Lithium Battery Technologies Take in Massive Funding
Trying to stay on top of disruptive technologies isn’t easy. Sometimes, things sneak up on us. Last month, a firm called Sila Nanotechnologies landed $70 million in funding for their lithium battery technology. That’s when we realized that a lot of funding has been going into the lithium battery technology space in 2018. It’s a topic we’ve covered most recently in a March 2017 article we published titled “A List of New Lithium Battery Technology Startups“. At the end of the article, we asked our readers to bring to our attention any names of startups developing technology to improve lithium batteries that had crept under our radar. They did, and in less than a year and a half, it appears that the landscape has already changed quite significantly. Let’s start by looking at some of the biggest funding rounds in 2018 so far for startups working on lithium battery technologies. (Funding information provided by Cleantech Group.)
Taking on the Gigafactory
Founded in 2002 and hailing from Hayward California, Farasis took in a monster round of $790 million in February of this year in their first recorded funding round to date. The two co-founders, currently holding CEO and CTO positions, have extensive experience working on developing lithium batteries. The CFO worked previously in M&A at Merrill Lynch, so they may be looking at expanding through acquisition using all that cash they have on hand. In a news release published late last year, the company talked about a “1 million battery pack order”, and how they are moving towards 35 gigawatt-hours per year. The term “gigawatt-hours per year” provides a convenient way to measure battery production across various manufacturers, all of which are producing different battery configurations:
The chart above from the Economist shows the growth plans of major battery manufacturers over the next 3 years. If Farasis hits their goal of 35GWh annually, they would be a major player alongside the likes of Panasonic and BYD. And they might be interested in what’s going on at our next startup.
Nano And Anodes
Founded in 2011, San Francisco startup Sila Nanotechnologies has taken in $70 million in funding so far from a single round that closed just last month. In addition to securing funding from a large Japanese lithium battery manufacturer (Amperex), the startup has also partnered with BMW who expects the technology will result in a 10-15% increase in the amount of energy a battery cell can hold. (That’s also called energy-density, something we covered before on our article on The World’s Most Energy Dense Lithium Batteries.) According to an article by MIT Technology Review, Sila’s new nanomaterial will result in graphite anodes being replaced with silicon anodes. An article by Benchmark Mineral Intelligence back in 2016 talks about how Tesla claims that the anode is one of the most important cost factors for their lithium-ion battery:
When downplaying the lithium supply issue, Tesla explained that the most important cost factors to a lithium-ion battery included the cost of nickel and the graphite anode. “The main determinants on the cost of the cell are the price of the nickel in the form that we need it… and the cost of the synthetic graphite with silicon oxide coating,” explained Musk. Graphite has not experienced the price spikes that lithium is going through primarily because the price is driven by the materials’ consumption in steel, a globally depressed market. As a result, graphite’s supply situation has fallen under the radar.
Sila’s product is a powder that can work as a drop-in material so that existing battery manufacturing processes don’t need to be changed. Expectations are that next year it appears in consumer electronics products and in BMW vehicles by 2023 (apparently there’s a 5-year lead time of required testing by the auto industry.)
Will We Finally Achieve Solid-State?
Staying on the anode topic, an article by Greentech Media says that “for battery nerds, ‘solid-state’ is synonymous with ‘lithium metal anode,” that’s according to battery expert David Snydacker. Solid state batteries use both solid electrodes and solid electrolytes, instead of the liquid or polymer electrolytes found in lithium-ion or lithium polymer batteries. This creates a safer battery and also increases the energy density as well. Founded in 2010 and hailing out of the San Francisco Bay Area, startup Quantumscape closed on a $100 million funding round this past June from leading venture capital firms like Khosla and Kleiner Perkins along with Volkswagen as lead investor. Apparently, Volkswagen has been working with Quantumscape since 2012 and expects to more than double the range of their E-Golf using Quantumscape technology. You’ll need to wait until at least 2025 to see it hit the streets.
A Solid Plastic Electrolyte
Staying on the topic of solid-state batteries, our next startup is also taking in funding from auto manufacturers to develop a polymer electrolyte that will support lithium anodes without going pear-shaped. Founded in 2012, Massachusetts-based Ionic Materials has taken in a total of $65 million in funding from some big corporate names like Renault, Total Energy, Nissan, and Mitsubishi. All that disclosed funding came in the form of a Series C round that closed in February of this year with the company coming out of stealth mode only recently to talk about their flame-resistant solid-state battery which is not only cheaper to produce but also claims a 5 to 10 times increase in energy density. That’s according to an article by IEEE Spectrum which talks about how the battery can be pierced and cut without exploding. In a follow-up to that article, IEEE Spectrum interviewed Bill Joy, the man who wisely once said that the future doesn’t need us, and who also says that Ionic Materials is not a battery company, but an IP company that’s developed an incredible material that there isn’t even a name for – thus the company name, Ionic Materials.
Zee Best Battery for Zee Smart Home
It’s not just the anode that can be improved upon but also other battery components, like the cathode. Our next startup uses iron as a cathode which offers superior safety features along with better durability (the battery can run through more charge-discharge cycles before performance starts to degrade.) Founded in 2008, German startup Sonnen has taken in $168.5 million in funding so far with their latest round – a $71 million Series E – closing in May of this year and led by Shell Ventures. Sonnen didn’t develop their batteries in-house, but instead, they’re using Sony’s Fortelian battery line which uses iron as a cathode and offers up the following benefits:
Sonnen has packaged these batteries into a “smart home energy solution”, and the end result is a battery that was featured in our article “10 Companies Selling Home Batteries“. Sonnen plans to use their new funding to expand into the U.S. and Australia. An article in Renew Economy today talks about how the Australian government is subsidizing up to 50,000 home installations that Sonnen plans to build out over the next 5 years.
Electric Vehicles, Batteries, or Both?
Our next startup could qualify as a lithium battery company, it just depends on who you talk to. Founded in 2013, Chinese startup Skio Matrix has taken in a total of $250 million in funding with the majority of that money comprising a Series C round that closed in February of this year totaling $159 million. We’re hearing mixed reports about whether or not this is a battery company, with an article by China Money Network stating that the company started out “designing batteries for new energy cars” and now “helps auto manufacturers convert their existing vehicles models into electric vehicles” with some auto financing thrown in for good measures. Skio Matrix is also building out a nationwide electric vehicle charging network in China so we’re keeping them on our radar.
Electric Buses for All
Founded in 2004, San Francisco startup Proterra has taken in a whopping $472.2 million so far with participation from big-name investors like BMW, General Motors, and Kleiner Perkins. We’ve talked about Proterra last year in an article titled Electric Bus Startup Proterra Up Against China, and since then they’ve taken in another $100 million in funding in the form of a Series G that closed in May of this year. So far, Proterra buses have traveled more than 5 million miles on routes in communities across North America, operating at a lower overall cost than traditional diesel, CNG, and hybrid buses.
Their Catalyst E2 bus released last year has 2X the horsepower, 2X the acceleration, and 5X the efficiency of a diesel bus. The batteries that power these buses have been developed in partnership with LG Chem and deliver a nominal range of up to 426 miles—the longest range in the industry. As evidence of their batteries’ potential, Proterra set a world record last year for driving the longest distance ever traveled with an electric vehicle on a single charge. Proterra’s 40-foot Catalyst E2 max traveled 1,101.2 miles with 660 kWh of energy storage capacity.
Update 9/19/2018 – Proterra just raised another $155 million funding round with Daimler as a lead investor. This brings their total funding to just over $627 million. More than 70% of that funding was taken in during 2017/2018.
We recently wrote about how strong the demand for lithium is expected to be in the next ten years, mainly because electric vehicles will soon comprise the majority of vehicles on our roadways. Well, at least Chinese, European, and American roadways. The increased need for lithium that is expected to benefit companies like FMC (read about their planned lithium IPO here), but it will also create an incentive for designers to create batteries that use less lithium. Likewise, any other materials used in lithium ion battery production that become high-demand and consequently high-price will also be prime targets for substitute materials to be developed that perform better. Will carbon nanomaterials finally live up to their promise? We sure hope so, because investors have been waiting an awful long time now.
Are you paying too much in transaction fees to your broker? Check out a brokerage firm called Zacks Trade that's offering $1 trades for U.S. stocks and options until 2020. After that, you'll pay just $3 a trade or a penny a share, whichever is greater. It's one of the cheapest brokers out there and you can also trade stocks on foreign stock exchanges. Trade US stocks and options for as low as $1 per order until 2020.