GM Savors A123Systems and Coskata Deals Amid Dreams of Clean Vehicles That Can’t Crash
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announced last August. Under the deal, the Watertown company will co-develop the lithium-ion battery for the GM E-Flex electric vehicle architecture, which is the basis for the planned Chevrolet Volt electric car. The companies haven’t revealed the exact terms of the deal. But Ric Fulop, an A123 founder and vice president of business development, told me at the time: “It’s a significant deal…We are working together with GM to develop a very special product for the Volt.”
Clarke says it’s fair to see the A123 deal as a step toward GM’s larger vision of environmentally friendly cars. “We definitely have a vision toward the electrification of the automobile,” says Clarke. “Removing the automobile from the…imported oil, the climate change equation—I think that nothing short of that should be our goal, and that’s the journey we’re embarking on.” Fifteen years or so ago, electric cars used lead acid batteries. There has been an evolutionary change in battery technology since then, Clarke points out, leading to the lithium ion batteries A123 makes. “It would appear that this is the real deal this time,” he says, painting a picture of all-electric cars with 100-plus-mile ranges instead of today’s 40 miles or so. “The Volt’s a big deal for us,” he says.
Next we talked about Coskata, a Warrenville, IL-based company that says it has found an affordable way to make ethanol from almost any hydrocarbon-rich material, from wood chips to demolition waste to grass. Advanced Technology Ventures set up Coskata’s top-secret Series A funding round in 2006, along with Khosla Ventures of Menlo Park, CA, and GreatPoint Ventures. Wade did a great interview with ATV’s Bill Wiberg on the company in January, when GM used the Detroit Auto Show to announce it had entered into a research and development partnership with Coskata and had also taken an undisclosed stake in the company.
“The allure of biofuels is so great that it’s worthy of debate, consideration, and some concerted level of thought,” Clarke says. As Wade’s article also pointed out, so much corn is already being diverted into ethanol production that it’s raising the cost of food. And it takes almost as much energy to grow the corn and process it into ethanol as the ethanol itself gives back when burned.
“Let’s assume you could make [ethanol] out of something else—that’s where Coskata comes in,” says Clarke. “It was a lab setup when we first saw it,” he says of the company. GM had the work verified at Argonne National Lab, he says, “and chose to make investment in it.”
If Coskata’s technology works on an industrial scale, it could produce ethanol for around $1 per gallon, which inspires Clarke to muse about the possible future. “Wouldn’t it be great to have a fuel [where] the main cause of inflation was the price of garbage?” he says. “Chain your garbage to the curb so that people don’t come by and lift it.”
American research and educational institutions have the know-how needed to bring about this future, Clarke thinks. “We are world leaders in this type of microbiology,” he says. “That’s a game changer.”
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