he says, and all but eight were developed inside GM, which has pegged battery development and manufacturing as a core competence. But Kruse says some projects will be outsourced.

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