As any high school chemistry teacher will tell you, mixing lithium with water results in a pretty nasty explosion. So Steven Visco delights in dropping lithium batteries into a fish tank. As unsuspecting orange and white clownfish float by, the credit card-size battery sinks to the bottom. Electrons from the lithium in the battery are drawn toward oxygen from the water, illuminating a small light attached to the battery. “When we put that electrode in water and saw it was completely stable, it was a holy crap-type thing,” says Visco, a chemist who also works on fuel-cell technology at the Lawrence Berkeley National Laboratory. “And then we started to think about batteries we hadn’t even dreamed about.”
PolyPlus’s innovation is a ceramic seal that lets the battery pull oxygen from the water to create a controlled chemical reaction. Per gram of weight, the batteries last six times longer than anything commercially available, Visco says—which could ultimately add up to big profits for PolyPlus, the Berkeley (Calif.) battery research company he co-founded in 1990.
The trouble is, they work best underwater, so they’re not practical for use in most electronics or electric vehicles, the biggest potential markets. Visco’s team is using the water breakthrough to create a lithium battery powered by air, another substance previously thought too combustible to combine with the element, which should work for gadgets and cars.
Ultimately, the new battery could replace today’s lithium-ion models, which work by tapping energy released when lithium reacts with a metal oxide in the battery. Visco’s invention is lighter because it substitutes the metal oxide with water or air, which don’t need to be stored inside the battery. “This is a big deal,” says Arun Majumdar, director of ARPA-E, a federal agency that has given PolyPlus $5 million over the past two years. “No one else has the materials or the understanding that PolyPlus has.”
Now, PolyPlus faces what Visco calls its “valley of death” moment. Although the 27-employee company has no significant revenues, it has received $25 million in government grants and $15 million in equity investments from early backers over the past two decades, and holds nearly 100 patents. Visco says PolyPlus could start production of lithium-water batteries by 2014 and early lithium-air models the following year.
He estimates he needs another $25 million in private capital to do more research, build factories, and fend off powerful challengers such as IBM (IBM), General Electric (GE), and Toyota (TM), which are working on similar technology. PolyPlus “will need to rely more on both financial investors, in the form of venture capitalists, and strategic investors, potentially in the form of future partners,” says Robert Townsend, a lawyer at Morrison Foerster in San Francisco who acts as an informal adviser to the company.
PolyPlus faces one big technical problem: Its lithium-air battery can be recharged just 40 to 50 times, vs. thousands of times for traditional lithium-ion batteries. Until that hurdle can be overcome, the batteries won’t likely appeal to electronics companies and carmakers. That could make investors skittish. “Rechargeability is paramount for us,” says Bill Wallace, director of global battery systems for General Motors (GM). Wallace says GM’s venture arm would invest in a company like PolyPlus, but only if the batteries can be recharged a couple of hundred times or more.
Visco would like to expand incre-mentally, first perfecting a lithium-water battery, then non-rechargeable lithium-air, and finally a rechargeable lithium-air battery that, a decade from now, could power cars. To raise the necessary funds from venture capitalists, though, PolyPlus may have to abandon that timetable and concentrate on the biggest hurdle, rechargeability. “It’s probably a good idea … to try and solve the hardest problems first,” says David Wells, a venture capitalist at Kleiner Perkins Caufield & Byers, which is not invested in PolyPlus. “Venture is a hit business. You don’t get hits by aiming low.”
Visco fears VCs might push him into an early initial public offering, which could bring the lithium-air battery to market before it’s ready, leaving buyers unimpressed and limiting potential sales. He says he’s reluctant to be “forced into a position where you have to have a public offering,” which could lead to more competition in the field. An IPO “has to be a lot of noise, a tremendous public awareness,” he says.
For now, Visco is wooing strategic partners such as manufacturers and lithium miners to raise cash to start production of lithium-water batteries, which he says are ideal for powering sensors that monitor offshore oil rigs, submarine activity, and tsunamis. Most big underwater batteries today are toxic; Visco says his are entirely benign. Just as important, his batteries might last twice as long as today’s models—years on a single charge. “The ocean,” Visco says, “is going to be a bigger market than we even can map out now.”