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Over the weekend Senate Democrats officially passed the Inflation Reduction Act in what amounts to President Biden’s biggest legislative win so far. The bill includes a host of broad-spectrum economic policy changes and completely reworks the subsidies for electric vehicle purchases. The law still has to get through The House, but this should be a much smaller hurdle.
dot.LA covered the bill in depth as it neared the goal line at the end of July, and the final iteration doesn’t change much. To recap:
1.The rebate total stays $7,500 but is broken into two $3,750 chunks tied to how much of the car and its battery are made in the US.
2.The manufacturer caps are eliminated, meaning even EV companies that have sold more than 20,000 vehicles are once again eligible.
3.Rebates will now only apply to cars priced below $55,000 and trucks/SUVs below $80,000
With the new system placing a renewed emphasis on American manufacturing and assembly, the calculus of which vehicles cost how much is still being worked out, but the most comprehensive list I’ve seen has come from reddit user u/Mad691.
In addition to the EV rebate program, the bill also includes a number of economic incentives aimed at curbing emissions and accelerating the country’s transition to electric vehicles.
There’s $20 billion earmarked for the construction of new clean vehicle manufacturing facilities and $3 billion will go help electrify the USPS delivery fleet. Another $3 billion will go to electrifying the nation’s ports. Then there’s $1 billion for zero-emission trucks and buses.
Now that the bill is about to be codified into law, VC investment in the sector might heat up in response to the new money flowing in. “I do anticipate more climate funds standing up to invest in EV infrastructure,” says Taj Ahmad Eldridge, a partner at Include Ventures and the Director at CREST an ARES Foundation initiative with JFF/WRI that aims to provide training for people in the new green economy. “However, we do see funds being a little more thoughtful on diligence and taking their time to fund the right investment.”
The sentiment seems similar across Southern California. ChargeNet CEO and Co-Founder Tosh Dutt says the Inflation Reduction Act “super charges” the company’s effort to build infrastructure across the country.
“This investment accelerates the transition to renewable energy and gives companies like ChargeNet Stations the confidence to expand more rapidly, especially in underserved communities,” says Dutt.
For Rivian, the bill’s passage has left would-be customers in a sort of limbo. Because many of their models will exceed the $80,000 cap for trucks and SUVs after options, customers who’ve preordered are scrambling to sign buyers’ agreements to take advantage of the current EV rebate scheme which doesn’t include price caps. As I noted in the previous article, if you buy an EV before the bill is signed, you’re eligible for the current rebate system even if the vehicle isn’t delivered until 2023. Any existing contracts under the current system will remain valid.
With the legislation seemingly on the fast track to become law, it’s unclear whether or not Rivian will expedite the purchasing process to allow customers to sign the buyers’ agreement before the new rebate program becomes the law of the land. Tick tock!
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Faster charging, longer life, cooler temperatures.
For batteries, it’s usually a “choose one of the above” scenario.
But Battery Streak, a fledgling startup based in an unassuming business park in Camarillo, CA, says it has all three, and they have it today.
“Our technology, in its current state, is something that we're bringing to market today,” says Dan Alpern, VP of Marketing at Battery Streak. “We're out of the lab and ready to go now.”
Given those claims, it’s not surprising that Battery Streak says they’ve attracted attention from major multinational brands, the U.S. military and electric vehicle manufacturers. Their batteries offer lightning-fast charging: Up to 80% capacity in 10 minutes. This alone would make the technology attractive for a variety of applications, but the company says it can hit those numbers while maintaining temperatures lower than that of the human body—all while maintaining a higher capacity across more cycles than traditional lithium-ion batteries are able to provide. Battery Streak’s test results show their product retains 80% of its capacity after 3,000 charge/discharge cycles. Today’s best lithium-ion batteries usually drop to 80% in about 1,000 cycles.
EV’S New Hope: Niobium
Image by tunasalmon/ Shutterstock
The secret sauce behind Battery Streak’s impressive stats is a rare metal called niobium. Element number 41 on the periodic table, niobium naturally reacts with oxygen to form a porous crystalline structure known as niobium oxide or niobia. The molecule’s shape gives it an incredible amount of surface area—which is what makes it so useful in battery design.
When charging a traditional battery, positively charged lithium ions start at the lithium metal cathode and migrate to a negatively charged anode. The anode is usually made of graphite—a crystalline carbon structure that traps and holds the ions in a process known as intercalation. This works well enough, but it requires the lithium ions to penetrate deep into the graphite lattice and undergo a chemical phase transition, releasing heat. The process can also get bogged down if the metal ions don’t penetrate deep enough into the carbon matrix and instead clump to form a metal coating. This is lithium plating, and it’s a massive problem facing batteries of the future and today.
Replacing the graphite in the anode with niobium solves—or at least improves—both of these problems. Due to the larger surface area of the niobium oxide molecules, lithium ions don’t need to penetrate deep into the crystal lattice or undergo any phase transitions to remain in place. Instead, the lithium ions nestle onto the surface of the niobium lattice. Easy on, easy off, so to speak.
Most of the world’s naturally occurring niobium can be found in Canada and Brazil and the mines and supply chains are robust thanks to the metal’s long history as a component of steel alloys. CBMM, a Brazilian niobium mining company has invested $5 million in Battery Streak and supplies all of the niobium for their batteries. Additional funding has come from a National Science Foundation grant and a pre-seed round from Act One Ventures, bringing the total to $6.5 million.
The battery design was first conceived at UCLA by a team of researchers including Bruce Dunn and Sarah Tolbert.
“These professors came to the licensing group and basically said, ‘Hey, we got this great new technology, find somebody to spin it out,’” says Battery Streak President David Grant.
Grant, who has previously founded several successful startups, is UCLA’s entrepreneur in residence.
“They looked around and said ‘Well, David's not doing anything, let's call him’,” he jokes. The company brought in Chun-Han “Matt” Lai from UCLA as technology development manager and started working on the commercialization process. Five years later, the company is ready to hit the market.
Creating Demand for a New Battery Type
Image courtesy of Battery Streak!
Battery Streak’s ultimate goal isn’t to become a battery manufacturing giant…at least not yet. Their current business model is to make and supply the niobium nanostructures to battery manufacturers or to license the production technique to larger companies. In order to get these contacts, they have to convince the original equipment manufacturers (OEMs) selling the downstream products to give this new battery formulation a chance. A battery giant like Samsung isn’t going to switch up its battery chemistry unless there’s demand for the new tech. So, part of Battery Streak’s current strategy is getting their batteries into the hands of OEMs.They are targeting power tools, warehouse robots, drones, medical devices to start—all sectors where battery performance is critical and where there’s access to fast charging infrastructure.
When I toured Battery Streak’s manufacturing and design facility in June, the company was in something of a holding pattern. A standard COVID supply chain hiccup had them waiting on delivery of a 100-liter reactor that would let them move from producing a few grams of niobium per day to several kilograms. The reactor arrived a few days ago and as of July 19th, the company was drying its third large scale batch of product and sending out sample batteries for equipment manufacturers to demo.
Fortunately for Battery Streak, Dan Alpern says that battery manufacturers can build niobium batteries using all the existing lithium-ion equipment. There’s no need to purchase new machinery, parts, or packaging.
As impressive as some of Battery Streaks' numbers seem, there are two important caveats. The first is that to realize all their fast-charging potential, you need fast chargers. No standard home outlet can deliver enough power to let you charge your EV to 80% in 10 minutes.
Charging and discharging speeds are described on a C scale, where 1C means the battery charges or discharges in 1 hour. 2C indicates that the battery charges and discharges in 30 minutes, 3C indicates 20 minutes, etc, etc. Battery Streak’s tech allows them to charge and discharge in the 6C range. That’s incredibly fast. To deliver that much power to the battery, you need more voltage (or current) than a standard wall outlet (120 volts in the United States) can supply. That’s why the company is focusing its initial efforts on applications with easy access to higher voltage/current power supplies: auto shops, hospitals, warehouses, etc. Still, consumer electronics aren’t completely off the table: With a new type of charger, Grant says that his company’s batteries could offer improved charging times for phones or laptops, even with the current electrical grid.
A Fast-Charging Revolution?
As EVs become more mainstream, access to faster charging infrastructure will likely become more widespread. Many EV owners and landlords are installing level 2 charging (240 volts) in their houses or properties. Battery Streak is hoping to ride this wave into the future, but the electrical infrastructure required to reap the full potential of their technology isn’t that widespread yet.
Battery Streak is taking a more conservative approach in the electric vehicle sector. They’re in conversation with multiple automotive clients, but the second caveat facing their tech is that the niobium formulation reduces the total capacity of the battery by about 20% compared to a lithium-ion battery of the same size. The tradeoff is faster charging for reduced range. Some deficit can be offset by the reduced need for cooling gear, which also costs weight and space, but with so much consumer concern over range, other next generation battery technologies–especially solid state–may ultimately win the race. Scooters, bikes, and other micro-mobility use cases are also definitely on the table.
In terms of clientele, Battery Streak can’t say much because they’re bound by NDA’s with “pretty much everyone,” according to Grant. Their only large public contract is with the U.S. Navy. Their low temperature and high discharge rate has made Battery Streak’s batteries an enticing target for drone use. Quadcopter-style drones require considerable energy for takeoff, but use much less to maintain flight. The military was searching for a battery that could meet that dynamic power profile and recharge quickly in arctic environments, says Alpern, who served in the Navy on active duty from 1984-1990, and worked as a civilian employee from 2009-2021.
New Subsidies, New Opportunities
Image courtesy of Battery Streak!
Battery Streak’s next phase is unclear. With its giant new reactor finally online, the company hangs on a precipice: If the test cells it’s sending out are well received by OEMs and the company can convince larger battery manufacturers to add a niobium formulation to their offerings, Batter Streak could potentially become worth billions, if only as a supplier of niobium powder.
There’s also the possibility that Battery Streak becomes a manufacturer. This wasn’t really at the forefront of the company’s plans even a few months ago, but according to Alpern, the winds are changing. There’s a possibility of setting up a factory in Kentucky using $50 million of state and federal funds allocated for clean energy initiatives to help replace coal jobs in the region. There are also whispers about Department of Energy subsidies.
“We're looking at Nevada, we're looking at Texas, we're looking at Arizona, we’ve spoken with North Carolina,” says Alpern.
Such an investment wouldn’t be unheard of for a niobium battery startup either. Earlier this month, UK-based Nyobolt secured $59 million in Series B funding to begin construction on a manufacturing facility that could come online as early as 2023. Another UK-based competitor, Echion Technologies, has also been in the news.
With the space clearly heating up, the race to market is on. Battery Streak says it’s hoping to have its first production batteries commercially available within the year.
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Fifth Wall, a Los Angeles-based venture capital group, has closed a half-billion-dollar fund to decarbonize the property industry. The new money brings the group’s total managed investments to just north of $3 billion. It will be used to “invest in anything and everything to decarbonize the real estate industry,” says Brendan Wallace, co-founder and managing partner at Fifth Wall.
The real estate industry is vast, and its contribution to climate change is well documented. A recent McKinsey study estimates “[r]eal estate drives approximately 39 percent of total global emissions.” Transportation, by comparison, is responsible for around 27%.
“It's the single biggest lever the world can turn on mitigating climate change,” says Wallace. “However, as a category, it's pretty systemically under-invested in from climate venture capital funds. “Only about 6%, historically, of climate venture capital has gone into real estate-related technologies.”
Fifth Wall wants to change that by bringing together some of the biggest real estate owners—names like Marriot, Hilton and British Land—and investing their money into technologies that will help decarbonize the industry.
Fifth Wall’s portfolio includes everything from companies that make more efficient HVAC motors to carbon negative cement. The group also has financial stakes in heat pump and green hydrogen companies. There’s software of all sorts to invest in: regulatory compliance, fintech and industrial internet of things (IoT) technology that can support a real estate and construction economy that tracks carbon.
Wallace says the sheer scope of the real estate market combined with new interest in climate conscious investments helped create a demand for new fintech products that can track emissions and provide financial products that bake carbon costs into savings. “The U.S. commercial and residential real estate market is bigger than the U.S. stock market. It's the single biggest capital market on Earth,” says Wallace. “The allocators to that market are overwhelmingly saying ‘We will preferentially deploy capital to low or no carbon footprint real estate.’ So THE cost of capital has dramatically changed for lower carbon footprint real estate.”