Compact Power, a Michigan subsidiary of South Korea’s LG Chem, is starting to look like the player to beat in the competition to supply lithium-ion cells and battery packs for electric vehicles, having bagged deals with General Motors, Eaton and Ford.
President Obama’s visit to Smith Electric Vehicles in Kansas City, Mo. last week was just a warm-up for what’s shaping up to be a full-on electric car and battery offensive by the White House this week.
Battery startup A123Systems was on a roll in 2008: It went into the year with a fresh round of capital (funds totaled $132 million in October 2007) and by May seemed to be headed for an IPO. But less than two weeks into 2009, the Massachusetts-based company has been defeated in a battle for what could be (if the automaker stays afloat) one of the biggest electric-vehicle battery supply deals in the country: GM’s (s GM) Chevy Volt.
Granted, GM has said it will continue working with A123 (and other battery makers) “to support several [battery] companies and technologies.” But why did A123 lose out to LG Chem’s Compact Power for the major deal? According to GM vice chairman Bob Lutz, the automaker wanted flat, lithium-ion. The risks involved with working with a startup also played a factor.
The Michigan Business Review reports this explanation from Lutz:
A123 is still sort of a startup, they’re still ramping up, and A123 has been specializing mostly in…cylindrical cells, which are good with power tools and stuff. What we need here is prismatic, which is flat cells. And LG Chem is just farther along.
General Motors (s GM) has contracted Compact Power, a Michigan subsidiary of Korea’s LG Chem, to supply lithium-ion polymer battery packs for its electric Chevrolet Volt. GM CEO Rick Wagoner announced the plan this morning at the Detroit Auto Show after more than a year of competition for the supply deal between Compact and Massachusetts-based A123Systems — confirming buzz that the deal had been struck back in October.
Today’s announcement comes on the heels of news from A123 Systems that it has applied for DOE loans to build a battery factory in Michigan, but the state is not an EV battery hot spot just yet: Compact Power plans to manufacture the Volt battery packs at its plant near Seoul, Korea. At higher volumes, LG Chem chief Bahn-suk Kim said the batteries could be produced stateside.
[qi:_newteevee] Hollywood take note: Sony Pictures is the sixth (and final) major movie studio to pull up stakes in South Korea, where blazing fast, ubiquitous broadband has sucker-punched the market for DVD sales and rentals, NewTeeVee reports today. In Korea, where average broadband penetration rate by household hit 90.1 percent last year (and in Seoul reached 107.8 percent), nearly 50 percent of Internet users say they download movies, and the typical users is downloading about a movie a week. Unsurprisingly, perhaps, DVD sales have more than halved between 2008 and 2002, and rental shops feel to a third of their 2001 numbers by the end of 2007.
But here’s the real zinger: In the face of ubiquitous broadband, DVDs won’t be replaced by other physical formats or even VOD services, but by the cloud. At the center of the Korean downloading craze are web-based storage solutions — so-called “webhard” services — originally popularized by LG. Today, there are dozens of vendors, with some offering up to 1 Terabyte of storage space for free. The services are monetized through priority access points that guarantee higher speeds. Rather than fighting the trend, Korean film studios are joining the cloud and starting a webhard-based movie download service by the end of the year.