Kiwi battery technology charged up on green car opportunities


By guest blogger, Imogen Reed

Congratulations are due to UC’s Dr John Abrahamson (Chemical and Process Engineering) and Christchurch company ArcActive who recently won one of three prestigious awards at the April 2012 CleanEquity Conference in Monaco.

The award, for Excellence in the Field of Environmental Technology Research, is proof positive that New Zealand is at the forefront of exploration into new battery technology for the green car market, and the future for the company looks bright.

The CleanEquity Conference is magnet for the world’s investors and ArcActive, buoyed up by their success, aim to raise enough equity over the coming year to develop a mass market for their innovative battery. As ArcActive’s Chief Executive, Stuart Mackenzie, commented: “This will be a multibillion-dollar market by 2020. Our technology has world beating performance and is very low cost, so we hope it wins out over other new technologies.”

Igniting the Spark

The Company began its life at Canterbury University; building on technology first developed over 30 years ago by Dr John Abrahamson, but has since expanded and taken this initial research much further.

ArcActive is targeting the “stop- start” and micro hybrid vehicles which are increasing in number in China, Europe and the United States. These cars’ engines reduce or turn off in certain situations such as when the car is idling or coasting to a stop which saves on fuel but places huge demand on traditional batteries which last only weeks in these vehicles.

ArcArctive’s long term aim is to fine tune the negative electrodes found in the batteries for stop/start vehicles in order that the DCA (Dynamic Charge Acceptance) can allow the battery to have a much longer charge life. (See a slightly technical explanation here)

McKenzie commented that: “every man and his dog” had been trying to enhance the DCA of batteries and stated: “What we have developed is a battery which has got astonishingly good DCA and lifetime and is no more costly than a state of the art battery.” However, he felt confident that although other companies were also in the running to solve the DCA problem, ArcActive were in a strong position to beat their rivals and take a chunk out of the car battery market if they could scale up their technology and replicate the results with international car and battery manufacturers.

Collaboration Has Been Key

The initial University of Canterbury project received some much needed initial support via a $225,000 KiwiNet PreSeed investment from Ministry of Science and Innovation to prove the technology worked.
McKenzie felt that this early support was critical in getting the project to this stage as early work identified electrodes for batteries as a key application for the technology.

He commented: “It’s been a very collaborative effort getting to this point. We’ve received some great support from KiwiNet in terms of funding and expertise from other members. This support allowed us to move the project to a point where we could attract additional technology grants from the Ministry of Science and Innovation and private investor funds to get to where we are today.”

Raising capital in order to develop a product is a hard task in itself, but it is clear that the company has worked diligently to raise $5m in grants and investor capital with about $2.5m still unspent in the bank.

Such is the faith in this product that investors in the company have grown as ArcActive continue to develop and refine their product. They now include NZVIF, ACC, Neville Jordan of MAS Technology and Endeavour Capital fame and K1W1, while Canterbury University still has a large stake.

Greener Products for the Planet = A Billion Dollar Industry

Recently mandated emission controls in both the EU and USA are driving the take up of electric vehicles as automakers focus on fuel economy and protecting the environment. The race is on.

There are big bucks to be made for companies who can provide cheaper solutions to ongoing issues within the green car market.

It is worth noting that the market for start/stop batteries has been forecast to grow from 5 million batteries per year in 2011 to 39 million per year (US$6.3B) by 2017 and nearly 100 million per year by 2020.

In Europe 30 per cent of all new cars are expected to be stop-start by 2015 and all cars by 2020, with China and US following shortly after.

Stuart McKenzie is positive about this: “The auto industry is undergoing a quiet revolution towards green cars. We’ve tested the performance of our batteries using new protocols developed by the hybrid car industry and obtained exciting results.”

From the research the company has undertaken, it has been estimated that that start/stop cars using ArcActive lead acid batteries will have a longer life and consume 10% less fuel, compared to 2-4% if using alternate technology AGM batteries, at no extra cost.

By cutting costs in this way, ArcActive are aiming to become an important component of this emerging multibillion dollar market and with the desire to have their components being manufactured in New Zealand, it could also be good news for the country’s economy.

What Does The Future Hold?

Stuart McKenzie is the first to admit that the company have a long way to go.

“If we sell one battery to a car maker we will be a very big business,” an optimistic McKenzie said, but he pointed out that one of the biggest challenges facing them would be to convince battery makers to adopt the new technology.

There was also the added technical problem of making the batteries in volume, but the company are determined to find a way to solve this issue, hence the reason why they have given themselves until 2015 before they fully promote the product on the market.

However, with the arrival of Westerby’s Mitsubishi MiEV electric car now available on the New Zealand market, and one of eight, midway through a two-year trial to evaluate their real world performance, the signs look pretty positive. This compact car has been expressly targeted at government and corporate fleets that travel short commuter distances.

One of the proposals put forward is that this nifty little car could be used for carhire or as a ‘pool car’ employed on short trips by multiple users and being quick-charged between runs. In that scenario, it could be a powerful tool, and ArcActive are only too aware of the potential that their product can offer to the green car market in New Zealand and worldwide.

As the Ministry of Science and Innovation chief executive Murray Bain so aptly put it: “Kiwis are great at coming up with good ideas, but it’s sometimes a challenge to turn those ideas into something valuable. ArcActive are showing the way – not only developing new technology, but doing so in such a way that industry wants to be a part of it.”

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About sticknz

sticK is by Peter Kerr, a writer for hire. I have a broad science and technology background and interest, with an original degree in agricultural science. My writing speciality is making the complex understandable. I am available for outside consultancy work, and for general discussions of converting a good idea into something positive
This entry was posted in Angel investment, Entrepreneur, high tech, Innovation, proprietary, Prototyping, SciBlogs, start-up, sustainability, technology, university and tagged , , . Bookmark the permalink.

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