Te ECon Technology Engineering Consulting On-Bat Project Micro

Te. ECon Technology Engineering Consulting On-Bat Project Micro SOFC for portable application WP 5 Project Management Te. ECon Consulting Dr. Hans-Walter Praas Radebeul, Germany Nov. 17 th, 2005 Confidential WP 5_Te. ECon_17. 11. 05. ppt

Te. ECon Outline Technology Engineering Consulting • Background • Field of interest • Evaluation process for ONE – BAT project • Assessment of application entrance strategy • Industrial partner evaluation process • Application and energy source roadmap Confidential WP 5_Te. ECon_17. 11. 05. ppt

Te. ECon Background • • • Technology Engineering Consulting I: Technology has been developed, but still breakthrough waited – Japanese Toshiba, NEC, Hitachi, Fujitsu and Casio take lead (wow, they are the losers in secondary battery…does it happen by accident? ), the first product will be launched soon in 05 CY (but they said “ 07 CY would be the target year”…) – Japanese NTT and KDDI expect FC can be “new power device” for 3. 5/4 G – Sad news is the stopping of Nokia’s FC development II: What is the killer application? – Cellular phone with TV tuner and HDD REC/PLAY – NBPC which runs 10 -100 hours – Electric motor bike for ecology – It seems that co-generation system for house is more promising in Japan III: Conclusion: 1 st gen FC will not compete with secondary battery – FC is charger as accessory, still equipment needs internal LIB/Laminate – If users accept such a device, which can be the next step for 2 nd gen FC – If FC charger performs good, which can be the driving force to expand portable equipment market and secondary battery industry would be also happy Positive impact on rechargeable battery business – If IIT is consulting someone, we recommend to develop 2 cells 18650 charger with built-in AC-charger for power consuming cellular Source: Takeshita April 2005 Confidential WP 5_Te. ECon_17. 11. 05. ppt

Te. ECon Field of Interest Technology Engineering Consulting Micro SOFC for portable application – a revolution of energy, when, what …. Is the time right, what are the limits and show stoppers…. FC SO Rugged Computer Soldier Power Professional Video Consumer Notebooks Confidential Mobile phones / PDA / MDA WP 5_Te. ECon_17. 11. 05. ppt

Evaluation process for ONE – BAT project Te. ECon Technology Engineering Consulting During the project periode the main task and validation belongs to an PROVE of CONCEPT. Targed varification 3 m Process varification 4– 8 m Industrial partner selection Application varification 6 – 10 m 8 – 12 m The project validation (quarterly based) covers always a technical assessment, followed by timing, the competitions (on battery and FC) and potential application partners. Confidential WP 5_Te. ECon_17. 11. 05. ppt

Assessment of application entrance strategy Te. ECon Technology Engineering Consulting Li. B/Li. P total Market volume = 1. 25 Billion units in 2003 Position 1 2 3 4 5 6 7 8 Company Sanyo Sony BYD (China) MBI (Matsushita) SDI ( Samsung) LG GSMT (Sanyo) ATB (Toshiba) Volume (M Cells) 350 250 125 100 75 32 30 ~20 8 companies represent ~ 80% Li. B/Li. P marketshare Confidential WP 5_Te. ECon_17. 11. 05. ppt

Assessment of application entrance strategy Te. ECon Technology Engineering Consulting Market Overview: Portable Device Drivers – Mobility is rapidly increasing (Laptop, Cellphone, PDA, MP 3. . . ) – Product life cycle of mobile devices is shortening – Run time of mobile devices and number of features is increasing • Power source (Battery) capacity must increase • Application power consumption must decrease – Different technical requirements depending on application (speciality markets) Confidential WP 5_Te. ECon_17. 11. 05. ppt

Assessment of application entrance strategy Te. ECon Technology Engineering Consulting Market Overview: Battery Drivers ØEnergy density (volume, weight) ØPower density (volume, weight) ØDevice design (form factor) ØEnvironmental conditions (temperature) ØSafety (UL) Confidential WP 5_Te. ECon_17. 11. 05. ppt

Assessment of application entrance strategy Te. ECon Technology Engineering Consulting Industry Value Chain Analysis OEM Battery Manufacturer Partner Distributor Pack Assembler ODM Representative Distributor End User Pack Assembler Confidential End User Small OEM WP 5_Te. ECon_17. 11. 05. ppt

Te. ECon Market trends in portable application Technology Engineering Consulting Li-technology will dominate high end applications with Li-polymer substantially growing its share… Main applications Growth trend CAGR 2004 - 2008 Price trend Battery technology share, 2001, % Battery technology share, 2006, % Ni. MH Digital camera 26% 48 Ni. MH Li-ion e-bike 20% 59 18% Ni. Cd 89 Li-ion 45 Ni. MH 0 Ni. MH 88 Li-ion 83 Li-ion 68 Li-ion Ni. Cd Ni. MH 4 2% 2 29 59 Ni. MH Li-p 93 Ni. MH Camcorder Li-ion 1 4 37 Ni. MH 81 Li-ion Li-p 5 Ni. MH 6 Laptop PDA Power tools 52 19 Ni. Cd 52 15 Ni. Cd 19 2 Ni. MH 32 81 Ni. Cd Source: Avicenne, Arthur D. Little Confidential WP 5_Te. ECon_17. 11. 05. ppt

Te. ECon Market trends in portable application Technology Engineering Consulting Li-technology will dominate high end applications with Li-polymer substantially growing its share… Main applications Growth trend CAGR 2004 - 2008 Price trend Battery technology share, 2001, % Ni. MH 43 Ni. MH 0 Battery technology share, 2006, % Ni. Cd 40 26 57 Ni. Cd 74 Ni. Cd 60 Ni. MH 54 Ni. MH 74 Ni. MH 91 Ni. Cd 65 Li-ion RC Models Cordless phone -3% Ni. MH Household -6% 77 46 Ni. Cd 23 Ni. Cd 26 Ni. Cd 9 Ni. MH Security -7% 100 Li-p Cellphone Ni. MH 28 5% Ni. Cd Ni. MH 9 13 65 Li-ion Li-p 22 Source: Avicenne, Arthur D. Little Confidential WP 5_Te. ECon_17. 11. 05. ppt

Assessment of application entrance strategy System concept for Batteries System concept for SOFC Chargers Battery Integrated Energy Solutions Safety Electronics Te. ECon Technology Engineering Consulting Control electronics Pack Assembly Sustaining a profitable business will require playing a new game Confidential WP 5_Te. ECon_17. 11. 05. ppt

Assessment of application entrance strategy Te. ECon Technology Engineering Consulting High value, low volume market creates acceptence and confidence Full access to key customers and existing markets Confidential WP 5_Te. ECon_17. 11. 05. ppt

Industrial partner evaluation process Te. ECon Technology Engineering Consulting Speciality Markets Independed of the energy system, large OEM main market requires reliable and very cost optimized energy source products. medium value high value Military Health care Medical Scanner Volume Markets Laptop PDA medium value DSC • Market entrance strategy depends of achievements during the first phase. Best approach is always in Quadrant I. Handy Packer Spot Market low value Standard Product Customized Product Confidential WP 5_Te. ECon_17. 11. 05. ppt

Te. ECon Industrial partner evaluation process Design and samples Planning & Design BSR : Market info competitors Target BOM Resources Cost R&D Cost factory Detailed plan Product specs and architecture Prototypes R&D resources R&D costs Industrial scenario Ind. investments Ind. resources Target SMP/TR Design/simulation First samples Mechanical samples W/S samples Equipment defin. Equipment install. Project Launch PL PA Commit to go for the project: Team leader Target dates Definitive samples on factory line Process capability Industrial infrastr. Engineering Sample Approval Plan Approval E/S A Commit to the plan: Accept plan Agreement on timing Agreement on costs Agreement on CAPEX Ramp-up production Pilot QA & Production accepts design MASS PRODUCTION Prepa ration Technology Engineering Consulting Production running in Check manuf. performance Check costs Customer feedback Improvements Start Pre Production Transfer Release SMP TR Start delivery to customers Customer approval QA & Production agrees to deliver Design/processes frozen Yield on target Industr. set-up complete Production ownership Industrial partner after prove of Concept Confidential WP 5_Te. ECon_17. 11. 05. ppt

Industrial partner evaluation process Te. ECon Technology Engineering Consulting Application assessment spread sheet (example for Li-Ion) Confidential WP 5_Te. ECon_17. 11. 05. ppt

Te. ECon Energy source roadmap Technology Engineering Consulting Large OEM Li-Ion manufacturer entering various applications ’ 02 ’ 03 ’ 04 ’ 05 ’ 06 ’ 07 ’ 08 ’ 09 ’ 10 1 st Gen. LB 2 nd Gen. LB High-Voltage : 5 V Samll Size Battery Li. PB for Note-PC For Power tool Non-flammable Cell 24 V E-bike Large Size Battery Explore EV 42 V/HEV 300 V/ EV System (Load leveling, etc) Fuel Cell, Super Capacitor, Solar Cell, etc Source: LG –chem Roadmap portable batteries Confidential WP 5_Te. ECon_17. 11. 05. ppt

Te. ECon Energy source roadmap Technology Engineering Consulting • The future will see increased mobility due to a wider range of utility of portable power sources • This will create the opportunity for new applications of portable power technology New Applications Free Energy Communication Primary Batteries Household Appliances Sensing Micro ICE Rechargeable Batteries Fuel Cells 0. 001 0. 1 1 10 100 Energy Requirement Wh/day Confidential WP 5_Te. ECon_17. 11. 05. ppt

Te. ECon Contact Technology Engineering Consulting Te. ECon Consulting Am Gymnasium 4 01445 Radebeul Germany +49 – (0) 351 – 83 38 47 3 +49 – (0) 351 – 83 38 47 4 (Fax) +49 – (0) 172 – 37 37 02 2 (Mobil) Hw. praas@teecon. de Confidential WP 5_Te. ECon_17. 11. 05. ppt