A few days ago, GM announced that it had awarded advanced battery development contracts to two suppliers to design and test lithium-ion batteries for use in the Saturn Vue Green Line plug-in hybrid SUV. One contract went to the A123Systems-Cobasys partnership (Energy Conversion Devices (ENER:NASDAQ) is a strategic partner here), and the other went to Johnson Controls-Saft Advanced Power Solutions. This is a joint venture between Johnson Controls (JCI:NYSE) and Saft.

Now while this is certainly exciting news for the high-performance battery segment, we have to realize that high-performance battery technology is advancing every single day. So what GM may be looking at now could be irrelevant in three years.

That’s why, while I’m certainly not disregarding the A123Systems-Cobasys or the Johnson Controls-Saft partnerships, I am focusing less on what’s being integrated now and more on what will be integrated tomorrow.

I’m not saying these companies won’t deliver in 2007. But the companies that maintain a technological advantage in 2007 could be the companies that get the most lucrative contracts in 2008—when we’ll really start to see a significant increase in electric vehicle production.

One company that I’m definitely impressed with right now is the small, Indiana-based firm EnerDel.

EnerDel is actually a joint venture between Ener1 (ENEI.OB) and Delphi. The two companies joined forces a few years ago to up the ante in lithium-ion production.

Instead of using cylindrical cells inside the battery (which can make it much larger), they’re using a unique flat-cell design that allows the battery to be even smaller and lighter than conventional lithium-ion batteries. This is a big deal when you’re trying to decrease weight and size.

But what’s really interesting is that EnerDel has a patent on what’s called “Method for Cell Balancing for Lithium Battery.” This method allows each individual cell to be charged to unique, specific levels that optimize the power of each one. This results in a reduction in charging time, helps avoid overcharging and eliminates power robbing temperature spikes. The end result is longer battery life, safer operation and lower operating costs.

We’ll be keeping an eye on EnerDel this year. And as more develops, we’ll keep you posted.

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Part of most PHEV cars is the use of an internal combustion engine, at least in the near future. Maybe some coverage of new designs would help. Several companies have substantial improvments over the piston engine. Examples are Axial Vector (AXVC) and Cyclone Power (CYPW). Axial can run on any flamable fluid and has very high torque (3 x HP) which is perfect for electric generation. They also have 98% efficient generators.

I'd like to hear other reports on companies in this area such as Advanced Battery Technologies.