ITIS in Taiwan Believes in Nation's Potential to Turn Up EV Li-ion Cell Biz

Official EV-related

Clearly the technological movers and shakers in Taiwan, backed by official support, are not only talking eco-friendliness but also keeping a watchful eye on the latest developments of the electric vehicle (EV) sector. The Industry & Technology Intelligence Services (ITIS) recently held an industry conference themed "Discovering Taiwan, Constructing the Future," where industry experts analyzed the EV battery sector and market in Taiwan and China, as well as proposing suggestions.

The ITIS, a government-sponsored program managed by the Department of Industrial Technology of the Ministry of Economic Affairs (MOEA) in Taiwan, provides information collected or analyzed by research institutes on the island.

Not exactly exceeding popular expectations to come up with new discoveries, the ITIS says that with exigent problems as climate change and occasional reports of increasing difficulty in tapping crude oil, China quickly replacing the U.S. in terms of per-capita carbon footprint left, and the recently reconfirmed unprecedented melting of polar ice, as well as pirate deforestation in the Brazilian rainforest, more nations are motivated to promote and ratify policies and regulations to reduce greenhouse gases and assure long-term energy reliability. And with China obviously seen by most automakers as the next U.S. in terms of per-capita car ownership, coupled with downturn-defying new car sales in the past year or so, global experts have been brainstorming to develop newer, better technologies, such as fully-practical and popularly-priced EVs, to eventually replace gasoline-powered cars.

Battery being the heart of EVs, the lithium-ion battery sector has been drawing as much attention as the often-reported only son among many families in China, with ever more governments and private firms, especially in developed economies, investing to advance the technologies, eagerly trying to perfect core competitiveness to maximize business opportunities.

Energized by China

With its work practically cut out, the ITIS says that China targets EVs as one of the key industries for special development. Just as China can become the world's biggest car market, so can it become equally as massive as an EV supply base and market. Driven by China's 11th five-year national development project, with policies and mapped goals, to build EVs and its supply chains, many automakers in the nation are also engaged in building complete EVs and key systems and parts.

Not forgetting which side its bread is buttered, the ITIS says that many lithium-ion battery makers in Taiwan have had an early start, not only establishing technological strength but also having tapped into global automakers' supply chains to win confirmation for products. With Chinese carmakers aggressively trying to promote EV products, fueled likely by heated domestic competition that can be tilted towards those who are well-connected, as early birds, the ITIS stresses that Taiwan's makers of EV lithium-ion batteries are expected grow significantly by securing more deals and partnerships with Chinese automakers.

Invest More

W.J. Chen, deputy chief of ITIS, advises Taiwan to invest more to push ahead EV technology and enable local battery makers to quickly supply Chinese EV makers. Nevertheless, Chen urges local battery makers to keep core capabilities—including battery development, design, and production processes—rooted in Taiwan for long-term advancement rather than short-term gains by moving them to China. He also notes that local battery makers can move product standardization and mass-production to China to cut cost, including freightage related to shipping goods factory-direct.

Chen continues that once Taiwanese EV cell suppliers successfully tap into Chinese automakers' supply chains, the experience and track record will help the EV-related companies gain world-class credibility as potentially major players.

Looking even further into the future, Chen proposes that the success built by Taiwanese battery makers would energize local battery management system (BMS) developers as they try to supply EV makers in China.

USA Too

Switching focus to the U.S., Chen says that the time is ripe for Taiwan to develop EV-related products as the U.S. government has kicked off a US$2.4 billion project to build the next-generation plug-in hybrid electric vehicle (PHEV), including US$1.5 billion to build high-efficiency lithium-ion EV power cells.

The ITIS also says that other nations are also developing newer, better EVs and battery technologies: Japanese automakers have launched different commercialized and concept EVs; the European Commission (EC) kicked off the E-tour 10-nation project to promote using light electric vehicles (LEV) as early as in 2000-2003, forecasting that EV sales would gradually increase, driven by rising eco-consciousness and graying societies.

Taiwan is also gung-ho to promote EV applications: the government has, from late 2009, begun subsidizing NT$8,000 to NT$11,000 (US$264 to US$338) for each e-scooter or e-bike sold meeting performance requirements set by the Industrial Development Bureau. The aim is to subsidize 160,000 LEVs sold on the island in four years, which would not only clean up the environment but also advance LEV development in Taiwan.

On a larger scale, the Yulon Group, the largest carmaker in Taiwan, has from mid-2007 begun a four-year, government-sponsored project to develop homegrown BEVs. Two have been launched so far since the second half of 2009: the Luxgen7 EV+ BEV driven by lithium-ion battery powering a 180kw motor and a smaller BEV developed for Yulon's Chinese partner Geely Automobile. ITIS says Taiwan will carry out more such projects to build more EVs in the future.

Barriers

The ITIS also says that two major barriers stand in the way of popularization of EVs in Taiwan and elsewhere. The largest barrier is that current battery technology still lacks efficient energy density, unit price, cycle life, safety etc., and Taiwan cannot independently build and mass produce large cells.

Further revealing weaknesses, the ITIS says that existing lithium-ion battery technology still leaves much to be desired in terms of safety and overall performance: Japanese-made 3C lithium-ion battery packs still reportedly explode, while China-made packs may be cheaper but even riskier.

The other obstacle is relatively more willingness and aggressiveness to invest in regenerated energies, EVs and large-sized cell system technologies by major rivals in China, Japan, South Korea and the U.S. Such barrier will likely block Taiwan's battery industry from becoming more competitive globally. The ITIS urges both state and private parties in Taiwan to devote more resources into building next-generation energy-storage systems and key components.

2010 Critical

J.P. Pan, section chief at the Material & Chemical Research Laboratories in Taiwan, believes 2009 and 2010 to be critical for EV development, basing his view on the saturated internal combustion engine (ICE) car market, in which all major global automakers try to build, promote EVs to cope with fierce competition, as well as stay with the trend.

Echoing what has been said of the ICE car market in Taiwan, Pan says that the EV segment in Taiwan is also too small to achieve economy-of-scale, so the most efficient way is for Taiwan to build new opportunities in the EV business by partnering with Chinese automakers, via leveraging technological and cost advantages in Taiwan and China, setting up operation and safety-certification standards as firsts globally.

Rosy Outlook Justified

Painting such a rosy outlook is justified for Taiwan has a well-established lithium-ion EV cell supply chain: Battery pack suppliers as Delta Electronics, Inc. and Simplo Technology Co., Ltd. are the world's largest power-supply system makers and 3C (computer, communication, and consumer electronics) lithium-ion pack provider; E-One Moli Energy Corp. supplies high-quality LiMn2O4 cells to the BMW Mini-e, Tesla Roadster, Fisker etc. as well as Ford Escape hybrid HEV.

More development works for Taiwan. The island is gradually reinforcing local makers of anode and cathode materials for lithium-ion batteries, efforts that may help the sector to be a globally-leading player. If Taiwan makers can tap advanced technologies by working with world-class R&D institutes and find markets, especially in China, ITIS says, the island can look forward to ranking among the world's top three makers of lithium-ion cell maker to command a vital role in the global EV business.