After a hectic day at PowerPaul, it’s time to sit down and decompress, and part of that often involves jotting down thoughts and ideas that have cropped up during the day.
Amongst the myriad of things we get asked about each day (we receive about 20 emails a day, plus many messages through Facebook), a couple of things crop up somewhat regularly. Pricing and Recycling.
Pricing…
Price of products is fairly easy with some basic economics experience. We obviously don’t go into the detail of profits and costs per product, but we can say we run VERY lean here. We do this by focussing on the process, not the profit. Saving time/cost but keeping the same quality, or increasing the quality and keeping the same cost, are our key motivations. We also have really low overheads because we’re just 2 people. Sure we have a web guy and an accountant to handle some of the work we’re not set up to handle, but we don’t have a fleet of staff onsite doing this. Overall it’s a good system with our current setup. This keeps us busy all the time and we’ve honed the process to work well. It also keeps us intimately involved with the product to watch quality, and the customer to ensure we cater to them.
Price is also somewhat dictated by the market. People have mentioned that the price of Lithium has dropped significantly in the past couple of years, this is true (it also went up just as significantly in the 2 years before that). However Lithium is a small component of LiFePO4 batteries, about 15% (of the cell alone) to be specific. So a price drop of 50% in “Lithium” raw material, which is only a fraction of the cost of the “Battery”, would probably only result in a drop of a couple of percent in overall cost at best. That couple of percent is more than offset by inflation and other economic considerations. Keep in mind that there are also other components, metals, connections, labour, testing, infrastructure, shipping, admin, advertising, warranty, product support and learned knowledge that’s built into the cost of your purchase.
Regarding Recycling…
Recycling Lithium batteries is a budding industry. Australia is typically long behind places like China, USA and Europe, but that’s not necessarily a bad thing. This means they get to do the hard work of figuring out the methods, and we can learn from that hard work (even though Australian places such as CSIRO have some amazing tech that the world often learns from). We’re also way behind in uptake of this battery technology, so our recycling needs will be similarly delayed and lower quantity.
The lifespan of Lithium batteries is long in the battery world. A heavily used battery should still last 10 years, providing it’s of good quality and is used correctly. We will probably see many of the batteries produced today, lasting a generation which is truly amazing. So by the time those batteries start reaching end of life en-masse, we should see recycling technology spinning up to match it. I would rather see this technology on our shores hosted by local companies than having to ship these items back overseas. That shipping is both risky and costly, resulting in zero benefit to Australia.
So if you’re concerned about recycling, we recommend you don’t be. It will be mature when the real need arises in the years to come. PowerPaul will keep up to date with recycling technology and will (when required) provide its customers with the necessary facilities.
Informative as usual. Great work.