➡️ Tell me about Volta’s model and how the company can separate fact from fiction to find technologies worth investing in the global battery and energy storage markets?

The idea for Volta was developed when I was working at Argonne National Lab in its technology licensing department, around 2010, and realised three things:

1. The opportunity was, and still is, enormous: the need for technology for batteries and storage for transportation and grid was going to dramatically increase in the coming years;
2. The knowledge in the R&D system was broad and deep: the research teams in the US DOE [Department of Energy] lab system had studied most technologies, ranging from new materials, through manufacturing and scaleup methods, to fast charge of electric vehicles, etc., and;
3. Investors were applying the mindset of software investors in the battery and EV vertical: in the private sector large financial and strategic investors were investing in technology that with the expectation of rapid scaling or a pivot to a new tech if the founding idea was flawed

It was these three thoughts together that inspired us to want to launch and build a team that combined industrial experience developing and scaling hard tech, with deep technical knowledge needed to properly assay a technology, and last but certainly not least, an economic viewpoint and deep experience underwriting and investing. It is the integration and application of these three forms of expertise that enables teams like Volta to ‘separate fact from fiction,’ as you say.

➡️ Volta says it can validate a business opportunity and help entrepreneurs commercialise and scale their technologies. Which of the 18 companies under its portfolio is closest to commercialisation? Has Volta been involved in its R&D?

Core to Volta’s investment strategy is to deploy a minimum of 75% of its capital into companies that have a clear path to scale, have customers pulling the technology forward, and have a supply chain that exists and is stable and ready.  With that frame in mind, most of what we invest in are closer to commercialisation than typical early-stage venture.  In terms of specific examples: one of our portfolio companies that is local to us here in Illinois, a company called NanoGraf, which has developed a new high-energy density anode material, and as a result NanoGraf is already deeply engaged with the US DoD [Department of Defense] in a way that will yield sales and revenue soon.

Then we have CorePower Magnetics, a company that has developed a number of devices useful in both electric mobility and renewable power, has received a $20m grant from the DOE to assist in scaling up, and is in early revenue. Another example is UK-based Echion is scaling a new anode material that enables the production of lithium-ion batteries for high-cycle-life, high-power applications like industrial trucks, backup power, and the like. Finally, Summit Nanotech has developed, and is scaling, a direct lithium extraction (DLE) technology, and is commissioning its first pilot facility in Chile in September of 2024.

In each case, depending on where the company is in its life cycle, Volta aims to contribute to the development of the company not only by investing capital, but also helping develop and shift business plans, helping scope the direction and details of product development research, and by connecting the start-ups to customers in Volta’s network.

➡️ With years of experience in the industry and as a director for energy storage research at the Argonne National Laboratory, what do you expect will be the next breakthrough in battery technology for EVs?

From our experience in industry, the Volta team expects increased adoption of electric vehicles and renewable power to be driven in great part by the rapidity with which the continued cost-down of the technology occurs. And, importantly, we believe much of the continued march down the cost curve will occur due to innovations in the supply chain and in the adjacencies.

For example, lower-cost production of lithium via DLE will ultimately result in lower cost of the downstream product – EVs in the showroom for consumers.  New manufacturing methods for materials and devices, and new quality control methods for manufacturing will drive costs down.  Increased energy density either through the development of new materials or by improved engineering at the pack level will improve performance and lower cost. Fast and wireless charging, new higher-efficiency invertors, and improved power control devices will enable fast charge and longer battery life, all of which will drive costs down and improve the user experience.

All of which is to say, while most investors are focused on finding a new battery device or material, Volta believes technology that makes up the balance of system will be driving costs down in the next phase of product development and adoption.  This includes but is most certainly not limited to chemistry and materials.

➡️ Do you expect lithium-ion battery costs to decline further this year? Would that reflect lower raw material prices, or efficiencies and economy of scale?

We expect that average battery prices will have fallen in 2024 compared to 2023, some of this is certainly due to falling raw material costs, but we are also seeing the glut of capacity in China driving battery prices down. What we hear coming from the Chinese market is that in some instances cell makers are selling cells at cost, without any margin, so they are not making a profit, but they are at least not making a loss. The introduction of new technologies, like silicon, will help to reduce cell prices further in coming years as will new manufacturing processes and further development of supply chains.

If I were to hazard a guess, I would say that average lithium-ion battery pack prices come out at a little over $120/kWh in 2024, with average cell prices at $95/kWh.  But this ‘guess’ is based on solid work by analysts at places such as BNEF, and is not simply Volta’s best guess…

➡️ Do you see lithium iron phosphate (LFP) batteries overtaking ternary battery adoption in the West, like in China?

As for LFP and its adoption outside of China, we are certainly going to see more LFP use in Europe and the US. As to whether LFP use surpasses ternary, or lithium-ion as they are more commonly known, batteries, that is a touch more complicated to answer. We may well see that the number of vehicles using LFP is greater than the number using ternary cathodes, because the low cost of LFP will allow companies to tap into those mass-market vehicle segments. However, in the mass-market segment, you will have a large number of vehicles that have relatively small battery packs, while in the premium vehicle segment where you are more likely to see the use of ternary cathodes, you have larger battery packs and so although there may be fewer vehicles on the road using ternary cathodes the GWh of ternary cells produced could be higher than the GWh of LFP cells. Of course, this balance will be dependent on the cost of the raw materials going into both chemistries.

➡️ Regarding stationary storage, what potential technology developments could we see challenging the traditional lithium-ion chemistry by decade-end? What do you think holds technologies such as sodium-ion and vanadium redox flow back?

There are several technologies that can match or outcompete lithium-ion on some performance metrics. Having said that, it is hard to find a technology that can cover the full range of applications that lithium-ion does at a competitive cost, this is important because today the returns of stationary storage projects are dependent on stacking revenues from multiple applications, from short-duration, high-power services such as frequency regulation through to long-duration, high-energy applications such as wholesale price arbitrage/energy shifting.

If the cost of vanadium flow batteries, or other types of flow batteries, can be brought down to match that of lithium-ion, you could find use for them in energy shifting applications. The trouble is that today, energy shifting alone wouldn’t support the project economics, maybe in 5-10 years’ time you could build a project based on this one revenue stream, but today you also need to provide frequency response, which flow batteries just aren’t great at providing.

The new generation of energy-focused sodium-ion cells, as opposed to power-focused cells, have performance that very closely matches that of lithium-ion and can be manufactured on the same equipment and therefore benefits from some of the economies of scale that lithium-ion does.

➡️ How can technology help EV manufacturers address major challenges such as affordability, range and charging time?

Battery technology and the related technologies that make up the balance of system are the beating heart of an EV and will directly impact the affordability, range and charging time. As I said, the imminent introduction of silicon anodes is likely to be major technology that makes EVs more affordable, increases range and decreases charge time. But again, to achieve all three of these aspects you need to have the right solution, and that’s why we invested in OneD.

All silicon solutions can increase range and reduce charging time, but the difficulty is reducing cost. Having looked at most of the silicon solutions on the market, OneD had the only silicon technology that reduces cost of the anode material and as a result the cell cost. It does this by using graphite, which is found in the anode of EV batteries today, as the host material for silicon, but by adding silicon in a low-cost way it reduces the cost of the graphite on a $/kWh basis. This cost reduction is also enabled by the unique process it has for adding the silicon to the graphite, where it uses a catalyst to efficiently form silicon on the graphite from a gas called silane.

Iontra is a company that is scaling a microchip-based power control device that enables fast charge, prolonged battery life, cold weather charge, and improved safety.  And, it does this without requiring any change to the chemistry or format of the battery cell itself.  This is the kind of technology we invest in when we think of improving performance and lowering cost of the balance of system.

Ultimately it is the combination of the battery technologies like silicon anodes with improvements in the balance of system, as well as lower-cost manufacturing methods, that will enable a continued march down in cost.  Even recycling will play a role; if you recycle batteries cost-effectively and reuse valuable minerals like lithium, copper, nickel, and cobalt, it can lower the cost of the EV.

➡️ In your view, how can the West compete with China in the power and energy storage battery industries? Do you believe an ex-China supply chain can be created in North America and Europe?

We are increasingly convinced that the battery supply chain should not be seen as a competition between China and the West, but instead we should be looking for ways for Western companies to partner with Chinese companies to their mutual benefit. For example, Chinese companies have the scale, capital and supply relationships to quickly deploy new technologies. As Chinese companies start looking to expand outside of China, they are in some instances finding that they don’t have the IP to introduce technologies that they have patented in China.

By partnering with Western start-ups who have IP in the desired technology space, the Chinese companies can expand outside of China with a differentiated product and the start-up gets a reliable partner to help it scale and bring its technology to market. It is a win-win situation. These relationships will also help to build and strengthen local supply chains in the West.

➡️ You were one of the key characters in Steve LeVine’s The Powerhouse book. Do you believe the book is a fair reflection of what happened and did it rightly predict the current ‘battery war’ between the US/China?

Being represented as a character in a book regarding real-life events is an uncomfortable experience, to say the least.  And it is very difficult to be unbiased in my assessment of the story in The Powerhouse, not only because I was one of the key characters, but also because I personally know almost all the characters and the events described in the book.

That said, yes, I do believe the book is a fair reflection of what happened.  I’m not sure the book really predicted today’s current ‘battery war’ between the US and China, because I do not see it as a war exactly, but instead as an opportunity for entities both political and private industry to collaborate to move the world forward as humans’ energy system transitions from being mostly reliant on carbon to including renewables and electric propulsion.

Did Steve LeVine set the stage properly that there is an intense, worldwide competition for the future economy, and the technologies and manufacturing on which worldwide economies would be based?  Yes.

The sooner policymakers recognise that the economy is shifting and evolving, as it always has and always will, and embrace the idea that new technology will ultimately result in economic security, energy security, and even environmental security, the better off the citizens whom the policymakers serve will be.