AppId is over the quota
AppId is over the quota
By John O'Dell September 23, 2011
Lithium battery developer Boston Power is shifting its focus -- and some of its manpower -- to China after a Chinese-led investment group acquired a huge stake in the six-year-old startup. This week Beijing-based GSR Ventures and the People’s Republic of China announced a $125 million investment in the Massachusetts-based company, a deal that was coupled with several key resignations. Responsibility for R&D, customer support, intellectual property development, and sales and business development will remain U.S.-based, but top executives responsible for several of those functions resigned in advance of the public announcement. Stepping down were Boston Power’s relatively new chief executive Keith Schmid, chief financial officer Steve Byram and marketing vice president Sally Bament.
The investment involved a mix of cash and incentives backed by China’s central government and proffered to help Boston Power build a second manufacturing plant there. The new plant, slated to open at the end of 2012, would boost the company’s annual production to a total of 400 megawatt-hours of batteries. That’s about a third of what company founder and executive chairman Christina Lampe-Onnerud has said Boston Power needs to be a significant player in the advanced battery segment now dominated by companies such as South Korean giant LG Chem (the Chevrolet Volt’s battery), France’s SAFT and U.S.-based Johnson Controls. With the new investment, Boston Power has raised about $325 million in capital since it was founded in 2005.
Power Shift
The company had applied for $100 million in federal funding in 2009 to help it build a new factory in Massachusetts, but its application was rejected and it then turned its attention to the Asian market. Boston Power officials could not be reached for comment, but in a statement issued earlier this week said that the new Chinese investment and incentive package would be used “predominantly to scale manufacturing, research and development, and business development activities in China.” As part of the new focus on China, Boston Power said it intends to shift “a number of positions and responsibilities” to China from its headquarters in Westborough, Mass.
A Boston-area newspaper reported that 30 of 80 jobs in the company’s headquarters would be eliminated. Boston Power has not announced replacements for the three departed U.S. executives. Schmid, formerly head of Virginia-based Distributer Power, joined the company as CEO in February when Lampe-Onnerud left that post to become executive chairman. Under the new deal, Lampe-Onnerude will serve as the company’s “international chairman” while GSR Ventures’ managing director Sonny Wu, a former Chinese telecom and semiconductor industry executive, has assumed the post of chairman of the board of directors, typically a more hands-on position.
EV Industry Beckons
While Boston Power began as a laptop battery developer, the company has recently moved into the hybrid and electric arena and is developing an EV battery research and engineering center in China. Wu said in a statement that he sees “rapidly expanding demand for Boston Power’s batteries (in China), as highlighted by the government’s unprecedented support for electric vehicles.” Onnerud started Boston Power with the aim of improving on an already-existing battery chemistry rather than developing an entirely new formulation. The Swedish-born international chairman was educated as a chemist and formerly was an Arthur D. Little battery industry consultant and headed global battery development for Massachusetts-based technology commercialization company Tiax.
Boston Power says its improved lithium-cobalt (Li-Co) batteries have three times the life of batteries using the same basic chemistry. Initially designed for laptop computers, the Li-Co chemistry eliminates the thermal build up that can diminish battery performance and, in rare instances, cause battery fires – a situation that resulted in the 2010 recall of more than 500,000 Sony laptops. Lithium-ion battery packs developed for automotive use are subject to considerable thermal stress, and safety and reliability have become key marketing tools for battery makers.
John O'Dell: is an AutoObserver Senior Editor. Follow @AutoObserver on Twitter.
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