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AllCell Technologies LLC |
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January 26, 2015 Issue |
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The Most Powerful Name In Corporate News and Information |
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Lithium-Ion Battery Packs for Light Electric Vehicles and Renewable Energy Applications |
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Co-Founder, Chairman & CEO
AllCell Technologies LLC
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – January 26, 2015
CEOCFO: Mr. Al-Hallaj, what is AllCell Technologies? Mr. Al-Hallaj: AllCell Technologies is a tech transfer company out of the Illinois Institute of Technology, Chicago, IL. We assemble and manufacture lithium-ion battery packs for light electric vehicles and renewable energy applications.
CEOCFO: What do you understand about the process that perhaps others do not? Mr. Al-Hallaj: The key contribution that we have or distinguishing factor at AllCell is our unique thermal management technology for lithium-ion batteries using a technology called PCC™ or Phase Change Composite that consists of phase change material and graphite connectors. That is technology that we developed out of research for developing battery packs for military applications.
CEOCFO: How is this traditionally done? What is your process and why is it better? Mr. Al-Hallaj: In general, the prevailing thermal management technologies that are used in the industry are using liquid cooling or air cooling to cool batteries and make temperatures uniform. There are two reasons for that. Number one; for batteries to last long enough and to perform better you need to control the temperature, make it uniform and not allow it to exceed certain thresholds. That is one thing for performance and for extending the life of the battery. However, the other issue that is actually more concerning is the issue of safety. There was a very highly publicized incident of lithium and batteries catching fire. For example, one of the recent ones was the Boeing incident where the 787 planes were actually grounded because some of the lithium batteries on board caught fire. This incident is called thermal runaway propagation. This also happens in some cases in electric vehicles that were also highly publicized. Tesla was one of them and the GM Volt was another one. There are many reasons for that, but the bottom line is that some of the cells, as they go through thermal runaway, which is an internal uncontrolled chemical reaction, due either to internal problems in the cell which is quality or to abuse, such as short circuits or accident or penetration by a foreign object. When they heat up they go out of control and then the heat propagates to the next cell. They heat up and you have a domino effect and you have a very safety concerting event, which is fire or thermal runaway. In general, the industry uses a combination of cooling technologies, such as liquid or air. Many years ago, what we did as part of our research development for military applications, we found that the amount of heat generated and the speed of it cannot be controlled by state-of-the-art active cooling technologies. We developed a composite material, basically. We placed the cell in this material, which is made out of graphite and wax. However, what the composite does is that the graphite moves the heat very quickly from the cell and the wax actually quenches it, as if you had ice in a glass of lemonade. The ice continues to keep the glass of lemonade or the water with lemonade in it at 32 degrees Fahrenheit (0 degrees Centigrade) until the last of the ice melts. That is called phase change latent heat and that is what we utilize in this technology.
CEOCFO: Is the industry aware of what you are doing? Mr. Al-Hallaj: We have no complaints. We have been growing, especially in the past few years, very rapidly, in areas where we feel that we are able to serve. Therefore, we have no complaints. Our business is growing very quickly, but we picked certain areas of applications; the light electric vehicles and renewable energy. One of the reasons is that market entry for small companies like ourselves, a startup, is much lower than traditional industries, such as automotive or the airline industry. The second thing is that our technology is more suitable for those applications, because it is passive. It does not require active cooling, which is not available for such applications, while with cars, most cars already have on board technologies for thermal management that could probably help. We have been talking to everyone for the last ten years and working with all kinds of companies, both national and international. We have succeeded in some markets. However, in some markets there are actually many reasons why new technologies take time to make it or do not make it. That is because the adoption cycle is very long.
CEOCFO: Regarding the safety issues? Might industry organizations for interest? Might insurance companies be requiring the use of your type of battery as it is so much safer? Mr. Al-Hallaj: No, you are absolutely correct. Organizations like the society of automotive engineers, which actually provides guidelines for the automotive industry, has reacted to these things. A few years ago they created some of the certification requirements or guidelines. One of them is the SAE J2929 which specifically addresses this issue. Therefore, for part of the requirements for a safe battery pack, they say that it has to demonstrate that if one component fails that it will not propagate. They have actually already started committees to address this issue and to provide guidelines for the auto industry. Now, keep in mind that these are guidelines; these are not mandatory. The government is aware of that, especially with the Boeing incidents and the published report by the FAA just a couple of months ago, provides some sort of guidelines for the industry to require them to meet certain standards. That is becoming something that the industry is looking at and we get a lot of inquiries, as I mentioned, because of that and we are working with everybody. We are literally working with all battery suppliers; foreign and local and automotive. However for example, any product that goes into an automotive application, it takes years to research it, develop it and build prototypes. Even when it approved, it will not be in production for anywhere between five to seven years. This is one thing that we learned as a startup company a few years ago. That is actually what saved us; that we initially focused on the automotive market for many reasons. Of course it is a big market. If your product spec then you will probably be able to secure investment. You become more viable. However, we noticed very quickly that the barriers against automotive market entry and the capital investment requirements are massive for a startup. Therefore we said, “Fine, we will do this as a long term.” We partnered with others who helped us through licensing and through partnership to get into the automotive. However, we immediately focused on markets that we could actually participate in and where we could have a competitive edge.
CEOCFO: When you are speaking with a prospective customer, do they understand the advantages immediately? Mr. Al-Hallaj: Yes. A few years ago, initially, one of the challenges that we had when talking to the engineers who are in charge of designing batteries; many of them are very sharp people and very experienced, but they are used to certain technologies and certain methods of cooling batteries. Therefore, when you tell them, “I have this material that can move the heat and control it naturally, because that is what it does; it is called phase change concept; the last time that many of them heard of the concept of phase change materials and phase change energy was in high school physics or chemistry. With many of them, if you are not into that area you do not see it again. Therefore, there are two reactions. One of them is that they are skeptics saying, “What is this – voodoo magic? We know how to move heat.” I do not blame them, because they see a lot of big ideas and many people trying to come up with some things that are not scientifically sound. We welcome skepticism. However, the other reaction that we get is people saying, “I understand what you are trying to do, show me how it works, Give me examples, give me tests, do some modeling.” Then some of them become adapters. Therefore, the skepticism is good, if it is healthy, but if it just turns us down and they do not even want to talk about it, versus, “Alright, I see what you are saying. This has some scientific merits; but prove to me that it works.”
CEOCFO: Do you offer standard products? Do you customize? What is available? Mr. Al-Hallaj: Two or three years ago we started working with European companies on the electric scooter market. That is something that a few years ago was not known in the US. That market has grown significantly all over the world. It is actually predominant in Asia; two wheeler scooters and electric bikes are in the tens of millions in India and China. However, in Europe those have also begun to grow very quickly. We actually found that the amounts of batteries sold in those markets are by far higher than lithium batteries sold in the electric cars or automotive applications. That is what many people underestimated. Therefore, we went after those markets in Europe. We had some success. Then we found that that market is growing in the US in a different way. In Europe it is dominated by big players. In the US it is mostly innovative, small Mom and Pop companies and startups who have some innovative design. Most of those do not have battery expertise and they do not have the resources to develop their own batteries. Therefore, we developed a simplified design batteries that voltage and capacity for these applications. We have about five to seven standard products that people go online and order them. We use internet, PayPal and very modern ways of using technology. Everyone has their account. We have about thirty to fifty customers across the country. We actually made it simple and easy and called Naked Battery. The reason we call it Naked is because many of those customers just want the batteries and they will figure out how to put it in a box, how to encase it and how to connect it. They just want the battery core and they want it at the cheapest price. Therefore, we managed to do that. We created those batteries, certified them on our own and developed them. They are available online. People come in and order online. However, in many cases we have more sophisticated customers who are working in many ways from robotics, materials, sophisticated scooter and motor bikes, who want their own customized battery and we work with them. We have very good engineers. We can do electrical, mechanical and come up with a customized solutions for our customers.
CEOCFO: What is your day-to-day focus as CEO? Mr. Al-Hallaj: My favorite part is when I meet with our sales team in the morning. I come in and say that we have inquiries or these customers. My favorite one is when a customer comes in and says, “I tried this and I could not find a solution. Can you help us?” That is actually where we excel. We excel where customers come in and say, “I want this battery, but I cannot use the traditional ones. I have weight limitations; I have physical limitations and of course cost. I want to develop, but I do not want to pay a million dollars for development costs.” Those are the ones who are typically startup companies. Actually, you would be surprised that some of the ones that we work with are Fortune 100, Fortune 500 companies. They are very aggressive and very dynamic and smart people who just want a battery solution quickly and those are the ones that we work on, most of the time. They come in and it is a drill. “I want a battery in two or three months.” Therefore, we start by talking to the people. Then I go to production and engineering. My least part of the day is when I meet with our accounts and CFO and talk about financials and cash flow and how we are going to manage this and what cash we need and how much money we need to raise. However, it is a combination of all kinds of things. Of course, the startup company or small company CEO does not have a script for what to do. You just deal with the things every day. Most of the time there is no structure or routine.
CEOCFO: What might be different a year from now at AllCell? Mr. Al-Hallaj: This year should be exciting. We managed to establish ourselves as a company that can provide innovative lithium battery solutions. This year, we are actually hoping to launch two programs with major named companies that you will know. We cannot say their names yet. Those are two programs that will allow us to have stabilized long term planning and supply with major players. The second thing is that we are now focusing on using our solutions overseas for remote areas where energy solutions right now; which is a combination of renewable, solar and batteries, are the next generation. It is like, if you recall twenty years ago how cell phones took over landlines. Today, we are embarking on projects overseas that we are offering, with some partners in Europe, the Middle East and Africa for rural areas where a combination of solar and batteries can offer mobility and power for remote areas in a way that is more competitive than putting those up those conventional power lines.
CEOCFO: Why should people pay attention to AllCell Technologies today? Mr. Al-Hallaj: AllCell Technologies is one of those companies that you see when you look at the renewable energy world today and the huge push for people to have clean power and clean mobility with electric cars, electric scooters and solar. You will find that the key to both of those, renewable and electric mobility, is energy storage. There are many people who are now paying attention to that and working on it. What is unique about us at AllCell, and I think people will see that clearly in the next few years, is that we are the kind of company that comes in with an open mind and asks our customers and our partners, “What is the best that we can do to give you the best of energy solutions and energy storage solutions in the world?” We are very good at looking at new solutions for old and new problems. I think that more and more you will see our name synonymous with companies who are breaking the mold; companies who are looking at renewable energy and electric mobility in ways that have not traditionally been looked at before. You will see us partner with these big players and innovative players and hopefully we will continue to offer unique and innovative energy storage solutions. The energy storage field is exciting as a whole. We are just scratching the surface. I think in the next ten to twenty years you will see more and more emphasis will be on energy storage as renewable energy starts to dominate and it becomes like a part of the big solution. Hopefully, more attention will be paid to energy storage solutions. |
“What is unique about us at AllCell, and I think people will see that clearly in the next few years, is that we are the kind of company that comes in with an open mind and asks our customers and our partners, ‘What is the best that we can do to give you the best of energy solutions and energy storage solutions in the world?’ We are very good at looking at new solutions for old and new problems.” - Said Al-Hallaj
AllCell Technologies LLC
Faz Piggott +1-773-922-1155
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Said
Al-Hallaj