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BFD Expert Voices - Climate Deals

BFD Expert Voices

The battery materials startup Sila has bought a 600,000-square-foot manufacturing facility in Washington to vastly expand production for EVs, Alan reports.

Why it matters: Sila claims that its silicon-based anodes enable batteries to have 20% more energy density — meaning 20% longer range for an EV. 

The company, which counts BMW and Mercedes as partners, replaces graphite with silicon in anodes, which it says produces a better battery. 

"You can have a car with a longer range. Or, instead of building a car with 1,000 cells inside, you can build a battery pack with 800 cells or 700 cells, and that makes it cheaper," Sila CEO Gene Berdichevsky tells Alan.

What's happening: The new factory, about 177 miles east of Seattle, will be roughly 200 times larger than Sila's current manufacturing facility — and could expand even more.

"We’re onto the third stage, scale. And that’s the hardest part," Berdichevsky says. The first two stages were proving the science and proving the market, he says. 

By the numbers: Sila's current facility, in Alameda, California, has nameplate capacity of 50 megawatt-hours (MWh), a spokesperson tells Alan. 

Sila's initial investment at the new facility in Moses Lake, Washington, will amount to 10 gigawatt-hours (GWh), the spokesperson says.

The facility could then expand to 150 GWh.

Of note: The company in September began supplying silicon battery materials for fitness-tracker Whoop.

What's next: Sila is aiming to begin production lines in the second half of 2024, with full-scale production starting the following year.

"The earliest you might drive a Sila-powered vehicle is right at the end of 2025," Berdichevsky says. 

1 big thing: Sila ramps up production

Three batteries as the bars of a bar chart, increasing in size.

Orb Aerospace, a seed-stage startup that wants to build an entirely electric vertical take-off and landing vehicle (eVTOL), has lost roughly a third of its funding in debt in the past two years, according to SEC filings. But a seed round is in the works, company founder Alex Taylor tells Megan. 

Why it's the BFD: Building highly complex eVTOLs is a capital-intensive business, and unless another tranche of financing can materialize quickly, Orb might fail to get off the ground. 

Driving the news: In its annual report filed with the SEC Monday, Orb Aerospace revealed that it roughly tripled its net losses from the previous fiscal year, to $660,450.40.

It doubled its assets in the latest fiscal year, which closed March 31, to just over $288,000, but roughly quadrupled its long-term debt to just over $1 million, which largely represents an unannounced financing round.

Taylor tells Megan that the company is in the process of closing its $3 million seed funding round via convertible notes, a type of debt equity for early-stage startups.

Context: Orb, which filed under its original name, Wind Craft Aviation, was valued at $15 million per the latest funding round, according to PitchBook data.

The United States Air Force's AFWERX and Michigan Economic Development invested in the Michigan-based startup via development contracts, Taylor says.

It had previously raised $132,370 of equity crowdfunding from MicroVentures on December 7, 2020, plus $350,000 in initial capital from undisclosed angel investors. MicroVentures' earlier investment is part of the upcoming seed round, the company tells Megan.

On January 10, Taylor was accepted into the 2022 class of Thiel Fellows, who receive $100,000 during the two-year entrepreneurship program.

Between the lines: EV companies have struggled to maintain profitability even after becoming public companies and raising billions of dollars in private financing. 

The same may be true of eVTOLs, a similarly promising niche within the EV industry that is in its early stages of development. Many companies, including Orb, are building eVTOLs specifically for military uses due to their ease of maneuverability and small size.

Early setbacks could easily derail the entire industry if investors feel the economics don't work out, as we saw recently with Amazon's write-down of its Rivian investment.

Yes, but: Tesla remains a success story in the EV industry from an investor and consumer standpoint, so it can be done. 

Many electric transportation companies purport to be the "Tesla of X" to encourage association with the industry's biggest success, with few panning out.

It cannot be overstated how early some of the technology is, especially in eVTOLs. Should capital continue to flow into research and development, the path to commercialization could materialize.

Orb has produced five demo videos on its YouTube channel since the start of 2022, including its most recent partnership announcement with Air Race World Championships. It is not clear from the demo the specifics of the partnership, though it does promote Orb's Nomad prototype eVTOL.

The bottom line: Orb isn't generating any revenue and is running out of cash, fast. It is almost entirely dependent on closing its seed round soon.

2. The BFD: Orb Aerospace torches its runway

Animated illustration of a launch button with a pause icon.

Activist investors go green: Atlassian co-CEO Mike Cannon-Brookes wants Australian utility AGL Energy to burn less coal, so he's putting his money where his mouth is.

Cannon-Brookes, who is Australian, took an 11% stake in AGL Energy through his investment firm Grok Ventures, CNBC reported Monday, and is now the largest shareholder in the company. 

The deal was one way to get around a proposed demerger that would break out AGL's energy retailer and energy generating sides, which would leave one of the new companies still reliant on burning coal. Cannon-Brookes intends to vote against the demerger, which he indicated via tweet Monday.

Biden supercharges battery production: The Department of Energy just opened the doors for applications to tap over $3 billion for domestic battery manufacturing and supply chain projects, our Generate colleague Ben Geman writes. 

DOE on Monday published solicitations for cash in the bipartisan infrastructure law. The largest tranche announced, at $3.1 billion, is for projects to manufacture batteries or process raw materials like lithium and graphite. There's another $60 million for recycling and "second life" opportunities for batteries used in EVs.

Growth in EVs — which the White House wants to hasten — will require a lot more batteries and related materials. The solicitation notes demand for EVs and stationary storage is projected to expand the global market by up to tenfold by 2030.

DOE eyes carbon capture hubs: An influential nonprofit called Carbon180 is working to shape how the DOE spends $3.5 billion to develop four regional direct air capture hubs, our Generate colleague Andrew Freedman writes.

These installations would seek to prove the scalability of the climate tech option, which is attracting increasing interest from investors. 

Whether and how to scale the technology will be partly determined by the criteria used for designing and implementing the regional DAC hubs, which were funded over the course of five years under the bipartisan infrastructure bill. 

To be eligible for the program, a hub, which involves the colocation of complementary infrastructure, must eventually be capable of capturing at least 1 million metric tons of carbon dioxide annually.

3. 🌡️ Temperature check

Illustration of an earth in a roast pan with a meat thermometer.

Loop Energy, a Vancouver-based startup that makes hydrogen fuel cell stacks and modules for EVs, raised $9.75m CAD (~$7.57m) from the Canadian government through Pacific Economic Development Canada’s Jobs and Growth Fund. http://axios.link/kJcU

Rangeland Energy, a multinational energy company, raised $300 million in growth equity from EnCap Flatrock Midstream. http://axios.link/SnKl

CH-Auto Technology, a Chinese EV maker, agreed to go public at an implied $1.7b valuation (including debt) via Mountain Crest Acquisition Corp. IV (Nasdaq: MCAF). http://axios.link/qT3U

Shell (NYSE: SHEL) agreed to buy Indian renewable power producer Sprng Energy for $1.55b from Actis. http://axios.link/OgYm

Avangrid Renewables flipped the switch at its 200-megawatt Golden Hills wind farm in Sherman County, Oregon. Puget Sound Energy (PSE) will use the energy generated to power a projected 60,000 homes annually. http://axios.link/1AVb

4. Hot deals

Piva Capital, a venture firm focusing on industrial sectors, promoted Maria Buitron to principal. She has been working at the firm since 2019 and has been involved in deals regarding Boston Metal, Joywell, MenloMicro and Velo3D. http://axios.link/cBHC

Schneider Electric promoted Jana Gerber to president of Microgrid North America. Gerber has worked at Schneider Electric for more than 20 years, most recently as the principal of sustainability consulting. http://axios.link/arzh

5. It's Personnel

🗓️ A reminder to mark your calendars for Climate Deals' inaugural virtual event this Thursday, May 5. Megan will be chatting with Jigar Shah, director of the Loan Programs Office at the Department of Energy, about the agency's priorities and the trends he has been seeing. Register here.

🪆 Megan sped through the new season of "Russian Doll" on Netflix during her flights last week. It is very different from the first season but is still artistic and extremely trippy. 10/10 recommend 

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May 03, 2022

1 big thing: Sila ramps up production