Venture Bytes #55 - The Future of Batteries is Aluminium - Not Lithium

The Future of Batteries is Aluminum – Not Lithium

Lithium is today’s primary ingredient for laptop, electric vehicle, and grid storage batteries. But the technology has many drawbacks including high levels of pollution and low energy density. Recent technological developments suggest the future of batteries is aluminum-air not lithium. This has broad implications - all for the better.

Big technology and car companies are all too aware of the limitations of lithium-ion batteries. Lithium-ion batteries are heavy, flammable, and not truly CO2 free so why has it been the go-to battery technology. It’s because there was no alternative - until now.

Aluminum-air batteries have the potential to be the long-run solution to our energy storage problem. Firstly, aluminum-air batteries are primary batteries (they cannot be recharged), which means that something has to be replaced manually to provide energy, and that would be the aluminum. Aluminum-air batteries get their energy from the chemical reaction between oxygen, air, and water. Up until now, once the battery was “plugged in,” the chemical reaction would keep happening even if the battery was not in use, losing about 80% of its energy in a month; recent developments reduced the energy lost to only 0.02%.

The manufacturing and recycling processes are more efficient and environmentally friendly for aluminum-air batteries than the process of making a lithium-ion battery. According to the United Nations Climate Change Conference, producing an electric vehicle (EV) with lithium batteries uses almost twice as much energy and pollutes over 60% more than producing a gasoline car. After the battery is made, operating the car is as clean as the energy it consumes, but most of the electricity coming from the power grid is generated from non-renewable sources, which means that EVs keep polluting over their entire lifetime. On average, an EV has to operate around 5 to 7 years to have a lower level of pollution than a gasoline car, but the battery lifespan is about 10 years, so current EVs are not a long-run solution to the environmental problem.

On the other hand, aluminum-air batteries only depend on the manufacturing process since they cannot be recharged. The energy and pollution come from the process of refining aluminum. Alcoa developed a new aluminum smelting process that does not utilize carbon and the waste product is in fact oxygen. The vast amounts of required energy by the factories can be locally addressed by renewable sources, which is easier than shifting the entire energy sources that come from the power grid to be carbon neutral. More importantly, almost 100% of aluminum waste from the batteries can be recycled to fuel more batteries, with lower energy consumption than making it from scratch. Aluminum processing for batteries can be a true carbon-free alternative.

The biggest advantage of aluminum-air batteries is that they can hold five to ten times more energy than lithium-ion batteries, with the potential to increase an EV range. For perspective, only 8 EVs have the range capability of going from NYC to Washington DC and no EV can make the trip from Boston to DC with a single full charge. Aluminum-air batteries have the theoretical capability of reaching up to 8 times the range of a lithium-ion EV at a significantly lower weight.

An EV with aluminum-air batteries would also be cheaper. Aluminum is the third most abundant element on the Earth’s crust, making it a cheap alternative. On average, a 100-kWh lithium-ion battery is estimated around a gigantic price of $20,000 while the cost of making an aluminum-air battery is fairly cheap. Considering a cost of $1.85/Kg for aluminum, an EV would cost about $1,000 to operate annually and the price of making the battery is not much different from its operating costs.

Investment Opportunity

There are very few companies working on this new technology, with Indian-based Log9 Materials being the industry leader followed by Israeli-based startup Phinergy.

Log9 Materials has developed an EV that runs entirely on aluminum-air batteries. Their EV only requires water to be added to the vehicle every 200 miles and replacement aluminum plates every 1,000 miles. Log9 Materials’ CEO indicated that the company cut down costs by one-third while increasing the battery efficiency by five times. The biggest challenge Log9 Materials is facing is power efficiency – the rate at which the energy is being released – which is the main challenge for these batteries, but the startup claims to have increased its power efficiency by 4 to 5 times. Log9 stated that their aluminum-air battery will be commercially feasible by 2020 and have a 1,000-mile range.

Phinergy, instead of trying to solve the power efficiency problem, combines a lithium-ion battery with an aluminum-air battery. The aluminum-air battery is used to recharge the lithium-ion battery. Although it seems an interesting approach, the solution seems to have a couple of problems; it adds extra weight to the car, still requires charging time for the lithium-ion battery, and has expensive lithium-ion battery cost. Phinergy claims to have achieved an 1,800-mile range using the combination of both batteries. This double battery approach is not unique to this company; Tesla has issued patents back in 2013, and again in 2017, to develop a dual lithium-ion aluminum-air battery to increase their EV’s range.

In conclusion the aluminum-air battery technology is not fully ready to be commercially viable at the moment, but it is getting close. The biggest problem of aluminum corrosion has just recently been solved, which is attrating interest from new companies. Its light weight, low cost, and carbon-free process presents a compelling proposition. Power efficiency is the main drawback, but there is still plenty of room for improvement. We believe this technology is going to dominate the EV energy storage business, as a growing number of companies allocate more funding and attention to improve the battery efficiency. **

It’s a Bird…It’s a Plane…It’s a Drone!

Drones came into limelight in 2013 after Jeff Bezos first mentioned them. Six years later drones have come a long way but still have a few more years to go before we see full scale commercial deployments.

Regulations are the main obstacle in the industry. The drone owners have to obtain FAA (Federal Aviation Administration) approval to operate as airlines. The FAA unmanned airline rules (1) prohibit drones of over 55 pounds, (2) do not allow the drones to fly over people who are not receiving the package or fly over an altitude of 400 feet, and (4) limit the speed of the drones to 87 knots (100 mph). The FAA has been stricter with deliveries related to food and goods compared to health-emergency related deliveries. While most companies are focusing on developing commercial drone services to deliver food and retail goods, maximum progress has been made in the health-related deliveries domain.

Flirtey, a provider of health emergency drone deliveries, was the first company to get FAA approval to fly the drones beyond the visual line of sight (BVLOS) but only in the city of Reno, Nevada on March 8, 2019, four years after proving its drone’s capabilities. Flirtey’s FAA approval is limited to 911 assistance calls, where its drones deliver defibrillators, EpiPens, and opioid overdose antidotes. Most 911 emergencies fail to save a patient’s life due a tardy response time, however Flirtey’s drones could fly in a straight line at potentially 100 mph, reaching patients in a very short time span to deliver the necessary medical equipment to the people assisting the patients until the ambulance arrives. Flirtey was also a pioneer in developing, in collaboration with NASA, a standard system to keep track of drone operations and air traffic in the industry in 2015. The software was named UTM, and it is the current standard air control system for commercial drones.

Google was the second and the last company after Flirtey to obtain FAA approval to operate drone deliveries. Wing, Google’s subsidiary, received approval to operate in Virginia. Google has been operating its drone delivery service in Australia having completed more than 3,000 deliveries. Amazon and UPS have also applied to obtain FAA certification, but the process could take up to 2 years.

Apart from regulations, the current drone technology is also holding companies back. The existing fleet of drones does not have a large weight-carrying capacity, but it is constantly improving. Drones keep evolving as companies look for the ideal weight-cost-noise balance. Google’s drone can only carry up to 4 pounds and Amazon’s up to 5 pounds, so they are only practical for small deliveries. Currently, bigger drones are able to carry higher payloads, but it also increases its costs, as well as the noise pollution. Companies need to find the optimal balance between these three characteristics to determine if drones are really going to be a viable delivery option.

The current focus on drone technology is on developing autonomous drones. Companies are opting to add LIDARs and cameras, similar to autonomous vehicles, to apply deep learning algorithms that would allow drones to operate in a fully autonomous manner. Achieving drone autonomy is a much simpler task than autonomous driving; therefore, it is more likely to see autonomous drones in the near future. Drones typically fly at an altitude of 400 feet and use GPS system that enables them to fly from point A to point B, but this feature does not allow drones to account for obstacles or even other drones in their way. Autonomous capabilities would allow drones to maneuver and evade trees and other drones. Adding autonomous features to drones will improve their safety as well as reduce labor costs.

There is still a long way to go for drones to become the norm in the delivery business, but its future is promising. Regulations need to catch up with the developments in the industry including regulating and controlling the air traffic. Given the evolving drone technology and capabilities, we believe drones will take at least 3 to 5 years to become part of the mainstream.