The Daily Update - Battery Tech, All About Speed

Away from the President Trump inspired trade and sanctions fury, it is very difficult to tell the difference between Tariff and Sanction, a great piece from the team at Bloomberg yesterday regarding ‘stranded assets’.

In the past the term was used to describe fossil-fuel projects which had turned unprofitable before even being deployed as pollution regulations tightened. Now the term is being used in conjunction with battery technologies as the pace of new development in the storage devices is so fast that yesterday’s technologies is outdated before production can start.

Investment in new start-ups in battery development companies rose to more than $1.5bln in the first half of this year, nearly twice that seen in the whole of 2017. Car makers the world over are funding such initiatives and the Japanese Industry group New Energy & Industrial Technology Development Organisation has reported it will invest $90mil immediately in the devices with a group of manufacturers and universities.

People in the know report there are many differing systems being tested across the industry and even the lithium-ion basis has many differing ‘flavours’ under investigation. Bloomberg estimate about 1784 gigawatt-hours of capacity will be required by the year 2030, from the 100 gigawatt-hours currently available. About $16.7bln has already been spent to install factories around the world with at least a further $42bln of investment expected by the year 2022.

The development is at such a break neck speed that in the ‘worst case, you may need to redesign entire factories’ before production even starts. Some companies are investing huge amounts of money; one Nordic company is looking to invest around $4.6bln in a manufacturing platform to have the capability of evolving as the technologies develop. Even so it would appear that a number of investors are likely to end up with a battery which is just not economical as other product comes to market, ‘stranded assets‘ need to be avoided and any bond issuance in this sector warrants a full credit analysis.

Just off to charge my iPhone have a good evening.

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