U.S. Bets on Faster-Charging Battery in Race to Catch Energy Rivals

Source: By Scott Patterson, E&E News • Posted: Sunday, February 27, 2022

With private and public funding, the startup Ion Storage aims to offer a longer-lasting power source

Ion Storage’s battery technology faces less risk of fire. Photo: Nate Palmer for The Wall Street Journal

BELTSVILLE, Md.— The U.S. is far behind its global rivals in the race for energy supremacy in a low-carbon world. To catch up, it is pinning its hopes on companies such as Ion Storage Systems, a next-generation battery company started in a University of Maryland chemistry lab with a $574,275 federal grant.

At a new factory outside of Washington, D.C., Ion Storage will be among the first companies in the U.S. to produce a new kind of faster-charging, longer-lasting battery. The company’s batteries also don’t catch fire; combustibility is a problem that has bedeviled the industry’s batteries for years.

The U.S. government and private investors have poured cash into battery startups hoping to catch up to the Chinese, Japanese and South Korean companies that dominate battery manufacturing. The goal is to leapfrog their rivals with better technology.

There is an urgency for U.S. battery makers to get products to market because big customers such as auto makers are lining up long-term suppliers. If there are no U.S. options, the buyers will go abroad. “This is our last chance to get it right” in the U.S., said Ricky Hanna, Ion Storage’s chief executive and the former executive director of battery operations at Apple Inc. AAPL 1.30%

Ion Storage plans to begin producing batteries later this year. The company has a contract to develop batteries for the U.S. Army, and it is working on battery development with defense giant Lockheed Martin Corp. LMT 3.48% Company officials say they are in talks with five auto makers regarding batteries for electric vehicles.

The company is one of several startups focusing on solid-state lithium-ion batteries. These batteries differ from most lithium-ion batteries today because the electrolyte that conducts a charge between cathode and anode is solid, rather than a flammable liquid. That allows faster charging, less risk of fire and longer battery life. Ion Storage scientists demonstrate their batteries’ durability by cutting them open with scissors or putting them before an open flame.

Now the company is pondering an initial public offering of stock in the next year or so, said Mr. Hanna, who helped oversee production of the batteries that power iPhones, iPads and other devices while he was at Apple.

The technology behind Ion Storage is the brainchild of Eric Wachsman, director of the Maryland Energy Innovation Institute at the University of Maryland. Mr. Wachsman first became interested in alternative energy in the 1980s, when he worked on batteries and fuel cells at Stanford University.

CEO Ricky Hanna says Ion Storage is considering an initial public offering. Photo: Nate Palmer for The Wall Street Journal

Mr. Wachsman is a “top-notch, world-class scientist, especially in solid state” battery technology, said Susan Babinec, a leader of battery research and development at Argonne National Laboratory in Illinois. Ms. Babinec helped oversee Mr. Wachsman’s battery projects for several years at the Energy Department’s Advanced Research Projects Agency-Energy program, known as ARPA-E.

Ion Storage faces stiff competition in the U.S. and abroad. Silicon Valley solid-state startup QuantumScape Corp. QS -0.13% , which is backed byVolkswagen AG VOW 6.35% , went public in 2020 and briefly became more valuable than Ford F 3.97% Motor Co. Toyota Motor Corp. , the world’s largest car maker, says it is working on solid-state batteries.

Other competitors include Colorado’s Solid Power Inc., SLDP 4.80% which has had backing from Ford, Hyundai Motor Co. and BMW AG . Factorial Energy, a solid-state company based in Woburn, Mass., last month said it had raised $200 million in a funding round led by Mercedes-Benz Group AG and Jeep maker Stellantis NV.

Some experts are skeptical that solid-state batteries will be able to compete with today’s standardized lithium-ion power packs soon. A vast supply chain and manufacturing industry has been created to build those batteries, helping drive down costs some 90% in the past decade. Much of the production lines for certain solid-state batteries will need to be built from scratch or borrow methods used in other industries.

“There’s still quite a long way toward commercializing any kind of solid-state technology, especially when it comes to electric vehicles,” said Andrew Miller, chief operating officer at Benchmark Mineral Intelligence, which studies battery technologies and their supply chains. “These batteries haven’t been proven at scale.”

Ion Storage is developing its own technology to produce its next-generation batteries, which are based on a nonflammable ceramic.

Ion Storage says it can compete on cost because its batteries don’t need cobalt or nickel, which have surged in price during the past year amid booming demand for lithium-ion batteries used in electric vehicles. The company also says its devices require less lithium than standard rechargeable batteries. Lithium prices have surged more than 500% in the past year.

Skyrocketing demand for the minerals that make up electric-vehicle batteries threaten to end a decadelong decline in the cost of batteries. Electric-car sales hit 6.6 million in 2021, nearly 9% of the global car market and triple the number sold just two years earlier, according to the International Energy Agency.

The Biden administration is counting on technological breakthroughs nurtured by its big universities and research institutions with government and investor support to jump-start the U.S. battery industry.

The clean-energy funding push is one of the biggest government efforts at industrial policy in decades. The hope is that government money will help drive private investment in startups such as Ion Storage.

Eric Wachsman of the University of Maryland developed the technology behind Ion Storage and founded the company. Photo: Nate Palmer for The Wall Street Journal

A decade ago, Mr. Wachsman’s University of Maryland group won the $574,275 award from ARPA-E based on decades of research that went back to his time at Stanford. One advantage of the technology is that it can withstand high temperatures of about 300 degrees Fahrenheit.

Such high temperatures could start a fire in many of today’s batteries. Fire risk has been a significant issue for batteries in cars, consumer electronics and jetliners. General Motors Co. last year recalled tens of thousands Chevrolet Bolts, its marquee electric car, for fire risk, while Tesla Inc., Ford and BMW have recently issued recalls for new battery-powered models.

Six years after his first ARPA-E award, Mr. Wachsman founded Ion Storage in 2019. Soon after, it hired Mr. Hanna, who brought to the company years of experience with the global battery supply chain.

Mr. Wachsman’s University of Maryland group and Ion Storage have collectively received more than $20 million in federal grants, and the company received commitments for $25 million earlier this year in a round of private fundraising. Ion Storage will use those funds to start producing cellphone-size batteries later this year from its Maryland facility.

The company expects to have the capacity to produce 1.5 million such batteries a year by 2023, and it plans to start producing batteries for electric vehicles for the commercial market by 2026.  Mr. Hanna said the company will soon branch into lithium-free stationary batteries used to power the electricity grid.

Mr. Wachsman said Ion Storage plans to locate all of its production in the U.S. “We think we’re the company that’s not going to blow it,” he said.

A box of Ion Storage’s fully assembled solid-state lithium-ion batteries. The company plans to start producing batteries later this year. Photo: Nate Palmer for The Wall Street Journal

Write to Scott Patterson at scott.patterson@wsj.com