Transcript: EnergyCS and EDrive: Battery Powered!

This transcript is from a PodTech.net podcast at:
http://www.podtech.net/home/technology/1870/energycs-and-edrive-battery-powered

Guest: Greg Hanssen - EnergyCS and EDrive Systems
Host: Matt Kelly - PodTech

Greg Hanssen - EnergyCS and EDrive Systems
EnergyCS is a small research and development and prototyping company in Monrovia, California, just about 10 miles East of Pasadena. We work on battery systems, fuel cell systems, hydrogen delivery systems, and as the name would imply, energy control systems.

Matt Kelly - PodTech
You have an offshoot, EDrive Systems, can you explain what that is about?

Greg Hanssen - EnergyCS and EDrive Systems
EDrive Systems is a spin-off from EnergyCS, concentrating on the conversion of Prius and other hybrid vehicles into plug-in hybrids. EnergyCS is more of a design shop and we're not really designed to interface directly with retail customers or handle kind of an assembly line process of converting cars. So, the idea was to separate the R & D side, the brains from the brawn I suppose, and move EDrive into a separate entity, once we actually had a product that we had completely certified with the government and tested and were completely sure that we had a producible product. Unfortunately we're still in the process of doing that. So, EDrive at this point is just a virtual company.

Matt Kelly - PodTech
Can you tell us about this product that you are developing?

Greg Hanssen - EnergyCS and EDrive Systems
The product that we're developing for EDrive is what I've been calling the second generation of the prototype vehicles that we have been producing here at EnergyCS. EnergyCS has produced about a dozen conversions, mostly for state government, electric utility, fleet customers, and for testing purposes, but we've got, like I said, nearly a dozen of these vehicles on the road right now, mostly in California. We take Valance technology, U1 batteries, it's a iron phosphate lithium ion chemistry, and we mould them and reshape them into a way that we can fit into boxes, that we can mount in the back of a car in such a way that we get proper air flow to the whole system, and can actually secure it well on the vehicle. That whole process is very time consuming and very labor intensive.

So, we've been trying to design a second generation battery system that is smaller, more compact, and much easier to install, and more of a turnkey system, because the goal with EDrive is that, although the initial installations will be done here in Los Angeles, we want to setup satellite locations in other parts of the country, where say Joe's Garage can become an authorized installer for EDrive, and then they can just order the kits to be installed into vehicles, into those conversion themselves.

Matt Kelly - PodTech
Can you talk about the promise of this new technology and what do you think it represents?

Greg Hanssen - EnergyCS and EDrive Systems
For the plug-in hybrid, allows us to migrate towards an electric base transportation system. Me and my partner were very involved in the 90s with the electric vehicle program here in California, which we thought was the next big thing. It showed great promise and a lot of us who drove this electric vehicles really enjoyed them, but the big drawback of the electric vehicle of course is the cost of the batteries, and the limitations in that it may only serve 98% or 95% of your needs, but most people don't want a car that only suits 95% of their needs.

So, the plug-in hybrid allows us to have many of the same benefits of the electric vehicle that is moving away from gasoline as a source fuel, which of course have all the CO2, and International conflict say issues, and moved towards electricity which we can produce here at home. Whether it'd be through coal, which of course is not the most environmentally friendly method, but certainly abundant here in the United States, or nuclear which is environmentally clean, but of course as you know has its own issues or renewable energy.

There's a lot of people who are investing in solar panels for their own homes and there is a renewable portfolio requirement for many states including California to increased the amount of clean, renewable energy, windmills and things like that. So, it allows us to move from say oil from Iraq to power our vehicles to something that we can grow here at home.

Matt Kelly - PodTech
It would seem to me that this is a great business opportunity?

Greg Hanssen - EnergyCS and EDrive Systems
You would think, but then you might look back over the last 20 years and see how many people have gotten rich selling battery powered cars, and other than people who maybe shammed investors, I would say that's probably zero. Its very difficult because it is a niche market, mostly because of the cost, but I think that as fuel prices rise which I know we're in a kind of a little dip right now, but expected to go back up to $3 a gallon pretty soon here I'd guess.

As the battery costs come down and as the battery technology matures, we'll start seeing, similar to with the regular hybrid vehicles, I mean we got to a point where they can make a nickel metal battery that could last 10 years and put it in a vehicle like the Toyota Prius and they got what would have been a 25 or 30 miles per gallon car and bump it up to 50 miles per gallon. Well, the Prius has been the only real smash success in the hybrid arena.

The other hybrids from Honda and Ford that haven't quite done as well, but the Prius has been the one successful shinning star that shows that there are enough people out there willing to pay for a unique vehicle, that either sends the right message or saves the money on fuel or whatever, and that gives us hope that there is going to be a large enough niche at some point in the future to enable these hybrid vehicles to actually have bigger batteries that are worthy of being plugged in.

Matt Kelly - PodTech
What are the challenges that you're facing?

Greg Hanssen - EnergyCS and EDrive Systems
It's all about the batteries, it's about the battery cost and it's about the battery safety, it's about the battery longevity. The auto makers have found that they can take a nickel metal high drive battery, use about 25% of it and get it to last ten years. Now, there have been vehicles, electric vehicles on road that have gone over 100,000-120,000 miles on a single battery pack. So, there is hope that the battery technology is progressing to the point where we can have a long warranty on a vehicle that is more heavily used, but it's still so quite ways to get there.

Lithium shows great promise, because the actual material cost for lithium is lower than nickel metal, or at least it's approaching that. A lot of the research now into chemistry is for lithium that are suitable for vehicle applications, are taking place now. Whereas a lot of the lithium research that has been happening over the last 15 years has been geared towards the consumer electronics market, making a cell phone or a laptop that last that much longer per charge, but of course might be worthless in two years.

Matt Kelly - PodTech
Do you think it's going to take companies that are nimble and small like yourself to actually force the larger auto makers to come around to this sort of technology and adopt it and put it out to the marketplace on mass?

Greg Hanssen - EnergyCS and EDrive Systems
Well, what EnergyCS and EDrive are hoping to do with this technology is, as you say, demonstrate for those early adaptor of that niche -- within a niche market that this is a viable technology. Now, how viable is this at $10,000-$15,000-$20,000 for a conversion? It's hard to say, but the goal would be to show that an OEM, who is doing this from a ground up vehicle could certainly do it for a lot less money, maybe $3,000-$4,000-$5,000.

Are you willing to pay another $3,000-$4,000-$5,000 to double your mileage once again, say from 50 to a 100 miles per gallon? With energy prices poised to go up again just because we're in a constraint environment now, there is going to be competition between all the different other alternatives like ethanol, bio-diesel, and we're going to get to a point where we need all of them and more of them, and more than we can possible deliver I believe.

So, I see a point somewhere down the future, 2010-2012, where all of these technologies will be doing very well, but right now because of the price point on the batteries, it's really just a small niche market. That's where a small company can really be most helpful, because the giant auto makers aren't interested in producing a vehicle for a very tiny market, as Honda learned the hard way with their little Insight hybrid, it's a wonderful little vehicle, but Americans have just decided that they want bigger cars now. I think that $3 and $4, $5 gallon gas is going to change that, but it's going to take time.

Matt Kelly - PodTech
All we have to do is look at Ford in a sense and the $15 billion loss that they sustained when they banked on bigger, larger trucks and automobiles.

Greg Hanssen - EnergyCS and EDrive Systems
Yeah, for many years when gas was a dollar, a dollar and a half a gallon, these gigantic machines made from GM and Ford were the cash cow, that allowed them to take their otherwise fairly inefficient business and make it profitable, because for an extra $1000 worth of sheet metal you could add $10,000 to the price of the vehicle, and it was sheer profit. Now that you have higher fuel prices, it's going to be hard, I mean they've got pension and medical issues and other things that put them in a very sad shape compared to the some of their rivals.

Matt Kelly - PodTech
I would imagine that this technology is probably a little bit more widely accepted and more easily adopted in European and Asian markets.

Greg Hanssen - EnergyCS and EDrive Systems
It's hard to say, certainly the Asians and Europeans drive smaller cars to start with. Some of that's because of their higher fuel prices, because of the fuel taxes, and some of it is just because they have little tiny streets and little tiny parking spaces. It seemed odd to some of us in the electric vehicle world that electric vehicles didn't take off better in Japan and Europe.

There are certainly our electric vehicles in Japan and Europe but not to the extent that you would think. If you're paying a penny per mile for electricity versus 10 something mile for a bigger vehicle, of course most of them don't have the bigger vehicle, so we're already fairly efficient, and there is a lot of diesel over there, at least in Europe. So, a lot of these little vehicles are already getting 40-50 miles per gallon, and maybe a more expensive technology just isn't that pallable at the moment.

Matt Kelly - PodTech
Your final thoughts on your company and the state of the fuel economy situation and hybrids and kind of wrap it up all for me.

Greg Hanssen - EnergyCS and EDrive Systems
I think that as we get to this point where global supply of oil intersects somewhat with the demand for oil, and the demand for oil actually exceeds the available daily or monthly producible supply, wWe're going to see this gyrations in price, where it will zoom up to $75 a barrel and then it will drop back down to $60 a barrel, and it will go back and forth. Everyone will have a sigh of relief when it goes down, and everyone will panic when it goes up, but the trend is going to be upward.

So, I think that the small and more efficient cars like the hybrids and like the smaller cars, I think that the alternatives like ethanol are all going to come into play, and the technology that wins out -- actually, that's not really fair, I think a number of technologies will win out. It's all going to come down to economics, if someone's not going to pay an extra $5000 for a car necessarily to save $200 a year, but if they can spend $3000 extra for a car and save $600-$800 a year, then maybe that's worthwhile. It's kind of skewed, our whole political system is all skewed, I mean we subsidize oil and gas. The alternatives have some subsidies, but not nearly to the extent that being green to oil industry does.

So, you think well, as a national strategy, should we really be spending hundreds of billions of dollars in Iraq and subsidizing oil drilling or should we be looking at alternatives that are more sustainable? Unfortunately. we haven't really been making the right choices in my mind, so without that it's going to take a little longer for these alternatives to come into the limelight, but it will happen.