The battery business is facing major challenges. One who confirms this is Don Gao, founder and managing director of Positec Tool Corporation, which was launched in Suzhou, China, in 1994. In an interview with Motorist (and BaumarktManager), he describes his perspective and what it means for the Kress specialty retail brand and the Positec DIY brand Worx.
Mr. Gao, you have already been in Germany for a few days and have already visited a number of dealers. What impression do you take away from your meetings?
Don Gao: The market is changing and retailers are feeling this very keenly. In particular, the retailers I visited are very alert. I was really surprised by the astuteness with which they are analyzing which technology and which offerings will enable them to survive and grow in the future. However, it is also clear that not all motorists will make it, but only those who question their business models.
On a scale of 1 (low) to 10 (high), how would you currently describe the dynamics in the field of battery technology? Why?
Definitely at ten. The market is currently very dynamic. You can feel that everywhere. Everywhere you look, sustainability and electrification are the dominant themes. "Going green" is a real megatrend. Not only in the garden technology sector, where consumers clearly prefer battery technology, but also professional users in green care. Politicians are also making their mark. The EU has just decided to ban internal combustion engines from 2035. Germany has signed up to this, even though the automotive industry is one of Germany's key industries and Germany is not exactly a leader in the field of e-mobility. This shows how central the issue is and that the market must move consistently in this new direction. This is a real milestone.
What do you see as the biggest challenge at the moment?
The fact that there is almost no solution yet for the task described above. Not even for the small motors used in gardening equipment. The problem is downtimes and power peaks. In the DIY segment, this is not so important because users usually only have the devices in use for a limited time and an hour more or less does not matter when it comes to charging. In the professional segment, where we operate with our Kress brand, things are different. Here, every minute counts because unused working time costs. If it takes an hour to charge a lithium-ion battery, there is no longer any question of fast charging. Especially since constant charging and discharging is detrimental to battery life. If you let a good battery handle 500 cycles - most of them only manage 300 - then this means that even in the best case scenario, the battery will be exhausted after three to four months if it is charged several times a day. Replacement batteries are also not a panacea, because they also cost money and tie up capital.
Yet you seem quite relaxed about it?
(Laughs): We do have a solution, but we won't be presenting it until September at GaLaBau in Nuremberg. So I can't reveal too much yet. Just this much: It involves a new technology in the structure of the battery that makes it possible to charge the battery to 85 percent in just 5 to 10 minutes. The peak power is also significantly increased and the service life is ten times longer than with conventional lithium-ion batteries. This will change this market as the first truly professional battery system in the 60 volt class, I am convinced. The tests we've been doing in the U.S. since last year also bear us out. The feedback has been overwhelming.
We see a clear trend towards alliances in the battery market, what is your position on this: Will you be able to hold your own at all as a stand-alone player in the future? Or will we see the advent of the one-size-fits-all battery at some point?
Battery alliances satisfy customers' demand for convenience, and that's good. Being able to power many devices with one battery is a monetary advantage and is good for the environment. An alliance is also advantageous for equipment suppliers who only offer a limited range. In the higher volt range, as we serve, I see less of a need and tend not to believe in it. Customers will also continue to want choice.
The further back you trace the battery market, the more often - in fact, always - you end up in China. Is the battery business a China business?
Not necessarily. The cells used to come from Japan, then Korea. But of course China is an important battery supplier.
Competition in the battery market starts with sourcing. That creates competition, especially since the whole world is calling for batteries. Will this have an impact on prices? Or is there even a threat of a distribution battle?
Competition at the source is indeed fierce. However, the bottleneck is not so much raw materials as manufacturing capacity, because the market has developed so rapidly. Of course, this drives up prices, which is what we are currently seeing. I don't see a turnaround there yet either.
In view of scarce resources and sustainability, topics such as reparability and recycling are coming into focus. What does Positec have to offer here?
A separate industry has already been established around the topic of recycling. Repairability is a good thing, but not so much for small cells, but rather with a view to the large batteries in the 60 volt range.
A word about the Kress brand. In 2019, you launched your sales concept in Germany. Where do you currently stand? And what are your plans going forward?
Our professional brand Kress is developing well and Germany in particular is an important market for us. The dealer network is growing and our sales model, which is based on commission, is being well received. We would like to push this further.
What's new at Worx?
We are currently the market leader in the DIY segment with Worx. That also confirms that we should continue in the same vein.