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.”