The Bosch and Samsung SDI joint venture -- SB LiMotive -- has begun operations to develop, build, and market lithium-ion batteries for use in hybrid and electrical vehicles. The 50-50 joint venture will require a joint investment of $300 to $400 million in the next five years from the two firms.
The new battery venture will be run by executives from both Bosch and Samsung. Samsung SDI's Youngwoo Park and Bosch's Dr. Joachim Fetzer will head the venture. Park will be in charge of finance, production, sales, and purchasing with Fetzer in charge of engineering and quality.
The two firms expect the market volume for li-ion batteries to grow to 3 million vehicles by 2015 reports Green Car Congress. SB LiMotive will be headquartered in Suwon, South Korea with other facilities in German and Korea.
SB LiMotive isn't the only new firm working hard on lithium-ion batteries for hybrid and electrical vehicles. Reuters reports that Ener1 believes that the cost of lithium-ion batteries for hybrid vehicles will be cut in half once its technology reaches scale. Despite the fact that Ener1 has not yet signed a production agreement with an automaker, it expects to sign two new battery development deals this year.
Ener1 will be supplying lithium-ion batteries from its EnerDel unit to Norwegian Think Global for use in its Think City all electric vehicle. The Think City will be sold in Europe later this year.
Ener1 CEO Charles Gassenheimer said in an interview, "We can cut the cost of the battery by 50 percent and I believe that can be passed onto the consumer. I also believe that we can bring down the break-even to less than two years, which would obviously be very favorable because that would be within the three-year lease that is a popular choice for American purchasers of automobiles."
Gassenheimer told Reuters that if the price of oil stays around $100 per barrel that a 50% reduction in battery cost would allow buyers of hybrid cars to break even in less than two years as opposed to the seven to eight years it takes to break even now.
Ener1 doesn't believe demand for lithium-ion batteries for the automotive industry will be a problem. Gassenheimer says that demand in Asia and Europe is off the charts. Demand from American automakers is reportedly low, but growing. A breakthrough from the University of Texas at Austin also promises significant reductions in the costs associated with lithium-ion batteries for the automotive industry.
The increased demand for lithium-ion batteries will be helped in America if other major cities follow the precedent that Boston has set for transitioning all the city cabs to hybrids. Boston.com reports that new regulation put in place by the City of Boston will require all taxi drivers to replace their cabs with hybrids once the cabs hit six years of age.
The migration to hybrid taxis will come at a cost to taxi riders in Boston as well as the taxi owners. Boston.com reports that a cab ride across the city will cost $5 for the first half mile and $2.80 for each mile after that -- the highest cost in the nation.
The Boston police department -- who sets the regulations for taxis -- reports that once transitioned a hybrid will save taxi drivers $1,000 a month on gas and cut carbon emissions from taxis in half.