24M

YET-MING CHIANG: I'm Yet-Ming Chiang. I'm a co-founder of 24M. And I'm also a professor n the Material Science and Engineering Department at MIT, where I've been teaching for over 30 years now. I've been doing research in batteries for about 25 years, and 24M is the culmination of a lot of things that we learned both in research and in the industrialization of new battery technologies.

RICK FELDT: I'm Rick Feldt. I joined 24M about seven months ago now. I'm the company CEO. I've got about 40 years of high technology experience, mostly in companies that design and make products. And I thought this was a great opportunity to join Yet and team, because I think 24M is just at that transition point-- ready to take off and do substantial commercialization. That's why I'm here.

YET-MING CHIANG: Lithium ion batteries are today's most advanced battery technology. The technology is about 26 years old now, and first developed in the late 1980s in Japan. And it has come to dominate all aspects of our technological lives, from handheld devices, to electric vehicles, and increasingly for grid energy storage.

And there are a lot of good reasons for that. It has a material set that is very high energy density. So it's a lot of energy for the volume or the mass that you have. It delivers high power, lasts a long time.

But as a technology that's now a quarter century old, what has carried along over the last 25 years are the original ways of designing and building that lithium ion battery. And over the last quarter century, some of the less efficient parts of the manufacturing process have really persisted. And having earlier developed a battery technology that was a new chemistry and was put into commercialization but manufactured the conventional way, I have learned a lot about what the weaknesses of the conventional manufacturing approach were.

And so 24M is a company that we formed to remedy those deficiencies. In short, what we do at 24M is we have developed both a cell design, which makes much more efficient use of the materials that go into a lithium ion battery. And specifically, it decreases the amount of material that does not store energy. We maximize the amount of energy-storing materials, decrease all other materials, and in that way we lower the cost of materials for the entire battery.

So that's one key aspect of our technology. Along with that, however, we've also developed a new manufacturing method. And this manufacturing method strips out a lot of the unit operations of the previous manufacturing method. We have about 1/3 the number of unit operations in our manufacturing approach. It speeds up the time to produce the lithium ion battery. It decreases the footprint to less than half the factory footprint for conventional lithium ion batteries.

It removes, for example, the need for any organic solvents. And so a conventional battery manufacturing uses organic solvents that are evaporated and then have to be recondensed. And so we'd get rid of these solvents that are unpleasant and in certain parts of the world are being phased out. By not having these steps that we used earlier, we also decreased the energy consumption of our manufacturing method.

So for example, we have no drying processes in our manufacturing. Drying takes a lot of thermal energy. And then if you're drying an organic solvent, what you then need to do is to-- we condense and capture that organic solvent, also very energy intensive.

So overall, we have lower materials costs, we have a faster process, a smaller factory, at lower costs, and overall for the battery cells that we produce, a significantly lower cost compared to today's lithium ion. And also where today's lithium ion is headed, along the conventional technology track.

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RICK FELDT: As I mentioned a few moments ago, I've been with companies that design and manufacture high-tech products for 40 years. What really impresses me about what Yet has done is he hasn't come up with a radically new chemistry for the battery. But he has modified his design. And he's radically changed the manufacturing process, not unlike Henry Ford who changed the way automobiles got made and then almost really created a whole new Industrial Revolution. So that's why I was excited to join. And I think this is as transformative as what Henry Ford did with cars.

YET-MING CHIANG: So our vision for the company is that the way that we manufacture lithium ion batteries will become the preferred way for making batteries around the world. Our model is to partner with those who want to produce batteries, to produce their own batteries without having to make these immense investments. They don't have to build gigawatt-hour sized plants. They don't have to spend close to a half a billion dollars. They can spend what they need in order to get the capacity they need and grow the manufacturing capacity over time as their demand grows.

And so in a sense, what we're trying to do is democratize the manufacturing of lithium ion batteries so that, really, any company can do it, not only know a few select large companies around the world.

Why is the company called 24M? Well, every MIT startup has a name that, somewhere along the line, has a scientific root. So it turns out that the large M, in chemical notation, stands for molarity. It's a unit of chemical concentration.

If you take a lithium ion battery and take the electrode alone and you calculate the storage in terms of units of charge or charge density of the electrode, it comes out to be roughly equivalent to a concentration of 24 Molar, hence 24M.

RICK FELDT: It's lost on most laypeople.

YET-MING CHIANG: Originally, this was our aspiration. But now it's the reality. Our batteries, we recently exceeded that target of 24M.

To be a little more specific about what we improve in terms of the design and cost factors of the battery, the part of the material set that goes into a battery that doesn't store any energy, we've decreased that by about 80%. What this then does is to take the cost of the materials that go into a battery and decrease that cost by 25% to 30%. And so we call that the bill of materials.

On top of that, we have a factory cost which is calculated in terms of equipment depreciation. And then on top of that, we have operating costs, the energy budget, et cetera for the manufacturing process. When we roll all of that up together, our savings over a conventional lithium ion battery is about 25% for the cell that's produced.

Now, this 25% can change over time. But we believe we have a sustainable advantage over time, because as the energy-storing materials that go into the battery decrease their costs over time, our percentage advantage over the conventional manufacturing approach now grows even further.

RICK FELDT: Yeah, the shorthand version of all that is we use a lot less stuff. And it takes us half as many steps to actually produce the cell. And so when you have less materials and then you have fewer steps, you have a smaller building, you have fewer people, you have less equipment, you have a faster process. And all that ends up creating a lot of savings.

YET-MING CHIANG: And another reason that we believe we have a sustainable advantage over time is that the lithium ion battery roadmap is actually very rich and continues to develop. We are nowhere near the end of this technology. So new energy-storing materials, the cathode and anode components of the battery, are being developed all the time. And so the roadmap goes to systematically higher energy density and lower cost per stored energy.

And so this roadmap is something we aim to capitalize on. A lot of the research we do at MIT, and others do in the national labs and other laboratories around the country and the world, are focused on developing ever better chemistries. So 24M's technology is a platform that can adapt to many of these new chemistries that are coming along.

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YET-MING CHIANG: The main applications of lithium ion batteries today are in three primary areas. One is portable devices, the second is transportation, and the third is storage for the electrical grid or for renewable energy-- to smooth renewable energy. And at 24M, we made a decision a number of years ago that our first target would be for large-scale applications, rather than handheld applications.

And so our first product that we've developed, which is ready to manufacturer, is actually a battery for grid energy storage for stationary applications. However, very closely on the heels of that first product, we've also developed a higher energy density lithium ion battery for transportation and so-called motive applications, where the energy per mass, and energy per density is somewhat more critical than they are in the grid application.

RICK FELDT: And it's no surprise then that the first partner that we'll be dealing with wants batteries for energy storage. And we've recently signed our first deal with a company in Thailand called GPSE. They're owned by Thailand's largest company, PTT, which is a large oil and gas company in Thailand. And in this case, our partner, GPSE, will be providing operating capital to build a factory outfitted with equipment based upon our specifications, and we will share with GPSE economics that factory. In the case of GPSE it'll be via a royalty.

And so we just signed that deal two months ago. We are in the final negotiations with a very large Japanese industrial company who wishes to remain anonymous for some similar type deal. Where, again, we will license them our technology, and we will reap the benefits of the economics through royalties. We just entered into discussions with a very large US company, now moving to a little higher energy density, as Yet mentioned, for motive of applications. And we are in the process of trying to come to a conclusion on definitive documents potentially into a third manufacturing partnership.

So in all cases, these partners will rely on our technology, and we'll be the technology provider. And they will actually then build the factories, buy the equipment, and operate those factories with our help. And we'll basically share in the economics of those factories.

YET-MING CHIANG: For widespread use in transportation, the goals for battery technology are to get the cost of batteries down in the range, driving range up to where it's easy for anyone to use an electric vehicle and there are really no limitations on user behavior. But to minimize the limitation on user behavior, we still do not need to charge them. And so in round numbers, getting the cost of a lithium ion battery pack down to about $100 per kilowatt hour is what is required. And so a small electric vehicle may have a 60-kilowatt hour battery pack in the future, and that'll provide quite a bit of range for a small car.

So that would be, for example, a $6,000 battery pack. And up until now, over the last decade, it's been several times that. And so you can imagine scenarios in which the battery pack is the single most expensive component in an electric vehicle. But that's going to change. And what we're aiming to do is to really accelerate the adoption of electric transportation by providing the lowest cost lithium ion batteries that anyone can produce because of the greater efficiency of our design and manufacturing method.

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YET-MING CHIANG: In terms of battery technologies that might compete with lithium ion, the first thing to be mentioned is that lithium ion is not a single technology. When I referred earlier to the fact that there's a very rich roadmap ahead of us, using lithium as the working ion AS the key chemical component allows you to actually adopt a lot of different variants of rechargeable batteries. So for example, today, there's a lot of effort-- and we're involved in such effort-- to research efforts ourselves in developing a lithium metal electrode-based rechargeable battery.

Lithium ion, today, does not use lithium metal. But if we were able to use lithium metal as one of the electrodes, it would immediately allow about a two to three-fold increase in the energy density of today's batteries. Now, some might say that that's not lithium ion. That's something well beyond lithium ion. Well, regardless of what you call it, it's still on the roadmap as something that our approach and our technology can manufacture. So we include that in what we call lithium ion.

There certainly are a lot of other chemistries being explored all the time-- lithium sulfur, lithium oxygen, and others. And I think that what we are focused on is the fact that as these other technologies become developed, if the chemistry proves itself to be useful, and successful, and low cost, we will have a way of dropping it into 24M's approach.

It's hard to predict the future, especially in batteries. So the near-term roadmap is fairly clear. The longer term roadmap there are a broad range of options. One of the future applications that we hear a lot about now is electric flight. And so that begins with drones. And a better drone battery is something that many people would like to have, but also, a manned flight, in terms of both hybrid and all-electric aircraft. So all-electric aircraft are short-range, hybrid for longer range.

And so that whole discussion in the industry has just gotten started. There are multiple efforts in laboratories and companies, including startup companies, around that. And so it's yet another large industrial sector in which better batteries can really make a difference.

We're a startup battery company. And being a startup battery company is a tough job.

RICK FELDT: It is a tough job. Being a startup, generally, is a tough job.

YET-MING CHIANG: And we know a number of models for startups in the battery space that have not been successful. And we've lived some of those. And so with 24M, we're really in search of the right business model. What is the right way to grow a new battery company?

And our approach is to partner. And I think Rick can address specifically how we partner and what types of partners we're looking for.

RICK FELDT: Yeah. The reason we chose partnerships is because, as a small company, it's very difficult to raise the capital to build factories, buy equipment, develop a sales force, and then go out and sell the product, and then warranty the product for the 15 or 20 years that's necessary for customers, because you don't have a big balance sheet. And so rather than repeat the mistakes of others, we said, to at least get started, we're going to look for partnerships-- people that have an immediate need for the technology, like the idea of manufacturing themselves, and will share enough economics with 24M so we can launch the company.

Once we get through a few partnerships, the aperture of opportunity opens for us. We could continue-- if this model works and we're pulling more companies that don't want to be reliant on just a couple of large battery manufacturers. And that could work for a long time. But once we achieve some level of revenue, and we've demonstrated how well this technology works, then we would also have opportunities to selectively build factories of our own and market segments of our choosing. And we could go in a different direction.

So we first have to get over the startup hurdle. And once we do, I think we have many more opportunities.

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YET-MING CHIANG: One might ask, why would a company want to partner with us, and why would they want to make their own lithium ion batteries, recognizing that the cost of lithium ion batteries has systematically decreased over the last decade. Well, for many companies it's a make or buy decision. And yes, they may be able to have a purchase order, a contract today that's low cost, but what about the future?

A number of companies have been in the area of making their own batteries over time to supply their own products. And now, if they change that model and become entirely reliant on a few global companies, well, that has ramifications later on. And it can disrupt their business model.

RICK FELDT: Yeah It both has price or cost ramifications. But additionally, it gives enough flexibility in modifying a design it would suit their needs better. You have to buy sort of off-the-shelf versus we allow companies to modify the design to really suit their application more specifically.

YET-MING CHIANG: And for companies and even other countries, the ability to have an efficient battery manufacturing industry is becoming increasingly important. Because, especially for transportation and large-scale energy storage for renewables, if you're reliant on other countries, other companies, for your entire source of batteries, that creates vulnerability. And so, we get a lot of inbound requests from other countries, where they are looking ahead and seeing that as a strategic national resource, they would like to be in the position of being able to produce their own batteries.

And we offer a way for them to do that without having to follow the footsteps of the global leaders today against whom they may never actually catch up. We offer them an alternative way, a lower cost manufacturing method that we think is the future.

RICK FELDT: Energy storage is becoming to be viewed as a national resource, as Yet said, almost like gasoline. Gasoline is one way of storing energy, batteries are another. And so it's becoming a national priority in some nations.

YET-MING CHIANG: We're delighted to be nominated to STAX. And the Industrial Liaison program at MIT has a long history. Over my 30 years at the Institute, I've taken advantage of the industrial contacts many, many times. But this is a new program, and I think it's special. And being part of that select group of top startups out of the very broad range of startups we have at MIT. And being asked to participate in STAX 25, that's a real honor for us.

And already, we've seen its impact in simply participating in the events that STAX 25 has organized. After these events we just get so many inbound requests to meet and talk about how to partner, from small companies to large. And from those, we expect a lot of great opportunities for partnering to emerge. Because it turns out that partnering is our key model.

RICK FELDT: Yeah. So we're glad for the opportunity.

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