Why so many gigafactories? It’s not just EVs driving demand

The current battery boom might feel familiar to those who lived through the clean tech bubble that burst a decade ago, with an awful lot of money being invested in what are still nascent markets.

But certainly they’re bigger this time around: The number of electric vehicles on the road has more than doubled in the last seven years, for example, and demand doesn’t seem to be slowing. Market share for EVs has been growing even as the overall automotive market has softened in recent years.

It’s been enough to convince automakers and battery companies to commit nearly $300 billion to building a raft of gigafactories around the world, including more than $38 billion here in the U.S. alone. That confidence has cascaded through the market, driving waves of investment that have resulted in over $42 billion in venture and private equity capital committed to battery research, development, commercialization and manufacturing.

For battery startups like Michigan-based Our Next Energy, betting it all on the automotive market, which is notoriously fickle, can be a risky proposition. Demand for cars and trucks often craters when the economy tumbles. EV sales have been historically tied to an even more volatile indicator: gas prices. And as COVID showed, just a few ripples in the automotive supply chain can send shockwaves through the market. The automotive market has a lot of volume, sure, but that doesn’t make up for the fact that margins are typically thin.

As investments go, the automotive sector doesn’t seem like a great place to make massive, long-term bets like the kind required for gigafactories.

And yet the money keeps flowing, and companies like ONE and its investors are increasingly confident that this round of climate tech investments will turn out very differently from the last. What’s behind that bravado?

Why so many gigafactories? It’s not just EVs driving demand by Tim De Chant originally published on TechCrunch

Electrification is poised to turn school buses into money-making arbitrage assets

Across much of the U.S. this summer, as temperatures soared nearly every afternoon, air conditioners clicked on again and again, sending electricity demand through the roof. Just north of Boston, the normally temperate coastal city of Beverly was no exception. Since the Fourth of July, the city has experienced nearly 20 days when temperatures crested 90 degrees Fahrenheit, 10 degrees above the average high.

When electricity demand surged, the city’s small fleet of electric school buses sprang to life, sending electricity stored in their massive batteries back into the grid to prevent brownouts and blackouts. So far, the buses have contributed 10 MWh of electricity on 30 separate occasions to National Grid, the regional utility, according to Highland Electric Fleets, which supplies and manages the buses.

The test, while small, hints at the massive potential for school buses to stabilize a grid that’s being increasingly threatened by extreme weather wrought by climate change. There are nearly half a million school buses in the U.S., and many of them sit idle for more than 18 hours per day, a number that’s even higher in the summer.

“These electric buses can do a lot more” than diesel buses, said Sean Leach, director of platform management at Highland. “They can move the students however many times a day they need to, and then in other times of the day, they can become resiliency assets to support the community.”

Today, there are only a few thousand electric school buses in the U.S. But that’s about to change. States like Maryland and Maine have laws mandating their adoption, and others like Colorado and New Jersey have been running pilot programs. In addition to being cheaper to operate over time, the buses don’t pump out pounds of diesel pollution next to vulnerable children’s lungs.

Massive iron batteries could be key to displacing natural gas from the grid

With the impending passage of the Inflation Reduction Act, renewables are about to get a fresh jolt in the U.S. They’re already some of the cheapest sources of electricity to build and run, but they haven’t taken over because they’re often dependent on the weather.

The simple solution is to store any excess power produced, but that raises the overall cost of renewable power. That’s set off a race among startups to find the cheapest way to do it, from batteries to compressed air and even giant concrete blocks.

The front runner so far appears to be batteries, many of which use the same lithium-ion chemistries found in EV batteries. The scale of EV battery production has made lithium-ion easy to obtain, allowing it to get a foothold in the sector, but its long-term prospects for grid-scale storage are murkier given its high cost of materials.

Competition for battery materials is intensifying, and there are many uses for batteries beyond EVs, which is why some companies, like Germany’s VoltStorage, are trying to build batteries using the cheapest, most widely available materials possible — chiefly, iron.

The road map for building the Uber of climate tech

The world needs a company willing to force governments to take action on climate change.

So far, climate tech has been the polite corner of the startup world. All pleases and thank yous, triple bottom lines and shared upsides, plenty of virtue and virtue signaling.

That’s great and all. Saving the world from probable calamity is an honorable mission statement, one that probably bleeds over into the way companies do business. And certainly the world could use more kindness, not less.

But here’s the thing: Right now, the world is moving too slowly, on track for 2.7 C of warming by 2100, far short of the 1.5 C goal that’s in the Paris Agreement. There’s no longer time for niceties. We need a climate tech startup that’s going to throw its weight around and force evolution on sclerotic governments and companies.

In short, the world needs a climate tech startup that’s like an early-days Uber, a company that won’t take no for an answer, one that tackles an entrenched, slow-moving industry bound by regulation, one with deep pockets and an eye toward the long game. Should it succeed, everyone would want to sign up as a customer. The rewards for the startup and its investors could be handsome.

Tesla solar sees best quarter in 4 years, but ‘semiconductor challenges’ spell trouble

Tesla’s mythical solar roofs may be on ice right now, but its conventional solar business is a whole ‘nother story.

This afternoon, the automaker said the division notched its “strongest” quarter in more than four years, with a total of 106 megawatts deployed in Q2 2022. “Although we continue to experience import delays beyond our control on certain solar components,” Tesla reported, “we have expanded our supplier base to enable growth in this business.” Compared to the same quarter last year, Tesla upped solar deployments by 25%.

Speaking of delays: Tesla’s energy storage arm, which includes home and commercial battery systems, saw a year-over-year 11% drop in deployments to 1.1 gigawatt-hour. The firm blamed the decline on “semiconductor challenges,” which are at least due in part to Russia’s war in Ukraine.

Tesla’s solar business is still far from the highs it reported right after buying SolarCity, the insolvent company originally launched in 2006 by Elon Musk’s cousins. In the final quarter of 2016, shortly after the acquisition closed, Tesla said deployments had topped 201 MW. Months later, Tesla halted solar door-to-door sales and laid off hundreds of staffers. The division’s U.S. marketshare plummeted over the next few years. In other words, Tesla’s solar business is still recovering.

Tesla’s solar roofs may not be helping much. Though the company sells lots of panels that sit atop roofs, it has struggled to get its solar-tile business off the ground, so to speak. Musk publicly set high expectations for Tesla’s solar tiles, saying in 2016 that they “should last longer than the house” and could even become cheaper than a standard roof.

The CEO set a goal of 1,000 home installations per week back in 2019, but the company has reportedly failed to get anywhere close—earlier this month Electrek reported the company installed just 2.5 megawatts of solar roofs in Q2 2022. That would equate to roughly 20 medium-sized (9.6-kilowatt) home installations per week, according to my own back-of-the-napkin math. Tesla hasn’t said much on the record lately about its solar roof business.

Gridtential thinks the OG renewable battery chemistry is ripe for disruption

Lithium-ion batteries are one of the driving forces behind the transition away from fossil fuels, but the rechargeable battery that started it all — lead-acid — has received very little attention.

Invented over 160 years ago, lead-acid batteries have been upgraded a few times, but today’s cells are largely unchanged from those sold in the ’70s and ’80s. Gridtential, a Santa Clara-based startup, is betting there’s plenty of room for improvement. It’s developed a silicon plate that can replace up to 35% of the lead in a traditional battery while improving its charging rate fivefold and quadrupling its lifespan.

Gridtential today announced partnerships with two players in the lead-acid market, Hammond Group, which makes battery materials and additives, and Wirtz Manufacturing, which makes equipment to deposit battery material on a substrate.

4 climate tech investors sound off on Supreme Court’s EPA ruling

This week’s Supreme Court decision to curtail the Environmental Protection Agency’s ability to regulate greenhouse gas emissions may not have been unexpected, but it was still a bombshell. Not only did it kill the prospect of quick executive action on the matter, it potentially cut off a number of regulatory solutions.

The EPA had sought to rein in carbon emissions first through the Obama-era Clean Power Plan, which had been shelved after court losses, and then through Biden administration regulations. The two Democratic administrations relied on part of the Clean Air Act that authorized the EPA administrator to use their judgment to produce a list of stationary pollution sources “which may reasonably be anticipated to endanger public health or welfare.”

Carbon emissions certainly deserve to be on the list, with climate change expected to cause nearly 5 million excess deaths annually by 2100.

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Now, if anything is to be done on the matter, the court said that Congress must explicitly authorize it. Given the current state of Congress, climate legislation isn’t impossible, but it’s also not very probable.

Until that happens, the U.S. is going to become increasingly reliant on the private sector to provide climate-oriented solutions that not only limit carbon pollution but also give the country a chance at remaining competitive in a world that’s quickly moving away from fossil fuels.

“This is a race we cannot afford to lose, yet the Supreme Court has just tied weights to our feet.” Peter Davidson, CEO, Aligned Climate Capital

The good news is that the climate tech sector has become a hotbed of activity in the past few years, drawing tens of billions in investment. Despite a dearth of government action in the U.S., investors have remained bullish, in part because of the sector’s enormous potential. By 2025, climate tech could draw up to $2 trillion in investments annually by 2025, according to McKinsey.

The Supreme Court’s decision threatens to pour cold water on that, of course. While it may have tempered some enthusiasm in the short term, three climate tech investors remain optimistic that opportunity still exists and that the private sector can deliver results.

What’s the ‘secret sauce’ behind Croatian EV maker Rimac?

Rimac Group made headlines in June after it raised €500 million ($537 million) in a Series D round led by Goldman Sachs and SoftBank Vision Fund 2. The deal valued the Croatian startup at $2.2 billion, prompting the question: How has this company succeeded where so many other EV makers have struggled?

Rimac, which merged its hypercar division with French supercar maker Bugatti in November, has taken a two-pronged approach the industry has not seen before: It’s continuing to make hypercars as Bugatti Rimac while using the knowledge gleaned from that process to develop technology to supply other automakers through its Rimac Technology subsidiary. Its client list includes Porsche, a four-time investor that now holds a 20% stake in the company.

Founded in 2009 in the garage of Mate Rimac, then a 21-year-old student, the company has become a Croatian sensation, one of two unicorns in the country, alongside Infobip, an IT and telecommunications business.

“I view their secret sauce as the complementary nature of the two businesses — how the test bed for the hypercar creates value for the B2B supplier,” said Stephen Beck, founder and managing partner of management consultancy cg42. “The two businesses feed off of each other without really competing against one another.”

EV fleet management startup Synop steers its way to $10M seed round

When it comes to moving the transportation sector over to EVs, commercial fleets are probably some of the lowest hanging fruit. More often than not, they have consistent routes, reserved off-hour parking, and cost a lot less to drive and maintain.

But for many commercial operators, EVs are still a wildcard. Gagan Dhillon and Andrew Blejde co-founded Synop to minimize the unknowns and accelerate the adoption of EVs in commercial fleets. In an exclusive with TechCrunch, the company today announced a $10 million seed round led by Obvious Ventures and joined by Wireframe Ventures, Congruent and Better Ventures.

“The electrification of transportation is a massive undertaking, especially with companies operating large fleets,” said Andrew Beebe, managing director at Obvious Ventures. “Synop is addressing the biggest, hidden infrastructural barriers for companies looking to make and manage that transition seamlessly.”

Fleet operators, Dhillon and Blejde found, have a lot of questions that need answering before they’ll jump to EVs. “How do you prolong the life of this vehicle, of this asset? And then how do you operationalize the day-to-day of that asset? Where does it need to be? What time does it need to charge? How long does it need to charge for and on the back end?” Dhillon said. “All of that is orchestrated through the Synop platform.”

One of the company’s first customers is Highland, an electric school bus fleet provider based in Beverly, Massachusetts, that raised a $253 million Series A round in early 2021. The company offers bus fleets through a subscription model that includes charging infrastructure, operating electricity and maintenance. Synop is working with Highland to optimize charging and routing.

But it won’t be just school buses on Synop’s platform. Dhillon and Blejde are designing their software to work with virtually any vehicle type and manufacturer. “We want to build something that’s vehicle class-agnostic, so from Class 2 to 8 on the commercial vehicle side,” Dhillon said. “We also want to build something that’s use case-agnostic. You can bring an electric semi to Synop for drayage use cases — we’re having folks bring electric garbage trucks, which is really surprising.”

The company is also working on a feature to manage vehicle-to-grid, or V2G, connections. EVs have long been viewed as a potential asset for grid managers, one that they might pay handsomely to access. EV batteries plugged into the grid could help stabilize the flow of electricity in instances of equipment failure or downed power lines, giving grid managers time to respond with more durable fixes. They can also help offset peaks in demand. All of this gives fleet operators an opportunity to monetize their assets when they’re not in use.

But no one who owns an EV — especially fleet managers — wants to wake up to find their vehicle’s battery depleted at the moment they need it most. “Our software is going to help you as a fleet operator optimize when to push [electricity] back [to the grid] because you don’t want to discharge your battery at 4 a.m. and then not have any state of charge for a route that you’re supposed to run at 7 a.m.,” Dhillon said.

Blejde said that Synop is collecting and analyzing data to help optimize EV usage across different fleets. But it’ll also keep a customer’s data separate if they request it.

Synop can also help fleet managers decide which routes are ripe for electrification. “Give me 100 of your routes, and then let’s figure out the road map for electrifying them,” Blejde said. “We ingest the data, we look at the route, we can give a confidence interval for how electrifiable it is, and then give that answer to customers [to] get their vehicles on board and help them operationalize them.”

The goal, Dhillon said, is to help electrify and manage commercial fleets so that operators can realize all the potential cost savings that electrification can offer.

“Most of the competition today is building a very vertical approach where they want to go into it with just their products and not have support for interoperability,” he said. “We ultimately feel like the big opportunity in this space is for somebody to create sort of this neutral software layer for commercial electric vehicles and chargers.”

“We’re trying to position ourselves as you know, for lack of a better term, the plumbing of this industry,” Dhillon said.

Oklo’s Caroline Cochran and Swell’s Sulemon Kahn talk scaling alternative energy at TC Sessions: Climate

Stopping the dire pace and consequences of climate change requires a diverse range of climate technologies across multiple fronts, and alternative energies play an essential role. However, changing the way the world generates and consumes energy is just one of many formidable challenges. Scaling alternative energy solutions and achieving profitability are two more, especially important for venture-backed companies.

We want to explore the complexities of those challenges, which is why we’re excited to announce that Caroline Cochran, co-founder and COO of Oklo, and Suleman Khan, CEO at Swell Energy will join us in person and on stage at TC Sessions: Climate 2022 (presented by Extreme Tech Challenge) on June 14 in Berkeley, California.

The two startups focus on very different alternative energies. Oklo builds micro-nuclear reactors designed to power college campuses, industrial sites, large companies and remote locations. In an industry-changing twist, Oklo’s tiny reactors run on nuclear waste. Two years ago, the Idaho National Laboratory gave Oklo access to recovered spent nuclear fuel to develop the startup’s advanced fission technology. The company aims to have several micro-reactors operational by 2025.

Swell Energy, a renewable energy and advanced grid services company, specializes in smart home energy systems (e.g. battery-based energy storage) and virtual power plants. Last year, it partnered with Nuvve, a global cleantech company, to offer residential customers comprehensive home energy systems by combining battery storage, solar and smart EV charging.

During this panel discussion, we’ll ask Cochran and Kahn for their respecitve takes on the remaining challenges to scaling alternative energy solutions and building healthy businesses amid growing complexities. Given that individual consumers and private enterprises have different clean-sourcing demands, we’ll dig into whether the energy market is or isn’t changing fast enough to meet those varied needs and expectations.

We’ll start from there and see where the conversation leads. No matter which direction it takes, the highly qualified Cochran and Kahn will deliver crucial perspectives on the booming alternative energy industry

Caroline Cochran, founder and COO of Oklo, leads the team working on building advanced micro-nuclear reactors that use nuclear waste as fuel. Her career experience includes engineering, entrepreneurship, research, economics, policy, sales and marketing. 

Cochran has worked on technologies ranging from solar vehicles and advanced fission to oil and natural gas. She earned a bachelor’s degree in economics and a bachelor’s of science degree in mechanical engineering from the University of Oklahoma and a master’s degree in nuclear engineering from MIT.

Suleman Khan, the CEO of Swell Energy, directs the company’s customer acquisition, project development, project finance and grid services efforts. In the decade prior to launching Swell, Kahn worked at the intersection of renewable energy and structured finance, productizing solar and energy storage for the residential and commercial markets.

Kahn was also instrumental in establishing new energy divisions within various companies — including Tesla, where he helped build what would later become Tesla Energy. His earlier career includes a stint at Citigroup where he worked on the structured credit products desk, as well as within Citigroup’s investment banking mergers and acquisitions division and at Prudential’s alternative investments group. 

Don’t miss an in depth conversation with Oklo’s Caroline Cochran and Swell Energy’s Suleman Khan about the promise of alternative energy solutions and the challenges that remain to scaling them for mass use and profitability.

TC Sessions: Climate 2022 is all about the growing wave of startups, technologies, scientists and engineers dedicated to saving our planet and, of course, the investors who finance them. Join us in-person on June 14 at UC Berkley’s Zellerbach Auditorium. Register now and save $200.