CEO of Lithium-ion Battery Developer Valence Sees Revenue Growing 500% In Current Fiscal Year

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Valence Technology Inc., a Texas-based lithium-ion battery developer for transportation and industrial applications, expects revenue in the fiscal year ending next March 31 to be roughly 500% higher than the “just over” $20 million the company expects to report in the fiscal year just ended, Robert Kanode, president and CEO, told

“You’re going to start to see us move up in revenue,” Kanode said, noting that orders from the Smith Electric unit of Tanfield Group PLC should contribute up to $70 million in new sales that will be reflected primarily in Valence’s fiscal third and fourth quarters. The revenue will come from supplying lithium-ion battery packs for some 2,500 Smith electric delivery vans. “We’re actually shipping commercial products,” Kanode said as he highlighted how he thinks investors and analysts in the U.S. don’t realize how much farther along the electrified transportation market is in Britain.

Asked when he expects Valence to be in the black, Kanode said, “As we ramp up this year, the break even point will be at $30 million” in revenue.

Kanode indicated that he anticipates further growth over the next few years based in part on Smith’s plans to turn out 10,000 electric delivery vans for the U.S. market, plus another 9,000 for the UK and Europe, by 2010. Smith previously announced plans to build a manufacturing plant in the U.S.

Kanode forecast that, given rapidly rising gasoline and diesel prices, the big global delivery companies probably won’t be able to survive unless they completely turn over their existing fleets of delivery vehicles. “They must have (electric vans),” he said, estimating that in five years the advanced battery business will have annual sales of some $11 billion and that Valence will be one of several winners in this sector.

Kanode said that Valence is in talks with another electric van manufacturer, Modec, as well as with carmakers Renault and BMW. He anticipates the market for lithium-ion powered electric passenger vehicles to surge. “They’re going to have to get out of their SUVs,” he said, referring to American motorists whom he expects will get caught in the grip of pump prices that will rise to as much as $15 a gallon.

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