24M Semi-Solid Lithium Battery Startup

[LabSpokane]

Standard Disclaimer:  For informational purposes only. Not an endorsement.  Not a recommendation to invest. Due diligence recommended + more due diligence + a liberal dose of salt + ....

This involves a bunch of VCs spending other people's money, so I'm going to list it under "crowd funding."  I can hardly wait to see which VCs who bought in end up with paid positions on the board of directors.

P.S.

Don't run with the scissors.

======================================
http://www.technologyreview.com/news/538741/exiting-stealth-mode-24m-takes-on-the-battery-industry/

Exiting Stealth Mode, 24M Takes On the Battery Industry
A startup from one of the A123 founders aims to overhaul the making of lithium-ion batteries–but it’s not the first to try.

By Richard Martin on June 22, 2015

WHY IT MATTERS

Energy storage needs a step change in cost to propel the renewable energy revolution.

Aiming to completely overhaul the lithium-ion battery industry, MIT-based scientist Yet-Ming Chiang on Monday publicly unveiled his latest startup, called 24M.

The company uses a novel battery composition based on a semi-solid material that eliminates much of the bulk of conventional lithium-ion batteries—which are typically made up mostly of inactive, non-energy-storing materials—while dramatically increasing the energy density. Chiang and 24M CEO Throop Wilder also say that they can reduce the time needed to make a battery by 80 percent and the cost by 30 to 50 percent.


After five years of research and development, 24M has raised $50 million in funding from Charles River Ventures, North Bridge Venture Partners, and its strategic partners, along with a $4.5 million grant from the U.S. Department of Energy. It has strategic partnerships with the Japanese heavy-industry giant IHI and from PTT, the formerly state-owned Thai oil and gas company, which is increasingly moving into alternative energy. Since a 2011 paper in the journal Advanced Energy Materials previewed 24M’s technology, the company has received a large amount of press coverage for a stealth-mode startup, including articles in this publication as well as a long, adulatory profile on the website Quartz. The company calls its new battery “the most significant advancement in lithium-ion technology since its debut more than 20 years ago.”

That would be a remarkable accomplishment, with the potential to drive the electric-vehicle market to a new level and accelerate the spread of renewable energy. But 24M faces a challenge that many previous companies with promising technology have failed to solve: how to revolutionize a manufacturing industry with huge amounts of capital sunk into extensive existing capacity.

Yet-Ming Chiang is personally familiar with this quandary: he was one of the founders of A123, the lithium-ion startup that received nearly a quarter of a million dollars in funding from the U.S. government, went public in the largest IPO of 2009, and filed for bankruptcy in 2012. A123 was done in by an EV market that grew slower than expected and by its close relationship with EV maker Fisker, which itself failed in 2013 and was purchased by the Chinese auto parts company Wanxiang Group. But it also stumbled in trying to compete with more established battery makers such as LG and Panasonic.

Chiang acknowledges the dilemma: “In the last decade, there have been a lot of new lithium-ion plants built, and the EV market has not materialized to fill these factories.”

Now, energy storage demand is soaring—for vehicles, for power grids, and for residences with distributed renewable generation, such as rooftop solar arrays. Capacity in the United States is expected to more than triple this year, and rapid growth will continue through the end of the decade, according to GTM Research. That means that demand for a less expensive, more efficient technology should be robust. But the building boom of the previous decade means there’s also excess manufacturing capacity available to supply that market. LG Chem’s plant in Holland, Michigan, which makes batteries for the Chevrolet Volt and the Cadillac ELR, currently operates at about 30 percent of capacity, according to CEO Prabhakar Patil.

And established players are already increasing their output. Mercedes-Benz parent company Daimler, for instance, announced late last year it will invest 100 million euros ($113 million) to expand its lithium-ion manufacturing capacity through its subsidiary Deutsche ACCUmotive.

Then there’s the Gigafactory. Tesla’s giant Nevada plant will produce 35 gigawatt-hours’ worth of batteries a year, dwarfing any previous manufacturing ventures for lithium-ion batteries. Meanwhile, improvements in the manufacturing of conventional lithium-ion batteries are reducing the cost per kilowatt-hour of existing systems—even as research into next-generation chemistries, such as lithium-sulfur and lithium-air, continues at institutions around the world. In short, 24M is attempting to transform a worldwide manufacturing industry in which established players with deep pockets are investing hundreds of millions in the expansion of existing processes. That’s a tough road even for a startup with a novel and exciting technology.

Chiang and CEO Wilder are undeterred. “This is the next great mega-market,” says Wilder. “To quote Elon Musk, the world is going to need multiple gigafactories.”

[jwm_]

Hmm... stripping out all marketing and finance cruft. I can find two claims.

"lithium batteries are mostly non energy storage material." - by weight? volume? still seems pretty false, > 50% overhead is a whole lot.

and

"using a semi-solid will solve this" - what does semi-solid mean? like lithium-polymer batteries, they already exist and are semi-solid by some definition.

So... not much substance in that article, need technical info or it's just VCs moving numbers around on a spreadsheet, which can happen for many arcane reasons other than having a viable technology.

    John

[eas]

Another reminder of how far Technology Review has fallen...

[Rasz]

From what I read they aimed to deliver new revolutionary battery  .. and FAILED miserably. The only thing that came out of >$50 million R&D is a cheaper and faster way of making average if not sub-par liion batteries. Selling cheap shovels is a great business during gold rush, but dont expect miracle batteries out of this.

[LabSpokane]

What really bugs me is the timeline for 24M:  A123's IPO was in 2009. In 2010, 24M is spun off developing batteries with the essentially the  same chemistry. It's almost like they knew A123 would never work and merely hung out until the IPO paid them. (Cue Steve Miller...)

Then this article appears:  http://buff.ly/1K9L7nL

Written like some success story, it really is a saddening tale of PhD founders who knew so little about their "technology" that the undergrads had to do the math and scaling laws for them and showed that it was worthless.

Then the miracle electrolyte occurred. The irony of this new battery is that it's supposedly easy to manufacture, but they never get around to discussing if it's a good battery.  One would think this very thick electrolyte would have some major effects on functional properties, but nary a word.

I tweeted a comment about the article and the author replied with the attached, which still has left me puzzled. It's as though taking a pile of people's money, failing, then taking another pile of money to start a second, competing company with supposed technology that might might have saved the first venture is OK.

Why would anybody give someone who does that MORE money?!  Oh, that's right, this is the energy business with its omnipresent reality distortion field and a playing field that strongly favors the early VC investor (and screws the post-IPO shareholder).  And the people that matter (the VCs), got their dough from the suckers, er, retail investors.  A123's saga ended with the market investors getting shafted in bankruptcy court.

I hope that conventional market investors wise up and history does not repeat itself.

[amyk]

while dramatically increasing the energy density.

...and making them dramatically more bomb-like when they fail?

[eas]

What really bugs me is the timeline for 24M:  A123's IPO was in 2009. In 2010, 24M is spun off developing batteries with the essentially the  same chemistry. It's almost like they knew A123 would never work and merely hung out until the IPO paid them. (Cue Steve Miller...)

Yeah, or maybe its like after a decade and a successful IPO in the midst of a dire financial crisis, they thought they'd like to do a startup again. They new that A123 had to focus all its resources on its existing technology, so they had no trouble convincing its board to do a spin-off company in exchange for 10% of the new venture and favorable buy-out rights. Raising money was no trouble either, because, well, they'd made A123s original investors a nice return in the IPO.

Then this article appears:  http://buff.ly/1K9L7nL

Written like some success story, it really is a saddening tale of PhD founders who knew so little about their "technology" that the undergrads had to do the math and scaling laws for them and showed that it was worthless.

Sure, its reeks of corporate hagiography, but please don't pretend your version is any more true. Perhaps it should have been obvious to the founders that the technology wasn't going to pencil out before they started the company. On the other hand, that sounds like just the sort of thing a year of R&D could help you figure out. That an undergrad was involved in crunching the numbers can be spun as either damning or inspiring, but in the end, someone had to do it, and someone did it, and with that information in hand, the founders decided to do something different, which, again, is pretty much exactly what should have happened.

Then the miracle electrolyte occurred. The irony of this new battery is that it's supposedly easy to manufacture, but they never get around to discussing if it's a good battery.  One would think this very thick electrolyte would have some major effects on functional properties, but nary a word.

That would seem to be an important detail, but why bother with stuff like that, when everyone can have fun spinning the story to fit their particular biases.

I tweeted a comment about the article and the author replied with the attached, which still has left me puzzled. It's as though taking a pile of people's money, failing, then taking another pile of money to start a second, competing company with supposed technology that might might have saved the first venture is OK.

They were successful in the role of startup founders. They probably bear some responsibility for the ultimate fate of A123, but they also left a couple years before the wheels came off. In any case, this story isn't about them joining the executive team of a recently IPOed startup, its about them doing what they were reasonably successful at once before, a startup.

As for the notion that this new technology might have saved the first venture, you seem to want it both ways. On the one hand, you've said that they didn't understand the technology very well, on the other hand, it might have saved A123. Which technology are you talking about anyway? The flow-battery they started with, or what they are doing now?  Doesn't really matter though.

I hope it won't be controversial to suggest that a privately held company with $54M in funding has more modest revenue targets than a publicly traded company with a multi-billion dollar market cap. I hope people will also find it reasonable to suggest that a technology that *might* be viable in 2015 likely wouldn't have been viable in 2010, when 24M was started, or 2012, when it might have helped A123, or even 2013 when A123 filed for bankruptcy.[/quote]

Why would anybody give someone who does that MORE money?!  Oh, that's right, this is the energy business with its omnipresent reality distortion field and a playing field that strongly favors the early VC investor (and screws the post-IPO shareholder).  And the people that matter (the VCs), got their dough from the suckers, er, retail investors.  A123's saga ended with the market investors getting shafted in bankruptcy court.

I hope that conventional market investors wise up and history does not repeat itself.

I think you might be on to something here!

From what I read they aimed to deliver new revolutionary battery  .. and FAILED miserably. The only thing that came out of >$50 million R&D is a cheaper and faster way of making average if not sub-par liion batteries. Selling cheap shovels is a great business during gold rush, but dont expect miracle batteries out of this.

Given the sums invested in expanding battery production using existing techniques, $50M doesn't sound like a ridiculous amount of money to invest in potential improvements.

I think the lithium ion battery industry has some important parallels to semiconductors. The cycle times are dismally longer, but important dynamics are the same: The pace of improvement seems relatively constant over decades. There is plenty of demand for improvement, and, at the right price point, the market is the whole world. In this context, there plenty of market for innovation. An ambitious company can try to use an innovation to become a major player, but if they fail in that goal, their IP still has value to existing players.

Miracle batteries would be great. Nothing wrong with cheaper rechargeable batteries, and plenty of viable markets for them right now based on fundamentals. Electric cars are viable with existing tech, and the main thing keeping them from getting more market share is the cost of batteries. Similarly, renewable electricity generation is already economically viable, and cheaper batteries will make it more viable.

Its fun to bitch though. Keep it up, otherwise I won't have anything to bitch about.

[LabSpokane]

Yeah, or maybe its like after a decade and a successful IPO in the midst of a dire financial crisis, they thought they'd like to do a startup again. They new that A123 had to focus all its resources on its existing technology, so they had no trouble convincing its board to do a spin-off company in exchange for 10% of the new venture and favorable buy-out rights. Raising money was no trouble either, because, well, they'd made A123s original investors a nice return in the IPO.

THAT!!  That right there is what's broken with the system and thanks for admitting it. Who should the technological founders be responsible to?  The ones putting in the first few millions, or the final owners putting in billions?  Those later shareholders are buying in on the pretense of technological due diligence.  This "I've got mine, see you around" business "ethic" is borderline con artistry. The VCs aren't there to build a company, they're there for the sole purpose of fleecing unwitting investors at the IPO.

Technology due diligence starts in the form of basic stoichiometry and mass energy balances. They are the fundamental basis of all technologies that depend on chemical reactions. Getting these things right can take some time and effort, but the principals should be providing that work *up front*. For anyone to get neck deep in a business before someone works through the chemical reactions and converts the molecular weights and corresponding electrical charges into quantities of material versus kilowatts delivered...well that's just nutty. What the hell could anyone be developing without that math being done at the outset?!

Expect me to keep on "bitching" about this until I see guys with full mass energy balances for solid technologies get funded and the yoyos like this get kicked to the curb.

[helius]

Who should the technological founders be responsible to?

The fiduciary duty inheres in the board, not the founders of the company.

The ones putting in the first few millions, or the final owners putting in billions?  Those later shareholders are buying in on the pretense of technological due diligence.

Then they should have the wherewithal to do DD. Expecting otherwise is like asking the same real-estate agent to represent the buyer and seller

The VCs aren't there to build a company,

Because that's what the company's executives are doing. They don't share the goals of VCs.

they're there for the sole purpose of fleecing unwitting investors at the IPO.

The greater fool theory is a permanent part of equity markets. Without it the system would be liquidity starved

Technology due diligence starts in the form of basic stoichiometry and mass energy balances. They are the fundamental basis of all technologies that depend on chemical reactions. Getting these things right can take some time and effort, but the principals should be providing that work *up front*. For anyone to get neck deep in a business before someone works through the chemical reactions and converts the molecular weights and corresponding electrical charges into quantities of material versus kilowatts delivered...well that's just nutty. What the hell could anyone be developing without that math being done at the outset?!

No disagreement there