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Advanced Battery Weekly

© 2016 NAATBatt International • Advanced Battery Weekly • All Rights Reserved April 15, 2016 Vol. 7 No. 16

Summary: For the April 15th issue of NAATBatt’s Advanced Battery Weekly, we highlight recent sector activities. The NAATBatt Index was down 1.7% w/w, while the U.S. and Asia Indices were relatively flat w/w. The S&P 500 and Russell 2000 Indices were both down 1.2% w/w. Executive Director James Greenberger notes that the greatest potential for reducing the cost of storage lies in finding a way to manufacture batteries in high volume. Read “The Economic Challenge of Stationary Energy Storage” in the Executive Director's Notes section of the newsletter below. Check out our Members’ Press Releases section after the Key Highlights. New Member: NAATBatt is thrilled to welcome this week Nuvation Engineering as NAATBatt’s newest Silver member. Nuvation Engineering provides battery management systems for large-scale energy storage platforms used in grid applications, telecom power backup systems, specialty vehicles and mobile robots. Founded in 1997, Nuvation consists of a BMS products division and an electronic design services division. In addition to off-the-shelf battery management systems, Nuvation provides custom power electronics engineering and energy management solutions. For more information about Nuvation Engineering, go to: http://www.nuvation.com/battery-management-system. Key Highlights: • LG Chem plans to build an electric vehicle (EV) battery factory in Poland. The facilities, to be located

in the southwestern Polish city of Wroclaw, will ultimately have a production capacity of 229,000 EV batteries a year.

• BASF SE has acquired a license to manufacture and market the CAM-7 cathode material family for

lithium-ion (li-ion) batteries from CAMX Power. CAM-7 is a patented material with high nickel content that combines high energy density and high power for li-ion batteries.

• EnerSys announced that it has completed the acquisition of certain assets of The Enser

Corporation (ENSER). ENSER's proprietary lithium silicon cobalt disulfide chemistry provides increased power density required for strategic defense weapons and precision guided weapon systems.

• The California Energy Commission (CEC) has approved grants for the installation of DC fast

chargers along major state freeways and highways to allow electric vehicle (EV) drivers to travel from San Diego to the Oregon border. The grants went to four companies: Chargepoint, EV Connect, NRG EV Services and Recargo.

• Faraday Future has started construction on a planned $1 billion Las Vegas-area production plant.

Management is planning to have its first vehicles rolling off the assembly line in 2018. • Daimler Trucks has launched a fleet test for electric trucks (etrucks) in Germany. Over the next

twelve months, the Municipality of Stuttgart will test four 6-tonne Fuso Canter E-Cells in everyday working environments.



• Bushveld Minerals has signed a memorandum of understanding (MOU) with UniEnergy Technologies (UET). UET builds energy storage facilities that have a vanadium redox flow battery (VRFB) at the core.

• Researchers at Rice University have developed a combined electrolyte-separator for rechargeable

batteries that can withstand high temperatures. The essential part of the non-flammable, viscous composite is hexagonal boron nitride (h-BN) that functioned well in temperatures of 150 degrees Celsius (302 degrees Fahrenheit) for over a month with negligible loss of efficiency.

• An ‘Amnesty International’ report has highlighted that ‘blood mineral’ (cobalt) used in li-ion

batteries is being mined by young children. Over 50% of the world’s supply comes from the Democratic Republic of Congo.

Members’ Press Releases

Focus Graphite Focus Graphite: Graphite Mine to Market http://business.financialpost.com/news/mining/small-cap-news/focus-graphite-graphite-mine-to-market A Few More Details: LG Chem plans to build an EV battery factory in Poland and expects to have it completed in about one-and-a-half years. The facilities, to be located in the southwestern Polish city of Wroclaw, will ultimately have a production capacity of 229,000 EV batteries a year. The company counts a total of 25 automakers globally, including Renault, Volkswagen, Audi and Volvo in Europe, as its customers. Source: Reuters BASF SE has acquired a license to manufacture and market the CAM-7 cathode material family for li-ion batteries from CAMX Power. CAM-7 is a patented material with high nickel content that combines high energy density and high power for li-ion batteries. The license agreement between BASF and CAMX grants BASF the right to manufacture and sell the materials and also gets the same IP protection rights as the licensor. Source: BASF EnerSys announced that it has completed the acquisition of certain assets of ENSER, a manufacturer of molten salt "thermal" batteries used in powering electronics, guidance and other electrical loads on advanced weapon systems. ENSER's proprietary lithium silicon cobalt disulfide chemistry provides increased power density required for strategic defense weapons and precision guided weapon systems. The acquisition of ENSER provides EnerSys with opportunities for additional synergies within its lithium businesses. Source: EnerSys The CEC has approved nearly $9 million in grants for the installation of DC fast chargers along major state freeways and highways to allow EV drivers to travel from San Diego to the Oregon border. The grants went to four companies: Chargepoint, EV Connect, NRG EV Services and Recargo, which will install 61 DC fast chargers at 41 sites along major routes on Interstate 5, Highway 99 and Highway 101. In addition, 40 sites will have one Level 2 charger, and one site will have two Level 2 chargers.



Source: California Energy Commission Faraday Future has started construction on a planned $1 billion Las Vegas-area production plant. Management is planning to have its first vehicles rolling off the assembly line in 2018. The company has about 700 employees in the U.S. Source: ABC News Daimler Trucks has launched a fleet test for etrucks in Germany. Over the next twelve months, the Municipality of Stuttgart will test four 6-tonne Fuso Canter E-Cell in everyday working environments. Result of fleet test in Lisbon (Portugal) highlighted savings of around 1000 euros ($1,126) per 10,000 kilometres (6,214 miles) in comparison to diesel trucks. Source: Daimler Bushveld Minerals has signed an outline deal called a memorandum of understanding with UET. UET builds energy storage facilities that have at their core a technology called vanadium redox flow battery (VRFB). The patchy power infrastructure in Africa means the continent is ripe for an energy storage solution such as VRFB. Source: Proactive Investors Researchers at Rice University have developed a combined electrolyte-separator for rechargeable batteries that can withstand high temperatures. The essential part of the non-flammable, viscous composite is hexagonal boron nitride (h-BN) that functioned well in temperatures of 150 degrees Celsius (302 degrees Fahrenheit) for over a month with negligible loss of efficiency. The scientists believe the batteries with this electrolyte are suited more toward industrial and aerospace applications than mobile phones. Source: The Engineer An ‘Amnesty International’ report has highlighted that ‘blood mineral’ (cobalt) used in li-ion batteries is being mined by young children. Over 50% of the world’s supply comes from the Democratic Republic of Congo. Most of the cobalt is resold to corporations by Congo Dongfang Mining International, a wholly-owned subsidiary of China’s Huayou Cobalt Company Ltd. Source: Mint Press News



Exhibit 1: Indices Performance (From January 7, 2013)

100

150

200

250

300

350

400

450

500

1/29/2

013

2/12/2

013

2/26/2

013

3/12/2

013

3/26/2

013

4/9/20

134/2

3/201

35/7

/2013

5/21/2

013

6/4/20

136/1

8/201

37/2

/2013

7/16/2

013

7/30/2

013

8/13/2

013

8/27/2

013

9/10/2

013

9/24/2

013

10/8/

2013

10/22

/2013

11/5/

2013

11/19

/2013

12/3/

2013

12/17

/2013

12/31

/2013

1/14/2

014

1/28/2

014

2/11/2

014

2/25/2

014

3/11/2

014

3/25/2

014

4/8/20

144/2

2/201

45/6

/2014

5/20/2

014

6/3/20

146/1

7/201

47/1

/2014

7/15/2

014

7/29/2

014

8/12/2

014

8/26/2

014

9/9/20

149/2

3/201

410

/7/20

1410

/21/20

1411

/4/20

1411

/18/20

1412

/2/20

1412

/16/20

1412

/30/20

141/1

3/201

51/2

7/201

52/1

0/201

52/2

4/201

53/1

0/201

53/2

4/201

54/7

/2015

4/21/2

015

5/5/20

155/1

9/201

56/2

/2015

6/16/2

015

6/30/2

015

7/14/2

015

7/28/2

015

8/11/2

015

8/25/2

015

9/8/20

159/2

2/201

510

/6/20

1510

/20/20

1511

/3/20

1511

/17/20

1512

/1/20

1512

/15/20

1512

/29/20

151/1

2/201

61/2

6/201

62/9

/2016

2/23/2

016

3/8/20

163/2

2/201

64/5

/2016

NASDAQ Composite Index Russell 2000 AMEX Cleantech IndexNAATBatt Index Advanced Battery U.S. Index Advanced Battery Asia IndexTesla Motors LG Chem Johnson Controls

(Indexed to 100)

Tesl?a Motors at 728

Source: Bloomberg



Exhibit 2: Indices Performance

Close on 52-Wk % of 52-Wk PerformanceIndex 4/11/2016 High High LTM YTD Week

Dow 17,556.4 18,351.4 95.7% (2.7%) 30.9% (1.0%)S&P 500 2,042.0 2,134.7 95.7% (2.9%) 39.6% (1.2%)NASDAQ 4,833.4 5,231.9 92.4% (3.4%) 55.3% (1.2%)Russell 2000 1,094.6 1,296.0 84.5% (13.5%) 25.3% (1.3%)AMEX Cleantech Index 1,265.8 1,397.4 90.6% (4.4%) 24.0% (1.1%) Source: Bloomberg and ThomsonOne Exhibit 3: Supplier Performance (From January 7, 2013)

0

25

50

75

100

125

150

175

200

225

250

1/22/2

013

3/22/2

013

5/22/2

013

7/22/2

013

9/22/2

013

11/22

/2013

1/22/2

014

3/22/2

014

5/22/2

014

7/22/2

014

9/22/2

014

11/22

/2014

1/22/2

015

3/22/2

015

5/22/2

015

7/22/2

015

9/22/2

015

11/22

/2015

1/22/2

016

3/22/2

016

FMC Corp (Lithium Supplier) Hirano Tecseed Co. (Coater supplier)Polypore International (Separators) AlbemarleABB Sociedad Quimica y Minera de Chile S.A.Toray Industries Inc. (Separator supplier) Inoue Kinzoku Kogyo Ltd. (Coater supplier)

(Indexed to 100)

Source: Bloomberg Exhibit 4: Commodity Prices



Price on Price on Price on 1 Week 1 MonthCommodity 4/11/2016 4/4/2016 3/11/2016 Change Change

LME Copper (Cash, $ per tonne) 4,642 4,816 4,994 (3.6%) (7.0%)LME Lead (cash, $ per tonne) 1,686 1,726 1,726 (2.3%) (2.3%)LME Nickel (cash, $ per tonne) 8,550 8,270 8,270 3.4% 3.4% Source: LME Exhibit 5: Natural Gas and Crude Oil (From January 3, 2013)

0

50

100

150

200

1/3/20

132/3

/2013

3/3/20

134/3

/2013

5/3/20

136/3

/2013

7/3/20

138/3

/2013

9/3/20

1310

/3/20

1311

/3/20

1312

/3/20

131/3

/2014

2/3/20

143/3

/2014

4/3/20

145/3

/2014

6/3/20

147/3

/2014

8/3/20

149/3

/2014

10/3/

2014

11/3/

2014

12/3/

2014

1/3/20

152/3

/2015

3/3/20

154/3

/2015

5/3/20

156/3

/2015

7/3/20

158/3

/2015

9/3/20

1510

/3/20

1511

/3/20

1512

/3/20

151/3

/2016

2/3/20

163/3

/2016

4/3/20

16

(Indexed to 100)

Source: EIA



Executive Director’s Notes

THE ECONOMIC CHALLENGE OF STATIONARY ENERGY STORAGE

One of the benefits of being the Executive Director of NAATBatt is that it gives me frequent opportunity to speak and correspond with some of the brightest minds in the advanced battery industry and in advanced electrochemical energy storage technology. Those conversations are rarely of earth-shaking importance. But on more than rare occasion they reveal to me certain insights about our industry that make it a little easier to understand and clarify the path forward. I had one of those insightful strings of correspondence earlier this week with Bill Bushong, Director of Contract Research at Spectrum Brands, Inc. Spectrum Brands owns Rayovac and recently joined NAATBatt as a member. Bill sent me a link to an announcement by GE Global Research about a new energy storage system that GE is hoping to develop. The new system, based on supercritical carbon dioxide, is said to be 50 percent efficient at turning heat into electricity. Heat generated by solar energy, nuclear power, or combustion could first be stored as molten salt and the heat later used to drive the process. Bill asked me what I thought the implications of the GE system were for stationary battery energy storage. I replied that energy storage is as much about the why’s and the where’s, as it is about the what’s. The new GE technology sounds like a very impressive what. Using storage as a virtual power plant to replace gas peakers is a use case that many are pursuing and the GE technology might prove well suited to that function. But many of the most valuable use cases of storage—the why’s of storage--do not involve storing and releasing large amounts of energy at centralized locations. Those use cases involve storing small amounts of storage in commercial, industrial and residential settings and on distribution systems. That local storage can be used to manage the flow of electricity for a variety of possible purposes. The ability to store relatively small amounts of energy in small places is something that batteries do very well. It is hard for me to imagine that the GE technology, which relies on high temperature molten salt, is going to be suitable for many of those local storage use cases. Bill concurred with my observation but said that it gave him concern. What I was describing, he noted, was a series of small, separate markets for storage, each potentially using different storage technology. The struggle for rechargeable batteries, Bill said, is the volume/cost equation for battery manufacturing and sales. A fragmented market, and by implication the numerous low-volume markets that fragmentation creates, might make it difficult for any battery technology to achieve the cost reductions necessary to capture market share. Bill said that there are two fundamental ways to drive cost: design (chemistry/packaging) and volume (labor/materials). It matters what the total battery sales volume is. The more non-battery applications



that are used for energy storage, the greater the market that these alternatives occupy, the more expensive batteries will be. Bill said that, as a general rule of thumb, the cost of a new technology starts at about 80/20 (labor/materials) and matures to 20/80 (labor/materials). This suggests that more than 75% of cost reduction potential lies in the ability to squeeze out labor costs, usually through automation. The high capital costs of investing in automation can only be supported by high volume markets. Bill’s point, I believe, is a good one. If cost reductions are necessary to create a market for storage (and most believe that they are), the greatest potential by far for reducing the cost of storage lies in finding a way to manufacture batteries in high volume. This is not an original idea. I have heard it expressed before. But Bill’s comments reminded me about it in a very pointed way. And perhaps in a timely way: NAATBatt just proposed comments to an of energy storage bill that proposes tax credits for storage on a “technology neutral” basis (i.e., hydro storage and CAES would get the same credits as batteries). NAATBatt did not object to the technology neutral feature of the bill. On its face, that seems fair. But perhaps we, as an industry, need to rethink our position? If Bill is right, that batteries will not achieve a price point necessary to support their success in energy storage unless they are produced in great volume, NAATBatt and other advocates for advanced battery technology need to rethink their government relation strategy. We need, perhaps, to focus on promoting advanced battery technology itself, rather than energy storage more generally.

James J. Greenberger

Executive Director

April 15, 2016



NAATBatt International

Membership Applications for 2016

_________________ Membership Applications and Dues Structure NAATBatt International is accepting applications for membership from companies engaged in the business or applications of advanced electrochemical energy storage technology. Annual membership dues for 2016 are $7,500 for Platinum Members, $5,000 for Gold Members $2,500 for Silver Members, and $1,000 for Public Service Members (not-for-profit and government entities). Affiliates of Platinum Member companies and early stage companies with less than two years of operating history and revenues of less than $500,000 per year may join as special Silver Members for the price of $1,000 per year. Applicants may choose their level of membership based on their desired participation in NAATBatt International. Membership runs for 12 months from the month in which an application is accepted. For details about our membership structure, including a list of the benefits of each class of membership, and a membership application, please click here. Why Join NAATBatt International? NAATBatt International is a not-for-profit trade association of companies, associations and research institutions commercializing advanced electrochemical energy storage technology for emerging, high tech applications worldwide. Our mission is to promote the commercial interests of our members by supporting developments in the science of and markets for advanced electrochemical energy storage technology consistent with the goals of enhancing energy efficiency, reducing petroleum dependence and enabling carbon-free electricity generation. Our members include advanced battery, ultracapacitor and electrode manufacturers, energy materials suppliers, vehicle makers, electric utilities, equipment vendors, service providers, universities and other research institutions. We are a membership-based organization focused on delivering the following benefits to our members:

• Strategic market intelligence • Access to new and emerging electrochemical energy storage technology • Networking and building name recognition within the industry

NAATBatt International conducts multiple programs for its members over the course of the year. One of our most popular programs is our Members’ Site Visit meetings. At these meetings, one NAATBatt member hosts all other members for a tour of the hosting member’s business and production facilities. These tours give participants an unprecedented opportunity to learn about the needs and capabilities of individual member firms. Past hosts of these programs include General Motors, EaglePicher, Duke Energy, EnerDel, Cabot Corporation, S&C Electric, Magna Steyr, DNV-GL, Grafoid, Hydro-Quebec, XALT Energy and Battery Innovation Center (BIC). These programs are open to NAATBatt members only. NAATBatt members also get exclusive information about new products and new opportunities in the market. Each year, NAATBatt runs an Energy Storage Innovation Summit in conjunction with our annual meeting and conference. At the meeting, 20 jury selected emerging companies developing market-ready energy storage-related technologies make presentations directed to companies looking for licensing and



acquisition opportunities. The Summit is the culmination of an industry-wide survey and solicitation for new technologies. NAATBatt members have the exclusive opportunity to participate in the selection process and get a first look at these new technologies. NAATBatt members have access to ABC PatentEdge™, a database of patents and patent applications covering advanced batteries and ultracapacitors developed by NAATBatt in cooperation with the research firm IP Overviews. The database, and the quarterly reports summarizing developments in the database, provide NAATBatt members with deep insight into where advanced battery and capacitor technology is going and where the major players in that market are really making their R&D bets. NAATBatt, as the only international trade association focused on advanced electrochemical energy storage, is a frequent resource for companies looking for products or services involving advanced battery technology. NAATBatt routinely receives inquiries for products and services, which NAATBatt forwards, exclusively, to NAATBatt member firms. For example, NAATBatt recently received and transmitted to its members a solicitation for batteries from a California municipality looking to electrify its bus fleet. This inquiry was transmitted to NAATBatt members well before non-NAATBatt members learned of the opportunity. If you think that NAATBatt membership costs money, think about what not being a member costs. NAATBatt is the pre-eminent networking organization for professionals and companies working in the advanced battery industry. NAATBatt believes that good business relationships are founded on good personal relationships. From our members-only networking dinners, to our Advanced Battery Golf and Tennis tournament, to our annual meetings held at four and five-star resorts, we are dedicated to ensuring the development of strong personal and social relationships among professionals working in the industry. NAATBatt membership is meant to be fun, but it is fun with a serious purpose: Helping our members build bigger and more profitable businesses. NAATBatt is a not-for-profit trade association qualified under Section 501(c)(6) of the Internal Revenue Code and works for the benefit of the entire advanced battery and ultracapacitor industry. Every dollar spent on NAATBatt memberships and programs goes to recouping program costs and to supporting activities intended to benefit the entire advanced battery industry. At a time when it seems that the only people making money on lithium-ion technology are professional conference organizers, the advanced battery industry needs to take control of its own market and its own future. Electrochemical energy storage is the most important technology challenge of our time. Solving the problem of how to store more electricity in a smaller mass is fundamental to progress in vehicle technology, the Smart Grid, robotics, consumer electronics, unmanned aviation, fuel efficient maritime systems, electricity-based weapons systems, medical devices, monitoring systems and many of the other technologies that will shape human society in the 21st Century. Join us in our mission. We are helping to store the energy that will power the world.™



Contact Information:

NAATBatt International 122 South Michigan Avenue, Suite 1700

Chicago, Illinois 60603 (312) 588-0477

www.naatbatt.org

Officers

Davion Hill

DNV-GL Chairman

Bob Galyen Amperex Technology Limited

President

Jean-Pierre Arvers Digatron Power Electronics

President-Elect

Randy Moore

EaglePicher Technologies Chairman Emeritus

Steve Vechy

EnerSys Chairman Emeritus

Zak Kuznar Duke Energy

Chairman Emeritus

Brian Morin

Dreamweaver International Vice President

Ralph Brodd

Broadarp of Nevada Chief Technology Officer

John Butkowski

Beckett Energy Systems Vice President

Michael Lew

Head of Communications

Paula Szyper

Director of Meetings

John Platt

Snell & Wilmer LLP Secretary

Jim Greenberger Executive Director

Sandy Kane

Chief Financial Officer



Member Notices and Advertising

Intersolar/ees™NorthAmerica

NAATBattandees®NorthAmericahaverenewedtheirpartnership!Co-locatedwithIntersolarNorthAmerica,ees®NorthAmericarunsJuly12-14,2016inSanFranciscoandcoverstheentirevaluechainofinnovativebatteryandenergystoragetechnologies.ThisshowisthebestopportunitytoexploretheopportunitiesforcombiningenergystoragesystemswithPVsolarsystems.IfyouareinterestedinexhibitingatIntersolar/ees®NorthAmerica,pleasecontactWesDoane([email protected])

DuetoNAATBatt’scontinuingpartnershipwithIntersolar/ees®NorthAmerica,NAATBattmemberfirmsexhibitingattheshow—themostattendedsolarindustrytradeshowinNorthAmerica--areentitledtothefollowingexclusivebenefits:

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ContactJimGreenberger([email protected])orWesDoane([email protected])fordetails.



ThereisstilltimetojoinIMLBinChicago,June19-24,2016!TheExhibitandSponsorshipdeadlinehasbeenextendedtoFriday,April1,2016.

The lithium-ion battery was first commercialized in 1991, but did you know that the FirstInternationalMeetingonLithiumBatteries(IMLB-1)washeldinRomein1982?Now,34yearslater, IMLB-18 is set to bring together the leaders in this technology to discuss the latestresearch and advancements in the field. Do notmiss your opportunity to be a part of thisdistinguishedmeeting!ReasonstoParticipate:

• ThisisthefirstIMLBheldintheUSAsince2002• Speakersfromrenownedcompaniesincluding:BMWGroup,FordMotorCompany,Toshibaand

PolyplusBatteryCompany.• Sponsorsincludeindustryleaders:LGChem,SamsungSDI,ToyotaandNovonixBattery• IMLBisoneoftheleadingresourcesforindustryexpertsfromaroundtheworldandattendees

representanextremelywell-targetedandresponsiveaudience.• NetworkdevelopmentopportunitieswithbothAcademiaandBusiness• NAATBattInternational’sExecutiveDirector,JimGreenberger,willserveashonoraryco-chair

LearnmoreaboutIMLB2016|Viewexhibitandsponsorshipopportunities

Astheexhibitandsponsor lineupcontinuestogrow,werecommendyou lock inyourexhibitlocation and sponsorship options today to guarantee your companies presence at this can’tmiss meeting. Please see our online exhibit and sponsorship brochure for a full listing ofopportunitiesanddetails.

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