Friday, April 24, 2009

Insight on Battery Maker Valuations

AltEnergyStocks looks past the happy, happy joy, joy of the battery biz:
...I love the Li-ion batteries in my laptop and cell phone and believe it Li-ion an excellent choice for applications like electric two-wheelers (E2W) and other vehicles where there is a rational relationship between vehicle weight and passenger weight. But it is high comedy to suggest that Li-ion batteries will ever be able to power 300 pounds of passengers and 3,000 pounds of steel for 40 or 50 miles at highway speed. It's like using 5,000 golden hamsters to pull a stagecoach when what you really need is a horse.

I've been rational, analytical, courteous and engaging for the last ten months, but it's high time for somebody to stand up and call bullshit on the shameless Li-ion hucksters who have nothing to offer but happy-talk forecasts and hype! It's also high time for taxpayers to stand up and say "Not with my money you don't!"

America's leading Li-ion battery developers including Altair Nanotechnologies, Ener1 and Valence had combined losses of $93 million on $42 million of 2008 sales, yet they sport a combined market capitalization of $1 billion. In comparison America's leading lead-acid battery manufacturers including Axion Power (AXPW.OB), C&D Technologies (CHP), Enersys (ENS) and Exide (XIDE) carry a comparable combined market capitalization even though they had combined profits of $140 million on $6.2 billion of 2008 sales.

Something is dreadfully wrong with this picture. Summary data for each company follows.

Per Share
Mkt Cap
Altair Nanotechnologies Inc. ALTI $1.29 $120 $6 ($29)
Valence Technology Inc. VLNC $2.22 $273 $29 ($21)
Ener1 Inc HEV $5.40 $613 $7 ($43)
Group Total

$1,005 $42 ($93)

Axion Power
C&D Technologies
CHP $2.10 $55 $375 ($8)
Exide Technologies XIDE $4.66 $352 $3,698 $58
Enersys ENS $13.96 $670 $2,162 $101
Group Total

$1,126 $6,236 $151

For months my message to storage sector investors has been simple: the energy storage sector will ride the crest of an investment tsunami as we enter the cleantech revolution, but cleantech is all about price vs. performance and there is no room for irrational expectations. The DOE has said the same thing and now the President's auto industry task force has joined the chorus. Lithium dreams have become an investor's worst nightmare. It's time to wake up and smell the coffee, go to work and solve our problems to the best of our ability with cost-effective technical solutions like compressed natural gas and advanced lead-acid and lead carbon batteries....MORE