develop nickel-zinc technology. Although Next Century failed and Eisenberg died, a group of investors acquired the intellectual property needed to resume development in 2000. Phillips has continued to serve as the company’s chief technology officer at PowerGenix since it was founded.
“The company really didn’t get its legs until 2003, when professional investors stepped in,” said Squiller. PowerGenix moved to San Diego the following year, and Squiller initially focused on developing the nickel-zinc rechargeable technology for handheld drills and other cordless power tools. PowerGenix also developed rechargeable AA batteries for cameras, and sought to develop nickel-zinc batteries for power garden tools, electric scooters, and other markets.
“Two out of the three largest power tool companies have tested and qualified PowerGenix’ rechargeable nickel-zinc batteries,” Squiller said. But the company’s entry in the consumer power tools markets never materialized, “partly because we couldn’t negotiate suitable commercial terms,” Squiller says, but also because the construction industry was hit hard as the housing downturn accelerated in 2008.
The company continues to generate some revenues today from power tools and AA batteries, but not enough to become profitable, and Squiller says PowerGenix moved to develop its technology for hybrid electric and micro-hybrid electric vehicles in 2009.
“The power tool market is a $400 million to $500 million a year market, and gross margins are 15 to 20 percent,” Squiller said. “In contrast, the market in 2015 for hybrid electric vehicle batteries will be roughly $4.5 billion, with higher gross margins. While it’s certainly tough in the automotive business, we should be able to drive much healthier revenues and margins in that segment. So it’s kind of, ‘Do you want to do your fishing in a pond or in the ocean?'”
The years spent exploring opportunities for nickel-zinc batteries in power tools and other consumer markets weren’t entirely lost, Squiller said. “We’ve spent the last six years at PowerGenix gaining core experience on engineering the battery so it can be easily manufactured.”
Today PowerGenix has roughly 100 employees worldwide, but Squiller says about 85 of its employees are based in Shenzen, China, which now represents the company’s center of gravity. PowerGenix currently has a contract manufacturer in China, and plans to establish a joint venture over the next 12 months with Chinese partners the company has yet to identify.
“The rechargeable energy storage industry is dominated by the Japanese and Koreans, and the Chinese are coming on strong,” Squiller said. “They have a lot of talent, a lot of electro-chemists and engineers, so our decision to transition the company from San Diego to Asia was not tactical. It was really strategic.” As part of that strategy, Squiller added, “We had a specific objective to find a Chinese investor for our fifth round.”
Squiller says that creating a commercially viable, nickel-zinc rechargeable battery has been called a 100-year problem. PowerGenix has been working to develop its technology for only a decade or so, but given that Edison got the first nickel-zinc battery patent in 1901, the answer to this particular 100-year problem already is long overdue.
