Start-stop tech powers battery innovation and market expansion

Johnson Controls Inc expects its automotive battery business in China to continue double-digit growth as the company's fuel-savings technologies seize more market, an executive said.

The Milwaukee, Wisconsin-based company — already a leading producer of conventional lead-acid vehicle batteries, with more than a third of the global market in that segment — now has about a tenth share of the Chinese market, according to Kenneth Yeng, country head of Johnson Controls Power Solutions.

The company is betting on its start-stop batteries, used in automobile starting, lighting and ignition, which could improve fuel efficiency by 5 percent to 8 percent, compared with conventional batteries.

Start-stop technology turns off the engine when the vehicle comes to a stop and restarts it once the driver releases the brake pedal or presses the clutch. To successfully power additional starts and stops, the system requires a more robust battery.

Johnson Controls said it believes start-stop technology will constitute a growing share of China's vehicle battery market in the face of rising fuel prices and increasingly strict emission rules.

"While China has yet to require the auto industry to adopt start-stop batteries as standard configuration, it does have a mandate in place requiring automakers to improve fuel economy, which brings great growth potential for start-stop batteries," Yeng said in an interview. "Also, automakers are increasingly willing to use start-stop as a selling point to attract customers."

The company signed an agreement last month with Shanghai-based SAIC Motor Corp, China's leading automaker, to supply batteries to power its start-stop vehicles.

Yeng said China's overall auto battery market is growing about 10 percent a year, and Johnson Controls aims to grow at three times the industry's average.

The company earlier this month opened a US$154 million plant in the southwestern city of Chongqing. The plant has the capacity to produce up to 6 million automotive batteries a year, adding supply to an existing factory in Changxing, Zhejiang Province.

The company is also looking for site to build a battery plant in northern China, which is expected to open in 2017 or 2018, Yeng said.

Johnson Controls aims to increase the number of its aftermarket distributors for its Varta-branded batteries in China to 300 in two years from 200 at present, he said.

Still, while the retail market is important, Johnson Controls will always focus on the original equipment manufacturing segment because working with automakers is a key a battery maker can advance in technology, Yeng said.

The US company, which describes its products as "full-spectrum" technology, is also building the advanced battery industry for hybrid and electric vehicles. It was the first company in the world to produce lithium-ion batteries for mass-production hybrid vehicles.

In China, the company has been working with carmakers on developing lithium-ion batteries via a Shanghai-based research and development center, but there are no plans for mass production anytime soon, Yeng said.

While the electric vehicle market could eventually boom, he said, the best opportunity for vehicle batteries in the more immediate future in China is in start-stop technology and in the micro hybrid — a dual battery system that includes a lead-acid battery and a lithium-ion battery.

Micro hybrid batteries, with engine downsizing and powertrain boosting, can improve fuel economy by up to 15 percent, compared with conventional batteries. Johnson Controls estimates micro hybrid batteries could be adopted worldwide after 2020.

"The micro hybrid will be the best transitional product before hybrid and electric vehicles become mainstream," Yeng said.

In addition to vehicle batteries, Johnson Controls also does car interiors and makes heating, ventilation and cooling systems for buildings.