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Maintaining Motive Power Markets for Lead-acid
by Shirley Georgi

Adobe Photoshop ImageThe battery-powered  SC 3210 Crown  forklift has a   48-Volt  electrical  system.  The standard battery  compartment  has a length of   414 mm,  a width  of  830 mm  and a height of 627 mm.  The 48 Volt system provides 330 to 360 Ah (Amp hours).  The minimum standard battery weight is 560 kilograms. There is a battery discharge indicator with lift lockout.

The 48-Volt electrical system can be described as having traction and pump systems which are microprocessor controlled with on-board service diagnostics. Both systems utilize high efficiency motors to minimize battery consumption.  The traction controller features regenerative braking and proportional control of both drive units during turning to ensure smooth and safe operation. ( Photo is courtesy of Crown Equipment Corporation.)    

At the Battery Council International  (BCI) meeting in May 2004, the Lead-acid industry could celebrate motive power as being a positive market segment in the industry.  Although a three  percent rise in sales was anticipated, the final numbers   indicated that sales had risen by five percent from the year 2002 to 2003.  All totaled, North American sales in this category added up to a total of $437 million.  The largest application (95%) was for industrial trucks.  

Adobe Photoshop Image(Graphic is courtesy of Hollingsworth and Vose Company with special thanks to Bob Cullen.) +

In reviewing the trend line for the past five years, sales  hit a high in 2000 with over $400  million.  However, as in other industries, the “dot-com” presence took its toll and sales retreated and made  a slow steady comeback over the past three years. In reporting to the BCI attendees, Robert Cullen said, “By 2003, the economy began to recover with a stunning 8 percent third quarter GDP as orders for new industrial trucks increased.   Barring any unforeseen events, this market sector is projected to approach the $600 million markby 2008.”

The first quarter of 2004 was off in the positive direction and equipment for the industrial sector increased at a rapid pace.   However, sales are not enjoying a huge profit margin. In fact, Bob Cullen reported, “The overall market conditions reveal  tight margins and an increasing pace of new orders.”   

Adobe Photoshop ImageGraphic is courtesy of Hollingsworth and Vose Company with special thanks to Bob Cullen.) +

Competition among Lead-acid manufacturers

Comments by Research Analyst Hariharan Balasubramanian of Frost & Sullivan seem to confirm  the message of tight margins and the competitiveness of keeping current customers and getting new orders.  In the report, “World Motive Lead Acid Battery Market,”  Mr. Balasubramanian states, “In an increasingly competitive MLA (Motive Lead Acid) battery market with limited product differentiation in terms of design and construction, competetion pricing coupled with value added features could sway a customer’s  decision in favor of a particular vendor.”    He also goes  on to say that with competition going global, MLA battery vendors must work toward innovation and enhanced features, higher quality and rigorous after-sales support to fetch a premium for their products.

One factor in favor of North American suppliers is their 97 percent recycling of lead.  Lead-smelting units are of immense value to a MLA battery vendor with respect to controlling material costs. This is especially true when  lead is selling  at a premium in the open market   and competitors, not having a supply of recycled lead, must be dependent on an external sources for this metal.

Is there competition from fuel cells?

Interestingly, the three most common companies in the news touting their work on fuel cells for forklift trucks are all Canadian based.  Perhaps the most popular is Hydrogenics which designs and develops proton exchange membrane fuel cell systems.  
 Hydrogenics  In October 2003, the company announced plans to develop a fuel cell powered fork lift truck together with Deere and Company, Fed Ex Canada, General Motor of Canada, HERA Hydrogen Storage Systems, NACCO Materials Handling  Group and the City of Toronto.  By April of this  year, the company  was announcing plans to develop a hydrogen fuel cell Class I forklift and a refueling station.  The project involves outfitting two Class I sit-rider electric forklifts from  NACCO Materials Handling Group with fuel cell propulsion systems.  Demonstrations of the forklift and refueler will take place at GM and FedEx operations within the Greater Toronto Area, and potentially other locations, through the fall and winter of 2004 and 2005.  

Cellex Power Mr. Chris Reid, Cellex’s President says that his company has validated that industrial lift trucks will be the early adaptors of fuel cells due to a strong customer value proposition.  The company has conducted field trials during 2003 in both the U.S. and Canada.  In June 2004 the company announced that the logistics subsidiary of WalMart Stores, Inc. will participate in a set of field trials later this year with their electric forklift trucks powered by Cellex Power’s fuel cells.

Tom Hoying, Cellex’s Vice President of Sales & Marketing, believes fuel cell technology  can improve productivity and reduce operating costs.  In  a Cellex white paper, he discusses the laborious task of the  need for batteries to be changed several times during a 24 hour period.  One battery is in use, another is being charged and another is cooling.  He  says, “Every stop a lift truck operator makes for a battery change means 20 to 30 minutes of lost labor.”  He  notes that the  fuel cell does not need to be changed and operates as long as the cell has fuel, and when refueling does take place, the off-floor time is only 6 or 7 minutes. Mr. Hoying  has experience with the forklift business; he was previously a vice president for Crown Equipment - one of the largest manufacturers of forklifts in the world.

General Hydrogen  The chairman and founder of this company is none other than Geoffrey Ballard, also founder of Ballard Power Systems.  In one of his essays, “Feeling The Future: How The Battle Over Energy Is Changing Everything,”  he discusses material-handling equipment   as an entry point for fuel cells into the transportation market.

Is it a “get ready, get set, and  go” for fuel cells?

Although these fuel cell companies are readying for the commercialization  race, they are still working with demonstrations and field trials while fine tuning their product.  They have not yet entered the commercialization track for the big race.  Both Hydrogenics and Cellex hope to become entrants in a year or two.  

Meanwhile, the Lead-acid companies, promoting and selling  both flooded and VRLA (Valve-regulated Lead-acid), have been on the track for years.  Each year, they continue to fine-tune their offerings to the forklift industry.  For example, one of the September news releases came from Century Batteries.  They described their “new approach to forklift batteries” by maximizing five-year battery life with new monitoring equipment which controls current draw on the battery between various functions such as traveling, lifting and unloading, both in empty and fully loaded modes. Thus, the battery’s energy is being tailored for optimal performance at all times.

Microsoft Excel ChartThe applications included in this report on motive power include: heavy duty equipment, mining vehicles, railroad/locomotives , golf carts, RV motor homes and electric vehicles.   This is a broader category  than that defined by BCI  which includes only industrial trucks, mining vehicles and railroad/locomotives in the motive power sector.  (Information is from “World Motive Lead Acid Battery Market” by Frost & Sullivan, www.frost.com) +

Because VRLA batteries  in traction applications are pointing toward a trend where traction is becoming the largest market opportunity for VRLA technology, a symposium on the technological status and challenges will be held during June in Hawaii.  The application of  VRLA technology is not trivial to the industry as this Leead-acid group continues to work with charge control, thermal management and product uniformity.

Perhaps, Lead-acid will see fuel cells begin to enter the starting gate in the next few years, but these batteries  will continue to  remain the top runners and  keep market share. The Lead-acid providers should see their sales’ goal reaching  the $600 million mark by 2008 without any strenuous competition from fuel cells.
BD