Amid a boom in electric-vehicle production and a race for innovations that improve these new cars’ range and cost, battery startup Our Next Energy said Monday it has raised $25 million in a fresh fundraising round.
The investment in ONE, as the company is known, was led by Bill Gates’s Breakthrough Energy Ventures. The year-old startup, based in Novi, Michigan, says it has engineered a way to eke out higher ranges from lithium-iron-phosphate batteries, a more stable but less powerful chemistry than the nickel-based batteries used by most automakers today.
“The whole foundation of the industry right now is being built on nickel-cobalt,” said Mujeeb Ijaz, ONE’s founder and chief executive officer. “Because range was so important to the end customer, that was seen as the only way to get there. We’re offering an alternative.”
ONE’s innovation lies in the way it designs battery packs, which it plans to build a factory in Michigan to assemble. Ijaz, a veteran of Apple’s secretive car project, said he’s landed his first customer, an EV startup that makes medium-duty delivery trucks. He declined to name the customer but said production will start in November 2022.
The growth of the electric-vehicle market has brought challenges for the industry, including a shortage of batteries and soaring prices for raw materials such as nickel and cobalt, the latter of which is fraught with ethical issues. Nickel, the metal the auto industry largely relies on today to provide power and range, is prone to fire, a risk the industry is spending billions to control.
That’s driving automakers, battery manufacturers and startups — including ONE — to seek less costly alternatives.
ONE uses lithium-iron-phosphate, or LFP batteries, which are cheaper and less fire-prone than nickel-based chemistries. Typically, that approach would mean sacrificing power and range for stability, but the startup claims it’s solved that problem.
“We think he’s ahead of the curve,” said Libby Wayman, who leads the transportation team at Breakthrough Energy Ventures and sits on the board of ONE. “This is the beginning of a trend where people will look to alternative chemistries to achieve energy density, safety, supply-chain optionality, and supply-chain redundancy.”
Also investing in the latest round were Assembly Ventures, BMW iVentures, electronics-manufacturing company Flex Ltd., and Volta Energy Technologies. Gates is Breakthrough’s chairman and investors include Amazon.com Inc. co-founder Jeff Bezos and Michael R. Bloomberg, the founder and majority owner of Bloomberg News parent company Bloomberg LP.
A typical battery in an electric vehicle stores a lot of energy — enough to power the average U.S. home for about 2.5 days. So it’s a formidable engineering feat to ensure these cars are safe, even as large amounts of electricity are used to charge them or propel them around town.
To mitigate fire risk, manufacturers use filler material that helps ensure the battery doesn’t heat up too much, along with electronics to ensure all the cells charge equally. ONE’s innovation has been to find ways to cut down on the filler material, which enables them to add more cells, and thus store more energy, without increasing the size and cost of the battery pack.
Ijaz has spent three decades focusing on powering EVs. He conducted battery research at Ford Motor Co. and was chief technology officer at battery manufacturer A123 Systems LLC until he was poached by Apple Inc. in 2014. He returned to Michigan last year to launch his startup and hired former colleagues from A123, saying he felt the auto industry had reached an inflection point with electrification.
EV batteries are made of cells, which are bundled into modules, and then arranged in a pack to optimize power while mitigating fire risk. ONE is using a simpler and cheaper engineering approach called “cell-to-pack,” which skips the need for modules.
ONE isn’t the first or the only company to take this approach. It was pioneered in China by players like SVOLT Energy Technology Co. The world’s largest battery supplier, China’s Contemporary Amperex Technology, or CATL, sells it to customers today, including Tesla Inc.
Ijaz says ONE’s technology outperforms what other makers have been able to accomplish so far. He pointed to an internal analysis of how much energy is stored in the battery pack per unit of volume — a crucial consideration because EVs have limited space for batteries. Higher energy density for the pack means an EV can theoretically have long driving range.
ONE’s analysis showed its packs are made up of 76% cells and yield 287 watt-hours per liter (Wh/L) of energy density. By comparison, the analysis showed the pack from a Tesla Model 3 using LFP chemistry was made of 49% cells and yielded 173 Wh/L.
As nickel prices climb, other automakers are looking at using the cell-to-pack approach to get more power out of LFP batteries, said Jim Greenberger, executive director of NAATBatt, a non-profit trade association for advanced battery technology in North America.
“If the nickel crisis never comes, I’m not sure much will come of LFP chemistry, because it’s not as powerful,” Greenberger said in an interview. “But if nickel prices do prove volatile, or automakers don’t want to take the risk of nickel proving volatile, you may see more people using LFP technologies.”
(By Gabrielle Coppola, with assistance from Akshat Rathi)