How Interstate Is Shaping the Future of Rechargeable Batteries

By: Greg LindsayNovember 29, 2010
Interstate, batteries, CEO, Carlos Sepulveda

Power Player: Interstate CEO Carlos Sepulveda dominates today's battery business while he preps for tomorrow's. |Photograph by Darren Braun
Interstate Batteries' electric future.

It's a rechargeable world. Between tablets, electric cars, and the ubiquity of cell phones, batteries threaten to supplant paper, oil, and copper wire. The worldwide market is expected to grow from $36 billion in 2008 to $51 billion by 2013 -- and nearly $10 billion in the United States alone.

Upstarts such as Better Place and BYD envision swapping gas stations for recharging ones. They have the technology but lack retail channels and distribution. And building your own is expensive. Better Place estimates doing so will cost $150 million per region. Which is why the linchpin of a rechargeable revolution may turn out to be a Dallas company with stronger ties to Nascar than green cars.

Interstate Batteries started selling its namesake product 60 years ago out of the back of its founder's Studebaker truck. Today, the privately owned $1.4 billion company is America's largest distributor of lead acid batteries (think: car), selling 15 million a year. It silently manages the private-label replacement batteries for 20 of the world's 24 largest automakers, including Toyota. So while battery makers such as LG Chem, A123 Systems, NEC, and Johnson Controls are racing to perfect lithium-ion varieties, it will likely fall to Interstate to service, replace, and recycle most of them. (It already recycles more than a billion pounds of batteries annually.) "Right now, it's a highly fragmented market," says CEO Carlos Sepulveda, "but we're everywhere."

And coming soon to the strip mall near you. Interstate's All Battery Centers promise "every battery for every need" and come close, with solutions ranging from iPads to yachts. Since acquiring the first stores more than a decade ago, Interstate has opened 153 additional stores, although Sepulveda says he could eventually add up to 1,000 across the country. (This year, he'll open 40.)

As batteries become the common denominator of how we transport, express, and entertain ourselves, Sepulveda can see his chain staking a claim as the RadioShack of renewables. "If it's solar panels, we can have relationships with manufacturers for parts, for warranties, and for servicing," he says. "We can do the same thing for hybrid vehicles." Interstate has talked to Toyota and other hybrid manufacturers about building a new distribution and recycling system. By planting its flag as the retailer of power, Interstate could fill the missing link between battery lab and living room or driveway. "Whichever way this market goes," Sepulveda says, "we don't have to fight it."

ViaFastcompany