GM invests $7 million in Envia Systems to develop batteries for EVs

Article by Christian Andrei, on January 28, 2011

To guarantee access to technology related to electric vehicles, General Motors Co. has invested $7 million in Envia Systems, a start-up that is developing more powerful and cheaper batteries for EVs. Based in Newark, Calif., Envia has developed cathode technology for lithium-ion batteries that boosts their power and cuts their costs.

Last Wednesday, GM said that it has also entered a separate licensing deal to use the Envia cathode technology in its future electric vehicles.

It’s actually the second time this month that GM is taking a stake in a start-up. Earlier this month, GM announced a $5 million investment in Powermat, which provides wireless charging for electronic devices such as cell phones. GM wants to make use of the Powermat technology into upcoming vehicles, such as the 2012 Chevrolet Volt.

According to GM CEO Dan Akerson, he is pushing the company to hasten plans to build plug-in hybrids derived from the Volt while boosting the production of the Volt this year and in 2012.

In June 2010, GM founded a venture capital arm with $100 million in funding. Jon Lauckner, a veteran GM engineer, is the head of GM Ventures. It is overseen by GM Vice Chairman Steve Girsky, the former investment banker responsible for GM’s strategy.

According to Envia Systems CEO, chairman and founding investor Atul Kapadia, Envia is the solution to two major issues concerning next-generation battery cells: greater capacity and lower cost. He believes that these problems can be addressed by its high-capacity manganese rich cathode material.

He also revealed that GM and two other companies have invested in the company Kapadia maintains that their battery materials are now the new leaders in technology and will help reduce the price as well as open the market potential for their clients.

Due to their technology and products, they believe that Envia is in the best position to capture a considerable part of the huge market of battery materials. The highly sophisticated cathode technology of Envia makes use of more affordable materials that save more energy for every unit mass than existing cathode materials.

The cathode is a major contributor to the overall battery cost so when the cathode delivers more energy, the battery cost will tend to be lower due to the fewer required cells.

Electrical and Battery Systems GM executive director Micky Bly adds that the outcome of the test on small-format cells demonstrates that Envia’s highly capable composite cathode material can boost the lithium-ion cells’ energy density to a maximum of one-third with the same level of durability, safety and reliability.

They concluded that this development in cell energy density plus reasonably-priced materials will significantly reduce cell cost, resulting to lower price of battery packs such as the one in Chevy Volt. The cathode technology, likewise, offers benefits to other applications and devices that require reduced-cost, high-energy density storage solutions.

Press Release

GM Ventures Makes Strategic Investment in Envia Systems

General Motors Ventures LLC invested $7 million in Newark, Calif.-based Envia Systems to provide GM’s battery engineering team with access to advanced lithium-ion cathode technology that delivers higher cell energy density and lower cost. In a separate agreement, GM has secured the right to use Envia’s advanced cathode material for future GM electrically driven vehicles.

“Skeptics have suggested it would probably be many years before lithium-ion batteries with significantly lower cost and higher capability are available, potentially limiting sales of electric vehicles for the foreseeable future,” said Jon Lauckner, president of GM Ventures. “In fact, our announcement today demonstrates that major improvements are already on the horizon.”

Other participating investors in Envia are Asahi Kasei and Asahi Glass; as well as current investors Bay Partners, Redpoint and Panagea Ventures. The funding of the investor group totaled $17 million.

“With our high-capacity manganese rich cathode material, Envia is addressing two key issues in the next-generation battery cells – higher capability and lower cost,” said Atul Kapadia, founding investor, chairman and CEO of Envia Systems. “The investments announced today from GM and the two new strategic investors, demonstrate the excitement around our technology, as well as the importance of the challenge.

“We believe our battery materials have taken the technology lead that will help lower price points and unlock the market potential for our customers,” Kapadia said. “With our technology and products, we believe that Envia is best-positioned to win a significant portion of this very large battery materials market.”

Envia’s advanced cathode technology uses inexpensive materials that store more energy per unit of mass than current cathode materials. Since the cathode is a key driver for the overall battery cost, the more energy the cathode delivers, the lower the battery cost because fewer cells are needed.

“Our test results on small-format cells show that Envia’s high-capacity composite cathode material can increase the energy density of lithium-ion cells by up to one-third, at an equivalent level of reliability, safety and durability,” said Micky Bly, GM executive director for Electrical and Battery Systems. “We estimate this improvement in cell energy density and less expensive material will drive a substantial reduction in cell cost, leading to lower cost battery packs like the one in the Chevy Volt.” Envia’s cathode technology also will offer benefits for other devices and applications where low-cost, high-energy density storage solutions are needed.”

Said U.S. Energy Secretary Steven Chu: “Today we are once again seeing the benefits for the American people that come with federal investments in science and innovation. With this new agreement, a battery technology, originally developed at the Department of Energy’s Argonne National Laboratory, is making its way into the market. By supporting American innovation, commercialization and manufacturing, this partnership is helping to boost U.S. competitiveness and create the jobs of the future.”

Topics: gm, investment

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