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A Bad Week for Electric Vehicles

It’s not quite clear whether makers of all-electric passenger vehicles need upgraded batteries or upgraded customers. Maybe both.

Cute but rare? Toyota’s eQ, all electric vehicle. Credit:Toyota

Improved technology might bring cheaper batteries with extended range and a longer useful lifespan. But firms like Nissan might also benefit from customers that don’t mind paying a lot and aren’t suffering from “range anxiety.”

Certainly, it is easier for automakers to change their strategy than to invent the perfect customer. This week, Toyota said it would roll out 21 new or redesigned gas-electric hybrids. It will expand sales of a version of the Prius that plugs in. But it is tempering expectations about its all-electric eQ, saying it plans to sell just 100 of the tiny vehicles, reports the Wall Street Journal.

Meanwhile, Nissan CEO Carlos Ghosn told the WSJ that it will upgrade the battery in the Nissan Leaf EV to help the firm lower its price. The Leaf has suffered slowing sales, and recent critisms that the battery’s capacity has dropped too quickly for drivers in hot climates.

Interestingly, Hundai says it would like to leapfrog the battery issues and instead offer a fuel cell-powered electric vehicle, says Reuters. The FCEVs will have their own problems – high sticker price and a lack of refueling stations.

Chrysler, a brand not known for cute subcompact city cars, has been a laggared in electrified vehicles. Nonetheless, it has a test fleet of plug-in hybrid vehicles. But the company has already determined that the initial batteries will need to be upgraded as the test showed problems with overheating. The company is testing how fleet operated electric vehicles might be able to transfer power from their batteries to the electric grid – a process called “reverse power flow.”

Lux Research, which has been sounding the alarm about likely weak sales of EVs commented on the Toyota announcement. “The reality is that HEVs and light PHEVs are simply far more economical now, given high battery costs, and will remain so for years to come. As a result, in 2020 sales of HEVs and light PHEVs will be 16 times greater than those of heavy PHEVs and EVs.”

No IPO For Smith Electric Vehicles

As recently as yesterday, IPO-watchers were keeping an eye on Smith Electric Vehicles, which was expected to go public today. I recently wrote about the company’s plans.

But last night the company pulled its SEC filing. “We received significant interest from potential investors, however, we were unable to complete a transaction at a valuation or size that would be in the best interests of our company and its existing shareholders,” said Bryan Hansel, Smith’s chief executive, in a release. “We have instead elected to pursue private financing opportunities to support the execution of our business plan.”

Though in general, IPO traffic has picked up in the last few weeks, some cleantech and chemical companies have been shy to pull the trigger on public markets. But many have had success instead with follow-on rounds of venture investing or strategic investments.

It can be a better bet than the IPO market, because investor appetite for particular sectors can change quickly. In Smith Electric’s case, some analysts think that slow sales of plug-in hybrid passenger vehicles dampened enthusiams for the electric vehicle market overall.

John Petersen, an analyst who blogs at SeekingAlpha, includes the news about Smith Electric in a larger roundup of information about the battery marketplace. He includes information from a Congressional Budget Office report on the high cost of government subsidies for the electric vehicle market. And he links to a detailed article from the American Physical Society about why lithium ion batteries (at least the versions around now) may not be the right technology for transportation.


And More Coming in Biobased Chemicals

I’m very pleased my story about biobased chemicals commercialization occupies this week’s cover, not because it sports a lovely image of poplar trees but because it’s Rudy Baum’s last official issue as Editor In Chief. Not that he’d ever toss his back issues of C&EN, but if he ever decided to clean out his home office I know he’d sure keep the Sept. 17 issue.

Anyway, I’m already off topic – sorry about that. The biobased chemicals story was fun to write because it’s a nice change of pace from the normal “experts say commercialization will take five to 10 years” concept. This one features actual photos of actual facilities making actual stuff.

One thing that is an issue in tracking this industry, and is only hinted at in the story, is that any report of upcoming capacity is based on company announcements, and there are promising product areas that just aren’t at that stage yet. (while some announcements may be a bit … premature). Luckily the wonderful C&EN online team made up a Google Map which I can update periodically.

Biobased acrylic acid is one product area that is not yet at the commercial announcements phase. OPX Bio and partner Dow recently presented an update on their two track effort towards scale up and commercialization. You can examine the details on the OPX Blog. And we’ll certainly be watching the BASF, Cargill, Novozymes effort.

I’d love to hear your thoughts about what else should appear on the map – whether it’s happening now or soon. Put it in the comments section or drop me an e-mail .


Ingredients of Consumer Backlash

Angry customers. No consumer products company or brand wants to be in a position of having to face consumers who have been told that their health and safety has come in second to company profits.

Firms can argue, with scientific studies in hand, that their products are perfectly safe, but once a company is forced to have that conversation, they are already at an uncomfortable disadvantage.

This week, the Twitterverse has served up controversies over cleaners, food, and personal care products. Though consumers often say they are concerned about global issues like climate change and water pollution, what really raises the temperature of debate is issues about products that people put in or on their bodies, or use in their homes. They may hear about something that sounds alarming first from activist groups – though often, news organizations pick up and amplify the criticisms.

Early in the week, the Environmental Working Group launched its 2012 Guide to Healthy Cleaning. Many, many mainstream cleaning products received grades of D or F. The American Cleaning Institute, a trade group for companies that make cleaning products, responded with a statement decrying “scare tactics” and a link to its own database of cleaning ingredients.

Also this week, Reuters reported on a skirmish in California over genetically modified sweet corn. Around a dozen anti-GMO protesters “stopped trucks from entering or leaving Monsanto’s Oxnard, California-based Seminis for nearly six hours.” Seminis is a seed company owned by Monsanto that has introduced the GM corn seeds.

Meanwhile, Seventh Generation, a green-targeted firm that sells mainly cleaning and paper products, is launching two lines of personal care products –first one for babies and another one for adults. Green ingredients supplier publication newhope360 has a feature on the new lines. The story makes it clear that Seventh Generation is moving into a market space that was created, in part, by recent plans by Johnson & Johnson to remove ingredients that can release 1,4-dioxane or formaldehyde from its products.

This week also brought news of a backlash about a backlash. Meat supplier Beef Products, Inc. is suing ABC News for a whopping $1.2 billion in a defamation lawsuit. The company says it was defamed by ABC reports about its “lean finely textured beef.” News reports had borrowed the unlovely term “pink slime” from a USDA employee, and Beef Products says that news programs falsely said the product was unsafe.

None of these controversies are particularly  new, but they are clearly not simmering down, either. The article about Seventh Generation’s products made several mentions of green chemistry and bio-based chemicals. Advocacy organizations know that consumers are likely to adopt the precautionary principal when choosing food, cleaning products, and personal care items. Suppliers to these industries will need to closely study the ingredients of consumer backlash.

DowAgro Satisfies Growers on 2,4 D Drift Dangers

[With a note on some confusion about wheat, and if it has been genetically modified (see below)]

The herbicide 2,4 D is pretty powerful stuff. It has recently been in the news because it kills weeds that have developed resistance to glyphosate (brand name Roundup). In May, I wrote about efforts by Dow AgroSciences to bring a new genetically modified corn to market that has been engineered to be tolerant to 2,4 D.

The idea is that the new corn would withstand applications of both glyphosate and 2,4 D, and that farmers would use those two herbicides, and presumably a rotation of at least one other chemical control, to kill weeds and prevent new occurrences of resistant weeds.

Along with the new corn, Dow scientists created a new version of 2,4 D, called 2,4 D Choline, that is less likely to drift off the fields where it has been applied. Now, one group of growers, the Save Our Crops Coalition, has issued a joint statement with Dow saying that the information Dow has supplied about reduced drift and volatility, along with the company’s pledge to investigate non-target claims, has gone a long way to satisfy its concerns about migrating herbicide. Both SOCC and Dow say they have “agreed to modify positions with respect to pending regulatory matters around 2,4-D tolerant crops.”

Prior to this agreement, the Save Our Crops Coalition had used the USDA’s open comment period to request an environmental impact statement to assess the likelihood of drift from 2,4 D applications.

They pointed out that since not all farmers will be growing 2,4 D tolerant crops, drift to non-intended targets could result in significant crop damage, since it would be applied during the growing season (imaging a field of vegetables that got smogged by 2,4 D – the plants would croak along with the weeds).

I reported on Dow’s work to reduce migration of 2,4 D in the C&EN feature story. Here’s the relevant background:

David E. Hillger, an application technology specialist at Dow AgroSciences, explains that rather than traditional ester or amine forms of the molecule, which can volatilize in the environment, the new version is a more stable quaternary ammonium salt.

In addition, Hillger says Dow’s proprietary manufacturing process produces a product with less particle drift when application directions are followed. Dow recently reported that field tests of the formula showed a 92% reduction in volatility and a 90% reduction in drift.

Crops that contain the 2,4-D tolerance- trait will also tolerate older versions of 2,4-D. However, Dow has developed a stewardship program that obligates farmers to use a premixed combination of 2,4-D choline and glyphosate. The program includes farmer education about using multiple herbicide modes of action, the requirement to use Dow’s new herbicide mixture, and labeling instructions for proper application. State pesticide regulations generally require farmers to follow labeling guidelines when using herbicides.

For now DowAgrosciences is waiting on regulatory authorizations for 2,4-D tolerant corn, but the company says it plans to get the green light in time for the 2013 growing season.

Certainly there are other criticisms of the 2,4 D-tolerant crops still out there. One important concern is that farmers may use chemical fertilizers in such a way as to promote even more herbicide-resistant weeds – ones that cannot be killed with 2,4 D or glyphosate. Another is the possibility that the amount of 2,4 D used on crops will dramatically increase (glyphosate, though used in large amounts, breaks down rather quickly in soil).

And of course, foes of all types of GMO crops abound, and anyone who is against Roundup Ready corn is not likely to be in favor of the new varieties.

Speaking of which, I’ve noted a number of commentaries relating to wheat lately, apparently due to the rise of anti-gluten eating. Many leave the reader with the impression that the U.S. is awash in genetically modified wheat. This is incorrect – there are many wheat hybrids on the market today, but none have been genetically engineered.

I find it handy to refer to an online USDA list – updated seemingly daily – which lists pending GM crops as well as those that have been approved already (in the section titled Determinations of Nonregulated Status). You may want to bookmark it, or have it printed on handy cards to give to people.


Smith Electric Vehicles Wants Investors, Cheaper Batteries

There aren’t very many electric vehicle companies in the world. One of the few was founded way back in 1920. Which makes it older than most cleantech firms by at least eight decades. But like many hip, tech-driven, venture-backed start-ups, Smith Electric Vehicles is planning an IPO.

A Smith Electric Vehicle truck delivers Staples products. Credit: Smith Electric Vehicle

Smith manufactures medium-duty delivery trucks – often called box trucks – used for delivering stuff. The trucks are much bigger than the kinds of passenger cars that come to mind when someone says “electric vehicle” – they need 20 times the battery power of a Nissan Leaf, for example. But they use similar types of batteries as their tiny cousins.

As President Obama noted in his speech last night at the Democratic National Convention, high tech battery manufacturing has been part of the U.S.’s push into advanced manufacturing. He mentioned “thousands of Americans have jobs today building wind turbines, and long-lasting batteries.” I’m assuming by “long-lasting” he’s talking about the big rechargeable li-ion battery packs meant to power electric vehicles.

In large part to make those jobs possible, several battery manufacturers got significant government support from Recovery Act spending. Factories are indeed manufacturing advanced batteries. But as C&EN reported back in February, the electric passenger car market is moving more slowly.

At the time, Smith’s CEO Bryan Hansel was plenty happy about the glut in big batteries. “It’s tremendous for us that supply is coming up—we’re ahead of the demand curve and so we benefit from oversupply in the short term,” he says. “It drives down cost and helps drive demand for our products, and we can then be a bigger customer.”

But with the IPO coming, business and technology risks in the battery industry cast a bit of a shadow on Smith’s operations. The company is shifting to batteries made by A123 Systems, a pure-play technology firm whose own stock chart looks like a downhill ski slope. And it’s not just A123. I also saw in Smith’s SEC filing that a related risk is “the recent bankruptcy filing by Valence Technology, Inc., or Valence, which produces the battery systems for our U.K.-produced vehicles.”

Also in the filing, Smith explains that it is depending on decreasing the costs of its electric drivetrain in order to make a gross profit on its truck sales. As of now, the company loses money on each sale. If the battery makers cannot be profitable, it will be hard for Smith to be profitable.

But that is not to say anything is hopeless. The value proposition to fleet operators to switch from diesel trucks to all-electric ones is promising. The whole supply chain is going to depend on developing and scaling-up the production of cost-effective batteries.

Algae Ponds: the lovers and the haters

This week’s issue of C&EN includes some news from algae-based biofuels firm Sapphire Energy. The company is reporting its first harvests of algae biomass from a large, outdoor algae farm in New Mexico.

Sapphire’s outdoor raceway ponds in New Mexico. Source: Sapphire Energy

Sapphire has grown and gathered 21 million gallons of algae biomass totaling 81 tons. Eventually, the plan is to make a kind of crude oil from the algae. They grow the stuff in very large outdoor ponds. According to the press release, “the cultivation area consists of some of the largest algae ponds ever built with groupings of 1.1 acre and 2.2 acre ponds which are 1/8 of a mile long.”

You’d think that the promoters of algae for biofuels would be clinking glasses filled with spirulina-enhanced juice at the news. But you’d be wrong.

In fact, a trade group of algae firms calling itself the National Algae Association says the kind of ponds used by Sapphire – known as raceway ponds (you can see why looking at this image) – will not scale up commercially. Instead the NAA supports the development of photobioreactors (PBRs for short). Similarly, algae researcher Jonathan Trent, writing in a New Scientist magazine piece that also appears in Slate is arguing in favor of photobioreactors. Specifically, Trent says PBRs should be deployed offshore. I’ll quote from his article where he summarizes the raceway/PBR tradeoffs:

There remains the question of how and where to grow the algae. A few species are cultivated commercially on a small scale, in shallow channels called raceways or in enclosures called photobioreactors (PBRs). Raceways are relatively inexpensive, but need flat land, have lower yields than PBRs and problems with contamination and water loss from evaporation. PBRs have no problems with contamination or evaporation, but algae need light, and where there is light, there is heat: A sealed PBR will cook, rather than grow, algae. And mixing, circulating, and cleaning problems send costs sky high.

Trent doesn’t mention what industry analysts complain about the most. When it comes to algae, though PBRs might be the best bet, they require too much capital expenditure for the equipment.

Meanwhile, Solazyme, which started life as an algal fuels firm but now is manufacturing oils for use in skin cream and other high value applications, grows its algae in a third way – its algae live in bioreactors, but in the dark. They eat sugar and make oil. Is there a best way to commercialize algae for fuels and chemicals? Is there any way? It seems that it is still too early to tell.

Say Hello to Two New Microbial Employees

Give them a cozy place to live and plenty of food, and they will make fuel and chemicals without demanding a salary or a pension. They’re microbes – and just like with any workers, it’s important to find good ones to make a business successful.

Two new kinds of microbes may be putting on hard hats and punching time clocks in the renewable fuels and chemicals space, thanks to researchers working on separate projects at the University of Georgia and MIT.

University of Georgia scientist Janet Westpheling, a microbial geneticist in the Department of Genetics, and her colleagues have developed an enzyme tool to alter the DNA of a group of thermophilic anaerobic bacteria called Caldicellulosiruptor. These bacteria can munch on biomass directly, which make them interesting for streamlining the process for producing useful products from biomass.

According to UGa, the newly developed process means researchers can redesign Caldicellulosiruptor to make useful stuff like ethanol or polymers. It remains to be seen, of course, how well the modified bacteria do compared to the established competition (heat, enzyme and/or acid treatment followed by fermentation by yeast) to make ethanol from cellulosic feedstocks. If the microbes can withstand real-world processing conditions and cut out some steps, they may find job security.

Meanwhile, at MIT, researchers are busy stressing out a soil bacterium called Ralstonia eutropha in an effort to prepare it for a job making isobutanol. Christopher Brigham, in MIT’s biology department and his team know that when Ralstonia is deprived of nutrients such as nitrate or phosphate, it starts storing carbon in complex compounds, perhaps in order to store food for later. By engineering it to change the type of compound, Ralstonia could make fuel from carbon inputs such as CO2.

The modified bacteria would expel the compound – in this case isobutanol – in a continuous process that could be scaled up. This tends to sound favorable compared to normal batch processes. In the lab, Brigham’s group has been feeding the microbe fructose, but the focus is now on switching to CO2 as a feedstock.

Battery Start-up Gets New Name

Liquid Metal Battery Corporation now has a new name – Ambri. I have to admit, since I track a number of cleantech start-ups, I had a fondness for LMBC partly because the name was so descriptive of the technology. It helps when my memory gets a little faulty.

The researcher and founder of Ambri, Donald Sadoway, is profiled in C&EN’s very recent cover package about Entrepreneurs in Chemistry. I enjoyed Sadoway’s story very much. As C&EN’s Amanda Yarnell points out in the story, though he is an expert in materials, Sadoway and his team are not experts in the battery industry. Their outside perspective helped the team come up with a cheaper method to store intermittent, renewable energy.

But I will miss the old name. The press release says Ambri comes from a snippet of Cambridge, home of MIT. Maybe Liquid Metal Battery Corp was considered too long, or perhaps too, er, sloshy?

Switchgrass Bait and Switch

Sometimes when you dig a little on Google News you find fascinating nuggets in local news of the topics that we cover here at C&EN. A great example is in Knoxville’s alternative newsweekly Metro Pulse.*

They grew the switchgrass. Now what? Credit: University of Tennessee

Newshound Joe Sullivan digs into what ever became of $70 million that the state of Tennessee spent in the flush days of 2007 to start up a switchgrass and cellulosic ethanol industry in the state.

The good news on the project is that the promised 250,000 gal per year cellulosic ethanol plant did open, in Vonore, Tennessee. The bad news is that it has not been using any of the switchgrass grown on 5,000 surrounding acres. The switchgrass part of the project involved the University of Tennessee Institute of Agriculture. The state figured switchgrass would grow great there. And it seems to have been correct.

Sullivan reports that more than half of the $70 million project money went to build the pilot plant. But corporate partner DuPont (now DuPont Cellulosic Ethanol) has used the pilot plant to test and demonstrate its ability to make ethanol from corn stover. Corn stover is a feedstock that is available in huge quantities…. in Iowa. As it happens, DuPont’s first commercial-scale cellulosic ethanol plant is in Nevada, Iowa, and is set to come online soon.

C&EN has mentioned the Vonore plant a half dozen times (including in a previous post on this blog). The move away from switchgrass escaped our attention, but it is an important development for the UT folks and the farmers they have been working with.

So what will happen to the 50,000 tons of switchgrass that were harvested by Vonore-area farmers? Read the story to find out.

* Edited 8/28 to correct reference to Metro Pulse

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