Battery startup Farasis Energy is betting that a combo of low manufacturing costs in China and advanced tech expertise in the U.S. will lead to lithium-ion cells that can compete on a global mass market. CEO Yu Wang said in an interview today at IBM’s Almaden Institute in San Jose, Calif., that the six-year-old, Hayward, Calif.-based startup is close to having a factory ready in China for pilot-scale production of its lithium-ion cells.
The strategy is similar to the bet that electric car startup Coda Automotive is making and A123Systems also said it would base much of its manufacturing in China if it didn’t get funding from the U.S. Department of Energy. In addition to the cost-cutting benefits of keeping production in China, the strategy puts these companies at the forefront of what’s shaping up to be a powerhouse EV market. China has growing demand for autos in general, but also new government support for electric vehicles and charging infrastructure, as well as its own auto and battery makers eager to beat out Europe, Japan and the U.S. on plug-in vehicle technology.
Founded in 2003 by Wang and Keith Kepler, President and CTO (both directed research at now-defunct battery maker Polystor), Farasis Energy got its start before the field of lithium-ion battery startups really became crowded, or acquired the hype observed last month by venture capitalist Vinod Khosla. Wang said he’s banking on that head start and his team’s industrial experience, in addition to the technology itself and low costs, to give Farasis a competitive edge.
So far the company has raised a first round of venture capital from Chinese investors as well as at least $750,000 under the DOE’s small business innovation research program. But unlike Coda, A123Systems, and more than a hundred other battery and vehicle developers, Farasis has opted out of requesting stimulus funds. For its second round of financing, sometime in the next two years, Wang tells us that Farasis may be courting investors stateside.