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Slow Advancement in Battery Technology Is Hindering Product Innovation

CEOs need to be wary of exactly how much they can expect from advancements in the capabilities of the underlying batteries themselves and make sure their R&D honchos are playing it straight with them.

General Motors, for example, just disclosed that it plans to broaden its green-vehicle offerings by adding an all-electric car to a lineup that already includes the Spark EV and the Volt plug-in hybrid—despite the clearly limited interest in EVs demonstrated by mainstream consumers around the world so far.

“Breakthroughs in energy storage technology aren’t coming. Not in the foreseeable future, at least.”

And it isn’t just automobiles. Advancements in laptop computers, smartphones and all sorts of other gee-whiz consumer electronics continue to depend on continual improvements in lighter and longer-lasting batteries. So do improved products in more mundane realms such as portable vacuum cleaners. Even a not-so-obvious nascent tech-based business, drones, ultimately requires ever-lighter and more-powerful batteries if Amazon is ever really going to be delivering packages to Americans’ doorsteps.

The big problem is that the capacity of the best batteries in all of these applications keeps rising only incrementally, despite the billions of dollars in research funding that have been thrown at the problem for decades now, and which are mounting today. A vast array of research projects have been aimed at achieving a real breakthrough, but all that automakers, for example, can count on over the next few years are electrified vehicles whose ranges increase to about 200 miles from up to 100 miles now.

In other words, noted Wall Street Journal columnist Christopher Mims, “There is no Moore’s Law for batteries. That is, while the computing power of microchips doubles every 18 months, the capacity of batteries … exhibits no such exponential growth.” He added, “breakthroughs in energy storage technology aren’t coming. Not in the foreseeable future, at least.”

Interestingly, one visionary CEO is likely to become an even bigger winner because of this prospect that vexes so many other CEOs. Tesla co-founder Elon Musk is building the company’s $5-billion “gigafactory” near Reno, Nevada, to vastly expand the global supply of lithium-ion batteries using more or less current technology—and it won’t even begin spitting them out until 2020. Even over a time horizon that is relatively long for one of the most cutting-edge areas of technology, Musk doesn’t have to worry about being outstripped by new developments. Other CEOs should follow his lead.


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