A coin cell battery from a Blacksburg startup could power a Fitbit, a watch or a home scale. But the company has a different target: the electric vehicle battery market, its founders say.
Fermi Energy is a two-man outfit: Virginia Tech chemistry associate professor Feng Lin and one of his former graduate research assistants, Ray Xu. They bonded over batteries, and their goal is to develop an EV battery that can solve supply chain issues and help reduce carbon emissions.
What’s inside their coin cell prototypes is different from any other battery you can find. It uses regionally sourced materials, instead of such minerals as cobalt and nickel, in the battery’s cathode. Its anode contains coal-derived material.
“Cobalt is available at only a few locations on this planet,” Lin said during a meeting at the Virginia Tech Corporate Research Center in Blacksburg, where Fermi is based. “And the reserve is really not that significant to drive the full electrification of our society. The other element that people use a lot is nickel. The use of nickel is increasing a lot and will be increasing further in the next few years.”
Eddie Amos, who returned to his native Southwest Virginia after retiring from Microsoft and whose recent resume includes sitting on the Roanoke-Blacksburg Technology Council’s board of directors, has heard Fermi’s pitch and said it was impressive.
“So whenever you have a good researcher and a fired-up grad student that can come in, magic can happen,” said Amos, who was chief technology officer at Roanoke-based software company Meridium, post-Microsoft, then stayed on for three years after GE Digital bought the company.
“Some of the greatest technology that comes out of the Silicon Valley comes out of Stanford [University] and [University of California] Berkeley, places like this. And it’s a similar type of thing. Folks will work in the lab. They’ll have a great idea, and the next thing you know, it’s the next big thing. It’s just refreshing that this is happening here in the commonwealth, at Virginia Tech, in our backyard.”
Lin and Xu have received millions in grant money this year. In January, they won a $2.9 million grant, through Virginia Tech, from the U.S. Department of Energy. Documents associated with that grant show that the batteries would feature coal-derived anodes, in addition to their cobalt- and nickel-free cathodes.
“Using a coal/carbon/silicon anode will resolve environmental issues of coal waste and reduce anode cost by 75% compared with a graphite anode,” a Department of Energy news release stated.
Last week, the Energy Department announced an even bigger award: $3.4 million to Virginia Tech, Fermi, General Motors, American Lithium Energy and an augmented intelligence company called Xpertography. That grant was in a parcel of more than $61 million in federal money for 31 “materials and technologies projects selected to help combat the climate crisis, secure U.S. domestic supply chains, and position the country as a leader in the global clean energy economy,” according to the department’s website.
That team, with Virginia Tech in the lead, will aim at “reducing manufacturing cost, energy use, and greenhouse gas emissions, as well as improving product quality, throughput, and ultimate battery performance,” according to Energy Department documents.
Fermi also received grants this year from Verge, based in Blacksburg and Roanoke. Last year, it was part of the Regional Accelerator and Mentoring Program, known as RAMP, in Roanoke, where Amos met the principals and heard their pitch. [Disclosure: Verge, the Roanoke-Blacksburg Technology Council and RAMP are Cardinal donors, but donors have no say in news decisions; see our policy.]
“They’re thinking about how they [can] scale up low-cost and sustainable cathodes for automobiles,” Amos said. “So it’s completely outside of the box, and they could reduce the [battery] cost by 50% if this comes to fruition. This is one of these companies that we should be cheering for, helping out any way we can, helping them with capital raises. That’s one of the big problems we have here anyway, is raising capital for startups like Fermi. But I have a good feeling about these guys. I think that they could be the next big thing.”
Battery guys
Lin and Xu’s partnership started in China. Lin had returned there in 2017 to give a seminar at the University of Electronic Science and Technology of China, where Xu was studying.
“I’m really into batteries, and Feng had this opening [for a research assistant], so I applied for the position,” said Xu, who received his doctorate at Virginia Tech in 2021. “Before I graduated I interned at Tesla for the summer. I saw some really cool stuff, some really exciting stuff and projects going on there. I also realized that we have some exciting projects that we have been working on … for a few years. I’m pretty confident that these technologies are no worse than Tesla technologies.”
The pair said they can’t talk about materials or design specifics just yet, but they do have a major American automobile company lined up to test a scaled-up version of Fermi’s battery in EV conditions, once it is ready.
Lin and Xu, who started Fermi Energy in February 2022, recognized that no significant cobalt mining exists in the United States, and that if a lithium-ion battery maker relied more on nickel for its cathode, that could deplete the available nickel supply.
The Democratic Republic of the Congo mines the vast majority of cobalt, according to the Cobalt Institute, and multiple sources raise questions about child and slave labor in its extraction. There is plenty of nickel around, but lithium-ion batteries used in EVs require high-purity nickel, and concerns remain about the material’s sustainability, according to S&P Global.
The price to process both — the U.S. does neither — is a factor. Batteries contribute up to 20% of an EV’s cost, which averages about $64,000, within a range between about $19,000 and about $250,000, according to multiple sources. EV batteries last at least 10 years in normal weather conditions.
Overall, the market is small, with EVs accounting for less than one percent of the 250 million vehicles sold in the U.S., according to J.D. Power. Reduced prices could help the market, and Fermi Energy’s plan is to provide savings.
“If everything goes according to plan, we’ll reduce EV prices by $8,000 to $10,000 per EV,” Xu said.
Xu and Lin went back to the periodic table, looking for other low-cost and more abundant elements, Lin said. Once they identified the materials, they set out to test them.
“We started the company for the purpose of helping the U.S. create a battery manufacturing supply chain,” Lin said. “That’s the biggest critical challenge that the United States faces in decarbonization and degasification.”
What’s next
Fermi is working to develop a cellphone-sized battery in the next 18 to 24 months.
“With that size, then all the major characteristics of a battery can be evaluated against the requirements of EVs,” Lin said. “Then you can go and further scale up from there.”
They can’t provide an estimate of how much more funding they’ll need, Lin said, as it depends on too many factors. But they said they have discussed the product with multiple potential investors, including EV manufacturers and original equipment manufacturers, or OEMs. The latter make things that other companies sell under their own brand names.
Xu and Lin realize they are not alone in trying to find such solutions.
“So we are in this competition [to] drive this further than other competitors,” Lin said. “Or if we are driving this development at the same speed, can we develop this into something that is unique and more impactful than their technology?”
If it is, they’ll multiply coin cells by thousands for the packs that power EVs.
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