Johnson Controls, XL Hybrids in lithium-ion battery deal

BOSTON--XL Hybrids, a 10-person startup here trying to chew off a chunk of the huge fuel-efficiency pie, today announced that Johnson Controls Inc. (Milwaukee, Wisc.) will supply the lithium-ion battery packs for XL's hybrid power trains for the fleet aftermarket.

The agreement is central to the company's strategy of sourcing components from top supplier while adding value at the system-integration level, according to Clay Siegert, a co-founder who serves as vice president of XL Hybrids' supply chain.

"They understood about selling to fleets...how to make it an economic proposition for fleets," Siegert said. "We're trying to make this right for fleets."

XL, founded here by MIT alums in 2009, the darkest days of the recession, is building hybrid electric drive trains specifically for Class 1-3 commercial fleets, for vehicles ranging from pickup trucks to vans used to deploy telecommunications.

The battery pack has 1.8 kilowatt-hours (kWh) of energy storage, a peak discharge power rating of 50 kW and a nominal voltage of 260V, according to the company. The pack will come from JCI's LiOn facility at  Holland, Mich. in early 2013.

The system
XL, which was looking for fast and powerful energy from its battery pack selection, builds systems "geared toward short bursts of assistant power and regenerative braking--10 seconds is a spec we used," said Justin Ashton, a co-founder who serves as vice president of business development.
 
The company's goal is to deliver a system installed for $8,000 with a three-year payback on investment (much of that in savings from reduced brake maintenance because of the regenerative braking system).

Neither Siegert nor Ashton would comment on the battery-pack selection process other than to say it was the culmination of a six-to-nine-month process. In a 2010 report, the Center on Globalization Governence and Competitiveness identified 18 other domestic battery-pack sources in addition to JCI, such as A123, Continental Automotive Systems U.S., Nissan, EnerDel Inc., among others. It also identified three additional startups in the LiOn battery pack business: Atieva, Dow Kokam and Quallion.

While big car companies like GM also have battery-pack technology in the works, it's not a big focus.

"There was a huge niche available when we started. There's still that same niche," Siegert said, adding, "OEMs are looking at improving technology in engines and vehicles themselves rather than looking at electric drives themselves."

Market potential
Ashton sees a near-term market that could stretch to hundreds of thousands of fleet vehicles ("multibillion-dollars in annual retrofits"), but it remains a market at the mercy of happenstance, particularly the price of oil and natural gas--the latter a fuel that's getting considerable uptake from the fleets.

XL Hybrids' value-add comes in the hybrid controls and integration, Siegert said, noting the companies hold two patents in the area. One regards how technicians install and integrate the components in a post-transmission parallel hybrid system, coupling the electric permanent magnet motor to the line drive "in a novel way."

The second patent is software that ties a wireless device to a vehicle, allowing wireless services to pull vehicle data into the cloud, analyze it and push relevant updates back to the vehicle based on real world use, Sieger said.

XL Hybrids has sold hybrid Chevrolet Express vans to a few U.S. fleets for pilot testing, claiming reduced fuel consumption of up to 21 percent on urban routes, the company said.

By integrating Johnson Controls’ Lithium-Ion battery packs, the system is capable of reducing fuel consumption by up to 21 percent on urban routes, helping fleet managers reduce fuel costs without added infrastructure or changes to operations.

"2012 is a validation year," Ashton said. "We're in low volume pilot test phase and working toward getting bigger contracts for next year."

The hybrid Chevrolet Express and GMC Savana vans featuring the 1.8 kWh battery pack from Johnson Controls will go on sale in 2013, the company said.