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  • jforuus jforuus Dec 5, 2011 11:23 PM Flag

    Smokey the bear says use VLNC batteries

    The fires reported by General Motors (NYSE: GM ) earlier this week were just the latest in a string of bad news for battery makers. It has also left battery manufacturers scrambling to reassure customers that their chemistry is safe.

    Valence Technology (Nasdaq: VLNC ) released a press release reiterating that its batteries were safe and GM and LG Chem are working hard to try to find the root cause.

    Before we get too worked up about a battery fire a week after a crash test, I will point out that new technologies often have hiccups like this and since it doesn't appear to be immediately dangerous to drivers it shouldn't be a long-term problem. As a former research and development engineer who started an inadvertent fire or two, I have confidence they'll solve the problem.

    But maybe, just maybe, the Chevy Volt fire will be good for A123 Systems (Nasdaq: AONE ) . The Volt battery is made by LG Chem, a Korean company that won the contract over A123 when the company was in its infancy. If A123 can prove to have safer technology, this could help it win contracts in the future.

    Pink slips at A123 Systems
    For now, A123 has to deal with its own problems of slower-than-expected demand and mounting losses. That has forced the company to lay off 125 workers at its plant in Michigan. The company says the layoffs are temporary, but the way things are going right now, who knows if they'll ever come back.

    This isn't the end of the world
    The battery fire is bad news for everyone from A123 Systems to Tesla Motors (Nasdaq: TSLA ) and Toyota (NYSE: TM ) . As these companies try to overcome high costs and uneasy customers, every bad news story is bad for the industry. But I don't think this is what will determine the success or failure of electric cars. For that we have to look at consumer demand, which simply isn't strong for EVs right now. That's more important than a fire that will leave the headlines in a week or two.

    Interested in reading more about A123 Systems? Click here to add it to My Watchlist to find all of our Foolish analysis on this stock.

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    • they dont need smokey, they have connections right to the top of GM, but I dont think its going to end like some want and other despise. Big question is, how many years will Adlemans salary be 5% of total quarterly sales.


      Valence Technology, Inc. /quotes/zigman/79580/quotes/nls/vlnc VLNC +3.45% , a leading U.S.-based global manufacturer of advanced energy storage solutions for commercial applications today affirmed the inherent safety of its lithium phosphate chemistry for automotive electric batteries, as demonstrated in cell penetration and cell crush testing.

      "Since 2004, Valence Technology has utilized a patented lithium phosphate chemistry in our batteries. This chemistry offers many advantages, including an enhanced safety factor over other lithium chemistries such as lithium metal, lithium metal oxides and lithium mixed metal oxide batteries. While there are dozens of different chemistries under the rechargeable 'lithium ion' umbrella, we firmly believe that our lithium phosphate chemistry offers one of the safest solutions currently available," said Robert L. Kanode, president and chief executive officer of Valence Technology.

      Valence is a leading supplier of lithium batteries for the commercial electric fleet market in North America and Europe, and its energy storage solutions are deployed in a host of innovative applications including industrial, marine and health care equipment.

      Batteries by their nature are designed to store high energy and thereby can present a risk if that energy is released. Valence employs safety circuitry external of the cell and internal cell safety features to reduce the risk of release of the energy in some situations. However, due to the inherent nature of some cathode materials used in batteries, some risk may be presented which can not be controlled through the use of safety circuitry and internal cell features. The Underwriters Laboratories (UL) crush test and industry's Japan Storage Battery Association (JSBA) nail penetration test are designed to simulate such additional cell risk factors. Not only does Valence provide safety circuitry external of the cell and internal cell safety features, its cells made with Valence's proprietary cathode materials also pass these crush and nail penetration tests.

      More information about Valence's battery safety and third party tests can be found on the "Safety" section of Valence's website .