Here's a roundup of news about two conversion
companies (Hymotion and Hybrids Plus) and two
battery makers (A123System, including reports of
a possible IPO, and Compact Power), plus,
immediately below, welcome news that Toyota is
softening its public warnings about conversions' impact on Prius warranties.


After years in which Toyota said no more than
"modifying your car may void your warranty"
(overlooking the fact that such modifications
would in fact only 'potentially affect' the
emissions system warranty (one of four warranties
for the car), cooler heads appear to have
prevailed. Now Toyota's spokesperson, Bill Kwong with far more caution says,
``We don't recommend customers modify our
vehicles,'' said Bill Kwong, a spokesman for
Toyota's U.S. sales unit in Torrance, California.
``It wouldn't automatically invalidate the
warranty, but if they put this in and it fries
the electrical system, for example, obviously that would not be covered.''

In the Bloomberg story below, as we just
discussed in talking about the Wall Street
Journal story, here the headline conveys a
message that's much more alarming than the story.

Toyota Says A123's Batteries for Prius May Nullify Warranty
By Alan Ohnsman in Los Angeles at
aohnsman@... Bloomberg News April 29, 2008
http://www.bloomberg.com/apps/news?pid=20601101&sid=aMCS2ME8EIlo&refer=japan

Toyota Motor Corp. said A123Systems' planned
lithium-ion battery packs for the automaker's
Prius to boost the hybrid car's all-electric
driving range may nullify warranties for owners who install them.

A123 said in a statement today that it's taking
orders for the $9,995 L5 battery module to
convert a standard Prius into a plug-in hybrid
that may get 100 miles per gallon of gasoline
when driven in a range of 30 to 40 miles. Initial
installations are to start in July, the closely held battery maker said.

``We don't recommend customers modify our
vehicles,'' said Bill Kwong, a spokesman for
Toyota's U.S. sales unit in Torrance, California.
``It wouldn't automatically invalidate the
warranty, but if they put this in and it fries
the electrical system, for example, obviously that would not be covered.''
<snip>

HYMOTION'S FURTHER COMMENTS ON WARRANTY
At blog at
http://www.a123systems.com/blog/hymotion/ by
Sanjeev Choudhary, General Manager, PHEV Systems

Since our L5 PCM product availability
announcement, Toyota has officially stated to the
media that the Prius’ factory warranty will not
be automatically voided due to installation of
the L5. Toyota has further said that if the L5
creates a problem with a warranted system then
Toyota may refuse to provide warranty service if
the L5 is the source of the problem.

These statements from Toyota are consistent with
our own position on how the Toyota factory
warranty will be affected by installation of the
L5. We have consistently said that Toyota can’t
automatically void the Prius’ factory warranty
simply because an L5 is installed. We have also
noted that if the L5 causes a problem that would
otherwise be covered by Toyota’s warranty then
Toyota may refuse warranty coverage. Rest assured
that in this event, A123 will pay for the cost of
the otherwise warranted repair for our customers.


Also see other comments at Hymotion's blog after
launch http://www.a123systems.com/blog/hymotion/?p=4#comment-20


FURTHER COVERAGE ON HYMOTION'S ANNOUNCEMENT
Our comments were included in an analysis at Greentech media:

Can Hymotion Convert the Auto Industry?
http://www.greentechmedia.com/articles/can-hymotion-convert-the-auto-industry-84\
6.html
The A123Systems subsidiary starts accepting
orders for a kit that turns Toyota Prius hybrids
into plug-ins. If it's successful, it could drive
car manufacturers to roll out their plug-in
hybrids more quickly, an analyst says.
by Rachel Barron April 29, 2008

CAPTION: The U.S. only has about 150 plug-in
hybrids today, and most of them ­ including this
Pacific Gas and Electric Co. car -- belong to
utilities and research institutions. But if
Hymotion's conversion kit is successful, everyday
drivers also will have the chance to plug in.

The first commercial plug-in hybrids are on their
way, and they might not be coming from General Motors or Toyota.

Hymotion this week began taking Web orders for a
conversion kit, called the L5 Plug-in Conversion
Module, that will enable Toyota Prius owners to
recharge their hybrids at electrical outlets.

By replacing some fuel with electricity, drivers
will be able to get more than 100 miles per
gallon, the company says, well over the Prius’ 46 miles per gallon.

Of course, orders aren’t the same as deliveries,
and Hymotion ­ which was bought by A123Systems in
May -- hasn't said when it will produce and
deliver the kits, which cost $9,995, including
installation, plus an extra $400 “destination” fee.

And once customers receive the kits, they still
will need to have them installed by one of a
network of certified installers, the company says.

But the news is significant because it marks the
first plug-in hybrids for the consumer market.
And even though it’s unclear how large the
production numbers will be, industry watchers say
the move could have an impact beyond the number
of conversions it puts on the road.

After all, taking orders ­ and $1,000 deposits --
is a way to test market demand, and major car
manufacturers likely will keep watch to assess
consumers' appetite for their own plug-in products.

Felix Kramer, founder of CalCars.org and an
advocate of plug-in hybrids, said the news is a
landmark for the electric-car industry and that
it marks the first time an aftermarket conversion
company is targeting the consumer market in large volumes.

About 150 plug-in hybrids cruise U.S. roads,
Kramer said, adding that most of the vehicles are
owned by utilities, research institutions and a handful of early adopters.
<snip>


MAJOR STORY ON HYBRIDS PLUS CONVERSION
In IEEE Magazine (the publication of the
electrical engineering profession), John Voelker
has a long story about a customer of Coloraddo's
Hybrids Plus, including photographs of the installation and a

Plugging Away in a Prius
http://www.spectrum.ieee.org/may08/6174
Audio Slideshow: The Steps in a PHEV Conversion
http://www.spectrum.ieee.org/may08/6185
Web-Only Sidebar: Automakers' Plug-In Plans
http://www.spectrum.ieee.org/may08/6174/priussb1
Or read them all on one page at:
http://www.spectrum.ieee.org/print/6174



A123SYSTEMS (HYMOTION PARENT CO) BATTERY STORIES
More about A123 and batteries at Popular
Mechanics, which has been running "Future Car Week"
http://www.popularmechanics.com/automotive/new_cars/4261451.html

http://www.technologyreview.com/read_article.aspx?ch=specialsections&sc=batterie\
s&id=20570&a=
An Electrifying Startup By Kevin Bullis
Technology Review May/June 2008
A new lithium-ion battery from A123 Systems could
help electric cars and hybrids come to dominate the roads.


RUMORS OF A123SYSTEMS IPO
Finally, all the interest in PHEVs means that
business prospects for the companies supplying
components may become big financial winners. The
buzz is beginning about an Initial Public
Offering by A123Systems (which in addition to its
automotive business, is already delivering large
volumes of its batteries to the power tool
industry). In addition to the story below, see
also
http://earth2tech.com/2008/05/01/a123systems-preparing-ipo/
and http://gm-volt.com/2008/04/30/get-ready-for-the-a123-systems-ipo/


Wednesday, April 30, 2008
The A123 Systems IPO: Signed, Sealed ... But Not Yet Delivered
http://www.innoeco.com/2008/04/a123-systems-ipo-signed-sealed-but-not.html

Two unnamed sources with close ties to A123
Systems, the Watertown maker of next-gen lithium
ion batteries for Black and Decker cordless tools
and plug-in hybrid cars, tell me that the
company's IPO filing is essentially complete.
Once the first quarter numbers are finalized, an
S-1 is likely to arrive in the SEC's inbox
sometime in the next month or so. The offering
could value the company at more than $1 billion.
Road show is planned for September; Goldman, JP
Morgan, and Merrill are underwriting, I'm told.

A123 Systems has raised more than $150 million
since it was founded in 2001. Among the biggest
winners from a successful IPO would be North
Bridge Venture Partners and Sycamore Networks
chairman Desh Deshpande. (North Bridge has a cool
video case study on A123.) Sequoia Capital and
General Electric are also investors.

Will Wall Street have an appetite for a battery IPO in September? We'll see...

A123 Systems' PR rep, Keith Watson, says, "The
company can't comment on anything related to an IPO."

(In the photo is George W. Bush with A123 CEO
David Vieau, standing next to a plug-in hybrid
Prius that A123's Hymotion division converted.
White House photo by Paul Morse.)



COMPACT POWER IS ALSO CONFIDENT
There's a huge horse race in batteries; for the
GM Volt contract, A123 is competing with Compact
Power, and GM has said it could pick both. Here
Compact Power says it's optimistic about meeting
GM's specifications, and citing its ability to
deliver high volumes of batteries.


Prabhakar Patil: Charging Ahead on Chevy Volt Battery
By Dale Buss, Contributor Apr 28, 2008
http://blogs.edmunds.com/GreenCarAdvisor/420


Prabhakar Patil is used to taking the battery and running with it.

The company he heads, Compact Power, is one of
two suppliers of the lithium-ion batteries
General Motors is testing to outfit its
hyper-critical Volt plug-in hybrid project. But
the high-pressure task before him only reminds
Patil of a decade ago, when he was Employee One
in Ford’s crash initiative to develop the Escape Hybrid.

"At the time, I was manager of electrical and
electronics for Ford production vehicles," recalls Patil.

"Alex Trotman was [Ford] CEO, and Toyota had just
introduced Prius. I got my assignment in the back
seat of a Prius when he and I were being driven
around, and [Trotman] said 'Develop a hybrid for Ford.'"

Patil began immediately to build his Escape
Hybrid team. He had a crew of about a half-dozen
within a month and the team peaked at an
enterprise of about 300 people before Ford
introduced the vehicle in 2004 as the first hybrid SUV on the American market.

Patil came to Compact Power, a unit of the Korean
chaebol LG Group, in late 2005, again as Employee
One of what promised to be an ambitious
enterprise to produce a market-leading
lithium-ion battery and powertrain for the burgeoning U.S. hybrid market.

"This is something that I have personally
believed in," said the Indian-born Patil, 58, who
earned a doctorate in aerospace engineering from
the University of Michigan and then spent 27 years with Ford.

"When I was doing the Escape Hybrid, I came to
realize that the battery was the key enabler or
disabler of these projects. So when the
opportunity came to do something about that, I came to this company."

Troy, Mich.-based Compact Power begins with the
huge advantage over other companies in this
derby: LG's existing, high-volume operation for
manufacturing lithium-ion batteries in Korea. The
company uses a manganese oxide chemistry

Patil believes that was one key in GM's selection
of Compact Power as one of two finalists for
supplying batteries for the Volt, which GM has said will debut in 2010.

That's an aggressive schedule, dependent on
battery development as well as GM's ability to
successfully handle all the other challenges of
developing what would be the world's first
high-volume extended range plug-in hybrid car.

While Patil is sure his company can do the
battery work, GM is taking no chances and has
contracted with a joint venture of A123 Systems
and Continental Automotive to develop another
battery system using its nanophosphate chemistry.

If both teams succeed, it is likely that GM will
use both, meaning some Volts will use one type of
battery, and some will use the other.

Compact Power also is negotiating development pacts with other auto makers.

In addition to leading the team developing the
Volt battery pack in the U.S., Patil also
supervises a team at LG in Korea that is helping
develop the individual battery cells.

"The miraculous part of doing this battery in the
required time period was that, at first, we
didn't even have a cell" of the proper size, Patil said.

"There was a great degree of difficulty: We
literally had to double the energy capability of
the cell that we had developed for hybrids prior
to Volt." Compact Power’s work on the Volt system
"is by no means a slam dunk ­ we’ve had our challenges."

At the same time, Patil said, "There is no 'show
stopper' that we're aware of that would make us
take a step back. There are engineering
challenges, but so far we have been working
through them. And the packs we've delivered to GM
have worked very well ­ line on line with how we said they'd perform."

Compact Power, which now has about 55 employees
in Troy and is one the way to 100 by year's end,
didn’t get its contract from GM until a year ago
and only really kicked off the Volt project last
June. But it delivered the first batch of test batteries to GM in October.

"It doesn’t matter what it says on the calendar ­
we’ve been working. We’ve had meetings at 6 a.m.
with some of the GM folks. It's a marathon being
run at a sprint pace," Patil said.

He insists, though, that and his charges at
Compact Power are up to the enormous challenge.

"What keeps people going is that they relate to
this not just as a job, but it has become a cause
bigger than themselves," he said.

"They’re doing something specific for the country
and for our technological reputation, as well as
for the environment. And rarely do you get a
chance to be associated with something that is
literally a game changer in the auto industry."




-- -- -- -- -- -- -- -- -- -- -- --
Felix Kramer fkramer@...
Founder California Cars Initiative
http://www.calcars.org
http://www.calcars.org/news-archive.html
-- -- -- -- -- -- -- -- -- -- -- --