Out Of Stealth Mode With A Major Battery Breakthrough

You look down at your battery gauge and see that you are starting to run low on your cross-country trip. You pull your EV into the next charging station, plug in, stretch your legs, and head into the store to buy snacks.

You pick out your snacks, pay the cashier, and head back out to your car. Recharging is finished, so you replace the plug, sit down behind the wheel, and start up. You are confident you have enough charge for another 400 miles now—just in time to stop for lunch.

For Tesla owners who have experienced the gnawing uncertainty of range anxiety on a long trip, the above might sound like science fiction. But for an EV equipped with Xerion’s quick-charging, high-capacity batteries, this story may soon be science fact.

In fact, my little tale does not do justice to the advances made by Xerion—a scrappy, Midwestern start-up chock full of geniuses whose nanotechnology advances offer huge potential for everything from electrification of transportation to reinvigorating American manufacturing to onshoring of critical supply chains.

Executive Summary

Xerion’s founders—world leaders in the fields of nanotechnology and materials sciences—have discovered a process that makes the already “pretty good” technology of lithium-ion batteries even better, all while massively cutting the cost and carbon footprint associated with the entire supply chain.

Xerion believes its technology will allow it to procure and refine essential battery component materials almost exclusively from domestic sources, manufacture lithium-ion batteries with stunning improvements over current offerings and cut the carbon footprint both of manufacturing and recycling in a big way. All this while invigorating domestic manufacturing supply chains in areas that were once thriving but now tend to be sniffed at as “fly-over country.”

The company has been in “stealth mode” since 2010 but its founders have chosen this column on Forbes for Xerion’s coming out party.

Xerion has raised $65 million in funding, mostly through high-net-worth individuals and family offices (including the family office of a former governor of the company’s original home state of Illinois). It is now pushing to fund its first commercial production with a plant in Dayton, Ohio on the heels of a major recognition from the U.S. Department of Energy.

This is big news, in my opinion. Read on and prepare to be amazed.

Company History

Xerion was founded in 2010 to commercialize insights into lithium-ion battery architecture discovered at a lab at the University of Illinois. The head of the lab, Paul Braun, Ph.D., worked out the fundamental technology in the late-aughts and founded the company in 2010 with John Busbee, Ph.D., a materials scientist who had completed his doctoral work the University of Illinois while simultaneously serving as an Air Force officer.

Busbee’s job in the Air Force was not flying jets but rather flying high-tech development projects in the nanotechnology space. Essentially, Busbee was running a $100 million VC fund that supported the work of 125 scientists working on high-tech projects with national security implications.

Busbee served as the start-up’s CTO for its first two years before moving into the CEO position in 2013. Xerion’s initial funding came from a $1 million contract from the Department of Defense (Army Research Laboratory and Army Research Office) and the Department of Energy.

Xerion has existed in stealth mode for all this time, raising money not from coastal venture capitalists, but from private investors and family offices. It has raised over $65 million to date and is now looking to expand its investor base to build out a manufacturing center in Dayton, Ohio.

Coastal elites might write off a city like Dayton as fly-over country, but it has a long history of being a hotbed for technological innovation. Dayton is the hometown of the Wright brothers, so has a claim on the birthplace of modern aviation. It was also the home base of Charles Kettering, the founder of DELCO (Dayton Engineering Laboratories Company), the company that pioneered electric starters and ignition systems for automobiles.

Xerion’s Innovative Lithium-Ion Technology

Sony commercialized the first lithium-ion battery over 30 years ago, in 1991; the manufacturing process has improved since then, but the fundamental framework for how materials are sourced and batteries are manufactured remains tied to Sony’s original 20^th century paradigm.

Xerion has completely re-envisioned the old paradigm and brought it into the 21^st century. Xerion’s fundamental change in approach ripples through the entire supply chain—making it more energy and cost efficient—and creates significant improvements in battery performance.

To understand Xerion’s advances, let’s first look at how lithium-ion batteries presently work.

All batteries are split into two halves—the energy storage side and the energy sink side. The storage side is manufactured by attaching a lithium-containing battery compound to a thin aluminum foil and the sink side is formed by attaching graphite to a copper foil.[1]

In the legacy production method, the lithium-containing battery compound is mixed with binders and additives and deposited in multiple layers onto aluminum foil in the same way that one might spread chunky peanut butter on a piece of bread. Each layer lays flat on the foil and just as you don’t have any control over the direction of the peanut chunks when you spread peanut butter on a piece of bread, the atoms in the lithium compound are randomly aligned with respect to the foil.

Batteries work by sending the lithium ions from the storage side of the battery to the sink side (where they are re-paired with the electrons that just lit up your screen or whatever). For the lithium ions to migrate from one side to the other, they must navigate the many layers of randomly aligned molecules.

Because the paths are not well-ordered, lithium ions face traffic jams and must make detours to get to where they need to go. When the battery recharges, those same lithium ions have to return to the storage side and must again wind their way along the chaotic paths through many layers.

This legacy set-up has a few problems. First, the binders and adhesives in the lithium compound are “dead space” in terms of storage capacity, so decrease the maximum possible energy density of the battery.

Second, because the randomized structure of the battery material throttles the speed of lithium-ion movement, there is a limit to the amount of instantaneous power batteries can release when discharging and a limit to the speed at which the battery can recharge. This is why you need to plug your mobile phone or Tesla in for a relatively long time before it is recharged!

Xerion’s first technological advance, a process it calls DirectPlate, fixes both of these problems.

Xerion starts the process by dissolving lithium and other metal-containing compounds in a molten salt bath; the lithium pairs up with atoms from the metal-containing compounds to form the lithium-containing battery material, which can then be directly electroplated onto the metal foil.

This DirectPlate process enables the active materials to be deposited onto the metal foil in a highly ordered crystalline structure oriented perpendicularly to the foil. (Imagine spreading peanut butter with all the peanut chunks arranged perpendicularly to the bread, stacked into a neat matrix.)

Because of this orientation and structure, the paths for the lithium ions to travel to the other electrode are completely clear, so it takes a lot less time to charge a Xerion battery and the amount of impulse power it can generate is much larger than a conventional cell (handy for things like vertical lift-off air taxi services, for instance).

In addition, Xerion’s electroplating allows the active materials to be deposited without the binders and additives, so there is a lot more active battery material in a Xerion battery—resulting in a 40% higher energy density than conventional lithium-ion cells, according to the company. The higher energy density represents a big improvement because you can stuff a lot more energy into a battery of the same weight—a terrific plus for device portability.

Finally, Xerion’s revolutionary battery architecture creates a structural safety switch that eliminates the danger of “thermal run-away” that plagued Samsung’s flagship phones a few years back and prompted airlines to forbid lithium-ion batteries in checked baggage.

These benefits in themselves are great, but it turns out that an application of the DirectPlate process creates some surprising and phenomenally positive effects discussed in the Climate Impact section below.

The second groundbreaking nanotechnology pioneered by Xerion is a novel re-architecting of battery electrodes that the company calls StructurePore. This advance offers a way to inexpensively mass-produce a highly porous metal structure to which active battery material is applied using DirectPlate. This means that battery material is deposited on a highly porous metal “foam” that further improves Xerion batteries’ ability to charge and discharge quickly.

Having a Xerion battery that is both energy dense (i.e., it has the capacity to run for a long time without needing to be recharged) and powerful (i.e., can give you a surge of energy when you need it) is a big boon to the goal of electrifying our transportation system.

This brings us to the climate impact of Xerion batteries, which also appears to be an unalloyed positive.

Climate Impact

Anyone who follows battery technology knows that lithium-ion, for all its advantages, has plenty of weaknesses as well. One of those weaknesses is the supply chain and the ecological and social damage caused by the processes involved in mining lithium, cobalt, and other component materials.

Another downside is that the batteries are not easy to recycle. Once lithium-ion batteries are used up, essentially, the process to reuse the material takes a lot of heat and other energy-intensive steps before the active battery materials (lithium, cobalt, nickel, manganese) can be recovered for use in another battery.

The amazing thing that Xerion found was that the DirectPlate process allows many of the legacy battery mineral refining steps to be completely omitted. Low-concentration cobalt- and lithium-containing ore are added to the DirectPlate molten-salt bath. As these low-purity materials proceed through the DirectPlate process, high-quality active battery materials are electroplated on the foil, while impurities end up getting sloughed off in the molten-salt bath.

This sloughing process is environmentally friendly—it emits no gases and is accomplished without the use of organic solvents—and creates a very valuable biproduct: refined cobalt. The company uses the molten salt to dissolve feedstock ore that contains what is usually considered uneconomic quantities of cobalt (for example, the tiny amounts of cobalt mixed in with the tailings from nickel mines) and one-third of this “scrap” congeals into highly-purified, economic quantities of cobalt metal.

Those of you who have read my comments about the exposé, Cobalt Red, which details the immense toll taken on the people and environment of the Democratic Republic of the Congo and the role of Chinese mining companies in that humanitarian disaster will understand why the U.S. government considers refined cobalt a “strategic metal.”

The carbon footprint of Xerion’s batteries is much lower than those manufactured using legacy processes—the company claims a massive 40% reduction—because all the lithium and cobalt preprocessing steps can be omitted.

Also, by avoiding the preprocessing, the lithium-ion supply chain’s dependence on foreign factories also disappears. The steps that are avoided are expensive, energy-intensive, highly-polluting, and overwhelmingly carried out in China, a country that increasingly looks more like an antagonist than a partner to the U.S. and the West.

Recycling lithium-ion batteries is similarly easy using Xerion’s DirectPlate technology. Essentially, all the energy- and time-intensive steps that go into legacy recycling processes are avoided by using the molten salt solvent. Shredded batteries can simply be deposited into the molten salt mixture and the plastic casing and other impurities are sloughed off while the refined lithium and cobalt salts are deposited directly as high-quality cathode active material on an electrode.

As if all of this was not enough, an application of Xerion’s technology also holds tremendous potential as a new, environmentally friendly way to source lithium salts. Xerion and the University of Illinois just won an award from the Department of Energy for the application of its DirectPlate process to extracting lithium salts directly from geothermal brines, such as California’s Salton Sea. Xerion’s direct lithium extraction (DLE) has enormous potential to more efficiently and less expensively extract lithium from a wide range of brines that are readily available in large quantities in North America.

You can read a press release about the DoE award, Xerion’s process for removing lithium from geothermal brine, and see an animation of this process here.

The take-away from all this is that the process that Xerion has pioneered not only makes lithium-ion batteries better and more useful—thus providing more impetus for clean energy and electrification—but that its innovative technology will make the sourcing of lithium, nickel, and cobalt, and the manufacture of batteries much cleaner as well.

The result is that our climate wins two times over!

Xerion’s Business

Xerion is focused on building out its Dayton plant and using the manufacturing lines there to supply batteries for mostly military contracts and consumer electronics starting in 2024. The Dayton plant will be further expanded for production directed at wearables and electric vehicles in 2025, followed by expansion to a new facility in Florida soon afterwards.

The company presently has proven its technology for two lithium-ion chemistries—LCO (lithium-cobalt-oxide) and LMO (lithium-manganese-oxide)—has demonstrated its technology for NMC (nickel-manganese-copper) batteries and has LFP (lithium-iron phosphate) batteries in development.

LCO batteries have fallen out of favor with EV companies due to the reliance on cobalt and the social costs cobalt mining exacts in Africa. As such, Xerion plans to focus first on military, consumer electronics and aerospace applications, for which LCO continues to be the go-to lithium-ion chemistry.

As Xerion scales up and perfects its manufacturing technology, it plans to expand into the electric vehicle market. If all goes to plan, the company projects generating over $10 billion in revenues by the end of the decade at a very healthy profit margin.

Xerion believes that using its technology to extract lithium from geothermal brines, such as California’s Salton Sea, then recycle and manufacture batteries in Ohio and Florida will make the American economy stronger and less dependent on imports from China and from other politically fragile states. These local benefits simply add to the global benefits associated with a lower carbon footprint manufacturing process and a product that will spur electrification.

Erik’s Take

Speaking with Busbee, it really seems like Xerion has discovered a very smart way to rearchitect battery material and also developed a workable technology to produce high-performing batteries. Xerion’s techniques improve on the strengths that lithium-ion chemistry already has while cutting down many of the limitations.

One of the aspects of Xerion’s business model that I particularly appreciate is the insistence on domestic manufacturing and the company’s decision to site its facilities in “fly-over country.” The view of nurses wearing trash bags in place of PPE at the start of the COVID epidemic due to reliance on long, brittle supply chains and overseas manufacturing still stirs a feeling of anger and disgust in me that I can summon to this day. I am not a jingoist, but I do believe the U.S. needs to regain the competency in manufacturing that helped make it a world economic power.

The technical aspect of Xerion about which I am most optimistic is the reduction in carbon footprint related to manufacturing and recycling lithium-ion batteries. To me, even if Xerion batteries displayed no technological advantages in terms of energy density, safety, and all that, its technology would still be attractive just from the lessening of ecological pressure in their sourcing and manufacturing.

Busbee knows, as I know, that energy storage is a huge hurdle in our civilization’s push to decarbonize. Using yesterday’s thinking will not get us where we need to be; we need out-of-the box, structural shifts in the way we do things to continue to flourish into the back half of this century and the next.

Intelligent investors take note.

NOTES:

[1] There are a few different lithium-containing compounds used for batteries that are given three- or four-letter names based on their chemical compositions. Here is a good explanation of these chemistries.

Virginia Mugo contributed reporting for this article.