PowerGenix plans to unveil a nickel-zinc battery pack for hybrid vehicles this week at a conference in Tampa, Fla.

In an announcement Monday, the San Diego-based company said its battery pack, called the D-Cell, has 30 percent more energy density than nickel-metal-hydride, or NiMH technologies. That means the batteries can deliver 30 percent more power in the same size, or the same amount of power in a 30 percent smaller package, as the batteries currently used in the popular Toyota Prius.

PowerGenix claims its batteries cost 20 percent less per watt-hour than NiMH batteries (and about half the cost of lithium-ions), and can be manufactured on existing nickel-cadmium and NiMH production lines. It also says the batteries are nontoxic, made of more recyclable materials than any other battery chemistry and noncombustible – making them safer than lithium-ion batteries, which occasionally have been known to overheat and catch fire.

The company intends to showcase a retrofitted Prius, with its battery pack installed next to the original battery pack to demonstrate the size and weight savings, at the Advanced Automotive Battery and Ultracapacitor Conference, which begins Wednesday.

But the technology isn’t ready to hit the market. CEO Dan Squiller said PowerGenix hopes to license the technology within a year, and said it would likely take three to four years to get into commercially available cars.

The company plans to use the demonstration to collect data and establish benchmarks that it can then take to a large battery company, such as Sanyo, Panasonic, LG or Johnson Controls, for licensing, he said.

“We’ve made a lot of progress,” he said. “Being able to demonstrate the performance benefits of a nickel-zinc cell in a mainstream hybrid-electric vehicle not only validates nickel-zinc as a battery platform, but validates it as a much better solution for HEVs (hybrid-electric vehicles).”

Squiller spoke with Greentech Media about PowerGenix’s automotive strategy, the challenges ahead and plans for an initial public offering.

Q: As a company that already produces batteries for other segments, including power tools, why have you decided to pursue licensing agreements in the auto industry instead of manufacturing them yourself?

A: We have a view of the auto industry that there’s probably only five or six companies in the world that have the financial strength, systems, processes and logistics to do business with the auto companies. It’s the LGs of the world, the Sanyos and the Panasonics. We have very realistic expectations of how we’re going to enter the market. We think we have to enter the market by piggybacking on the coattails of someone who has an entrance into that channel.

Q: Are you already in discussions with any potential customers?

A: With respect to the battery companies, we’re not in any serious discussions with anybody. But because of relationships with a couple of our VPs [including Joe Carcone, who started Sanyo’s battery business in North America], we’re on these guys’ radar screens and they know we exist.

Q: The automotive industry isn’t known for its speed to market. How long do you think it will take to get your battery packs into cars on dealership lots?

A: We think that for anybody that’s got a battery product that’s not yet been optimized for this very demanding segment, you’re talking at least three years of engineering the manufacturing and hardening the manufacturing processes for the thing to see the light of day. We’re thinking it’s probably three years before it starts getting manufactured, then, depending on the model year, it could be four years.

Q: Many car companies have talked about lithium-ion batteries, or li-ions, as the next-generation beyond NiMH. Although li-ions have some challenges, such as cost and – in a few cases -- overheating, li-ion companies say they can get double the energy density compared to NiMH, which is more than the 30 percent improvement PowerGenix is claiming. How do you expect to be able to compete?

A: One advantage is that nickel-zinc is sort of a kissing cousin to NiMH in that the discharge characteristics are very similar. Our charging is actually a little bit simpler and the safety and thermal controls are either the same or a little bit [easier] than NiMH. Our pack’s got 30 percent less cells, but if you look at it as a black box, it behaves very similarly to NiMH and that’s good because it means that auto manufacturers, in terms of tuning their software, don’t have to reinvent the wheel. With lithium, it’s a whole different category. And they are asking people to change their production lines, which for millions of dollars is a real hard sell. We’re saying, “Hey, just change some chemicals.”

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