Introduction

This assignment explores the business case and requirements for setting up a factory for the design and production of a new type of car battery. In doing so, many factors have to be taken into consideration, such as the effect on the environment and society, as well as the risks and opportunities involved. This assignment will also contain weekly problems that the students have to resolve.

Background information

The Battery

You have patented a new technology which can be used with a car battery. The battery can be used inside a hybrid vehicle or a purely electric vehicle. The technology involves the use of solar panels to charge the battery while the vehicle is in operation.

You have the option of creating a new battery from scratch or attaching your new technology to one of the existing types of car battery. Existing battery types are:

Lithium Ion Battery (Li-Ion)

made from carbon and highly reactive lithium

stores high amounts of energy

more horsepower than a typical hybrid-battery

weighs less (0.5kg)

150,000 miles/15 year battery Lifespan

recyclable

offers a 30 minute charge transmitted

best choice for hybrid vehicles

high cost (up to $5000), but will continue to decrease

larger batteries may experience overheating

need to produce large li-ion batteries necessary to power hybrid vehicles without reverting to the internal combustion engine

Nickel Metal Hybrid Battery (NiMH)

made from hydrogen, nickel and another metal such as titanium

on the market longer than Li-Ion batteries

more affordable ($1500) than Li-Ion batteries

offers 4-5 miles/kWhr

weighs 1kg

easily rechargeable but store less energy than lithium ion battery packs

NiMH batteries are less expensive and more predictable in performance

Both NiMH and Li-Ion batteries are both harmful to the environment when improperly disposed of

Lead Acid Battery

made from lead, sulfuric acid, and water.

most affordable battery ($500)

the oldest auto battery

least stored energy

weighs 1kg

recyclable

attractive for environmentalists

Question: which of the three above technologies do you think you should piggy-back your new technology? Why?

You can produce two types of batteries: and advanced enhanced battery, and a simple enhanced battery.

For the advanced enhanced battery, your new technology will double the price of each battery type but will also double the capacity of each battery type, depending on the availability of sunlight.

For the simple enhanced battery, your new technology will add 50% to the price of each battery type but will also add 50% to the capacity of each battery type, depending on the availability of sunlight.

Question: which of these two battery types should you piggy-back your new technology? Why? In determining which battery to produce, you might wish to look at the Tesla models as a baseline for the advanced enhanced and the simple enhanced batteries. Tesla models can be seen at Tesla Vehicles Compared. For instance, the Tesla Model S uses lithium-ion battery cells in 16 modules and has a range of up to 600km.

Question: how much are you going to charge for your battery? For production, you will need to purchase roughly $250,000 worth of equipment to build either type of enhanced battery. Since your enhanced battery (simple or advanced) will provide the cash flow, you need to determine the price for each and the profitability for each. In doing so, you will have to research the cost and profitability of the lithium-ion battery, the nickel metal hybrid battery, and the lead acid battery.