On-Bat Project Micro SOFC for portable application WP 5 Project Management TeECon Consulting

1. On-Bat Project Micro SOFC for portable application WP 5 Project Management TeECon Consulting Dr. Hans-Walter Praas Radebeul, Germany Nov. 17th, 2005

2. Outline • Background • Field of interest • Evaluation process for ONE – BAT project • Assessment of application entrance strategy • Industrial partner evaluation process • Application and energy source roadmap

3. Background • 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 05CY (but they said “07CY would be the target year”…) • Japanese NTT and KDDI expect FC can be “new power device” for 3.5/4G • 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: 1st 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 2nd 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 • If IIT is consulting someone, we recommend to develop 2 cells 18650 charger with built-in AC-charger for power consuming cellular Positive impact on rechargeable battery business Source: Takeshita April 2005

4. Field of Interest Micro SOFC for portable application – a revolution of energy, when, what …. Is the time right, what are the limits and show stoppers…. SOFC Rugged Computer Soldier Power Professional Video Consumer Notebooks Mobile phones / PDA / MDA

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

6. LiB/LiP total Market volume = 1.25 Billion units in 2003 PositionCompany Volume (M Cells) 1 Sanyo 350 2 Sony 250 3 BYD (China) 125 4 MBI (Matsushita) 100 5 SDI ( Samsung) 75 6 LG 32 7 GSMT (Sanyo) 30 8 ATB (Toshiba) ~20 8 companies represent ~ 80% LiB/LiP marketshare Assessment of application entrance strategy

7. Mobility is rapidly increasing (Laptop, Cellphone, PDA, MP3...) 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) Market Overview: Portable Device Drivers Assessment of application entrance strategy

8. Assessment of application entrance strategy Market Overview: Battery Drivers • Energy density (volume, weight) • Power density (volume, weight) • Device design (form factor) • Environmental conditions (temperature) • Safety (UL)

9. Industry Value Chain Analysis Assessment of application entrance strategy OEM Distributor Battery Manufacturer Pack Assembler ODM End User Partner Representative Distributor End User Small OEM Pack Assembler

10. Li-technology will dominate high end applications with Li-polymer substantially growing its share… Market trends in portable application Growth trendCAGR 2004 - 2008 Pricetrend Battery technology share, 2001, % Battery technology share, 2006, % Main applications NiMH 19 Digitalcamera 81 NiMH 48 52 26% Li-ion Li-ion Li-ion Li-ion 12 4 e-bike 20% NiMH 37 59 NiCd NiCd 29 59 NiMH Li-p NiMH 5 3 Laptop PDA 9 Li-p 6 NiMH 18% 88 89 Li-ion Li-ion NiMH NiMH 4 2 Camcorder NiCd 15 2% 45 52 Li-ion NiCd 83 Li-ion NiMH 19 32 NiMH 0 68 81 Power tools NiCd NiCd Source: Avicenne, Arthur D. Little

11. Li-technology will dominate high end applications with Li-polymer substantially growing its share… Market trends in portable application Growth trendCAGR 2004 - 2008 Pricetrend Battery technology share, 2001, % Battery technology share, 2006, % Main applications NiCd 40 43 NiMH 0 57 NiCd 60 NiMH RC Models NiMH 26 Cordlessphone -3% 46 54 NiCd NiMH 74 NiCd NiMH 23 NiCd 26 -6% Household 77 74 NiMH NiCd NiMH 9 -7% Security 100 NiCd 91 NiCd Li-p NiMH 9 13 Cellphone 28 NiMH 5% 22 Li-p 65 Li-ion 65 Li-ion Source: Avicenne, Arthur D. Little

12. Chargers Batteries Integrated Energy Solutions Safety Electronics Pack Assembly Assessment of application entrance strategy System concept for SOFC System concept for Batteries Battery SOFC Integrated Energy Solutions Control electronics Pack Assembly Sustaining a profitable business will require playing a new game

13. Full access to key custom ers and existing markets Assessment of application entrance strategy High value, low volume market creates acceptence and confidence

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

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

16. Industrial partner evaluation process Application assessment spread sheet (example for Li-Ion)

17. ’06 ’02 ’10 ’09 ’08 ’07 ’05 ’03 ’04 1st Gen. LB 2nd Gen. LB High-Voltage : 5V Samll Size Battery LiPB for Note-PC For Power tool Non-flammable Cell 24V E-bike EV Large Size Battery 42V/HEV 300V/ EV System (Load leveling,etc) Fuel Cell, Super Capacitor,Solar Cell,etc Explore Energy source roadmap Large OEM Li-Ion manufacturer entering various applications Source: LG –chem Roadmap portable batteries

18. New Applications Free Energy Communication Primary Batteries Household Appliances Sensing Micro ICE Rechargeable Batteries Fuel Cells 0.001 0.01 0.1 1 10 100 Energy Requirement Wh/day Energy source roadmap • 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

19. Contact TeECon 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