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Battery startup EnerVenue is planning an iconoclastic comeback. After failed plans to build a U.S. factory for its NASA-inspired tech, the firm announced $300 million in fresh funding to execute a manufacturing strategy that flies in the face of broader trends in the American battery market.
Battery startup EnerVenue is planning an iconoclastic comeback. After failed plans to build a U.S. factory for its NASA-inspired tech, the firm announced $300 million in fresh funding to execute a manufacturing strategy that flies in the face of broader trends in the American battery market.
A rendering shows how EnerVenue’s nickel-hydrogen batteries could be stacked in a warehouse, capitalizing on the chemistry’s safety, compared with lithium-ion’s. (EnerVenue)
EnerVenue seeks to commercialize a version of the pressurized nickel-hydrogen energy storage system that NASA used on the International Space Station and the Hubble Space Telescope. The original technology cost far too much to succeed in civilian power markets, but EnerVenue’s founders claimed to have swapped the platinum catalyst for a much cheaper material. The company says its battery can run 30,000 cycles with minimal degradation, maintaining its usefulness far beyond the typical lithium-ion battery’s shelf life, and with much better fire safety.
The Silicon Valley–based startup raised a $12 million seed round in 2020 and a $100 million Series A in 2021 from the likes of Saudi Aramco Energy Ventures and Schlumberger New Energy. In 2023, EnerVenue told Canary Media it would invest $264 million to open a factory in Kentucky and produce batteries by the end of the year.
Battery factories have been opening across the U.S. to meet skyrocketing demand for grid storage. Federal incentives reward factories for manufacturing batteries domestically and storage developers for installing batteries, as long as they don’t depend too much on ​“foreign entities of concern,” which in practical terms restricts corporate and supply chain exposure to China. This onshoring effort has moved so swiftly that the U.S. may well become self-sufficient in both battery cells and finished battery enclosures for grid storage by the end of this year.
EnerVenue opted not to contribute to this achievement, at least not anytime soon. The company pulled out of its Kentucky deal in 2024. The $300 million it unveiled March 31 (technically an extension of a $308 million Series B from 2024) will instead fund a factory buildout in Changzhou, China, which the company’s press release hailed as ​“the world’s epicenter of battery manufacturing expertise.” EnerVenue also promised to ​“expand its commercial operations across Asia, the Middle East, and Europe.”
“We see ourselves still as an American company,” Henning Rath, who took over as CEO in March, told Canary Media. But, he continued, ​“We’re going to become a global player.”
Why would this startup choose to zig to China when the rest of its peers are zagging to the U.S.?
For starters, once work began on the Kentucky factory, the company realized that its second-generation battery design wasn’t ready for mass production, and that it would be particularly capital-intensive to build a first-of-its-kind battery factory at the site, Rath said.
From the outside, it might seem sensible to design a viable product before starting to build a factory to mass-produce it. The venture-backed cleantech industry, however, boasts a long history of constructing factories for inventions that failed to function in either practical or commercial terms. Chalk it up to undue optimism, or the pressure to show venture investors a quicker path to mass production and revenue.
In any case, EnerVenue pulled the rip cord, and then-CEO Jorg Heinemann left in November 2024, spending 10 months as a ​“Cyclist, surf coach & c-suite advisor,” according to his LinkedIn, before becoming president and chief operating officer of a startup selling clean, dispatchable power to data centers. ​“As the company decided on shifting gears and we evaluated the technology and manufacturing setup, I think that both parties agreed to look into different options” Rath said of Heinemann’s departure. Rath didn’t formally step in as CEO until March; he previously ran supply chains for German residential solar startup Enpal — a task that involved sourcing Chinese solar products for installation back in Europe.
After the reset, EnerVenue delved back into engineering and spent nearly two more years honing a fourth generation of its tech, Rath said. Then the company made the choice to assemble the factory process in China, to take advantage of the mature battery manufacturing sector there.
EnerVenue now has a small R&D manufacturing line operating in Changzhou and is working to finish a 250-megawatt-hour-per-year line by the early fourth quarter of this year. The plan is to grow the factory to 1 gigawatt-hour in 2027 — a level of production that unlocks competitive unit economics, Rath said, at which point EnerVenue could ​“copy-paste it to different markets.” EnerVenue may have an easier time doing this than conventional battery upstarts, since the ingredients to make its nickel-hydrogen battery are more readily available around the world than the carefully refined cathode and anode materials in lithium-ion batteries.
“We have to showcase scale first, in a very capital-efficient way,” Rath said. ​“That is the reason why we chose China to build the first scale-up.”
That low-cost manufacturing environment comes with trade-offs, however.
The need to distance America’s energy system from China has become a rare point of agreement across the U.S. political divide. The Biden administration pursued this with tax incentives for companies that build batteries in the U.S. and those that install domestically produced batteries. The Trump administration kept those policies but added the more punitive ​“foreign entities of concern” test to withhold credits from companies subject to corporate control from China and from projects that use too much equipment from China.
Chinese companies that built factories in America have had to divest from those enterprises to preserve tax credit eligibility for the products made within. EnerVenue poses a different accounting challenge: Can an ostensibly American company move production to China and still sell batteries to the U.S. market that let project developers qualify for the tax credits? Will that ability persist after EnerVenue’s latest fundraise welcomed significant equity investment from the Hong Kong Investment Corp. (wholly owned by the government of Hong Kong) and the Hong Kong–based family office of real estate tycoon Peter Lee?
On maintaining tax credit eligibility for the China-built batteries, Rath said, ​“We haven’t had a clear conclusion on this yet, but I think within the next probably two months or so, we will have certainty and execute against it.”
Geopolitical intrigue is just one of the challenges EnerVenue faces in commercializing a novel battery. Also on the list: Convincing buyers to bet on a little known chemistry for large-scale grid projects, and to embrace the whole new style of power plant unlocked by a battery with a vastly different operating profile than ubiquitous lithium-ion systems.
Typically, the startups vying to replace lithium bill their inventions as long-duration storage, capable of cheaply shifting clean energy production for many more hours than the four or five that lithium-ion batteries currently muster. Companies like Form Energy and Noon Energy are attempting to push the boundaries to 100 hours. EnerVenue does not stake such claims, and to the extent that the company touts duration, it’s in the different context of the batteries’ overall operating life. Rath said customers have asked for different configurations — from a 2-hour duration up to a 25-hour duration — but didn’t highlight a particular level as indicative of what the technology can do.
Instead, EnerVenue hopes to attract customers with its batteries’ ability to discharge three times a day for 30 years without eroding efficiency or catching fire, and operating parameters from minus 4 to 140 degrees Fahrenheit. (Lithium-ion grid batteries typically discharge once or twice a day and can tolerate a much narrower band of temperatures.) That could make EnerVenue’s system ideal for utilities in rugged environments or petrochemical complexes worried about battery safety. The many cycles a day, meanwhile, could help developers in volatile energy markets who want to take advantage of alternating periods of super-low and super-high pricing.
The trade-off of this impressive cycle life is that the battery needs to cycle a lot to justify its up-front costs. Doing so would require a very different sort of battery business model than what’s in practice today. After EnerVenue shows it can manufacture a working battery, it’ll have to prove that customers are actually willing to pay that premium.
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