The past few weeks have been rough ones for the advanced battery industry and for electric drive.  Last week, NAATBatt member International Battery shut its doors, citing a lack of cash.  This followed General Motor’s announcement that Volt production was being suspended temporarily for lack of demand.  Bankruptcy court approval of Ener1’s plan of reorganization pretty much completed a trifecta of bad industry news for the month.

It is easy, in light of these announcements, to get bearish on batteries.  Bad news concentrates the mind on the challenges of battery technology, which have been talked about for some time:  low energy density relative to hydrocarbons, high cost and safety questions.  It also exaggerates the successes of competing technologies, such as petroleum and natural gas, which seem to be in the midst of a run of good news and growing political support.

It is important to remember, however, that the fundamental factors and mega-trends that made advanced battery technology seem attractive just a few years ago have not changed or gone away.  Worldwide demand for energy, particularly in the developing world, is growing steadily.  Using natural gas in the transportation sector suffers from significant challenges and its long term price volatility has not necessarily been mitigated by new sources of unconventional supply.  And the dangers of continued petroleum dependence…have you checked gasoline prices recently?

A closer look at the news over the last few weeks reveals some interesting items, which may have been lost in the gloom:  This week BASF announced a global licensing deal with LiFEPO4+C Licensing AG for a package of lithium iron phosphate technologies owned by Hydro-Quebec and others.  This follows BASF’s purchase last month of Ovonic Battery Company and its portfolio of patents in nickel-metal hydride technology.

Not to be outdone, 3M announced this week that it is investing in the manufacturing of silicon anode materials, based on its recently granted U.S. patent No. 8,071,238.  3M claims a 40 percent increase in cell capacity based on its new material and is apparently backing that claim with significant new investment.

In short, while some recent news has been discouraging, the energy challenges of the world have not changed and the smart money, or at least a good bit of it, is still betting on batteries.  After what was certainly some irrational exuberance in the last few years about the short term prospects of full electric drive, we may yet look back at 2012 as the time when the real deals were done, and the real foundations were laid, in a technology that will still one day power much of the world.