The headwinds hitting the electric vehicle market may make it all the more difficult for startups in the sector to weather what’s known as the “death valley curve,” or the rocky period when a company has invested heavily in bringing a product to market but has yet to see any returns. For startups focusing on battery technologies, a new influx of federal funding may help alleviate some of the pain.
Last month, the US Department of Energy (DOE) announced $3 billion in grants to support the domestic battery industry. The funding comes from a program in the Bipartisan Infrastructure Law, and is a piece of the $16 billion in investments in battery manufacturing and recycling the 2022 law made available through the DOE’s Office of Manufacturing and Energy Supply Chains.
The latest funding round will support 25 projects in 14 states that “will retrofit, expand, and build new domestic facilities for battery-grade processed critical minerals, battery components, battery manufacturing, and recycling,” per DOE.
The awards are a piece of the Biden administration’s efforts to bolster domestic manufacturing in the clean-energy sector as part of its climate agenda.
Among the recipients is Chicago-based startup NanoGraf, which won $60 million to support construction of a $175 million battery-material manufacturing facility in Flint, Michigan. The company touted the planned factory as one of the biggest silicon anode battery material plants in the world.
Tech Brew caught up with NanoGraf CEO Francis Wang about what the DOE grant will enable the company to do, its ambitions to enter the EV market, and why he believes the more than decade-old company has managed to avoid the death valley.
“The DOE award is a pretty big deal for us. It is catalyzing the scale of our company,” Wang told us. “We’ve had tremendous traction with the Department of Defense. We’ve been able to optimize our technology, create a product, get that product to market, which has been the military. Now we’re setting our sights on the electric vehicle market.”
Speed bumps: Wang acknowledged that it’s not exactly an easy time to be in the battery business, given the recent bumpiness in the EV transition. Automakers have been pulling back on electrification plans due in part to slower demand.
“This is what they call the ‘valley of death,’” Wang said. “There’s a slowing market. You have competition from China. Technology adoption cycles are long. These are tough times for startup companies to navigate…What sets NanoGraf apart is that we’ve actually punched our way through the valley of death, and we’ve leveraged the Department of Defense to do that.”
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While some of its competitors dove headfirst into the EV market, Wang said that NanoGraf instead focused on military applications as it established its business and started generating revenue. Now, he said, NanoGraf is ready for EVs.
Long range: Despite some recent setbacks, the EV sector is banking on advancements in battery chemistries to help improve range and bring down battery costs.
NanoGraf aims to be part of this effort. Wang declined to go into detail on the technology the Flint plant will employ, but he said NanoGraf is in the process of lining up automotive clients. The new factory—which NanoGraf plans to break ground on next year and to open in 2027—would focus on producing battery materials for the EV market.
If everything goes according to plan, the project would create about 150 permanent jobs and add enough capacity to produce 2,500 tons of silicon anode battery material per year—enough to supply 1.5 million electric vehicles.
The factory would be NanoGraf’s third battery material production facility, in addition to two plants in Chicago.
The project will make use of an existing facility in Flint’s Buick City, a former automotive manufacturing hub that stopped making vehicles in 1999 and which General Motors vacated in 2010. Efforts are underway to redevelop the massive site.
“We are thrilled to welcome NanoGraf to Flint,” Mayor Sheldon Neeley said in a statement. “The combined investment from NanoGraf and the Department of Energy will ensure domestic access to innovative battery technology, meeting future demand for higher-performing EVs, and creating high-paying jobs that will benefit Flint for years to come.”
For his part, Wang said he’s “super excited” to establish a presence in Flint, especially given Buick City’s “very rich history of manufacturing and automotive.”
“NanoGraf’s vision is to transform the Rust Belt into the Battery Belt. It’s something we’re passionate about. This BIL award is huge,” he added. “We’re excited about the work we’re going to do in Flint—and excited about leveraging our technology and product to generate the next generation of electric vehicles out in the market with longer range.”