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Boston Power founder Lampe-Onnerud says deal with China’s BAIC based on performance

August 24, 2012

China’s central government finally seems to be getting serious about its plans to grow China’s new energy vehicle segment – and by serious I mean putting immense amounts of pressure on Chinese automakers to get moving with EV production.  And in line with the government’s push for using foreign technology where necessary, Beijing Automotive Industry Holding Co., or BAIC, http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=9284293  is trying out different battery manufacturers to see whose system works best.

I learned that BAIC is testing various systems in a recent conversation with Christina Lampe-Onnerud, founder and international chairman of Boston-Power Inc., www.boston-power.com a battery maker that moved its operations from Massachusetts to China after a $125 million investment from mainly Chinese entities.

Boston-Power produces lithium-ion battery cells, modules, and systems.  In early August it announced that Beijing Electric Vehicle Co. (BEVC), the EV division of BAIC, would use Boston-Power batteries in an electric sedan.  Turns out that Boston-Power is only one of the companies whose battery system BEVC is trying out.  But apparently Boston-Power has fared well, so far.  “I think they want to go as quickly as possible,” Lampe-Onnerud said of BEVC.  “They have tried a few battery companies. We had the best performance.  They have multiple sources.  It is a scale up game.”

Rather than building EVs and seeing if there is market, BEVC is taking a pre-order approach, said Lampe-Onnerud.  The Beijing Municipal government, which owns BAIC, orders electric vehicles and BEVC, produces.  The first EV will be apparently be based on the C70, a sedan based on the Saab 9-5 chassis BAIC bought from Saab in 2009. Pre-ordered EVs will be available in the fourth quarter of this year, according to the press release.    BAIC is using these government orders to try out the technology, and “performance is critical,” said Lampe-Onnerud.  “We are fairly hopeful this market will develop into a real market.  We are not the only supplier that needs to perform.”

In late 2011, BAIC also signed a letter of intent with Daimler to produce electric cars. http://europe.autonews.com/apps/pbcs.dll/article?AID=/20111108/ANE/111109880/1131  But now it seems BAIC is producing electric cars on its own through its EV subsidiary.  And Daimler is designing EVs with BYD in the Denza brand joint venture. http://www.insideline.com/byd/daimler-and-byd-launch-denza-ev-brand-in-china.html  I’m not sure how the Daimler deal fits into what BEVC is doing with Boston-Power.  Perhaps it is moving forward on a number of fronts….  That wouldn’t be surprising, actually.  Lampe-Onnerud says the pressure from the central government for local automakers to produce EVs is “absolutely on.”  Boston-Power has had a hard time getting BEVC engineers to the U.S. for consultation because they are under such pressure to produce EVs, she said.

Lampe-Onnerud seems confident that Boston-Power’s technology will win over the government entities that drive cars using it.  It doesn’t hurt that she has spent a lot of time in China getting to know the right people.  Those kinds of relationships can make technology look better.

And she sounded really happy to see her years of efforts finally having results—or at least hopefully having results.   “There is not one solution,” said Lampe-Onnerud.  “There are quite a few that will work.  We are trying hard to be a good supplier.”   What is really comes down to is validation for all her hard work.  “Seven years ago I had a really big idea,” she said.  “Now we have multiple automotive customers as well as storage customers.  It is a lot of work to grow something from nothing.”

I like Lampe-Onnerud and wish her luck.  But it is too early to predict success if that is defined as volume production.  The government has to stick to its resolve.  And Boston-Power’s battery has to beat out competitors, some of whom may have better connections than Boston-Power.  And it may help that Boston-Power chairman Sonny Wu, chairman of Boston-Power and managing director of Beijing- and Silicon Valley-based venture capital firm GSR Ventures, www.gsrventures.com seems to have good connections in China.   At least he sure does in the east China city of Liyang, where Boston-Power is building a plant.  Another GSR-invested company, Protean Electric, www.proteanelectric.com is also putting up a plant in Liyang.

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