Friday, June 27, 2008

Zenn has the Potential for Disruption in the Auto and Battery Industries

Zenn is a Canadian company that currently makes electric cars and sells them in the US. These cars may soon (calendar year 2008 according to its CEO on a recent BNN interview) be powered by a new type of battery, one that can be recharged in minutes and allow 400Km of travel in one charge, and whose batteries are significantly lighter too (10% of the traditional lead battery weight).

Zenn trades on the Toronto Venture Exchange, ZNN.V and last traded at $4.92.

In the next several weeks, a privately-held and ultra-secretive company named EEStor Inc. will release the results of independent third-party testing of its electrical energy storage unit. These units can potentially be used everywhere, from hybrid cars to laptop computers. EEStor has Zenn and U.S. defence contractor Lockheed Martin Corp. equity and business partners. Lockheed bought exclusive rights to use EEStor's power system for military purposes, while Zenn bought exclusive worldwide rights to the system for vehicles weighing up to 1,400 kg. They say they believe it is the "holy grail" of electric storage systems.

[Edited June 27 10PM to add links and information]

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2 comments:

Calvin said...

It is a little premature to say that ZENN makes a car with Eestor battery technology. IF Eestor technology proves itself as advertised, and we can certainly hope it will, then ZENN will produce a longer range, faster charging vehicle than they currently do. There is still considerable scepticism about the ultracapacitor technology and fears that it will be the energy storage equivalent of vaporware.

The Shocked Investor said...

Thank you Calvin, you are correct. My main interest was actually in Zenn Motors as a speculative play. The fact that they have the rights for the EEstor technology smaller cars can be worth something, potentially a lot, but the way I look at it is just a plus. The Financial Post has an article on it http://www.financialpost.com/reports/oil-watch/story.html?id=613448

Zenn is looking into expanding its production and it is in theory a good alternative give current oil prices.

Someone else also pointed out at previous legal issues with one of the founders at Eestor.

"If it's real, it will swiftly and profoundly change the face of our planet. It would allow a car to be charged in 5 minutes for $9 with enough power to go 500 miles (804 kilometers). Essentially the patented invention by EEStor would function as a near-perfect electrical storage battery"

treehugger has some details about the technology: http://www.treehugger.com/files/2006/03/eestor_capacito_1.php

"* Whereas with lead acid batteries you might get lucky to have 500 to 700 recharge cycles, the EEStor technology has been tested up to a million cycles with no material degradation.

* EEStor's technology could be used in more than low-speed electric vehicles. The company envisions using it for full-speed pure electric vehicles, hybrid-electrics (including plug-ins), military applications, backup power and even large-scale utility storage for intermittent renewable power sources such as wind and solar.

* Because it's a solid state battery rather than a chemical battery, such being the case for lithium ion technology, there would be no overheating and thus safety concerns with using it in a vehicle.

* Finally, with volume manufacturing it's expected to be cost-competitive with lead-acid technology. "

Sounds like a lot to believe. However, a company that had, and still has, many skeptics was Timminco, tim.to and we know where its price is and the appreciation is has gone through. As the VC says in the article, very high reward, very high risk.

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