The future belongs to electric cars. The German government hopes to see one million of them on the road by 2020. U.S. electric carmaker Tesla is building a $5 billion, or €4.4 billion, super factory in Nevada, to produce 500,000 lithium-ion batteries for new vehicles annually.
You might think all that would make Johnson Controls, the world market leader in conventional lead car batteries, uneasy. But the U.S.-based multinational is still betting on its batteries with confidence. And for good reason – electric cars still need lead batteries to start the motor.
“All electric vehicles and hybrid vehicles on the market also have a lead battery,” explained Johann-Friedrich Dempwolff, the Europe managing director for Johnson Controls, in an interview with Handelsblatt. “This combination will continue for years.”
Every third car battery in the world now comes from Johnson Controls – a total of 140 million batteries from 50 production plants worldwide.
“Today, modern cars are like rolling computers, and, in the end, everything depends on the battery.”
The Milwaukee-headquartered company is not only betting on lead. In 2008 it also became the first manufacturer of lithium-ion-batteries for hybrid and electric vehicles. “We are very engaged in the new technologies as well,” said Mr. Dempwolff.
Sales last year reached $6.6 billion, with around 58 percent coming from the United States and one-third from Europe, where Germany is a prime customer. “The German market is very important, both for original equipment, as well for battery replacement,” said Mr. Dempwolff.
Johnson Controls may not be a household name, but its products are well-known. The company took over the car battery division of German firm Varta in 2002, and with that rose to world market leader in that field. Varta is a big brand name in batteries.
Johnson Controls is also involved in making Bosch batteries. “These are produced together, but sold through different distribution channels,” said Mr. Dempwolff. “In principle, it is about the same product with two strong brand names.”
The functions of a battery have increased along the way. “Today, modern cars are like rolling computers and, in the end, everything depends on the battery,” said Mr. Dempwolff.
New applications such as start-stop technology, which can save up to 8 percent gas, require extra battery power.
But what can be done with old lead batteries that contain poisonous heavy metal and environmental pollutants? Johnson Controls has plants, including one in Krautscheid near Bonn in Germany, that collect and recycle old batteries. Worldwide, its five plants can recycle up to 99 percent of lead batteries.
Plastics and even sulfuric acid are also recycled, as well as lead. “We are the largest lead recycler worldwide,” said Mr. Dempwolff.
Johnson Controls doubly benefits from the “green” consciousness. On the one hand, recycling produces a safe raw material supply, because lead can go back into new batteries without loss of quality. The supply of lead also becomes more predictable, which means the company is less dependent on the international raw materials market and its price fluctuations.
A ton of lead now costs almost $1,800, which is relatively cheap. Four years ago, the same amount cost almost $2,800. The reason for the price fall is a supply surplus, but that is changing. Lead supplies on the London metal market fell to a five-year low in May.
In the past 10 years, 45 million car batteries have been recycled in Krautscheid, and the number is increasing all the time. The plant received permission to double its capacity last year. “That affords us planning security,” said Frank Toubartz, managing director of Johnson Controls Recycling in Krautscheid.
Regine Palm is a Handelsblatt editor, writing about commodities, machine makers and the trade fair industry. To contact the author: email@example.com.