NEW YORK ( TheStreet) -- The world's biggest car companies and battery makers will gather for the 13th European Lead Battery Conference next month. The focus at the Paris event will be micro-hybrid vehicles with stop-start idle elimination, a sensible and cheap fuel-efficiency technology that will be used in 35 million cars a year by 2015. While I've agreed to give a keynote presentation to the ELBC's opening session, I expect to learn more than I teach and look forward to sharing new developments with readers.
Micro hybrids are not a subsidized technology for eco-elites who eagerly embrace "somewhere over the rainbow" payback periods. They're hard-working fuel-efficiency systems for the rest of us -- normal people who grapple with monthly budgets and expect reasonable returns from their investments in fuel efficiency. The primary market driver will be stringent new emissions-control and fuel-economy regulations in Europe, North America and Asia. When you get down to brass tacks, consumers won't have a choice because stop-start will be installed as standard equipment, just like seat belts, disk brakes, pollution-control systems and airbags.
For investors, micro hybrids are an automotive mega-trend that will generate several billion dollars a year in incremental revenue for a handful of companies that control technology. Since most investors have never even heard of micro hybrids, the stock prices of those companies don't reflect the rapidly changing market fundamentals.
Micro hybrids are the most sensible fuel-efficiency technology imaginable. They turn off the engine when a car comes to a stop and automatically restart it when the driver takes his foot off the brake. Simple "light micro hybrid" systems add $300 to the cost of a new car and save about $80 a year on gasoline. Sophisticated "heavy micro hybrid" systems can add up to $1,000 to the cost of a new car and save up to $250 a year on gas.The choke point for all micro-hybrid systems is the battery. The battery challenges of micro hybrids are easy to understand. Starting an engine 15 times during a typical daily commute uses about eight times more energy than a single engine start. It's not a one-for-one increase because restarting a warm engine is easier than starting a cold one, but the increased starter demands are massive. An even bigger problem is powering the accessories during engine-off intervals, a task that can demand up to 10 times more energy than the starter. When you work through all the calculations, a micro hybrid demands 90 to 100 times more work from its battery than a car without stop-start.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts