Japan’s battery start-ups take the world beyond lithium ion

What is the future of batteries? From smartphones to drones to electric cars, the current source of energy is the lithium-ion battery. But start-ups in Japan are battling to create high-performance power packs that could become the next global standard. In the port city of Yokohama, a company's phone never stops ringing. “Can we test the performance?” “We want to form a partnership.” On the other end of the line are US and European car and drone makers. They seek to try out new batteries or to collaborate with 3 Dom, a start-up that emerged out of Tokyo Metropolitan University in 2014.In the beginning, it was a one-man show. Kiyoshi Kanamura, a professor at the university, was 3 Dom's lone engineer. Since then, engineers from major appliance companies, such as Panasonic, and carmakers have gathered under him, lured by the promise of pursuing new activities.Now there are about 70 engineer colleagues, half of whom joined during the past year.Rechargeable batteries are a strong suit for corporate Japan, but the industry that produces them has come up against tenacious Chinese and South Korean competitors in recent years. Now Japan's hopes to remain among the global heavyweights in a market expected to be worth more than ¥2.7tn ($25bn) by 2035 rest on the ability of its engineers. The world’s thirst for lithium, found in abundance in the Salar de Uyuni salt flats of south-west Bolivia, might be quenched once battery makers perfect their next-generation technologies © Marcelo Perez del Carpio/Bloomberg 3 Dom aims to commercialise a lithium-metal battery by 2022.The start-up says its battery can produce twice the amount of energy of a Li-ion power source of similar weight, and its performance has already been demonstrated. Furthermore, the company says, its battery can greatly extend the per-charge mileage of an electric vehicle.The manufacturer hopes its products will one day power flying cars.While carbon materials are currently used for the negative electrodes of most lithium-ion batteries, 3 Dom uses lithium metal, which has the advantage of easily increasing a battery's capacity to store electricity but is prone to short-circuiting and igniting.The ignition is caused by a phenomenon in which branch-shaped crystals grow on the surface of the negative electrode because of an uneven chemical reaction. The company developed a separator that controls the phenomenon, known as dendrite. The separator has spherical holes several hundred nanometres (one nanometre is one-billionth of a metre) in diameter that are arranged in perfect order. The uniform size and orderly positions of the holes allow a uniform flow of ions and a uniform chemical reaction. This article is from the Nikkei Asian Review, a global publication with a uniquely Asian perspective on politics, the economy, business and international affairs. Our own correspondents and outside commentators from around the world share their views on Asia, while our Asia300 section provides in-depth coverage of 300 of the biggest and fastest-growing listed companies from 11 economies outside Japan. The separator is made of polyamide, a highly heat-resistant plastic that will not burn even at 400 C. 3 Dom currently produces lithium-ion batteries in a suburb of Seattle and plans to build another factory in the US, possibly next year, in preparation for production of its next-generation battery.With EVs and drones coming into wider use, the market for lithium-ion batteries is swelling, and manufacturers are stepping up efforts to develop next-generation technologies that will allow for larger capacity, safer and longer-operating batteries.Researcher Fuji Keizai expects the global market for next-gen batteries to be worth ¥4.2bn this year but ¥2.7tn by 2035.China's Contemporary Amperex Technology, better known as CATL, is the world's largest automotive battery maker. Panasonic is the second largest, and South Korea's LG Chem, a big supplier to European automakers, is the third. All three are working hard to develop next-gen power sources.The most promising energy pack of tomorrow could be an all-solid-state battery, which can be made more compact than today's batteries. It can also be rapidly charged. Toyota Motor and Panasonic, which operates battery facilities with Tesla, are developing the technology. Connexx Systems' Shuttle Battery produces electricity by mixing oxygen with hydrogen generated when iron reacts with water Meanwhile, Azul Energy, a start-up in Sendai, focuses not on a complete battery but on materials that determine performance.“Isn't it interesting to use this pigment as a catalyst?” Hiroshi Yabu, an associate professor at Tohoku University who specialises in materials science, was inspired by a comment made by his student a few years ago. Mr Yabu believed a possibility existed, although “there were hardly any cases in which a pigment was used as a catalyst for batteries”.Mr Yabu focused on a metal-air battery that uses the oxygen in the air as the reaction material for the positive electrode and a metal as the reaction material for the negative electrode. Metal-air batteries can store and discharge three to 10 times as much electricity as lithium-ion batteries; they are thought of as “the ultimate battery”.Twice weekly newsletter Energy is the world’s indispensable business and Energy Source is its newsletter. Every Tuesday and Thursday, direct to your inbox, Energy Source brings you essential news, forward-thinking analysis and insider intelligence. Sign up here.However, metal-air batteries can put out only a small amount of electric current, making them unsuitable for use in EVs despite their excellent charge-discharge properties. At present, hearing aids account for 90 per cent of these batteries' applications.When Mr Yabu used a ferrous pigment as a catalyst for the electrode in place of conventional manganese, the amount of electric current obtainable at a time increased by 20 to 30 per cent. He is aiming to further increase the capacity so the batteries can be used in drones. Azul plans to use the catalyst to jointly develop a metal-air product with a battery maker.Azul welcomed Koju Ito, an engineer from Fujifilm, as president and a founding member. Mr Ito was hesitant when invited by Mr Yabu but decided to accept the offer as he “wanted to venture into a new field that is difficult to tackle at a big company”.AC Biode, a start-up in Kyoto, has developed a battery that charges and discharges in alternating current instead of direct current. Called the AC battery, it lasts 30 per cent longer per charge than lithium-ion batteries of similar size, the company says. In 2019, AC Biode received an investment from InnoEnergy, a Dutch entity created by an organisation of the European Union, which provides financial assistance to innovative energy research projects. Connexx Systems, a start-up in Seika, Kyoto Prefecture, is developing the Shuttle Battery, which produces electricity by mixing hydrogen with oxygen. The battery produces hydrogen from iron powder and water, then supplies it to a fuel cell.Corporate Japan used to control the market for lithium-ion batteries but in recent years has been outperformed by rivals in China and South Korea. However, the country maintains advantages in main components and materials. Asahi Kasei and Toray Industries have a combined market share of about 30 per cent for separators. For positive electrode materials, Sumitomo Metal Mining retains strength.Although start-ups have opportunities, it will not be easy for them to break into the automotive battery market, tangled as it is by strong relationships between major battery makers and automakers. “To survive the competition,” said Tang Bin, a senior research officer at Mizuho Bank who keeps tabs on the battery market, “they will need to quickly expand production in co-operation with major battery makers and clients.”A version of this article was first published by the Nikkei Asian Review on August 2 2020. ©2020 Nikkei Inc. All rights reserved.Related storiesChina gives CATL, BYD and a fuel-cell start-up a second windAustralia challenges China's graphite crown in EV batteriesAsia's electric car sales drift into the slow lanePanasonic to supply Tesla Model 3 batteries that hold more juice