Should Intel Make Batteries For Electric Cars? - InformationWeek

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Should Intel Make Batteries For Electric Cars?

Former chairman Andy Grove is urging CEO Paul Otellini to make the move, because the lack of manufacturing capacity for batteries in the U.S. presents an opportunity for Intel.

Andy Grove, former chairman of Intel, says the maker of microprocessors should make batteries for electric cars as a way to diversify its business and to take advantage of automakers' shift toward the environmentally safer vehicles.

Grove, who retired in 2005, remains an adviser to Intel Chief Executive Paul Otellini. In an interview published Friday by The Wall Street Journal, Grove said he is urging Otellini to make the move, because the lack of manufacturing capacity for batteries in the United States presents an opportunity for Intel, which owns a massive network of fabrication facilities. Chinese and Japanese companies already are targeting the market, which they hope to dominate, while a number of small U.S. firms also are hoping to grab a slice.

It's unclear whether Intel executives will take Grove's advice, the Journal said. Otellini declined comment.

While Intel dominates the market for chips that are the brains of today's PCs, the company has not been successful in launching another major business. The company's diversification today is primarily focused on building low-powered processors for mobile devices, such as mini-notebooks, smartphones, and other handheld devices.

Building another business around electric-car batteries would be a far more dramatic undertaking, requiring the hiring of experts, establishing partnerships with other companies and launching new factories, the newspaper said.

Nevertheless, Grove believes Intel has the resources to pull it off, suggesting that the company's "strategic objective is tackling big problems and turning them into big businesses." Grove believes Intel's stash of more than $12 billion in cash and investments as of Sept. 30 gives it the resources to develop ways to make better batteries and drive down costs.

Battery production problems could limit growth of the electric car industry, experts have said. In addition, the battery is the most expensive component.

One U.S. startup developing battery technology that could someday find its way in electric cars is Boston Power. The 3-1/2-year-old company this week said its new, longer-lasting, environmentally safer lithium-ion battery would be offered with Hewlett-Packard laptops starting in January. Lithium-ion batteries also are used in electric cars, and Boston Power is experimenting with its technology in scooters and bikes.

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