Founding Scientist, A123Systems
United States Senate Committee on Environment and Public Works
Subcommittee on Private Sector and Consumer Solutions to Global Warming and Wildlife Protection
Emerging Technologies and Practices for Reducing Greenhouse Gas Emissions
I thank you for the opportunity to appear before you today to explain and answer questions about a recent breakthrough in lithium ion battery technology that we and others believe will help enable this nation to lead a worldwide plug-in hybrid transportation revolution starting now.
Let me explain.
The Technology And Its Capabilities
Five years ago, research conducted in my group at MIT under U.S. Department of Energy support resulted in new nanomaterials that we believed could enable breakthroughs in lithium ion battery power, safety, and durability. This technology was spun off by forming the company A123Systems, itself initially supported by the DOE with a $100,000 SBIR grant. Today the Company has raised over $100 million, has over 300 employees and operates facilities in Watertown, Massachusetts and Ann Arbor, Michigan. We sell millions of batteries annually to Black and Decker (Dewalt) and others for high powered handheld applications. We are simultaneously developing higher powered solutions for the aerospace and defense industries and have been chosen by GM, and other major American and European automakers, to help develop and power their hybrid and plug-in hybrid sedans, SUVs, trucks, buses and heavy equipment moving vehicles which will be coming on line over the next decade.
This has all been made possible by the development of our unique nanotechnology-enabled based lithium ion battery, which we call Nanophosphateä, which has a combination of power, durability and safety in excess of any rechargeable battery that has come before. When I describe our innovation as nanotechnology, what I mean is that we have designed and engineered key active materials in the battery to take advantage of physical and chemical behavior only accessible when the materials are reduced to a few nanometers in dimension. This behavior enables the material to store and release lithium ions with great facility and over a very long service life, all while being much safer than any previous lithium ion battery.
While the fact that our batteries are nanotechnology-enabled is of scientific interest - and indeed the science behind them is fascinating - what the end user and society benefits from are their new performance capabilities. In DeWalt’s new 36 volt power tool, our battery technology delivers twice the power of a corded tool with 2-3 times the runtime of conventional cordless tools. In vehicle applications, the advances over previous technology are no less dramatic, as I will now explain.
The automotive industry is in the middle of a critical transition to electric drive because switching from imported oil to a diversifying electric grid is a national security and environmental imperative, now made possible as a result of these battery technology breakthroughs. The evidence for this transformation continues to mount. Fueled by strong consumer demand for greener vehicles and a growing awareness of our greater responsibilities to our planet and our national security, there are now over 65 hybrid vehicle (HEV) launches planned by 2010. A123Systems is working with leading American and European automakers to develop batteries for upcoming hybrids and are working with the DOE and the U.S. Advanced Battery Consortium (USABC) to optimize our technology and provide leading price/performance in this market.
However, the next generation of technology beyond the conventional hybrid is the plug-in hybrid (PHEV). This game-changing technology will further displace the use of petroleum through shifting a much greater fraction of the vehicle’s power to electric drive, using advanced batteries that are recharged from the grid. This technology is one where the US automakers have established technological leadership and which delivers many immediate benefits including 100 MPG or greater fuel economy and reduced emissions, not just measured at the tailpipe but including that due to the additional electricity generated. A123Systems is a leading developer and supplier of battery technology for plug-in hybrids. We are working with General Motors and other leading American and European automobile and heavy equipment manufacturers to validate and introduce this technology into the market. But how long will it take to see the benefits of these new vehicle technologies, which apply to passenger vehicles, large trucks, buses and fleet vehicles, and can change both the emissions and fuel consumption profiles of some of our largest concentrations of polluting commerce?
Interrelationship with Cap and Trade
Over the years, the Congress has been in the forefront of recognizing the need to nurture these kinds of breakthrough technologies through legislation to kick start consumer demand. For example, putting the CLEAR ACT in place in 2005 was critical to both educating the public and producing the hybrid sale volumes that have lead to ever improving costs and economics. As a result, today's growing demand for hybrid vehicles is a tribute to the public's underestimated desire to do something about the health and national security risks of ever rising petroleum dependency when presented with economic choices.
The overarching question before this Committee today is how much more governmental stimulation is needed and how much faster can we go?
Let me suggest that the answer to that question depends on both the availability of new technologies and the practicality of the additional government initiatives which can be deployed.
On the first question of advanced technologies that are waiting and ready to enter the economy based on additional incentives, I can speak with some authority. They are here, ready to go, and await your leadership to make it happen as soon as possible.
Let me be specific. We at A123Systems have spent substantial energy strategizing on how to best move along the continuum from producing millions of our high performance lithium ion batteries for handheld applications today, to adding the manufacturing bandwidth required in 3 to 5 years to supply the major automakers with batteries for their fully designed and tested original equipment plug-in hybrid vehicles. Speed of execution is of the utmost importance to us. To address the power tool market, we developed game-changing battery technology from initial concept to full-scale manufacturing in just 33 months. Our customers tell us this is the fastest commercialization of a new battery system in history. It is testimony to the speed with which this type of technology can move when the will is there. Clearly, in the emerging and highly competitive plug-in hybrid arena, similar dedication to speed of execution will be critical to American competitiveness.
So we asked ourselves how best to ensure the earliest and ultimate success of the tens of millions of original equipment plug-in hybrids that will need to be rolling off the major manufacturers’ production lines through the next decade. Our answer was to develop Battery Range Extender Modules that can be installed in the spare tire well of any existing hybrid.
The result of that effort is parked right outside this building. On its face, it is one of the almost 1 million standard production hybrids now on the road in the US. Its original equipment nickel metal hydride battery provides enough power to go a few miles on electricity alone. But this car differs from most of its brethren in that it also has a supplemental module small enough to fit into its spare tire well. This module contains our current production battery cells and delivers enough usable energy for the vehicle to achieve as much as 150 MPG in urban driving and 100 MPG in highway driving with a 40 mile electric range. This module is charged overnight from a regular 120 volt extension cord which plugs into the bumper.
Since the average commuter travels under 30 miles per day, off-peak nightly charging of this module both improves a utility's load factor, lowering everyone's electricity bills, while reducing total gasoline consumption and emissions dramatically. In fact, DOE's Argonne National Lab has tested an earlier version of this module providing independent validation of the 150 MPG urban efficiencies that plug-in hybrids provide. Prototypes now being driven around the country, including here in Washington, have been obtaining the same results – mileage that is two to three times the 45 to 55 MPG today’s production hybrids achieve. Keeping in mind that this is the first fully-developed version of a new technology, the performance can only improve from here.
Numerous studies have also shown that emissions will drop significantly even after accounting for the generation of additional electricity. With charging occurring predominantly in the off-peak evening hours, a large percentage of this generation is made up of no emission, constantly running nuclear and hydro resources. The remainder comes from coal, which will continue to be baseloaded until cleaned up or replaced, with or without a plug-in revolution. The bottom line is that today's state-of-the-art baseload generating mix is far more efficient in terms of emissions than an individual tailpipe, and the policy choices we are in the process of making to improve the emissions profile of our electric generation grid will only improve that advantage.
Over time as battery costs are reduced, these improvements in battery technology also will benefit renewable energy technologies such as wind and solar, for which storage is a key issue, and will allow them to take on an increasing fraction of the baseload. The durability seen in this new generation of lithium ion batteries suggests that life-cycle costs will be significantly reduced over older technologies, such as lead-acid batteries, that have lower initial costs but a much shorter lifespan and higher maintenance costs. Reduced emissions from the electrification of vehicles starting now will therefore be further accelerated in the future as the same advanced battery technologies are used to help additional renewables come on-line even while continuing to increase the number of plug-in vehicles. These are synergistic effects.
So now let me be clear about where the technology stands: It is possible to achieve over 100 MPG with reduced emissions from a standard production hybrid equipped with a supplemental battery module using our current production lithium ion cells. And yes, it is affordable, reliable and a logical bridge between the even more efficient OEM plug-ins that we aim to enable in mass by the beginning of the next decade, and the ever growing millions of conventional hybrids that will be sold in the interim. A123Systems will be testing our current technology with various fleets in 2007 and intends to market this standardized module nationwide in 2008 in order to accelerate the adoption of plug-ins. It will be certified to meet all applicable new car test standards and can be installed by trained mechanics in less than 2 hours, without any changes to the underlying electronics, mechanics or materially useable space of the production hybrid other than the installation of the plug in the rear bumper.
Our battery modules that can create PHEVs from HEVs will be, for all intents and purposes, ready to go by the end of this year. The faster it is deployed, the cleaner and safer this country will become. So how much more should the government do? I would suggest that the greater the potential for known but not well publicized technologies to make a real difference in emissions and mileage, the more important it is for you to act aggressively.
The applicable market in the US is already the fastest growing segment of the automobile industry. There will be almost 1 million standard hybrids on the road through the course of this year. With over 60 hybrid models expected by 2009, there will be 5 million standard hybrids on the road by 2010. By 2015 there may be as many as 15 million regular hybrids on American highways. As a matter of additional government action to stimulate deployment, it is clear that if several thousands of dollars in tax credits were needed to start moving consumers from 15 MPG vehicles to initially more expensive 45 MPG hybrid vehicles, one option would be to do at least as much to achieve the 80% oil savings and 50% emissions reductions that would accumulate if each 45 MPG vehicle is now replaced with a 150 MPG comfortable, high performance plug-in hybrid.
Given the reality of the technology sitting outside of this hearing room for everyone to see and touch and experience, what other measures could help make plug-ins the cutting edge of the transportation revolution not 5 years from now but NEXT YEAR? How do we work into the market's pricing mechanism an accounting for the clear environmental benefits that tax incentives do not address?
Clearly I know a lot more about how to make a battery than I do about how to construct a fair yet complicated regulatory framework. But from where I sit, the sooner PHEVs are deployed, the sooner we drastically cut our oil imports and improve our deteriorating environment. The transportation sector currently provides one third of all our CO2 emissions. If a fair cap and trade system that increases the cost to emit CO2 can be put in place and administered so all parties understand the rules and have to play by them, we have no doubt that the rate of deployment of cutting edge facilitators like these modules, and ultimately OEM plug-ins, will be significantly accelerated.
Demand-pull incentives to kick start this promising breakthrough that holds the potential to cut our transportation-based use of oil by 80% and emissions by 50% has strong precedent with clear success. Increased research dollars to further lower costs and create a level playing field with our Asian competitors in the battery industry, who until now have established superiority as a result of heavy government investment, also has established government precedence in other US business sectors. Today, A123Systems is in the marketplace and in the lead ahead of the Asian governments who are our real competitors. They are investing. If we are to avoid the past mistakes of losing the commercialization race to Asia, we will have to level this playing field with active government involvement in ensuring the development of a new domestic battery industry.
And finding a way to price the environmental benefits of our new American technologies, whether through cap and trade or other regulatory mechanisms, will be the ultimate show of national will and leadership needed to reverse our energy fortunes as quickly as we need.
I urge all of you to come outside and look at the car and battery of the future to see what has already been done on the technology side. With your prompt collective action, over the course of the next year the average American can be in a full, responsive, comfortable sedan that can get over 100 MPG in combined city/highway driving for under $30,000. And as volumes increase, prices also can be expected to eventually fall as in any new breakthrough product. And with a cap and trade system, corporate America will demand more of these vehicles even sooner to stay in the game.
Clearly the original equipment hybrids due out early in the next decade, utilizing even better batteries integrated directly into the vehicle at the factory, will be more efficient and less costly. But there can be as many as 15 million standard hybrids on the road when plug-in volumes skyrocket from 2012 to 2017. Like the initial version of any breakthrough product, our battery technology and the PHEVs it will enable in the immediate future, will be much better than what was there before, and not nearly as good as it is going to get. But it can be an important part of a logical technology and policy continuum as we inevitably move to a dominantly plug-in hybrid national fleet.
In summary, you can count on our technology as one of the presently available breakthrough tools at your disposal which requires creation of a regulatory and business environment that will assure its mass use at the earliest time to begin reducing GHG emissions and our dependence on foreign oil. If we are collectively able to move up by several years the adoption of this particular technological solution, it will:
- Introduce a public hungry for tangible action now to a new American technology that lets them be part of the logical next step of a transportation revolution they have already started with their unprecedented demand for the standard hybrids available today.
- Gather invaluable experience and data for the next generation of factory produced vehicles through earlier widespread use of this new battery technology in real volumes in the everyday world.
- Stimulate earlier battery cost reductions from the earlier volume sales
- Advance by years the much needed 80% reduction in oil consumption and 50% emissions savings associated with each plug-in on the road.
- Serve the purpose of potentially speeding up the roll-out of the all important factory produced plug-ins as a result of the growing public awareness and demand.
This nation can turn our current energy vulnerabilities into a new technological renaissance that simultaneously reduces our greenhouse gas emissions, reduces our consumption of foreign oil, and produces an increasing number of good American jobs. We can do it by using a combination of incentives, grants to a more efficient, diversified, balanced and cleaner domestic electric grid, and fair and administrable pricing of the environmental value of new and enabling technologies. With your political will and leadership, and the kind of technological breakthroughs that I have discussed today, we will succeed.