Johnson Controls Sees Hybrid Unit Profit in 5 Years

By dancurranjr On October 8th, 2008

Auto parts maker Johnson Controls Inc’s  hybrid battery business will be profitable within five years as the new technology gains scale, the head of that unit said on Tuesday.

The president of Johnson Controls’ Power Solutions division, Alex Molinaroli, told the Reuters Global Environment Summit that the company’s profit projection assumes that hybrid electric cars will make up 6 percent of the U.S. and Western European auto markets by 2020.

“And we don’t see ourselves having a dominant share, we just see ourselves as being a player,” Molinaroli said at the summit.

Johnson Controls, through a joint venture with French battery maker Saft Groupe SA , is supplying lithium-ion batteries for Daimler AG’s Mercedes S-class mild hybrid luxury sedan due out next year.

Lithium-ion batteries are lighter, smaller and longer-lasting than the nickel-metal hydride batteries that power the current generation of hybrids, including Toyota Motor Corp’s popular Prius.

Given the promise of lithium-ion batteries, many companies are investing heavily in that technology, and Molinaroli said he expects the industry to consolidate.

In particular, he said newer companies without other battery or automotive businesses to support the high cost of developing an emerging technology would likely be swallowed up by established players such as Johnson Controls

“We don’t have an approach today that we are going to invent everything ourselves,” Molinaroli said. “We’re going to always be looking.”

Source: Reuters

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