The battery limitation on production:

The 'old' GM decided to go with USA built, LiON batteries. But the real disaster was Ovonic, a USA company that holds the expiring patents on the NiMH battery. They successfully snatched defeat from the jaws of victory ... much like 'old' GM when they walked away from the Precept, what is now called the Volt. Ovonic had a license to print money but screwed it up.

Of all of the parts, I have more confidence in the Pensky-Saturn deal. I'm hoping they'll kill the brand name, Saturn, and make a clean break with the 'old' GM. That group has the right vehicle sizes and hopefully, the innovative attitude to do it right.

Bob Wilson

I could have swore GM decided to go with Korean(LG Chem or Samsumg SDI) batteries...

This is good news for future Prius owners, because their hybrids will be more efficient with the help of this joint venture by Toyota-Panasonic.

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For their mild hybrids, they've been using batteries from Cobasys. I'm not sure about their two-mode hybrids.

I get the idea that Pensky only bought the dealerships and did not buy any car manufacturing assets.

Penske bought the rights to the Saturn name. He will not own the dealerships as they are independent franchise owners like any other auto dealer. GM will continue to build the current Saturn vehicles for Penske on a contract basis until the end of the current models. After that Penske will source vehicles from other auto manufacturers. Penske has did not acquire any manufacturing assest with this purchase of the Saturn brand and will not be manufacturing cars.


It is interesting to see that Toyota-Panasonic is investing so heavily in NiMH batteries at this point in time. A doubling of capacity from 500,000 units to 1 million units shows that Toyota is not planning on switching to Lion batteries in the near future.

NiMH is extremely reliable (with proper care) and highly suitable for hybrid application due to short charge/discharge cycles. It is a rock solid proven chemistry and gives the best bang for the buck! It also makes the most sense to recycle because it costs less than the value of raw material recovered -- unlike lead-acid or Li-ion.

The demand for Prius is booming and there are other hybrid models to follow. I am not surprise to see this production expansion.

Last I read about Li-ion, Toyota was studying the best way to mass manufacture since the engineering for performance and safety was completed. They were just testing /verifying different variations (two from PEVE) and would pick the best one to mass produce.

Their approach is different than GM. GM picked LG Chem over A123 cells after testing in the lab. Toyota would be picking after looking at the real-world fleet test data.

Very true. NiMH is a solid and proven battery technology. However it is limited by patents to batteries no larger than the one in the Prius. Without lithium ion batteries Toyota cannot make PHEV's or EV's. My Prius is nice and gets good mileage but I want my next vehicle to be an electric. Toyota's public statements as well as capital investments show they are not pursuing EV's.

PEVE just bought Sanyo. They would be building a lot of Li-ion batteries. Once the mass production issue is resolved, we should see PHVs and EVs from Toyota.

From what I read, the issue with Li-ion manufacutring involves a lot of manual labor process. Chinese are able to capitalize on it with inexpensive labor. Japanese are trying to automate with machine. Until they find a way to do it, we won't have Li-ion price low enough to make mainstream PHVs and EVs.

Thanks for the clarification. So how does Penske make money in this position?

In many real world situations, the best situation is to have two competing manufacturers continually improving there product to get the majority (e.g. 60%) of orders. I've seen this work better than giving all the business to one supplier based on a "snapshot" of the present situation. Once you have the entire supply contract, the focus is on maintaining the "personal ties" and status quo. If you are in continual competition, the focus is on making your product better for the next round of selections. You sure as heck (emphasis intented) are not going to be able to make the other competing company give you the business by "personal ties".

I'm not sure. Penske will have a little bit of time because GM will be providing the Aura sedan, Vue SUV, and Outlook crossover until 2011. After that he needs to arrange for new suppliers. My guess is that he will look to partner with Taiwanese, Korean, or Chinese car companies that would like access to the US market through the Saturn dealership network.

He does have experience with this kind of thing. The Penske Auto Group is the country's 2nd largest dealership network and Penske imports and distributes the Smart ForTwo for Mercedes.

Interesting! I didn't know that Penske was bringing the Smart, he really does have his hand in many pots.