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BFD Expert Voices - Climate Deals

BFD Expert Voices

🕶️ We hope the long holiday weekend got you amped up for the second half of 2024.

Electric boat makers see smooth seas ahead, despite the challenges facing their landlubber counterparts. 

Why it matters: The industry is courting cash from investors who see growth in powering boats with electricity instead of gas or diesel.

The big picture: Startups making battery-driven boats and components like electric outboard motors saw global venture investment last year jump 42% to $205 million, per PitchBook. 

Investment this year isn't quite keeping pace, amounting to just $53 million over 14 deals as of this morning. But startups are in-market — and sounding optimistic, despite considerable headwinds facing EV makers.

Driving the news: Flux Marine in Bristol, Rhode Island, is raising a $50 million Series B to ramp up production of electric outboard motors. 

Such motors are quieter than conventional models that run on gas or diesel, and they tend to require less maintenance.

How it works: The company sells 22-foot boats from manufacturers Scout and Highfield.

Workers install batteries in the boats' hulls and attach 100 horsepower Flux Marine outboard motors to the back.

The company then sells the boats to customers at a starting price of $105,000 or $125,000, depending on the model, roughly a 20% premium over conventional versions.

By the numbers: The systems deliver cruising speeds of 22 mph, and top speeds of 30 mph, with a range of about 30 miles.

They're compatible with DC fast chargers and conventional level 2 chargers — meaning they can charge not only via a marina's typical dockside ports but any roadside charger while being towed to the water.

The latest: Flux Marine made its first deliveries last year, and it expects to begin shipping production models this month to customers.

 It aims to deliver 20 models this summer, or roughly two per week.

The startup expects to close the funding round by year-end. 

"This is the critical mass funding that would allow us to reach profitability, be cashflow positive, on the existing product lines," CFO Daylin Frantin says.

Flashback: The round adds to the $15.5 million Series A that Flux Marine raised in 2022, led by Ocean Zero. 

What's next: Flux Marine is considering supplying motors to boat manufacturers, which would bring a higher volume of orders than its current approach of completing retrofits in-house. 

"We know that that's the path to market," Frantin says.

Batteries and boats 

A white, 22-foot boat outfitted with a gray-and-black, electric outboard motor from Flux Marine, motors across smooth waters beneath sunny blue skies in Bristol Bay, Rhode Island.

A boat outfitted with a Flux Marine electric outboard motor pilots through Bristol Harbor in Rhode Island. Photo: Courtesy of Flux Marine

The energy storage market will soar over 600% over the next decade, adding almost a terawatt of new capacity as it's used to bolster solar and wind projects. 

Why it's the BFD: The surge in storage makes the sector one of the fastest-growing in the power industry as batteries ride on the back of the solar boom. 

Zoom in: Energy storage deployments delivered record growth of 162% in 2023 compared to 2022, with 45 GW installed, according to the latest figures from the researchers at Wood Mackenzie. 

Energy storage is forecast to reach 159 GW globally by the end of 2024. Then between 2024 and 2033, a projected 926 GW will be added, producing a 636% increase.

The surge is being led by the build-out of battery projects paired with solar farms that use storage to provide energy around the clock. 

China alone is expected to add 42 GW of annual storage projects over the next decade, making it the global storage leader. 

The big picture: While storage is piggybacking solar, it's also making solar more competitive, helping the intermittent energy source run closer to 24/7. 

One of climate tech's great success stories is the rise of the solar-storage combo. 

The BFD: Energy storage's explosive growth

Illustration of three batteries increasing in size overlaid with money and surrounded by abstract shapes.

Lee Seok-hee, CEO of South Korean battery giant SK On, sent a letter to employees declaring a state of "emergency management" in light of cool EV sales.

Why it matters: The challenges reflect how disappointing electric car and truck sales are rippling upstream.

State of play: SK On is the fourth-biggest battery maker for EVs, behind China's CATL and BYD and South Korean rival LG Energy Solution.

The latest: SK On has recorded 10 straight quarterly losses since being spun off by parent SK Innovation, per FT.

It's announced layoffs at its first U.S. plant, in Georgia, and delayed plans for a second plant in Kentucky, which would be a joint venture with Ford.

The intrigue: One analyst points the finger at U.S. automakers, which he says have "badly let down" battery makers like SK On by failing to develop compelling EVs for mass-market consumers.

"The Korean battery makers haven't been making blind investments — everything they invested was based on order books with fixed volumes and pricing," Tim Bush of UBS told FT. "But the automakers didn't invest enough in producing high-quality affordable EVs."

Alan's thought bubble: The automakers have done an OK job with the technology that they've had. The challenge instead has been with federal and state policy.

If political leaders say they want more Americans to buy EVs, then they need to adequately compensate drivers for the tradeoffs that come with those vehicles, like lousy charging infrastructure and unreliable battery range.

Cooling sales of EVs suggest that existing incentives don't go far enough.

What we're watching: SK On executives are exploring options including a potential merger with LNG producer SK E&S.

Quote of the day: EV emergency


⚖️ A post-Chevron test for ESG: The conservative-leaning 5th U.S. Circuit Court of Appeals is set to hear arguments tomorrow in a lawsuit brought by 25 GOP-led states challenging a U.S. Labor Department rule favoring ESG considerations.

The 2022 rule says investment plans can consider environmental, social and corporate governance factors as a "tiebreaker" in investment decisions, per Reuters. A district judge previously refused to block the measure, citing the 40-year-old Chevron deference doctrine, which held that judges should defer to agency interpretation of ambiguous statutes.

🤖 Softbank's power plans: Japanese investment group Softbank is interested in funding $10 billion in energy projects and is talking to banks about borrowing the funds, according to The Information.

The move would be part of the firm's AI play to power data centers as it also looks to become a major buyer of AI chips.

⚛️ China wakes up to fusion: The Chinese government is now spending far more than the U.S. feds on nuclear fusion tech as the country builds out a huge campus and develops a national consortium, reports the Wall Street Journal.

China is spending about $1.5 billion a year on fusion, which is almost twice the U.S. government's fusion budget.

China also has 10 times as many Ph.D.s in fusion science and engineering

🌎 Kamala's climate record: With greater scrutiny of VP Kamala Harris as the potential Democratic presidential nominee, our friends at Axios Generate take a look at Harris' climate record.

While Harris aligns with Biden at a high level, Harris has previously leaned further left, co-sponsoring Green New Deal legislation, advocating a fracking ban and, as a prosecutor, going after big oil and gas.

Temperature check

a box of matches that pictures a small outline of the earth and text that reads "Temperature Check"

• Eneida, a Portuguese sensor and data analytics provider for grid operators, raised a €10.5m Series B led by Junction Growth Investors, joined by Santander Alternative Investments and insiders Korys and HCapital. axios.link/4eQzpQD

• Natcap, a London-based company focused on nature-based risks, has raised $10m in a Series A round from investors including André Hoffmann, Norinchukin Capital, Yeo Ventures, Pelican Ag, David Craig, Oxford Science Enterprises, funds advised by MW&L Capital Partners, and Alea Iacta Est. https://axios.link/4eXyC0r

• Alcemy, a Berlin-based cement AI startup, has raised $10m led by Norrsken VC and including Galvanize Climate Solutions and AENU. https://axios.link/3W9WwhH

• Damon Motors, a Vancouver electric motorcycle maker, is moving ahead with going public via the reverse merger it announced in October, per Motorcycle Sports. axios.link/4bBSjIj

• Devon Energy, an oil and gas company based in Oklahoma City, says it plans to acquire the Williston Basin business of Grayson Mill Energy for $5 billion. https://axios.link/3zw9vSb

• Rivian is investigating why delivery vans in Texas caught fire in an Amazon parking lot. axios.link/3VTKNCv

• Bankrupt EV maker Fisker wants to sell its once-$70k SUVs for $14k. axios.link/4cBPNmv

• Chinese consumer drone maker DJI is expanding into e-bikes and drive systems. axios.link/45TV6uU

Hot deals

New Amtrak Service Proves That Even Slow-Ass Trains Can Beat The Airlines

That's the headline in transportation news site The Autopian, which last week reported that a new Amtrak line connecting Minneapolis and Chicago not only turned a profit after just 11 days, but grabbed a 15% market share over competing airlines.

Why it matters: The results once again show that energy-efficient trains can compete directly with heavily polluting airplanes.

By the numbers: The Borealis line runs once a day in each direction. The 411-mile trip takes seven hours and 20 minutes, with an average speed of 54 mph.

The big picture: That's slow as hell. But passengers are opting for the service anyway — after all, start taking into account lengthy airport security, plus even getting to a far-flung airport, and the difference between rail and air starts to shrink.

Reality check: The trains run on diesel, so the emissions savings aren't nearly big as they would be with electrified track.

Even so, for trips under 700 miles such as the Borealis route, trains still tend to beat airlines on emissions.

What we're watching: As The Autopian points out, if passengers opt for rail even with a slow-moving train, imagine what happens with high-speed service.

Bonus: That sums it up


🧨 Katie can attest that the strange and fun tradition of Pacifica's neighborhood fireworks continued in 2024. 

🛏️ Alan's toddler transitioned to a junior bed this weekend, and it went remarkably smoothly. After trying the novelty of walking to the bathroom all on her own, as many times as she'd like, she went right to sleep — surrounded by about two dozen stuffed animals.

Thank you to Michael Flaherty and Chris Speckhard for today's edits.

And thank you for reading Climate Deals! Please share with your friends, family and electric boat buyers.

July 08, 2024

1 big thing: Batteries and boats