Nexergy, Inc — Hazardous Materials Safety Interpretation

Page 1U.S. Department of Transportation JUN 2 1 2004 400 Seventh St., S.W. Special Programs Research and Washington, D.C. 20590 Administration Mr. Philip J. Glandon Ref No.: 03-0207 President Nexergy, Inc 1909 Arlingate Lane Columbus, OH 43228 Dear Mr. Glandon: This is in response to your two letters, both dated August 11, 2003, concerning are contained in Section 38.3.2.1 of the United Nations Manual of Tests and Criteria and are implemented through the provisions of 49 CFR 173.185. Your scenarios are paraphrased and answered below: Scenario 1: Nexergy is a battery pack assembler. Nexergy assembles a lithium ion battery pack (Model No. 123) using nine 2.0 ampere-hour cells manufactured by ABC Company. The cells have passed the testing requirements under the IN Manual of Tests and Criteria. The Nexergy battery pack is tested and passes the UN tests. Nexergy now wants to assemble the same model battery pack using "substantially equivalent" cells from another cell manufacturer, XYZ Corporation, which also have passed the UN tests. Is this a new design type which must be retested or may Nexergy use the test results from its original tests to satisfy the requirements for this battery pack? Answer 1: If the cells from XYZ Corporation are "substantially equivalent" to the cells from ABC Company and the design of the battery pack remains unchanged, the battery pack is not considered a new design type and need not be retested. If the cells or battery pack are changed in any way that could affect test results for the battery pack, then it is a new design type and needs to be retested. A cell or battery is deemed to be "a new design type" if the change in vhichever is greater, or the change would materially affect the test results nass to the cathode, anode or electrolyte is more than 0.1 grams or 20% Scenario 2: Nexergy assembles a lithium ion battery pack using specifications (circuitry, safety features, etc.) for the battery pack design provided by the customer. The Nexergy battery pack is tested and passes the UN tests. The customer then contracts with Smith Battery Company (Smith) to 173.185 030207#

Page 2produce the same battery pack design using the same specifications and cells. May Smith rely on Nexergy's test results to determine that a battery pack manufactured by a different company also passes the United Nations Manual of Tests and Criteria or must the battery pack be retested? Answer 2: If a lithium ion battery and cell is not "substantially equivalent" from the tested design, the lithium ion battery and cell must be tested. However, if it can be established that a new lithium ion battery and cells are "substantially equivalent" to the tested design type, retesting is not required. Therefore, a battery design that contains cells that are "substantially equivalent" to cells in the tested design type, though from a different manufacturer, it is not required to be retested. Since Smith Battery Company is a different company than Nexergy, the Nations Manual of Tests and Criteria, Smith Battery Company may not company that originally tested the battery pack design under the United use the test results representing the original company (Nexergy) unless specific permission and arrangements, such as a written agreement, exist between the two companies, and Nexergy is willing to certify that the UN tests. battery pack design manufactured by Smith Battery Company passes the I hope this information is helpful. Please contact us if you require additional assistance Sincerely, Edward T. Mazzullo Director, Office of Hazardous Materials Standards#

Page 3AUG-19-03 TUE 02:22 PM NEXERGY INC. OHIO FAX NO. 614 351 2180 P. 04/05 ...." neyergy Columbus, OH 43221 1909 Arlingnto Lone 814.351.2191 lax 614.351.2180 www.nexergy.com Reer ford August 11, 2003 3/73.185 Via Facsimile Mr. Edward Mazzullo Batteries Director of Hazardous Materials Standards Research and Special Programs Administration U.S. Department of Transportation 09-0207 400 7" Street, SW Washington, DC 20590- Re: Request for Interpretation on UN Manual of Tests and Criteria for Lithium Batteries - Battery Pack using substantially equivalent cells from different cell manufacturers Dear Mr. Mazzullo: lithium or lithium ion battery packs. I am writing to request a clarification on the testing requirements for new "types" of Pursuant to the new Section 38.3.2.1 of the UN Manual of Tests and Criteria, Lithium cells and batteries shall be subjected to the tests, as required by special provisions 188 and 230 of Chapter 3.3 of the Model Regulations prior to the transport of a particular cell or battery type. Lithium cells or batteries which differ from a tested type by: the cathode, to the anode, or to the electrolyte; or (a) A change of more than 0,1 g or 20% by mass, whichever is greater, to (b) A change that would materially affect the test results, tests. shall be considered a new type and shall be subjected to the required Ohio; Gainesville, Georgia; and Escondido, California. We purchase lithium and lithium Nexergy is a battery pack assembler with design and assembly centers in Columbus, ion cells from various manufacturers for incorporation into our battery packs. These packs can contain from one to 12 cells. My question pertains to the use of cells from different manufacturers.#

Page 4AUG-19-03 TUE 02:23 PM NEXERGY INC. OHIO FAX NO. 614 351 2180 P. 05/05 ..• • On January 1, 2003, Nexergy assembled a lithium ion battery pack (Model No. which had passed the testing requirements under the UN Manual of Tests and 123) using nine 2.0 ampere-hour cells manufactured by ABC Company and Criteria. The Nexergy pack also was tested and passed UN tests. • On December 1, 2003, Nexergy plans to begin assembling Model No. 123 using substantially equivalent cells manufactured by XYZ Corporation. The cells from XYZ Corporation are also compliant with the testing requirements under the UN Manual of Tests and Criteria. / Question: Is Nexergy required to test the battery pack that contains cells from XYZ Corporation or can it simply depend on the testing results from the original January 1, 2003 battery pack, which utilizes cells from ABC Company? Thank you for taking the time to consider this very important issue. I look forward to your timely response. Sincerely, Philip Glandon President, Nexergy, Inc.#