When Elon Musk started bulldozing desert scrub to build his giga-factory near Reno, Nevada, he bet the ranch that the lithium-ion battery market would skyrocket to around $75 billion by 2020, making anyone with the right technology Bill Gates rich. Many battery researchers who were home-brewing new technologies in their labs had come to the same conclusion years ago and are now looking forward to trouncing his traditional batteries in the EV market.
Removing the electrolyte
One possible giga-factory slayer is Anne Marie Sastry, who'd done battery research for years at the University of Michigan before starting Sakti3 in 2006. Her small company is already well on its way to building a commercial, solid state lithium-ion battery. She choose the new technology after parsing battery materials with big-data-fed mathematical optimizations and realizing that she had to dump the liquid electrolyte, along with all of the expensive insulation and cooling it required.
Removing the volatile electrolyte, which can cause lithium-ion batteries to overheat and even catch fire, could upend Musk's ambitions as Sastry and other solid state startups not only develop more efficient batteries but cheaper production methods as well. While daunting hurdles still confront the upstarts, as soon as the first mass-market EV sporting a solid state battery is taken for a spin by Car and Driver magazine, Musk’s $5 billion giga-investment could fade to pennies on the dollar.
Buying frenzy
Recently, as if on cue, Sakti3 and other innovators have been snatched up by large manufacturers in a flurry of M&A activity. It started last August when German auto parts maker Robert Bosch bought Seeo, a California-based company that is also developing a solid state lithium-ion battery that reportedly doubles the range of electric cars.
That was quickly followed in December when Volkswagen bought a small stake in QuantumScape, another US solid state battery startup, which says its battery can more than triple the range of electric cars.
At the same time, several solid-state-powered EV's in Indianapolis are the first US wave of a new car-sharing program from France's Bolloré Group. These cars are a milestone because they're the first plug-in's on the road powered by the company's solid-state batteries, although they're still a low-mileage work in progress.
This buying frenzy came to a climax when Dyson, a successful British electronics and vacuum company, announced it would suck up Sakti3 for $90 million, along with Sastry, her whole research staff, and a well-stocked intellectual property library.
“The Sakti3 platform offers the potential for exponential performance gains,” James Dyson, Dyson’s founder and chief engineer, said in a press release. “Sakti3 has achieved leaps in performance which current battery technology simply can’t."
Sastry was just as enthusiastic about the deep-pockets deal. "Dyson is a multibillion-dollar engineering and manufacturing company — and they have the will and the capability to integrate our technology into their products and scale quickly," Sastry said to the Detroit Free Press.
Something has to change
Sastry always thought that home electronics would be Sakti3's best path to market, and that eventually the big battery payday, electric vehicles, would come. Dyson is thinking big and planning to build a big $1 billion (mini-giga) battery factory, and is expected to begin integrating Sakti3's battery into Dyson products soon.
Before Dyson hoovered up Sakti3, GM had already tagged the new batteries as a big improvement on an aging technology and pumped $3 million into the company's early research. Echoing Dyson and pointing out Musk's dilemma, Jon Lauckner, president of GM Ventures, who made the investment, said, "There's a limit to how much better conventional batteries can get." He felt that if electric vehicles are going to run combustion engines off the road, "something fundamental has to change." And he believed that Sakti3 (displaying major tech mojo) is "working well beyond the limits of conventional electrochemical cells."
Avoiding high costs
Back around 2007, after choosing to build solid state batteries, Sastry looked for a manufacturing platform that would avoid unnecessary costs. She says she threw away the script, "looked at different industries" and choose vacuum-deposition, which is used to make computer chips and flat screen TVs.
Deposition is cheap, easily repeatable and a lot less messy than a traditional lithium-ion battery production line with its mixers blending chemical powders into a slurry, which is then coated onto long sheets of metallic film, dried and then chopped into electrodes and placed in pouches with electrolyte. By contrast, Sakti3 simply deposits the layers of the thin-film battery — first the cathode, then the current collector, then the interlayer and finally the anode.
This results in a battery that packs twice the punch of traditional lithium-ion. Sakti3's battery will take up the same space as Tesla's floor-mounted pack but weighs less, while boosting acceleration and range. They're also prismatic (and stackable), and actually perform better at higher temperatures. So they can be packed closer together without the heavy cooling systems found in the Tesla.
Kicking the tires
During the summer of 2014, Sastry announced that the company’s prototypes had reached a record energy density of 1,143 Watt-hours per liter, which is more than double the energy density of today’s best lithium-ion batteries.
“Our target is to achieve mass production of cells at $100/kWh,” Sastry predicted at the time. “Our key patents have been issued. We're up and running on larger tooling. Our first market will be consumer electronics, and after that, we’ll move to other sectors.” Meanwhile, Tesla’s batteries, which are made by Panasonic, are estimated to cost around $250 a kilowatt-hour and probably won't get much cheaper.
Shortly afterwards, Dyson and his research chief Mark Taylor spent three months in Michigan evaluating Sakti3’s technology. That led to an initial $15 million courtship investment in the spring and a wedding in the fall.
Dyson, which has ambitiously mapped out a business plan to make 100 new products powered by his company's digital engines, explained why Sakti3's technology was so important. "Their platform offers the potential for exponential performance gains that will supercharge Dyson machines," he said.
So what's the moral for future entrepreneurs if Sakti3 ultimately succeeds with Dyson's help? Changing a core technology can reboot an entire industry and beyond, and it allows an innovative newcomer like Sakti3 to leapfrog Tesla's sheer manufacturing muscle. It's now time for Musk to renew his Ambien prescription so that he can sleep at night while the market sorts out the winners from the losers over the next ten years.
Comments
I think a follow-up article is called for.