The Exchanges

Q you. You also did something pretty unusual when you started your company, which is in addition to standing up this engineering team, obviously, to work on, you know, your technology, you also stood up an analytics team to help understand and really define the business cases for these batteries. So can you say a bit about why you did that and what the journey has been like for that team?

A Yeah, absolutely. In fact, even before we picked The chemistry to work on, which of course ultimately became Iron Air, um, we built software tools. This is my co-founder Marco Ferrara, uh, who himself was an energy trader, uh, for, for a number of years, so he really understood the energy markets, and funnily enough, he has a PhD in, uh, in nuclear fusion engineering from MIT, so he's not doing that. Yeah, um, but, uh, Marco built these, what we call comp, You know, sort of complex co-optimization modeling tools, um, what the utility industry would call capacity expansion modeling tools. Um, and, and he built them, uh, with capabilities that, that went beyond what the industry was currently using. In other words, you know, um, sub hourly resolution data, multiple years of, uh, you know, non-standard, um, meteorological data coming in, you know, multiple, multiple decades of time series of, of data, um, and, and sort of doing the co-optimization that way, as opposed to, Really simplifying the problem. In other words, take an average week out of a year and solve for that, which is what they had been doing. Um, so, so go do the optimization, you know, with hard math and, and, and modern compute. Um, and you get very different answers about what kinds of storage are then therefore, uh, entitled to bring a lot of value on the grid. What duration matters, for example, that that was o…

AI assessment note: “In fact, even before we picked The chemistry to work on... we built software tools.”

Q looking at manufacturing in China and basically finding creative ways to partner with manufacturing capacity there. Um, so you all made the very clear decision to manufacture in the United States. Was there a moment where you were considering either some sort of, like, joint venture with overseas companies or contract manufacturing, or was it always very clear to you that you needed to be manufacturing in the United States?

A Yeah, um, it was always very clear that we needed to manufacture in the U.S. for a couple of reasons. One, um, there is no existing manufacturing supply chain for an ion-air battery. We were inventing that from, from the, from scratch. Um, I don't mean we were inventing the machine sets. I mean, we were putting it all together for the first time. There was no incumbent that, you say, oh, give me, give me the, the line that makes a, uh, discharge cathode, right? Like, that doesn't exist. We, we had to sort of piece together different Machine sets from different existing industries and, and get them to do what we needed them to do. So, so that was, you know, sort of .1 on, on why you asked. Point, .2 is we were still improving and inventing the electrochemistry as we went. And, and it's never as discrete tasks, right, to say, oh, the electrochemistry versus the manufacturing. In fact, those are in many ways the same problem. Like, and you can't say that you've solved the electrochemistry until you're making it at a relevant scale You know, relevant, uh, throughput, with relevant yields, with relevant costs. Like, that's when you know you're done, I don't want to say done, that's when you know you actually have, have, have an understanding, I would say, of your electrochemistry. And so that notion that we would be making, you know, something overseas while developing it here, that…

AI assessment note: “it was always very clear that we needed to manufacture in the U.S.”

Q size analogy is the relevant starting point, but maybe how different, like, when you, when you, like, open the factory in twenty-twenty-four, and you're like, we're gonna go build this battery, and you have an idea for what it's gonna look like. How different is what you're doing now? Have a lot of things really fundamentally changed about what you're building, and are they still changing, or is it? Well,

A I would say from, like, for all the electrochemical pieces, they have not changed going sort of through subsequent designs. Um, and that's because once you get that process control and you really understand the electrochemistry, you do not want to change it, right? You want to keep it, you know, all the same. Um, the only changes we've made to the, to the electrodes, um, since we sort of started production was to make them a little bit, a slightly different form factor so that it's, in fact, easier to manufacture. Uh, but, but fundamentally the exact same material sets, the exact same processes, the exact same people involved, right? Um, what has changed is sort of how you then take those electrodes and put them in a, in a device, how you, how you combine them, but, but the fundamentals of all of the electrochemistry of an iron air battery are, are very much the same. Um, but, but sort of the, the packaging of that, you know, all the parts that I mentioned where we already had very high yields, um, you know, from the cell all the way through the, the complete system, um, You know, making design changes that still keep it super high yield, but, but lead to a much more manufacturable and reliable product, um, you know, once it's deployed. And so, you know, just kind of, I'll give you one sort of example. Um, you know, batteries need, need to be sealed. Ours happens to be air brea…

AI assessment note: “for all the electrochemical pieces, they have not changed going sort of through subsequent designs”

Q Okay, let's talk about the financing for a second. How did you finance this plan to get it built? Because it is no joke getting the funding to do something like this.

A Yeah, so we, ah, when we were looking at where to go for, for the factory, part, the reason we are in West Virginia is because the state, um, provided two hundred ninety million dollars of financing in exchange for 750 jobs by the end of 28. Um, that let us go, go build the building and stand things up from scratch. There, we could have gone to a cheaper, lower risk option there, just rented a building, you know, sort of deal with the whatever legacy Type infrastructure you're dealing with there. We love that site for a lot of reasons that I, that I mentioned. Um, and we like the idea of sort of building our own factory if we could, right? We didn't want to pay for it with equity, but, um, but, but given the support of the state, we were able to go do that. Um, and additionally, we won a hundred fifty million dollar grant from the, um, Department of Energy in the US, uh, for the CapEx equipment. So scaling up the manufacturing equipment. Um, this is out of the manufacturing and energy supply Uh, grants that, that, um, were part of the infrastructure bill. And, and so we're very actively invoicing on that project and, and scaling it up here. And then, of course, we do need to use equity dollars to, to finance beyond that, because it doesn't, doesn't pay for everything. Um, and so it's, it's a combination of, of those things. We have some equipment financing debt, but it's a huge…

AI assessment note: “state, um, provided two hundred ninety million dollars of financing in exchange for 750 jobs”

Q how it's working for you all, though. And one of the things I love about this story is that it's not just about, like, creating AI models or trying to sell things in an AI market. It's about actually using the results of the, of the AI work that you're doing. So can you say a bit about how you're incorporating AI, what it's doing for you at this stage?

A Yeah. More than, of course, AI data center demand driving, you know, our own, uh, growth, you know, the demand for our product. Um, we are heavy users of the tools themselves, maybe no surprise. Um, and, and of course, like in all the typical corporate ways that you would expect to, you know, have efficiency for information retrieval and, you know, that kind of thing. Um, but, but being, being a company that has a very core function of material science, um, discovery and innovation, um, Um, we found that the, that the models now are, are quite capable in a way that we didn't expect maybe a year ago, I would say. Uh, we sort of, around that time, we sort of noticed a, a step function of the capabilities there. Um, again, led by Marco Ferraro, who originally built those models that, that helped us sort of, you know, understand this, this space from a value perspective. And, uh, and so now those, uh, those are being very actively implemented in, in the discovery process and in, in the improvement process. Um, And, and specifically, um, you know, we have built our own physics-based models of, of each of the electrodes and then of the entire system for, for some time, and inevitably when you build physics, you know, multi-physical models of, of electrochemistry, somewhere it doesn't, uh, correspond to the empirical results that you have, right? That, that's just sort of, you know, a…

AI assessment note: “Proposed designs of experiments that help collapse that gap between the prediction”

Q Yeah, totally. But it sounds like you all had the right idea on coming up with something that is very low cost compared to lithium ion and that does the thing that lithium ion is bad at, which is long duration storage. What led you ultimately to iron air versus some of the other technology options out there?

A Costs. Pure, pure costs. Um, in, in the end, the duration is, is the valuable thing, and, and to provide that duration, right, a hundred hours plus, uh, you know, four straight days of discharging at the rated power You need to be in a very different cost regime from anything else that's out there. You know, in our case, what, what, what is the chemistry? Just real briefly, we're, we're oxidizing and reducing iron, rusting and unrusting iron. Um, so you start with iron, which is, you know, the most abundant substance on earth, just about, and, um, the most mined metal by a few orders of magnitude. And, uh, and you oxidize it from obviously air out of the

AI assessment note: “Costs. Pure, pure costs.”

Q And is there kind of a lot of variability among utilities and geographies around how your batteries are being used? Are you finding that there, that there's kind of one One way that folks are tending to approach this.

A No, there's, there's a few very consistent use cases. Um, what does vary is how often they sort of tap into the different use cases. Um, and, and as you would imagine, that varies by, by geography. It also varies by, by market structures. Um, so, you know, what, what kinds of market designs are in place. Um, the easy, obvious one is just reliability event. You've got a multi-day weather event. You, you just want to discharge, right? So of course, famously winter storm URI in Texas in 2001, and, you know, four days of black, so 21, I should say, and, and, you know, four days of blackout that, It costs tens of billions of dollars in damage. If we had been there, we would have just discharged flat out, right, for, for those four days, and there you go. Um, you know, the other is just tight grid capacity, uh, 10 days in a row. You're, you're operating within the reserve margins, right? You don't want to add any of your incremental stress to the grid. You, you operate almost exactly like what a gas beaker would do. You discharge only for 10 hours a day, 10 days in a row, right? Something like that. Um, and, uh, and then the other is just how do you enable these new large loads to come Online faster. Um, this is, this doesn't have a neat tidy graph that I can point to, uh, like the other, like the first two use cases. Um, but in that case, you know, bringing those large loads primari…

AI assessment note: “No, there's, there's a few very consistent use cases.”

Q looking at manufacturing in China and basically finding creative ways to partner with manufacturing capacity there. Um, so you all made the very clear decision to manufacture in the United States. Was there a moment where you were considering either some sort of, like, joint venture with overseas companies or contract manufacturing, or was it always very clear to you that you needed to be manufacturing in the United States?

A Yeah, um, it was always very clear that we needed to manufacture in the U.S. for a couple of reasons. One, um, there is no existing manufacturing supply chain for an ion-air battery. We were inventing that from, from the, from scratch. Um, I don't mean we were inventing the machine sets. I mean, we were putting it all together for the first time. There was no incumbent that, you say, oh, give me, give me the, the line that makes a, uh, discharge cathode, right? Like, that doesn't exist. We, we had to sort of piece together different Machine sets from different existing industries and, and get them to do what we needed them to do. So, so that was, you know, sort of .1 on, on why you asked. Point, .2 is we were still improving and inventing the electrochemistry as we went. And, and it's never as discrete tasks, right, to say, oh, the electrochemistry versus the manufacturing. In fact, those are in many ways the same problem. Like, and you can't say that you've solved the electrochemistry until you're making it at a relevant scale You know, relevant, uh, throughput, with relevant yields, with relevant costs. Like, that's when you know you're done, I don't want to say done, that's when you know you actually have, have, have an understanding, I would say, of your electrochemistry. And so that notion that we would be making, you know, something overseas while developing it here, that…

AI assessment note: “it was always very clear that we needed to manufacture in the U.S.”

Q Okay, let's talk about the financing for a second. How did you finance this plan to get it built? Because it is no joke getting the funding to do something like this.

A Yeah, so we, ah, when we were looking at where to go for, for the factory, part, the reason we are in West Virginia is because the state, um, provided two hundred ninety million dollars of financing in exchange for 750 jobs by the end of 28. Um, that let us go, go build the building and stand things up from scratch. There, we could have gone to a cheaper, lower risk option there, just rented a building, you know, sort of deal with the whatever legacy Type infrastructure you're dealing with there. We love that site for a lot of reasons that I, that I mentioned. Um, and we like the idea of sort of building our own factory if we could, right? We didn't want to pay for it with equity, but, um, but, but given the support of the state, we were able to go do that. Um, and additionally, we won a hundred fifty million dollar grant from the, um, Department of Energy in the US, uh, for the CapEx equipment. So scaling up the manufacturing equipment. Um, this is out of the manufacturing and energy supply Uh, grants that, that, um, were part of the infrastructure bill. And, and so we're very actively invoicing on that project and, and scaling it up here. And then, of course, we do need to use equity dollars to, to finance beyond that, because it doesn't, doesn't pay for everything. Um, and so it's, it's a combination of, of those things. We have some equipment financing debt, but it's a huge…

AI assessment note: “state, um, provided two hundred ninety million dollars of financing in exchange for 750 jobs”

Q Yeah, totally. But it sounds like you all had the right idea on coming up with something that is very low cost compared to lithium ion and that does the thing that lithium ion is bad at, which is long duration storage. What led you ultimately to iron air versus some of the other technology options out there?

A Costs. Pure, pure costs. Um, in, in the end, the duration is, is the valuable thing, and, and to provide that duration, right, a hundred hours plus, uh, you know, four straight days of discharging at the rated power You need to be in a very different cost regime from anything else that's out there. You know, in our case, what, what, what is the chemistry? Just real briefly, we're, we're oxidizing and reducing iron, rusting and unrusting iron. Um, so you start with iron, which is, you know, the most abundant substance on earth, just about, and, um, the most mined metal by a few orders of magnitude. And, uh, and you oxidize it from obviously air out of the

AI assessment note: “Costs. Pure, pure costs.”

Q And is there kind of a lot of variability among utilities and geographies around how your batteries are being used? Are you finding that there, that there's kind of one One way that folks are tending to approach this.

A No, there's, there's a few very consistent use cases. Um, what does vary is how often they sort of tap into the different use cases. Um, and, and as you would imagine, that varies by, by geography. It also varies by, by market structures. Um, so, you know, what, what kinds of market designs are in place. Um, the easy, obvious one is just reliability event. You've got a multi-day weather event. You, you just want to discharge, right? So of course, famously winter storm URI in Texas in 2001, and, you know, four days of black, so 21, I should say, and, and, you know, four days of blackout that, It costs tens of billions of dollars in damage. If we had been there, we would have just discharged flat out, right, for, for those four days, and there you go. Um, you know, the other is just tight grid capacity, uh, 10 days in a row. You're, you're operating within the reserve margins, right? You don't want to add any of your incremental stress to the grid. You, you operate almost exactly like what a gas beaker would do. You discharge only for 10 hours a day, 10 days in a row, right? Something like that. Um, and, uh, and then the other is just how do you enable these new large loads to come Online faster. Um, this is, this doesn't have a neat tidy graph that I can point to, uh, like the other, like the first two use cases. Um, but in that case, you know, bringing those large loads primari…

AI assessment note: “No, there's, there's a few very consistent use cases.”

Q Yeah, so what on earth does an energy storage company need with an old steel mill and the infrastructure surrounding it?

A Well, we are making a type of battery, which is based on iron and air, so we are reversibly rusting the iron as the electrochemical process inside of the battery, which, which stores and gives off the electricity that we need. It also means that we're moving a lot of iron in, uh, and very heavy things out, and so you think about sort of the core infrastructure that's needed to do that, uh, and it maps very nicely over the, basically the steel infrastructure of the country, so along the freshwater system of the United States, and so we're re-utilizing a lot of the core infrastructure there, rail lines on top of that as well, and part of the infrastructure is, of course, the human capital infrastructure, and just the people that sort of know how to make things in heavy industrial environments It's fantastic to be able to tap into the mindsets that they've been around for generations here in the region.

AI assessment note: “it maps very nicely over the, basically the steel infrastructure of the country”

Q 10 years ago, I feel like it was, like, the Wild West. There were, like, 80 battery technologies out there. That's probably actually a drastic undercount, but, like, very different things, from, like, redox flow batteries, to lithium ion, to, like, LFP, to, like, all of these different technologies. Is that still, is there still, like, a vast landscape of technologies, or are you starting to see that field narrow?

A Yeah, I would say that, that Cambrian moment there, where there's, like, that explosion of a bunch of different approaches, it did, it has consolidated, uh, to some degree, and, and, and what you're not seeing, especially In the last couple of years is sort of the brand new companies that are coming out. You sort of have a few that have been able to sort of hold on or, you know, you know, get through, uh, but, but you certainly don't see, um, the investment cycles in the new chemistry is partially because the landscape is starting to feel fairly settled. Like lithium ion is going to get super, super cheap. And so unless you can point to, you know, beating lithium ion at its own game, then there's really no point. And then I, I think where we were Perhaps slightly prescient was identifying just how cheap lithium ion was going to get and how far away you had to be from that on cost, um, to, to have an entitled position in the market. And, and for us, you know, the, the goal, as we said, from the very beginning of the company, we always were targeting something that would be 20 dollars a kilowatt hour all in at the system level. Um, and, and that we feel is still very much the entitlement there that we're, that we're headed towards. Um, and that's sort of far enough away from lithium ion to To, uh, to be differentiated enough that you don't have to worry about it. Um, but, uh, but…

AI assessment note: “it has consolidated, uh, to some degree”

Q So cool. Big success in opening the factory, and that leads you to the privilege of solving the next set of challenges. So let's dig in on what gets hard as you're starting up and testing and working through sort of the first manufacturing capabilities that you're bringing online. Um, what were some of the things that you learned quickly?

A Yeah, so in our factory, and this has been true from the very beginning, there's sort of three very different manufacturing environments, um, that we're managing sort of simultaneously. One is a, you know, pretty automated, high precision, I would say, uh, portion of it, and that's the electrode manufacturing. So in our case, we, we make two electrodes from powders. Uh, so one is the iron anode. Maybe that's obvious. The other is a discharge cathode. Um, and so this is sort of a, also known as a gas diffusion electrode or, or a membrane, if you will, that keeps Gas on one side and liquid on the other. And in our case has a reaction happening in the middle of it. So, you know, very sensitive piece of technology, um, that, that has to, you know, last for tens of thousands of hours and, you know, no, no pinhole leaks and, uh, you know, have very high performance and all sorts of things. And, and, um, and so that, that's probably the, the hardest part to get right. And I'll circle back around to that. And then we have sort of a, you know, sort of relatively, uh, Automated, but with some humans, a loop sort of cell assembly. So these are sort of classic, you know, welding and, uh, sort of assembly operations that you would sort of maybe envision looking at like an automotive type, type environment. And then, um, the last one is, you know, very manual assembly for the complete, um, i…

AI assessment note: “there's sort of three very different manufacturing environments”

Q Okay. So really big on the government grants. Were there any moments where you were nervous about the, the status of those government grants, or have they been pretty stable, especially given your manufacturing focus?

A Yeah, we, you know, with the new administration, of course, every grant was reviewed, um, and, uh, we always had a very, have always had a very strong, um, open line of communication with the Department of Energy and, um, and then built one with the White House. Uh, so, so we didn't, you know, and we knew that, that we were supported there, so we were just sort of wanting to let them get through their, their own reviews, but, um, in the end, uh, yeah, none of our grants were affected, so. Um, yeah, I think that speaks to the acknowledgement, broadly speaking, um, that manufacturing energy storage out of, you know, 85% domestic contents, you know, batteries, uh, you know, for electric grid reliability and affordability and load growth is generally a good thing. And, um, and it can be supported by, you know, any politician of any stripe.

AI assessment note: “in the end, uh, yeah, none of our grants were affected”

Q 10 years ago, I feel like it was, like, the Wild West. There were, like, 80 battery technologies out there. That's probably actually a drastic undercount, but, like, very different things, from, like, redox flow batteries, to lithium ion, to, like, LFP, to, like, all of these different technologies. Is that still, is there still, like, a vast landscape of technologies, or are you starting to see that field narrow?

A Yeah, I would say that, that Cambrian moment there, where there's, like, that explosion of a bunch of different approaches, it did, it has consolidated, uh, to some degree, and, and, and what you're not seeing, especially In the last couple of years is sort of the brand new companies that are coming out. You sort of have a few that have been able to sort of hold on or, you know, you know, get through, uh, but, but you certainly don't see, um, the investment cycles in the new chemistry is partially because the landscape is starting to feel fairly settled. Like lithium ion is going to get super, super cheap. And so unless you can point to, you know, beating lithium ion at its own game, then there's really no point. And then I, I think where we were Perhaps slightly prescient was identifying just how cheap lithium ion was going to get and how far away you had to be from that on cost, um, to, to have an entitled position in the market. And, and for us, you know, the, the goal, as we said, from the very beginning of the company, we always were targeting something that would be 20 dollars a kilowatt hour all in at the system level. Um, and, and that we feel is still very much the entitlement there that we're, that we're headed towards. Um, and that's sort of far enough away from lithium ion to To, uh, to be differentiated enough that you don't have to worry about it. Um, but, uh, but…

AI assessment note: “it did, it has consolidated, uh, to some degree”

Q how it's working for you all, though. And one of the things I love about this story is that it's not just about, like, creating AI models or trying to sell things in an AI market. It's about actually using the results of the, of the AI work that you're doing. So can you say a bit about how you're incorporating AI, what it's doing for you at this stage?

A Yeah. More than, of course, AI data center demand driving, you know, our own, uh, growth, you know, the demand for our product. Um, we are heavy users of the tools themselves, maybe no surprise. Um, and, and of course, like in all the typical corporate ways that you would expect to, you know, have efficiency for information retrieval and, you know, that kind of thing. Um, but, but being, being a company that has a very core function of material science, um, discovery and innovation, um, Um, we found that the, that the models now are, are quite capable in a way that we didn't expect maybe a year ago, I would say. Uh, we sort of, around that time, we sort of noticed a, a step function of the capabilities there. Um, again, led by Marco Ferraro, who originally built those models that, that helped us sort of, you know, understand this, this space from a value perspective. And, uh, and so now those, uh, those are being very actively implemented in, in the discovery process and in, in the improvement process. Um, And, and specifically, um, you know, we have built our own physics-based models of, of each of the electrodes and then of the entire system for, for some time, and inevitably when you build physics, you know, multi-physical models of, of electrochemistry, somewhere it doesn't, uh, correspond to the empirical results that you have, right? That, that's just sort of, you know, a…

AI assessment note: “Proposed designs of experiments that help collapse that gap between the prediction of the multi-physics”

Q And this is what you did at Tesla as well. So you, you built the energy storage business at Tesla up from, from the ground up, and you oversaw this period of immense scale from product development to, ah, a commercial product. I'm just wondering, how do the technical challenges for this kind of battery, ah, how are they different when you're developing a product like this at scale?

A Well, looking back at the Tesla challenge, it feels quite straightforward now. We didn't have to worry about the chemistry. You know, what was inside the can of the, of the cell is, you know, lithium-ion cells at Tesla are sort of inside what are known as cans, you know, the cylindrical cans. So what's inside the can at Tesla was fixed, and we didn't have to worry about that. It was, it was great, well-performing, high-performing, and, and the Work that had been done on the vehicle side also meant that essentially the module work, the collection of those cells was, was also quite stable. We didn't have to worry about what was inside the modules. We, we took essentially automotive designed modules and put them into the right enclosures and put them into the right, you know, control systems and, you know, thermal systems and that kind of thing. But, uh, relatively speaking, it was a pretty short engineering putt, especially for a company like Tesla, which is phenomenal at engineering. You know, that was, Uh, that, that was, you know, such a treat to work with, with, with that team, um, on that project because, uh, we had all the expertise in house to do all of the work, the mechanical work, the thermal work, the power electronics work, all of it. It was just amazing. It's sort of categorically a different challenge at form because we are developing the chemistry, uh, at the same …

AI assessment note: “categorically a different challenge at form because we are developing the chemistry”

Q recent one is with Georgia Power for a 1500 megawatt hour project. And for context, that's more duration than every battery project deployed in 2019 in The US. Um, so why does Georgia Power need a battery for that duration, and what are utilities specifically requesting these batteries for? What do they want to replace, and what are their grid mixes look like that would require this kind of battery?

A Yeah, so in, in one word, reliability. That's really what it comes down to. Uh, and in two words, decarbonized reliability. And, um, you know, that there are many challenges that the electric system faces today, uh, and, and, One of those challenges is, um, meeting demand growth, frankly. Um, right now we see a massive push to electrification for all sorts of things, but, uh, primarily, uh, for transportation, of course, you know, the rise of electric vehicles, uh, as well as, um, the rise of electrification of industrial processes, uh, because electricity is such a low cost, uh, source of power these days. And so, so that is driving a lot of demand, frankly, for just Growth in general. I was just at a conference not very long ago. A lot of it was on AI. Uh, and one of the main limiters for the growth of the AI industry today is electricity. They just can't get enough. And when you're limited by electricity, you know you're growing fast. It's, it's sort of shocking. The other is just overall system reliability. Uh, so, so even if we weren't going very, very quickly in the electric system today, uh, there is a big transition that's happening. And, uh, many, Uh, assets that used to provide reliability have been retired. Here I'm referring to specifically coal. Uh, you know, we've retired roughly 200 gigawatts of coal in the last twenty-ish years or so. Most of that has been repla…

AI assessment note: “in one word, reliability. That's really what it comes down to.”

Q So cool. Big success in opening the factory, and that leads you to the privilege of solving the next set of challenges. So let's dig in on what gets hard as you're starting up and testing and working through sort of the first manufacturing capabilities that you're bringing online. Um, what were some of the things that you learned quickly?

A Yeah, so in our factory, and this has been true from the very beginning, there's sort of three very different manufacturing environments, um, that we're managing sort of simultaneously. One is a, you know, pretty automated, high precision, I would say, uh, portion of it, and that's the electrode manufacturing. So in our case, we, we make two electrodes from powders. Uh, so one is the iron anode. Maybe that's obvious. The other is a discharge cathode. Um, and so this is sort of a, also known as a gas diffusion electrode or, or a membrane, if you will, that keeps Gas on one side and liquid on the other. And in our case has a reaction happening in the middle of it. So, you know, very sensitive piece of technology, um, that, that has to, you know, last for tens of thousands of hours and, you know, no, no pinhole leaks and, uh, you know, have very high performance and all sorts of things. And, and, um, and so that, that's probably the, the hardest part to get right. And I'll circle back around to that. And then we have sort of a, you know, sort of relatively, uh, Automated, but with some humans, a loop sort of cell assembly. So these are sort of classic, you know, welding and, uh, sort of assembly operations that you would sort of maybe envision looking at like an automotive type, type environment. And then, um, the last one is, you know, very manual assembly for the complete, um, i…

AI assessment note: “that's probably the, the hardest part to get right. And I'll circle back”

Q component and what you need to do to scale, uh, as you build this new factory. So you're working toward building these batteries at a very large scale, um, and the factory underway in West Virginia will cost, you know, three quarters of a billion dollars to build. What are the technical challenges in that scale and what leap in, what will that leap in scale do to your costs?

A Yeah, so, um, that three quarters of a billion dollars, in the end, that should deliver a factory that produces about 500 megawatts per year, uh, which for us, these are hundred hour rated duration batteries, so, um, so it can provide its rated power for a hundred hours, which means it's a 50 gigawatt hour per year, uh, manufacturing facility. So on, on par with all the other sort of lithium ion battery, uh, factories that are getting built out there these days. Um, but, but, The CapEx is much lower to go do that, and what that will produce in the end is cells at that scale that I mentioned, sort of those meter scale cells, and we will produce hundreds of thousands of them. Getting to cost efficiency at scale means you, you have to be very good at making the same thing over and over and over again, or, you know, the right variance of that same thing, and so that's what we will do. That means that we can really dial in the process, and that we can really dial in the Performance associated with the design that we have, uh, settled on so far. And, uh, you can really only do that in a, in a really stable manufacturing environment. And so building a factory is sort of what you have to do. You can't, you can't have, you know, we've learned this. We collectively in the power infrastructure industry have learned this over and over again. You can't really get cost efficiencies by having…

AI assessment note: “Getting to cost efficiency at scale means you, you have to be very good”

Q Okay. So really big on the government grants. Were there any moments where you were nervous about the, the status of those government grants, or have they been pretty stable, especially given your manufacturing focus?

A Yeah, we, you know, with the new administration, of course, every grant was reviewed, um, and, uh, we always had a very, have always had a very strong, um, open line of communication with the Department of Energy and, um, and then built one with the White House. Uh, so, so we didn't, you know, and we knew that, that we were supported there, so we were just sort of wanting to let them get through their, their own reviews, but, um, in the end, uh, yeah, none of our grants were affected, so. Um, yeah, I think that speaks to the acknowledgement, broadly speaking, um, that manufacturing energy storage out of, you know, 85% domestic contents, you know, batteries, uh, you know, for electric grid reliability and affordability and load growth is generally a good thing. And, um, and it can be supported by, you know, any politician of any stripe.

AI assessment note: “we knew that, that we were supported there... none of our grants were affected”

Q So what exactly is an iron air battery? How do you get electrons from rust?

A It's a great, uh, question, primarily because it's one that people naturally want to ask, because we know a lot about iron. You know, everybody knows the iron rusts, right? Uh, humans have known this for a very long time. You know, you, you, you could probably rename the iron age the rust age, because, because if you know anything about iron, you know that it rusts, uh, in the presence of, of water, uh, or oxygen, uh, and, uh, And some sort of electrolyte. And so, uh, so, so it's been a long, uh, line of human learning around, around iron and what it does. And when iron is rusting, essentially what it's doing is giving up an electron. It's taking on oxygen and giving up an electron. Um, now most of those electrons, of course, in rusting iron around the world is they're given up for free, uh, and they never come back. Um, but, uh, what is possible to do in the right set of conditions is to, um, have that reaction, uh, Happen in a very controlled way, and to reverse that reaction. So, you start with a metallic iron anode, which is submerged in a, a very basic electrolyte, so there's salts in the electrolyte, And, um, there are hydroxides in the electrolyte, and, uh, on discharge, uh, what happens is that iron, um, takes on, uh, one of the hydroxides, so it goes from, from pure metallic iron, Fe, to FeOH, and, um, and that is the charge carrier for us. It's not iron moving around …

AI assessment note: “when iron is rusting, essentially what it's doing is giving up an electron.”

Q In the coming years, do you think you'll feel more like a traditional steel industry executive, or, or like a cutting edge climate tech executive, or like, where do you think you'll categorize yourself?

A Well, I hope we, I hope we come up with a new category, frankly, um, and that, you know, the old paradigms are useful to, to learn from, and to, to, you know, understand what's possible, but, but hopefully we also chart a new path, and we can sort of maybe break down some of the silos of thinking that, that have gone into, you know, drawing these divisions between You know, clean tech and old tech or, you know, old, old industrial processes versus new ones. Um, and, uh, and some, it can be a little confusing and mind-bending sometimes to sort of, you know, build these new categories. Um, but what we have found is alliances with, with folks who maybe we, you wouldn't consider. Take Georgia Power, for example. Um, you know, they're, they are not what most would have considered to be a very forward-leaning utility, and here they are. You know, our, our, One of our major, um, partners, uh, leaning into, to the technology and to, um, and to the energy transition, broadly speaking. And same thing is true of the state of West Virginia. And I think part of it is understanding that energy is, is, is, and always has been and always will be important, uh, for, uh, the activities that we as humans, uh, like to do and need to do. And so as long as we're sort of oriented around energy as the unifier there, then, then you can see these new technologies playing a really important role. Um, and…

AI assessment note: “Well, I hope we come up with a new category, frankly”

Q So I listened to an interview you gave recently with Akshat Rothy of Bloomberg, and you said it's easy to build a terrible iron, uh, iron air battery. It's harder to make that chemistry perform at the highest level. So what's the difference between a bad iron air battery and a commercially viable one?

A The difference is around efficiency, and it's around, ah, manufacturability. In other words, can, can you make this device, ah, be a reliable, as highly efficient device as you possibly can make it, ah, and low cost as you possibly can make it? And, ah, and so that's, that's the main challenge, right? How do you actually engineer something to perform the way that we need it to be engineered, as opposed to just sort of letting the reaction happen the way that it naturally You know, is happening around us all the time, but very inefficiently and, you know, not very cost-effectively, that kind of thing. You know, iron wants to rust. Uh, and so, in, on Earth, essentially. Harnessing that in the right way is, is the challenging part. And that's what, what requires a lot of innovation and, and fantastic engineering.

AI assessment note: “The difference is around efficiency, and it's around, ah, manufacturability.”

Q inside national labs, forge manufacturing partnerships, assist in commercial deployment, um, as part of this strategy. And, and they say, the DOE says we need 460 gigawatts of Long duration storage capacity to keep us on a net zero emissions pathway, which is a lot of storage. I mean, how much of a lift is that in the coming decades? And then what do you make of this government strategy?

A Yeah, so first of all, I mean, the, the, um, work by the DOE on, on this topic, and broadly, I would say, recently has, has been fantastic. You know, the term long duration storage is, is one that's pretty broadly used. Um, so, so we do use that, we collectively use that term, uh, to refer to everything from six hours of lithium ion to, you know, seasonal hydrogen storage. Um, so, so I, I like to parse that a little bit and say that what FORM is doing is What we refer to as multi-day storage, specifically within, within that sort of long duration, you know, big bucket. So, you know, the way that we see the landscape, um, playing out is you're gonna, you, you'll need several different distinct types of long duration storage, uh, almost certainly, and, and we're really targeting that multi-day storage. But, but yes, it is a very large market, uh, broadly speaking. And, and, and the work to just even lay that out, uh, is important. You know, there's, there's a industry group also called the Long Duration Energy Storage Council, the LDS Council, and the They're doing important work to try to clarify these issues, uh, as well, and we are, we're an active part of that. So that's, you know, just laying it out and sort of, again, back to the analytics, it's really important to be able to clearly establish the case for, uh, these technologies as differentiated and, and providing high va…

AI assessment note: “the work by the DOE on, on this topic, and broadly... has been fantastic”

Q three phases, R&D, engineering, to manufacturing. And your expectation when the company was Founded that it would take a decade, perhaps more, to get to the manufacturing scale, and you are getting into that phase six, seven years in. What in the engineering part accelerated that phase? Were there happy accidents? Was it just execution? Like, what happened there that made you accelerate beyond what you thought you'd be at?

A Yeah, there, anytime you start down a path as unknown as the one that we started down, inevitably there are moments when you, you sort of turn over a card and it, and it, and it comes up your way or it doesn't, you know, the universe works the way you hope it might, or it does not, and, um, the, the few times that we've really, truly had one of those binary moments, it's broken our way, um, and so, you know, without getting into too many details there, you, you know, we didn't really know if you could Like I said, you can, we knew we could make a terrible iron air battery. The question is, could we make a good enough one, uh, at the cost points? And, you know, there were a couple of moments there along the way where we just, we just didn't know. And we had to marshal all the efforts of the company around a few really critical challenges that had to go get solved. And if they didn't get solved, we were either going to have to pivot or give all the money back or who knows what, but, um, but it was very clear that those were fundamental challenges. Binary yes or no challenges, and, and when I say, you know, the billion team knocked those down, that, that's what they did. Now, they were extremely systematic about it, and they're just, you know, phenomenally creative, intelligent people, um, so it's not, it's not as if it was just dumb luck that these things happened, but we just, y…

AI assessment note: “the few times that we've really, truly had one of those binary moments, it's broken our way”

Q Are there a couple of people on your team that were incredibly critical hires? Like, as you're giving advice to other companies who are entering this phase, like, what are the things that you did to get the right people and sort of right interactions among people in place in order to be successful?

A Yeah, I, I think, you know, if there's one area in particular that we should have leaned on earlier, you know, looking back at the retrospectives, what, what could we have done better? I, I think we certainly could have brought a much more robust manufacturing mindset to the To the design engineering work much earlier. Um, and that's, you know, that's hard, like, you know, design for engineering is, you know, or design for manufacturing rather, like that, that's the whole point, right? So, you know, there is no just like design for aesthetics or design for design purity sake, right? Like that doesn't, there's no point to that, right? We're not trying to win, you know, beauty contests here. We're trying, we're trying to win functional cost contests. That's what we're trying to win. And You know, we, we could, I could have done a better job early on bringing in, you know, that, that mindset part and parcel of, of the design, um, exercise. And, you know, I mentioned we were an R&D company. We added engineering within, we sort of added manufacturing. And, and in fact, it needs to be much more integrated than that. Um, you know, as, as you go at every step, it is never too early to, to really Rigorously probe and test and, and, and push back on design from a manufacturing standpoint. Um, precisely because the only thing that matters in the end is the manufactured product. Like, that…

AI assessment note: “we certainly could have brought a much more robust manufacturing mindset to the To the design engineering work”

Q Are there a couple of people on your team that were incredibly critical hires? Like, as you're giving advice to other companies who are entering this phase, like, what are the things that you did to get the right people and sort of right interactions among people in place in order to be successful?

A Yeah, I, I think, you know, if there's one area in particular that we should have leaned on earlier, you know, looking back at the retrospectives, what, what could we have done better? I, I think we certainly could have brought a much more robust manufacturing mindset to the To the design engineering work much earlier. Um, and that's, you know, that's hard, like, you know, design for engineering is, you know, or design for manufacturing rather, like that, that's the whole point, right? So, you know, there is no just like design for aesthetics or design for design purity sake, right? Like that doesn't, there's no point to that, right? We're not trying to win, you know, beauty contests here. We're trying, we're trying to win functional cost contests. That's what we're trying to win. And You know, we, we could, I could have done a better job early on bringing in, you know, that, that mindset part and parcel of, of the design, um, exercise. And, you know, I mentioned we were an R&D company. We added engineering within, we sort of added manufacturing. And, and in fact, it needs to be much more integrated than that. Um, you know, as, as you go at every step, it is never too early to, to really Rigorously probe and test and, and, and push back on design from a manufacturing standpoint. Um, precisely because the only thing that matters in the end is the manufactured product. Like, that…

AI assessment note: “we certainly could have brought a much more robust manufacturing mindset to the To the”