Johnson Controls Sees Smaller Lithium-ion Battery Firms Reportedly Being ‘Swallowed Up’
Submitted by EnergyTechStocks.com
Add to the list of important energy stories being overlooked during the credit crisis a report that the head of Johnson Controls Inc.’s power solutions unit expects smaller companies developing lithium-ion batteries for plug-in electric hybrid vehicles (PHEVs) to be “swallowed up,” as Reuters put in an October 7 report on the news agency’s global environmental summit in San Francisco.
Part of the blame must lay with Reuters, which buried Alex Molinaroli’s startling prediction in paragraphs six and seven even though it implies that half a dozen or more public companies could be acquired in the coming months and years. Reuters led instead with Molinaroli’s prediction that Johnson Controls’ own hybrid battery business will be profitable within five years.
In fairness, that, too, is a remarkable prediction for a player in an industry that hasn’t even gotten started yet. The first production model plug-ins aren’t expected to hit dealer showrooms until mid-2009. Molinaroli’s twin predictions effectively serve notice that one of the companies expected to battle for global lithium-ion battery dominance sees this new industry developing very rapidly, giving investors an opportunity to make big bucks through merger and acquisition activity as well as through companies’ own rapidly-rising sales.
Molinaroli only hinted at which battery makers might be acquired, calling them newer companies without other battery or automotive businesses to absorb the high cost of product development. Based on this admittedly overly-general description, it’s possible to speculate on some specific names, though investors should understand that there’s no reason to think any deal is in the works.
The first firm that comes to mind is Ener1, the Florida-based outfit trading on the American Stock Exchange that has been generating a lot of buzz recently as it demonstrates its technology and builds commercial relationships with, among others, enterprising Norwegian electric vehicle manufacturer Think.
Three others that fit Molinaroli’s description but don’t have Ener1’s buzz are Valence Technology Inc., Altair Nanotechnologies Inc., and Lithium Technology Corp. The first two trade on NASDAQ, the third over-the-counter.
Another firm with buzz is NASDAQ-traded Maxwell Technologies Inc., which makes ultracapacitors, battery-like devices likely to supply quick pick-up to go along with the lithium-ion batteries’ electric storage capacity.
