There’s nothing like money to incentives an industry and with a $100bnworth of market share in
automotive battery sales to compete for, the stakes are high. The companies competing for this prize market comprise a mix of listed and privately owned companies. Some of the most exciting are effectively start-ups, with all the risks and rewards inherent in such ventures.
rnIt is the fledgling businesses whose entrepreneurial executives can boast of industry-changing technological developments that perhaps grab the headlines more. These companies tend to be reliant on venture capital, although some have listed, and they represent the young upstarts hoping to revolutionize a very traditional business. The industry has attracted its fair share of bright young talent of this nature in recent years keen to change what they perceive as an industry stuck in the past — and make their own fortunes while doing so.
rnAxion Power International falls into such a category. It started life when nine individual investors got involved in a Canadian company that owned the technology forming the basis of Axion’s proprietary PBC technology: a lead acid carbon hybrid battery. It listed into a shell company quickly but remains venture capital backed in its ethos and business development.
rnOne of those investors was the company’s now chief executive Tom Granville, a veteran of several start-up ventures in different industries. He says he was attracted to the battery industry and the venture that is now Axion, by the technology’s potential to transform an industry.
“People think that because it is a 120-year old industry, everything has been done in terms of developing the technology. But that is not true. There is still a long way to go. A few years ago, lead acid was almost dismissed as having no future. Even the motor manufacturing industry was enticed towards using new technologies. But it now appears increasingly likely that lead acid will provide the solution for hybrid electric vehicles and not the new technologies,” says Granville.
rnAxion looks well placed to thrive in the battery industry. Manufacturing facilities it bought from a failed battery firm are generating revenue in more traditional products and it recently won a long standing court case with the Canadian company the investors originally invested in — a big monkey off its back.
rnAtraverda has been successful through its use of a unique conductive ceramic chemistry and product known as Ebonex. The technology in a nutshell means its batteries are smaller, lighter, greener and more reliable as a result.
rnAs is the case with Axion, the company believes its technology will act as an enabler for lead acid products, allowing them to efficiently operate in applications now reliant on other forms of battery chemistry. Its target markets include: electrified vehicles, UPS, e-bikes, wheelchairs and select military applications.
rnOn electrified vehicles specifically, Atraverda chief executive Gilchrist says: "The potential of this market is huge and there does not seem to be a lead acid solution. We believe that bipolar can be the lead acid solution.”
rnAtraverda certainly boasts some big hitting — and spending — investors that share this view. The company has raised more than $30 million through several rounds of venture capital funding charting each stage of its development. Its investors now comprise some big names from around the world in: Scottish Equity Partners, Chord Capital, Finance Wales, On point Technologies, enertech capital, Bank invest and Espirito Santo Ventures.
rnVenture capital investors appear to have warmed to and understood the potential of the lead acid revolution in a way that their stock-market counterparts have failed to do so far.
rnFirefly Energy, a company that has developed a Micro cell composite foam-based battery technology that does away with the need for the traditional positive and negative plates in batteries was also backed by venture capital. Revolutionary in its nature, the technology is the epitome of a new generation of lead acid battery technology.
rnAlthough venture capital-backed now, Firefly Energy came into being in what was perhaps an unlikely way: the technology was originally born in the research and development labs of Caterpillar, the global manufacturer of heavy equipment such as diggers.
rnThe company had used batteries in its vehicles and equipment for many years but in 2000 it started putting its own brand on batteries. These products had been carefully selected for the robust qualities required to cope with the tough workload and hostile environments required of most Caterpillar equipment.
rnThis prompted the company to invest in trying to develop its own superior
lead acid battery. It handed the problem to its $600 million a year R&D unit and an engineer called Kurt Kelley, now Firefly’s chief technology officer, was asked to consider the two main failings of traditional lead acid batteries: corrosion of the positive plate and sulphation of the negative plate.
rnKelley succeeded in solving these problems but his solution also improved the batteries’ performance. The potential of this new technology quickly became clear to Caterpillar’s executive management and in 2003 they provided seed funding for a separate business solely dedicated to the new technology.