|The New Thing in Batteries Isnt for EVs. Think Wind Power. -- Barrons.com|
2:21 PM ET 7/23/21
The start-up Form Energy unveiled a breakthrough for rechargeable batteries. This one isn't for electric vehicles--what most investors think of when they hear about developments on that front. Form announced the chemistry for its first commercial product Friday. It says it has designed an iron-air battery that can be used with intermittent but environmentally friendly power sources such as wind and solar cells. That could drive down the cost of renewable-plus-battery power generation. "We conducted a broad review of available technologies and have reinvented the iron-air battery to optimize it for multi-day energy storage for the electric grid," said CEO and co-founder Mateo Jaramillo in the company's news release. "With this technology, we are tackling the biggest barrier to deep decarbonization: making renewable energy available when and where it's needed, even during multiple days of extreme weather or grid outages."
Batteries all have two sides--a cathode and an anode--that facilitate the movement of electricity, powering a laptop, an EV, or electric razor. The types of materials selected for a cathode and an anode are always a function of energy density--how much power the battery can store--as well as cost, safety and reliability. Metal-air batteries have very high energy density: They pack a punch. That is the reason iron-air, or lithium-air, batteries could be perfect for grid-storage applications. Form's choice of iron could also make its product cheap. Iron is one of the least expensive, easiest to mine elements on earth. And the oxygen in a metal-air battery just comes form the ambient air. Still, metal-air battery life isn't all that long. There are still a lot of technical challenges to be overcome.
In any case, Form is a privately held companies, so investors can't buy the stock. But the low-cost batteries it could produce would be a boon to several companies. Grid-storage applications are big business for firms including: Schneider Electric (SU. France) Eaton (ETN), and even Tesla (TSLA), which sells battery storage and residential solar-power systems. Those stocks benefit from the transformation of the power grid. Battery technology, of course, isn't all about the grid. Investors have already demonstrated willingness to invest in early-stage battery technologies for cars.
QuantumScape (ticker: QS), a highly valued start-up, is developing solid-state battery technology for electric-vehicles. Solid state, in this case, means there is no liquid in the battery facilitating the flow of electricity from the anode to the cathode. Solid-state batteries promise better energy density, safety, battery life and cost, but like metal-air batteries, they aren't ready for prime time yet. For an automotive supplier, QuantumScape is worth a lot, at more than $10 billion, but assessing start-ups is tricky. Quantum stock is down roughly 83% from its 52-week high, but up more than 130% from its 52-week low. The shares are all over the place, despite the fact not much has changed regarding the company's path to commercialization. Quantum doesn't expect significant sales until 2025 or 2026. So far this year, QuantumScape stock is down more than 70%, trailing far behind the comparable gains of the S&P 500 and Dow Jones Industrial Average.