A123 Systems Raises $21.8 million Series D
Thanks to Xconomy
The company, a spinoff of A123 Systems, announced today it raised a $21.8 million Series D round led by Japanese companies Kyocera Group and Itochu. Long quiet, 24M is now happy to explain how over the past few years it hacked the battery’s conventional manufacturing process.
24M says its big development cuts out a handful of time- and capital-intensive steps from how lithium-ion batteries are currently made. The company says it’s ready to scale its new process to global production, with plans for multiple factories in the works. (More on that later.)
Conventional lithium-ion battery manufacturing requires a multi-step process that uses a solvent to deposit an active ingredient onto in the positive- and negative charged sides of the battery. It involves mixing, coating, drying, recovering the solvent, and eventually filling the battery with an electrolyte and finishing the battery.
24M came up with the idea of using the electrolyte—a part of one of the later manufacturing steps—as the solvent to deposit that active ingredient onto both sides of the battery. And over time, the company says it figured out how to make it work. The result: no more coating, drying, or recovering the solvent.
The resulting batteries have a higher energy density—a critical metric in the booming electric vehicle market—and come in at a lower cost, 24M boasts.
24M says the manufacturing trick they developed results in a 20 percent reduction in material costs and a 50 percent improvement in capital efficiency. And the startup’s partners are eager to put the technology through the paces at factory scale.
Kyocera, a longtime 24M investor, plans to build the first pilot facility in 12 to 15 months, according to 24M CEO Rick Feldt. The Japanese company is interested in pairing the batteries as storage to accompany solar panels.
24M also has a licensing agreement with an affiliate of Malaysian manufacturing company PTT Corp. in Thailand, and the company is looking at plans to open a factory there. Lastly, 24M is also in talks with a Chinese company also interested in production.
Lithium-ion cells have become the industry choice for consumer electronics, and electric vehicles, as well as residential power storage in products like the Powerwall by Tesla (NASDAQ: TSLA). Varied estimates put the lithium-ion battery market currently in the tens of billions of dollars with expected double-digit growth compounding the overall market to more than $100 billion within the next decade.
A number of companies are angling to win the energy density race for batteries. Another Boston-area battery startup, SolidEnergy Systems, is also aiming to boost how much power can be packed into the lightest weight battery. Its technology is already being marketed and sold to aerial drone manufacturers. Late last month, the Woburn-based company raised $28.9 million from investors, according to a Form D filing with the SEC. Time will tell which company’s technology comes out on top.
24M was founded in 2010 by IT-industry veteran Throop Wilder and MIT scientists Yet-Ming Chiang, who also co-founded A123 Systems, and W. Craig Carter. The company spent the intervening years refining its technology to be on-par with existing battery output. In the past six to nine months, 24M’s focus has been on ratcheting up how much energy it can pack into its batteries.
Feldt hopes the company is catching the battery wave at just the right time.
He says the cheaper manufacturing process enabled by 24M’s technology opens yet another door that early lab results have shown could help them further boost the energy density of the batteries. The change makes it possible to have different chemistries in the two sides of the battery—compared to the current process that calls for the same electrolyte in both sides.
“It can be very transformative if we get the chemistry right,” Feldt says. “We’ve demonstrated the science actually works.”
One risk for the company—and it’s a big one—is whether it can take that laboratory result and translate it into mass production of the sort that would interest an electric vehicle manufacturer or consumer electronics company. That’s what 24M is hoping to show with its pilot facilities, but it will take time.
Feldt says it’s “hard to predict whether it would take six months or six years.”