General Motors Co. will incorporate start-stop batteries in the 2014 Chevrolet Malibu, which goes on sale this fall, Johnson Controls announced.
The technology will increase the Malibu's fuel economy by an estimated 5 percent in city driving. The system enables the car's engine to shut off when the driver comes to a stop or idles, while the battery continues to power devices such as air conditioning during the stop mode. The engine restarts when the brake pedal is released.
"We're excited to be able to announce another large U.S. automaker introducing start-stop on one of their higher-volume vehicles," said Craig Rigby, a vice president of the power solutions business. "It represents what we've anticipated, based on the growth we're starting to see in the U.S., after what we've seen for the last several years in Europe."
Earlier this year, Johnson Controls announced that Ford was using the start-stop technology on the Ford Fusion.
The technology is an alternative for consumers who want to save money on fuel but don't want to pay the higher prices automakers have been charging for hybrids or electric vehicles.
GM announced Tuesday it's dropping the price of the Chevrolet Volt, a plug-in electric vehicle that also has a gasoline engine, by $5,000, or 13 percent, for the 2014 model year.
The start-stop batteries are a key source of growth for the power solutions business of Johnson Controls, Wisconsin's largest company based on sales.
Sales of absorbent glass mat lead-acid batteries rose 40 percent in the most recent quarter compared with a year ago, Vice Chairman Alex Molinaroli said during an investor conference call last month, shortly before he was named the company's next chief executive.
The advanced lead-acid batteries are immensely profitable for Johnson Controls, said analyst David Whiston at Morningstar Inc. in Chicago.
The company is in the process of expanding its production capacity worldwide, an investment of $520 million, to meet growing demand. The company is forecasting 50 million start-stop vehicles worldwide by 2017, up from 11 million last year.
By 2020, about half of all cars sold worldwide will use the technology.
The batteries that use the technology are advanced lead acid batteries, also known as absorbent glass mat batteries. They include a glass-mat separator that extends battery life and is conducive to the more frequent cycling and power needs required for start-stop batteries, said Rigby.
The technology was first used in niche applications such as race cars and high-end motorcycles.
In Europe, Johnson Controls introduced the batteries and start-stop technology to help carmakers comply with climate change regulations, Rigby said. But it quickly saw customers were interested in -- and asking for -- the start-stop feature.
"The technology is gaining more traction in the U.S., particularly as fuel economy standards start rising and become more aggressive. It's going to be one of the technologies that have to be adopted to meet some of those (mandates)," said Dave Hurst, principal research analyst at Navigant Research.
The emission regulations will require the auto industry to meet an average fuel standard of 35.5 miles per gallon by 2016, and 54.5 mpg by 2025.
Among the fuel-saving technologies on automakers' compliance menu are hybrids, turbo charging technology, and use of lighter materials to reduce vehicle weight.
"But a really obvious one is start-stop," said Whiston. "You get a 5 to 10 percent improvement in the fuel economy, but you don't have to pay an enormous premium to get a start-stop vehicle."
General Motors didn't release specific pricing information for the start-stop technology because it's going to be standard on the Malibu. Earlier this year, Ford said the technology would cost consumers about $300.
GM chose Johnson Controls for the Malibu start-stop technology after using a different supplier, Hitachi, on the Buick LaCrosse start-stop system, dubbed eAssist, several years ago.
Johnson Controls will supply the start-stop batteries from its factories in Toledo, Ohio, and St. Joseph, Mo., Rigby said.
Increasing demand from carmakers for absorbent glass mat batteries is a key driver for Johnson Controls' power solutions business. The company has forecast that its sales growth in this business will be in the range of 10 percent to 15 percent a year through 2017.
Johnson Controls has now sold more than 21 million absorbent glass mat batteries in Europe since 2001, an increase of 3 million from early this year.
The company currently is producing more than 5 million of the batteries a year, and projects that 80 percent of new cars built in Europe will deploy start-stop by 2018.
In the United States, one in three cars in the U.S. will use the technology by 2018.