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Yes, you did read the headline right, ExxonMobil (NYSE: XOM) is hoping to cash in from the growing demand in hybrid cars. I know what you are thinking... ExxonMobil and hybrid cars don't exactly sound right in the same sentence, but when you think about it, it makes perfect sense. ExxonMobil loves cash, and if they see business potential in hybrid cars you can be sure they are going to go after their fair share.While the hybrid market has been steadily growing, it is still a very small percentage of overall vehicle sales, but ExxonMobil thinks that hybrid popularity is going to grow at a quicker pace that the government is currently estimating.
According to Jim Harris, president of ExxonMobil's chemical division, "We are interested in good business opportunities, and that is what this is." While it is true that ExxonMobil's fascination with hybrids is due to the money-making potential, it is still good to see interest from the same company that held out so many years claiming that fossil fuels were having no impact on global warming.
OK, so what exactly is catching ExxonMobil's attention here? The company is betting that it can create parts of the batteries that hybrid cars will be using. Scientists at the company have been working on a "separator film" that goes into lithium-ion batteries, and if it can prove that it can make these without the risk of the separator exploding, then it will start to make the move into hybrid cars.
Currently hybrids are running off of nickel-metal hydride batteries. The industry wants to move in the direction of replacing the current batteries with lithium-ion batteries, which are lighter, smaller, and most importantly... more powerful than the current options.
There is one small problem with moving into the lithium-ion batteries... the potential risk of these batteries overheating and possibly even exploding when used in devices such as laptops. ExxonMobil is going to be forced to prove that then can help create a new generation of lithium-ion batteries that are safe, without the exploding risks that are inherit with current lithium-ion batteries.
Should ExxonMobil be able to improve the new generation of hybrid batteries, analysts are predicting that it will be a leading force in the ushering in the next generation of electric and hybrid cars.
Talk about your irony!
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.
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