I wholeheartedly believe in electric vehicles, but the vehicle sitting parked most of the time. The impact I'm having by going from internal combustion to electric is that one hour driving per day. I'm not burning gasoline. I'm using electricity instead. That's great. The applications that our batteries are going into would have used, you know, let's say internal combustion for 22, 23 hours a day and now they're being electrified, right? So a significantly higher impact on the electrification is what we're enabling with our technology.
Welcome to Sustainability Leaders. I'm Michael Torrance, Chief Sustainability Officer at BMO. On this show, we will talk with leading sustainability practitioners from the corporate, investor, academic, and NGO communities to explore how this rapidly evolving field of sustainability is impacting global investment, business practices, and our world.
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Welcome. My name is Stephen Wazota and I'm Director of Sustainable Finance and Clean Energy at BMO. On this episode of Sustainability Leaders podcast, I have the pleasure to welcome Raj Dasgupta, Chief Executive Officer at Electrovaya, a global supplier of safe and long-lasting lithium-ion batteries. In our discussion today, we will focus on the science of enhanced battery safety, the economics and supply chain of building a global lithium-ion battery supplier, and finally the tailwinds and headwinds facing this energy transition pillar. Raj, welcome to the show and thank you so much for being here.
Stephen, great to be here and thanks for having me. It's good to see you again.
Absolutely. So maybe tell us about a quick introduction of yourself and Electrovaya, your background and how your role and leadership has evolved at Electrovaya.
So I completed a PhD in material science around 2009, and the research I was involved with at that time was related to lithium-ion battery anode materials. I joined Electrovaya after that and it was a very interesting time in lithium-ion batteries and at the company in 2009. So for those of you who remember, President Obama had just been elected and had made electrifying vehicles a key target of his administration. So the targets were laid out and major automakers were getting bailed out by the government and were keen to demonstrate enthusiasm as well. So we had partnered with Chrysler for a few of their plug-in hybrid vehicles they were planning to demonstrate in partnership with the DOE in the US and there were other battery companies as well. Notable ones was A123 Systems. Tesla was a new company as well.
Now, Electrovaya remained focused on automotive applications for some time and I went along with that. I was in research and development and I developed the energy storage systems, but technology keeps developing. We're developing and the scale of this industry is moving at a lightning pace. And what ended up happening by around 2017 or so, we found ourselves much smaller than our Asian competitors like out of Korea or China and they could outprice us in this automotive space. But we also found we had innovated new battery technologies. One of which we thought had huge promise and that was a technology which we now call the Infinity Battery technology. And that technology enabled much better battery safety and much better cycle life, so the longevity of the battery, and we pivoted the company entirely. What's happening in warehouses is there's lots of electric vehicles inside warehouses. They operate 24/7, they're inside buildings. So both the safety and longevity portions were highly valuable in that space. And we pivoted the company into that space. I took over as CEO about three and a half years ago and have really driven that commercialization quite rapidly. So the company's been growing quickly.
Thank you, Raj. That's a very good flyover from Electrovaya's roots and how you've been innovating to sort of stay at the cutting edge of the market. Sticking with that theme of innovation, my understanding is lithium-ion hasn't always been the dominant energy storage or battery technology. How did that happen? Are there scalable alternatives to lithium-ion today? And how do you think about the future of innovation in this space? Will lithium-ion continue to be the standard bearer? How do you manage for that future state where things might change? Maybe they might not. But curious to kind of get your views on, you talked about the pace of innovation in this space. Curious to get your views on how this innovation has stacked up and where you think it's going.
So most certainly the battery space and the lithium-ion space in particular has been innovating rapidly since the early cells in the early 1990s came out. And so if you even just look at our products over the last five years, they have certainly progressed in performance. That being said, the public is used to maybe likes to compare the battery space with the semiconductor space and the semiconductor changes are at, you know, Moore's law, much much faster rates of improvements than can be met with a chemical-based system which is what a battery is. So batteries have some limitations in how rapidly they can be improved and it ultimately comes down to chemistry. So chemistry-wise, lithium-ion is a very very good chemistry basis for a battery. The reason being is lithium is the lightest metal on the periodic table. It's number three. Because of that, it has a much higher energy density from a fundamental basis. So a lithium carrier in a battery is hard to beat. You can change the lithium-ion, you can have lithium paired with different materials in there, but as an energy carrier, lithium is definitely from a fundamental point of view difficult to beat.
Thank you for that very insightful view there. You mentioned material handling. You talked about how Electrovaya pivoted from the OEM side of things to material handling. Can you speak to give our viewers a sense of how that shift happened? How large that market opportunity is and how Electrovaya continues to sort of support that enhanced safety requirement and cycle life requirement of that segment.
Great question, Stephen. So I'm an early adopter on electric vehicles. They're wonderful devices. I had a 2011 Nissan Leaf and my father still drives a 2014 electric Smart car, which uses our battery technology, by the way. So great battery technology, is still working. The Leaf is long gone, but the Smart car is working very well. But if you look at electric vehicles, their primary goal is to make the batteries low enough in cost that you can sell more vehicles, and that's great. A lot of technology goes into making batteries less expensive. We found we were a smaller player and it didn't make sense necessarily to go head-to-head against companies who have much larger footprints and capacities and can do that lower cost efforts better. We had also found a way to enhance the performance of this technology in a way which makes it highly valuable for much heavier use applications and applications frankly which are more sensitive to safety than cars. So if you have a fire in a battery that's in an electric car, which has happened of course many times, it's not necessarily the end of the world. You can probably get out of that car. You've got four doors. It's usually outside. But if it's in a warehouse where you may have hundreds of vehicles inside the building and a battery catches fire in there, it's a different story. It's a much more dangerous event.
The other difference is again I'm on my fourth electric car. Those cars spend most of their time parked, right? 23 hours a day they're parked and one hour a day they're being used. And so in terms of the amount of cycles you're doing on an electric car battery, it's not tremendous. In the life of a car, you might be in a couple hundred cycles, maybe a thousand cycles. You know, your cell phone works for two years very well, right? And then after two years, you notice, hey, the battery, I charge it many times a day and it's failing me. I should get a new phone. And two years of life on your phone, roughly one cycle a day, give or take. That's about 800 cycles before that cell phone battery reaches its end of life. An Electrovaya battery is doing 15,000 cycles. So it's very, very long-lasting. Does an electric car need that? Not necessarily. Does a cell phone need that? No. You want to get a new phone before that. But if you're operating vehicles or robots 24/7 in warehouses and doing multiple cycles per day, multiple charges per day, that really matters for life cycle cost and that's what we went after. And so it was a new space in general. This is the e-commerce again expanding in a similar period of time as well. Warehousing automation is just going gangbusters in that space and so like any business, timing is also, technology is one part and finding the application and getting the timing right is the other. And in this case I'd say Electrovaya finally got it right.
Thank you for that, Raj. I wouldn't have sort of connected e-commerce readily with batteries and energy storage, so thank you for helping us see those connections. And maybe switching gears a bit to kind of speak about the business model and maybe kind of spend a little bit of time on everybody's favorite topic which is supply chains. It takes a fair bit of putting together technology, materials and a whole host of other factors to get from raw lithium to product. Can you walk us through how global is your supply chain? What advantages do you have being a North American supplier with a footprint in the US and in Canada, if any advantages?
Right now, our core supply chains come from all around the world. In general, the company, you know, under my direction, we've focused ourselves to become less reliant on supply chains, especially in China, which is why we decided to build the facility in Western New York. That was one reason. The other reason, of course, is expanding our capacity and basically coming back to the roots of vertical integration. But the supply chains in batteries are complicated. One part is the materials, more importantly actually is in the processing of those materials and getting them to the right level where you can utilize them. Now us being a smaller battery manufacturer and one focused on what our technology provides, our technology is mostly around the way the lithium-ion cell is designed and made, and around ceramic separator technology which we also have significant IP around, and around electrolytes. In terms of the commoditized portions of the battery, we've generally tried to leverage other experts on that and leverage the existing supply chains.
