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Subject: TWL: RE: RE: RE: Batteries, cost
From: Michael Schooley (schooley@XXX.XXX)
Date: Sat Dec 28 2002 - 00:45:57 EST
Mark Richter wrote;
"Dear Mike, You seem to be intimately familiar with AGM batteries, so
maybe
you can answer a question I have. Is there anything in the design of
AGM batteries that makes them inherently 2-3 times as expensive as
flooded cells? I know that many manufacturers charge a premium price
for new products, to help recoup the development cost in a short time,
and to help promote the product's premium image in the consumer's mind.
Can we expect
the price premium to come down as volume goes up?"
Basically AGM batteries are always going to be more expensive than
flooded lead acid batteries. There is no simpler or cheaper way to make
a battery that flooded. They don't need pressure regulated valves or
glass mats and the plate alloys are cheaper. OTOH if production rate
were equal, the cost difference should be about 10% as opposed to 100%
to 200%. I believe that the main reason for the cost difference is that
AGM batteries haven't broken into the high volume market yet (car
batteries). This is because car manufacturers don't see any value in
installing a battery that outlasts the warranty and once the first
battery dies few people understand the cost benefits of AGM batteries or
plan to keep the car long enough to recover their investment.
"I have waited for years for the price of 406 mhz Epirbs to
descend, but they never have. While the price of GPS dropped
from $1000 to $100, the price of Epirbs inched down from $1000 to
$700. What gives?"
"I don't know about EPIRBS, but I do know that the cost of GPS have come
down because of higher levels of integration which are only economically
feasible with very high volume. GPS used to require several hundred
components with a bill of materials cost of about $250. When you add
assemble, test, overhead, profit, marketing, ... the results was $1,000
unit cost. Today Motorola has developed a single integrated chip GPS
which cost $24. The kicker is the development cost was in the hundreds
of millions. Motorola will need to sell a billion to break even. There
aren't a billion boaters, but GPS is going into many cell phones to
provide the FCC mandated emergency location service. The problem with
ERIRBS is the market is too small.
Regards;
Mike Schooley
Designing "Portager" a 36' trailerable trawler
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