Pivoted the company, we went through a big transition. It was a major bet. We essentially bet the company, and the company almost didn't make it at the time, but we did, and here we are. So we're very focused now on heavy-duty vehicles. I've been pushing as CEO, have a bit of focus and win it the first one and then go to the next one.
This is Energy Cast and I'm Jay Dhower. Today we're talking about heavy-duty lithium-ion batteries. The concept may seem a little contradictory. Lithium-ion batteries are by definition energy dense, they're light, but one of their biggest drawbacks is that most are not built to be used until the end of time. Their lifespans are typically defined by the number of cycles, charging and discharging, they can take before they start to degrade. My guest was one of the pioneers at the dawn of the lithium age, which began way back about 30 years ago. And to hear my guest tell their story, it's a tale of constant reinvention with a now laser-committed focus on the material handling sector. So why the sector? My guest says forklifts, for instance, have to run non-stop far more than the family Tesla. He says their batteries would outlive a car like that. There is also a critical need for safety. It's a niche market that's still worth billions of dollars. My guest says they plan to also expand into heavy vehicles and potentially utility-scale battery energy storage systems or BESS sites. One of the things we discuss in this episode is the need for these BESS sites to augment or add battery capacity as the original batteries begin to degrade, in some cases prematurely. You've heard me talk about some of my concerns about lithium-ion technology. It's too spread out. It promises to be the answer to too many of our energy needs. It's the same issue I hear from people who only support wind and solar, for instance. I like a balanced basket of energy technologies. My guest can't answer for the whole lithium industry, but it was refreshing to see a North American company focused on a particular sector in a field that's becoming increasingly diffuse. And it would be fascinating to see what their limitless lithium batteries add to that mix. My guest today is Dr. Raj Dasgupta, CEO of Electrovaya, a lithium-ion battery producer based near Toronto. Electrovaya was founded in 1997. Raj took over duties from his father, Dr. Sankar Dasgupta, last June. He describes the last few years as a quote 'bet the company' moment, pivoting from batteries Samsung and other Asian manufacturers are famous for to their own heavy-duty Infinity battery, as they call it. Electrovaya is also on the cusp of a long-awaited commercial solid-state lithium battery, which could essentially double the energy density of the batteries on the market today. I really appreciated Raj's frankness both with his company's history and some of the challenges facing the industry at large. I hope you enjoy my conversation with Dr. Raj Dasgupta.
We're here with Dr. Raj Dasgupta, CEO of Electrovaya. And Dr. Raj, lithium-ion batteries have some giants, Tesla, Samsung, LG, y'all know their names. How is Electrovaya's lithium-ion technology different from the companies that we've heard of?
This is an extremely competitive field. That specific space on the batteries has traditionally been dominated by the large Asian conglomerates who have plenty of people and money and backing from governments, etc. So it's a very, very difficult space. How do we compete? Electrovaya has been in the battery space for 25 years, and that battery space has always been lithium-ion batteries. We've managed to survive where there's plenty of dead bodies in the ground, right? And we've done that through being innovative on the technology side. That's been our focus all along. The company today has well over 100 patents, and we continue to evolve and play in this very competitive space. Now, this space of electrification, as you know, is very broad. It's more than just electric vehicles. We've decided, we designed one of our technology platforms around being extremely long in cycle life. Our lithium battery cells will cycle two to three times longer than automotive-grade lithium batteries, than most of them that I know of. And as a result of that, combined with the fact that we have a ceramic separator technology which provides much better safety, we've decided to focus our efforts on applications which are sensitive to both of those, which I think would be classified more as heavy-duty vehicles as opposed to your passenger vehicles. I drive an EV to work every day and have done so for many years, but that car sits parked about 23 hours per day at the best of times, right? I'm not using that battery very hard, and I'll probably do one cycle on my vehicle per week. The applications that we're targeting are doing one cycle per day or two cycles per day and using the battery 24 hours, 7 days a week, right? So it's a totally different market segment, but it's large. Material handling will be top of that. If you go into a warehouse, let's say it's a Walmart warehouse or even Amazon warehouse, those types of operations, they'll run those forklifts 24 hours a day, 7 days a week. They're moving your food, they're moving your goods. These companies, they make their money by being efficient, and so those vehicles are being utilized as heavily as possible. That is where we focused quite a bit of our efforts, and we've been pretty successful there.
Yeah, 25 years, what was Electrovaya doing 25 years ago?
Oh, not this, right? We've had lots of reinvention over that time. So 25 years ago, lithium batteries were new. We initially were early developers, I'd say, on the pouch cell development. We were very early there. We worked with companies like NASA, for instance, on their shuttle mission programs for batteries. We got into the electric vehicle space rather early. We had a partnership with Tata Motors, which is a large Indian automaker. Then a bit later, we partnered with Chrysler. We built the batteries for their test fleets of plug-in hybrid Dodge Rams and minivans. But again, this was 2009, 2010. Those vehicles that I just mentioned didn't go into production, and those companies may have been a little different today if they had, but they didn't go into production. So 2014, 15, 16, Electrovaya actually acquired Germany's largest lithium-ion battery plant of the time, and that was supplying Daimler for their e-Smart. So we were supplying the e-Smart. So we were very into the automotive space. What we were finding though was it was getting extremely cost-competitive, such that we were making losses on our products and something that we can't sustain. Around that period of time, we also started developing this new technology, which we refer to today as our Infinity Battery Technology platform. And we said, hey, it's overkill for these passenger EVs, but it's ideal technology for heavy-duty applications. We went through a big transition in 2018. We closed down the facility in Germany. It was a major bet. We essentially bet the company, and the company almost didn't make it at the time, but we did, and here we are. So we're very focused now on heavy-duty vehicles. They're more than just material handling. There's robotics, buses, and trucks are markets that we're eyeing right now. It has been a good bet for us as a company, and we'll see how things go. That said, we continue to keep our eye on the larger market, but again, we'll only go back through technology. We're developing our solid-state battery technology right now. It's looking promising. That would be the technology that would be more applicable for the electric vehicles.
Yeah, and so describe this solid-state lithium battery. Just to clarify, all lithium batteries are not solid-state, correct?
Yeah, your typical lithium-ion battery has your cathode, your anode, anode typically graphite, cathodes mixed metal oxide, and then you typically have a separator membrane and a liquid electrolyte. And that separator membrane is usually a polymer porous material. In our case, it's a ceramic material. A solid-state battery, you're replacing that liquid electrolyte and your separator typically with a solid separator electrolyte, and therefore you're getting rid of the liquids. And then because you're doing that, you can use pure lithium metal as your anode. And when you do all that, you suddenly increase your overall energy density by at least a factor of two. So it's a major game-changer in technology. A lot of companies are working on it. No one has commercialized it in any reasonable scale at this point.
What's been the drawback to that? I assume you're using more lithium in your batteries?
Yeah, you're using a little bit more lithium, but you're still using lithium in a lithium-ion battery, yeah. But the major drawback is it's hard to get it to work. The challenges have been getting a solid-state battery to work at room temperature, for instance. Some companies have actually commercialized solid-state batteries that work at elevated temperatures, but room temperature, some of your audience will know, liquids are of course more mobile and generally more conductive, especially with an electrolyte, than a solid would be for ionic conductivity. So conductivity is one of the challenges, especially at room temperature and lower. Manufacturing it is very difficult. One thing making a cell in a lab, another to be able to scale something for manufacturing. These are some of the major challenges that are there today.
You're saying you're going longer cycles. We've heard a lot about multiple cycles and almost have infinite cycles, so...
No, no, I'm talking about number of charge-discharge cycles you can do on that battery before it reaches end of life.
Okay, well then that's the name of the game, isn't it?
Yeah, like everyone's familiar with their cell phone, right? Right after two years, which is approximately, let's say, 600 cycles, maybe 700 cycles depending on how heavily you use your phone, that battery is noticeably working worse, right? The batteries that go into your cell phones probably will do 1,000 cycles or less. The batteries that are going into your typical electric vehicles will maybe do 1,000, maybe 2,000 cycles in some cases, but then they won't go beyond that. The cells that we're making on our Infinity Battery Technology platform, they're doing about 9,000 full cycles, you know, going 100% going to zero before they reach 80% of their initial capacity. It's a huge number of cycles. If you put that into your EV, it's going to last much longer than the chassis of that car is, right? So it's a little overkill, but again, there are applications out there that can utilize that. Even energy storage is a good one, right?
Yeah, and that's what I wanted to get into. I just came off an assignment. We're seeing a lot more attention to system design, especially with premature aging. What could be leading to premature aging with lithium-ion batteries? I think one of the situations I've seen is you take a lot of batteries, you put a lot of them in series to raise the voltage, and what it does is it just drags them all. It really ages them out.
Yeah, so the energy storage industry is close to my heart because I actually developed our energy storage systems about a decade ago. What I found is the last 10 years, it's been a new industry and sort of dominated by developers to some degree, right? So they'll say, I'm going to build an energy storage plant that has 10 megawatt-hours, and I'm going to go look for a battery system for that 10 megawatt-hours. And they get put out an RFP, and the lowest cost per kilowatt-hour upfront cost solution wins the bid, and that's what gets built. The developers aren't thinking 10 years down the line that the site is going to have to be augmented because the batteries are fading. Battery degradation is a very complicated science, and some of the factors that you've just mentioned, series, parallel, that has some influence, but fundamentally it's the chemistry. Chemistry is what's dictating the degradation of the technology. And this is something that, as our CEO, I look at this energy storage industry. I know we have the right technology for that market, but we're not pushing it too much at this point because I'm going to wait till some of these energy storage systems reach their end of life, and then developers start scratching their heads and say, oh, maybe we should have picked a different battery technology. So we're going to come back to it. But you know, like your battery that's designed for your phone or your car, which is 90% of the batteries that are being produced, more than that, they are not designed to cycle 10,000 cycles. They're not meant to do that, and that's why they're failing. Their core technology isn't designed around that.
Yeah, do you think that in a case like that, a better battery management system could prevent that? It seems almost like it's managing the batteries at the series level as opposed to on the individual modules or even the individual cells.
For sure, you need the best battery management system you can, especially the big, big systems. But that said, you can't get around the chemistry. Chemistry is your ultimate limitation there, and if your chemistry is weak, you're going to have a weak system.
And so you guys think you have a superior chemistry to what's out there, what's been thrown out in the field in some of these large BESS sites?
Yeah, yeah. Frankly speaking, I would say so. That said, we're not applying this technology to that industry segment because if you're making something and you're only making a hundred of them, you're going to sell it to the guy who's going to spend the most money on it. The guy who's going to spend the most money on it are these Fortune 500 companies operating warehouses where they want the battery to last as long as possible, and they can clearly see a longer-lasting battery is giving a lower cost of ownership.
Sure. And look, these BESS augmentations, the setting that I was in earlier this year, I felt like we were one of the first people to be doing augmentations. Everyone else is just putting the first greenfield sites in the ground. That's got to be a serious consideration moving forward, right?
