3M: A Safe Play in Lithium Ion Batteries

This past week, Compal, a small contract laptop maker, announced that its fourth-quarter shipments would be adversely affected by a shortage in batteries, which it claims is being caused by Sony's (NYSE: SNE  ) massive recall of lithium-ion batteries. Other larger manufacturers, such as Dell (Nasdaq: DELL  ) and Hewlett-Packard (NYSE: HPQ  ) , have said that finding batteries won't be an issue, based on the simple fact that many people have not deemed the small risk of a battery explosion a sufficient reason to warrant the time and inconvenience of having to replace the battery.

Regardless of user apathy, the issue of lithium-ion battery safety is a serious one for manufacturers who desperately want to avoid a similar issue in the future. And, to this point, there has been no shortage of companies, including Valence (Nasdaq: VLNC  ) , A123 Systems, and Altair (Nasdaq: ALTI  ) , that have used the recall as an opportunity to tout the respective safety and performance features of their own lithium-ion battery technology in the hopes of capturing a larger share of the market.

It's a very competitive field, and reports I have seen on Valence's and A123's batteries are favorable. However, when attempting to discern which, if any, of these companies will win in the broader commercial marketplace, I also encourage investors to consider 3M (NYSE: MMM  ) .

According to a recent article in Technology Review, by the end of the year 3M expects to have a new lithium-ion battery that is not only safer, but also will have an increased capacity of 30%.

I have written in the past about 3M's involvement in nanotechnology, and lithium-ion batteries are just one of the many areas where advances in nanomaterials and nanoparticles now appear to be quietly paying dividends for the massive Minnesota-based manufacturer.

One of the reasons is because it has developed a new material that can store more lithium ions -- a factor that provides the battery with its increased storage capacity. The company has also introduced new additives into the electrolytes. This prevents the electrolytes from reacting with the electrodes and thus triggering an explosion.

As an added benefit, the new, improved electrolytes are also reported to be able to operate at a colder temperature -- an advantage that could attract the interest of major automobile manufacturers who are looking to build hybrid batteries that can operate in colder climates around the world.

None of these advantages alone suggest that 3M's lithium-ion batteries are better than Valence's or A123's, but given 3M's size, its global presence, and its generally favorable reputation, manufacturers looking to avoid the cost and hassles of another potential recall might select the company's lithium-ion batteries over some of its competitors for the simple reason that the aforementioned characteristics make it feel like a safer play.

3M is a Motley Fool Inside Value pick. Try a free 30-day trial now.Dell is anInside ValueandStock Advisorselection.

Fool contributor Jack Uldrichis one of the many brave fools who have chosen not to replace their batteries. He does not own stock in any of the companies mentioned in this article. The Fool has a strict disclosure policy.


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