The little battery company that could has two more car customers on the way.
EnerDel, which specializes in lithium ion batteries for cars, "has two more OEMs (original equipment manufacturers) in the hopper" in the auto industry, says CEO Charles Gassenheimer, who swung through our offices today.
The company is already producing batteries for Think, the Norwegian car manufacturer, and has signed a deal to produce batteries for Volvo's electric cars.
One of those new customers could be Mazda, which has adopted EnerDel batteries for some experimental cars.
Think is currently manufacturing five cars a day. "By the end of the year we expect to be at a run rate of 60 cars a day, which is 900 cars a month," he said. Think has a few thousand on its waiting list.
Volvo plans to produce 1,000 electric cars a year starting in early 2011 and may bring out more models of electric cars. The company earlier had a contract to produce batteries for the Karma coming from Fisker Automotive. Fisker switched to adopt batteries from A123 Systems, which also invested $23 million in Fisker. Fisker at the time needed an injection of investment, said Gassenheimer, and EnerDel had its commitments to Think.
We will be posting a video later of our talk with Gassenheimer, but here are some other highlights:
--EnerDel currently produces battery packs for cars at less than $700 a kilowatt hour. The industry average, roughly, is closer to $900 per kilowatt hour, according to sources.
--The Department of Energy has a goal of driving down the price to $500 a kilowatt hour and $250 a kilowatt hour. The first goal will be hit. The second one will be tough.
"I don't see a path to $300 a kilowatt hour," he said.
--The supply of batteries could be tight. Even if you bought every lithium ion battery in the world and stuck it into electric cars, you'd only have enough batteries for 250,000 cars, he said. In a way, though, that's good news for battery manufacturers because it reduces the potential risks in building new factories.
"It is not going to be that challenging to soak up the capacity that exists," he said.
EnerDel is taking a modular approach to factory capacity. It is currently building out a factory capable of churning out 15,000 battery packs a year. That factory will take the company to being cash flow positive. It will then build up to a 60,000 and then a 100,000 pack a year capacity.
--The company has already begun to draw on the grants it won under the American Recovery and Reinvestment Act. It has also landed $70 million in grants from the state of Indiana and has applied for DOE loans.
If you didn't pick EnerDel as one of the emerging lithium ion battery makers in the U.S. a few years ago, don't feel bad. The company did not receive the lavish amounts of VC funds like Boston-Power or A123 Systems did. Like others, it also had to whistle past the graveyard in 2009.
"Twelve months ago things were pretty dark," he said. "Think was in Chapter 11 in Norway."
Although based in the Midwest, EnerDel is something of an international affair. The company's basic technology was coined by Peter Novak, a scientist and former member of the Russian Academy of Sciences. The batteries also rely on technology from Japan and packaging know-how from Delphi.