The death of a promising battery startup exposes harsh market realities

Image: Reuters/Fabian Bimmer
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Each passing year sees lithium-ion batteries get a little bit better. Makers are squeezing more and more energy into the same packages, and batteries are getting cheaper for each unit of energy they carry.

In Aug. 2018, Quartz covered a company called Pellion Technologies, which promised something different: a lithium-metal battery, which could double the energy packed into typical lithium-ion batteries. The Massachusetts-based startup had begun selling small batches of its innovative batteries to a company making drones.

But the world will have to wait for Pellion’s technology to become more widely available. In March this year, the principal investor in the company, Khosla Ventures, pulled the plug. Since then, Pellion has closed shop, its employees have found new jobs, its lab equipment has been sold, and its intellectual property is likely in new hands.

According to former employees, all of whom requested anonymity, Khosla Ventures lost confidence that Pellion could make enough money serving a niche market. The lithium-metal technology worked for products like drones, but the big money in the battery world is in the automotive sector. Investors weren’t willing to sink the money needed to develop the battery for electric vehicles.

“There are two camps in the battery world,” says Venkat Viswanathan, a battery expert at Carnegie Mellon University. “One that understands the problems and knows lithium-metal batteries are a long way off. Another that understands the problems, has some solutions, and knows that lithium-metal batteries will be in the market soon.”

Lithium-ion batteries work by shuttling a charged lithium atom—that is, a lithium ion—between two electrodes, during charging and discharging. Lithium-metal batteries involve replacing a carbon-based graphite electrode in common lithium-ion batteries with a piece of lithium metal. While graphite can hold only one charge-carrying lithium atom for every six atoms of carbon, lithium-metal batteries are made entirely of lithium atoms. With that increased density, a lithium-metal battery is able to pack in more energy compared to the typical graphite-based battery per unit of volume.

But packing so much energy in the battery brings with it problems. In 2018, Pellion’s state-of-the-art battery was able to run only for 50 charge-discharge cycles. That would be like needing to change your smartphone battery every two months.

Fifty cycles might be enough for a certain type of drone manufacturer, but it wouldn’t work for other applications. Smartphones, for comparison, need at least 300 cycles, and electric cars need 1,000 cycles. That gap, investors probably feared, would mean Pellion never makes a product for more lucrative markets.

Khosla Ventures, which has scrubbed the name of Pellion from its portfolio, did not reply to Quartz’s questions. Its other battery startups are QuantumScape and Natron Energy. It lists two more battery companies, Sakti3 and Seeo, as “alumni” after they were bought by Bosch and Dyson, respectively. While Bosch continues to use Seeo’s technology, Dyson’s purchase of Sakti3 for $90 million ended with Dyson abandoning the startup’s patent portfolio in less than 18 months.

Pellion had raised “tens of millions” of dollars, according to its former CEO Dave Eaglesham. Though sources confirm that bids were in a few months ago, Quartz wasn’t able to confirm who bought Pellion’s intellectual property and for how much.

The failure, however, doesn’t mean lithium-metal batteries are doomed. At least 10 other startups are developing lithium-metal batteries, and many investors continue to back the technology. QuantumScape, for example, has raised $100 million from Volkswagen.

“Pellion provided the proof of existence,” says Yet-Ming Chiang, a material-sciences professor at the Massachusetts Institute of Technology and a founder of three battery startups. “Lithium-metal batteries will happen with or without Pellion.”

Looking for more in-depth coverage? Read more in Quartz’s field guide on the battery revolution.