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Company says its battery will change future of cars

In a brick hall by the Charles River, where blacksmiths made cannons for the Union Army, a new breed of metalworker forges what may be the best weapon automakers will have for surviving the 21st Century.

At the labs of A123 Systems, technicians assemble an electric heart for the Chevrolet Volt, a battery pack that will be shipped to General Motors Corp. for testing as the company races to build an electric vehicle by 2010.

And for all the doubts about whether a tiny 7-year-old company can essentially rewire the domestic auto industry, A123's executives express abundant confidence in their invention.

"Today, we are providing enough batteries to power the equivalent of 100,000 vehicles," said Ric Fulop, one of A123's founders and its chief evangelist. "If you look at other technologies, they're still in the lab. It's years before they get into mass production." The hurdles to powering vehicles with electricity instead of oil have become less daunting in the past year, but they're still towering.

--Cost -- a battery pack for a single Chevy Volt would cost about $10,000 today.

--Safety -- protecting passengers in crashes and controlling hot batteries.

--Longevity -- guaranteeing 10 or 15 years of life from untested technology.

While GM's plan to build a car that travels 40 miles on a single electric charge has galvanized the industry, most experts say the technology isn't ready.

No battery today "does it all," said Don Hillebrand, director of the Center for Transportation Research at Argonne National Laboratory. "But when you watch the history and the progress they're making, they're improving rapidly. ... Soon, they'll have it."

Because 78% of U.S. commuters drive less than 40 miles a day, a vehicle that could travel that distance on electricity could find widespread appeal.

But several automakers and analysts question the electric vehicle charge, saying that plug-in hybrids and Volt-type vehicles can't make a major dent in U.S. oil demand before 2020, and that their extra expense and complexity will keep them rare.

Plug-in hybrids "aren't viable in the next seven or eight years," said Menahem Anderman, a battery industry consultant whose work is closely followed by many experts. "Even if existing technology can make it, automotive standards will require three to five years of testing in small volumes before anybody can seriously consider production."

But Fulop and other defenders say no other technology will deliver vehicles that can average the equivalent of 150 miles or more on a gallon of gasoline, and see a growing chorus of consumers who want to make an environmental statement with their cars.

"Why not give people that choice?" Fulop asked.

Reviving the dream

Automakers have attempted to power their vehicles with electricity for more than 100 years, with little success. Only in recent years has a new generation of battery been advanced enough to revive the concept -- along with tougher pollution rules that push automakers to get out of the fossil-fuel burning business.

Take that hunk of lead and acid under the hood of your car. To match the energy in a gallon of gasoline, you would need about one ton of those batteries. The nickel-hydride batteries in hybrids have twice the energy capacity per weight, but still lack enough capacity to power a regular-size vehicle.

Only with lithium-ion batteries, first sold by Sony in camcorders in 1991, did a design come close to the right levels of energy per pound. Most portable electronics use lithium batteries today, and Tesla Motors uses 6,831 standard lithium-ion cells to power its Roadster, which is supposed to begin regular production this month.

But industry executives say that Tesla has taken risks by going that route, and other automakers reject regular lithium batteries for a number of reasons. They are prone to overheating and are highly flammable, especially if punctured. They last just a few years at best, not the 10 years for which automakers usually certify their engines.

And solving those problems gets expensive. Experts estimate the battery pack in each $98,000 Tesla Roadster will cost $35,000, but Tesla executives have suggested that the cost is closer to $20,000.

Tiny scale, big results

While dozens of tech start-ups are pursuing new batteries, A123 has emerged as an early favorite. Founded in 2001, the company was the brainchild of Boston-based tech venture capitalists and Massachusetts Institute of Technology scientist Yet-Ming Chiang.

Battery research has been like trying to crack a safe with 100 dials. Improvements required testing endless combinations of materials and designs, with few clues for which combinations might work.

Chiang developed a way to tinker with the innards of the battery at the atomic level.

The result, called nanophosphate technology, is a battery that holds more energy per pound and pumps out power like a sled dog. The changes also make it safer. Putting a nail through an A123 cell results in a little smoke and occasionally a small flame, while the same test on a regular lithium cell creates a high-powered firecracker.

"This is the safest chemistry in the market," Fulop said.

The company has more than 850 employees and $148 million in funding, with General Electric Corp. as its largest contributor. From a factory in China, A123 supplies 10 million lithium-ion batteries that power everything from cordless drills to New York City hybrid buses. Its Ann Arbor branch works on finding military uses.

Yet it's the auto industry where A123 sees its future. The company has opened a Livonia office with 30 engineers, and it is one of two battery suppliers chosen to test batteries for the Volt program.

GM also is considering A123 cells for the Saturn Vue plug-in hybrid due in 2010. Most of the major automakers also have talked to the company.

But A123's technology still has some drawbacks, namely cost.

David Vieau, A123's chief executive, and Fulop contend that A123 has the largest staff of engineers working on vehicle batteries outside of Toyota Motor Corp., and that costs will fall rapidly if they can put their batteries into mass production.

"If we could take that initial conversion to hybrids from conventional vehicles, add batteries to it and get 100 miles per gallon rather than 45, the return you get on that investment is a much better case," Vieau said. "The higher the price of oil and gas, the better the case gets."

Volt of confidence

While most automakers expect to use lithium batteries in regular hybrids soon, GM has been the only major automaker to pledge mass production of plug-in hybrids.

Despite the daunting economics of plug-ins -- GM recently disclosed that the Volt may cost $35,000 -- the automaker remains optimistic that batteries from either A123 or the partnership between South Korean-based LG Chem and Troy-based Compact Power will meet its targets.

"They're not quite there yet," said Denise Gray, GM's director of hybrid energy storage systems. "But I'm hoping we'll have two suppliers who meet our qualifications."

Peter Savagian, director of hybrid powertrain engineering for GM, said the largest hurdle to getting the Volt built was proving that the batteries would last at least 10 years.

Battery life is "an open question," Savagian said. GM wants to have "a significant confidence that the battery will last the lifetime of the vehicle. When we talk about batteries that last 10 years, 15 years -- that's unprecedented in any application."

It's those kinds of questions that have cooled many automakers and experts to the idea of plug-in hybrids.

Battery expert Anderman, while praising A123, said plug-in hybrids could take off if gas prices soar and batteries continue to develop, but that GM's 2010 goal is simply unworkable.

"To rush into plug-ins is too much of a business risk, and actually there is a risk someone will put a car on the road with a safety problem and actually kill the good name of hybrids in the marketplace," he said.

Contact JUSTIN HYDE at 202-906-8204 or jhyde@freepress.com.