A FEW big problems are holding back the mass adoption of electric vehicles — and they’re mainly related to battery technology.
Electric vehicle batteries are slow to charge compared to pumping petrol. And they don’t store enough energy for long drives.
British innovator Ilika is developing solid-state battery technology to address both these problems.
“Innovative technologies are providing a solution to better batteries,” said Regnan’s Mohsin Ahmad. “This is the next big leap.”
Battery technology goes back a long way.
In 150 BC in Mesopotamia, the Parthian culture used a device known as the Baghdad battery, made of copper and iron electrodes with vinegar or citric acid. While they were probably used mainly for religious ceremonies, they were also the first known batteries.
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Ever since, society has worked to create more efficient batteries – a race that’s been supercharged in recent decades with the development of renewable energy and electric vehicles.
“Batteries are the Holy Grail,” says Mohsin Ahmad, a fund manager in Regnan’s Equity Impact Solutions team. “It’s why we’ve taken a position in Ilika.” (Find out more about Regnan Global Equity Impact Solutions Fund here.)
British-based Ilika is a pioneer in the development of solid-state battery technology.
Lithium ion batteries commonly found in mobile phones have a liquid electrolyte solution keeping the cathode and anode apart.
On the other hand solid state batteries use a solid electrolyte which plays the role of separator, enabling the delivery of much higher energy density.
The benefits range from sharply faster charging rates and longer life cycle and storage rates, to improved safety and easier recyclability, Ahmad says.
The potential market for solid state batteries is huge — and Ilika has two main targets.
The first is micro batteries used in medical devices and Internet of Things nodes.
The market for medical devices is huge and growing, and the benefits of long life, tiny batteries are clear. Ilika hopes to be producing micro-batteries for commercial use from next year.
The Internet of Things nodes are the infrastructure that will eventually allow driverless cars and communication between objects. While still further away, the potential is huge.
The second target market is electric vehicles (EVs). As Europe and North America continue to mandate far greater use of EVs, solid state lithium cells have the potential to achieve extended range and faster charging – two of the biggest impediments to sales and usage.
“There’s not many pure-play listed players that are focused on solid state batteries. Ilika has a number of partnerships with OEMs [original equipment manufacturers] including Honda, Jaguar, Land Rover and McLaren,” Ahmad says.
“We don’t think the market is appreciating the potential of micro batteries. These tiny batteries can go into implantable medical devices, they can be used in manufacturing facilities, and they can operate at high temperatures.
“They can enable Industry 4.0. Ilika has relationships with customers already and they are expecting first production next year.”
Production of batteries for EVs is still five or six years away, Ahmad says, but they are making good progress and the potential is huge.
“The battery can be one of the biggest cost components of an electric vehicle, and particularly while EV charging infrastructure is still being built, it would solve the ‘range anxiety’ problem,” he says.
Ilika has a bet on EVs and that is a very big potential market. There are also opportunities in medical devices and the Internet of Things. Other potential applications could include wind turbine blade testing and wireless automotive sensors.
“That makes it an attractive investment proposition, Ahmad says.
“This is the next big leap, and it’s only a matter of time before the technology provides a commercial solution to better batteries.”
Mohsin is a fund manager with Regnan’s impact investment team. He focuses on Regnan Global Equity Impact Solutions Fund. Before joining Regnan, Mohsin was a senior analyst working on the Hermes Impact Opportunities Equity Fund. He has worked on thematic equity funds such as water, clean energy and agriculture.
Regnan is a responsible investment leader with a long and proud history of providing insight and advice to investors with an interest in long-term, broad-based or values-aligned performance.
Building on that expertise, in 2019 Regnan expanded into responsible investment funds management, backed by the considerable resources of Pendal Group.
The Regnan Global Equity Impact Solutions Fund invests in mission-driven companies we believe are well placed to solve the world’s biggest problems.
The Regnan Credit Impact Trust (available in Australia only) invests in cash, fixed and floating rate securities where the proceeds create positive environmental and social change. Both funds are distributed by Pendal in Australia.
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For more information on these and other responsible investing strategies, contact Head of Regnan and Responsible Investment Distribution Jeremy Dean at firstname.lastname@example.org.
Regnan is a standalone responsible investment business division of Pendal Group Limited (Pendal). Pendal is an Australian-listed investment manager and owner of the J O Hambro Capital Management Group.
Regnan’s focuses is on delivering innovative solutions for sustainable and impact investment, leaning on over more than 20 years of experience at the frontier of responsible investment. “Regnan” is a registered trademark of Pendal.
The Regnan business consists of two distinct business lines. The investment management business is based in the United Kingdom and sits within J O Hambro Capital Management Limited, which is authorised and regulated by the Financial Conduct Authority and is registered as an investment adviser with the SEC. “Regnan” is a registered as a trading name of J O Hambro Capital Management Limited.
The investment team manages the Regnan Global Equity Impact Solutions (RGEIS) strategy, which aims to generate market-beating long-term returns by investing in solutions to the world’s environmental and societal problems. The RGEIS strategy is distributed in Australia by Pendal Fund Services Limited.
Alongside the investment team is the Engagement, Advisory and Research (EAR) team of Pendal Institutional Limited in Australia, which has a long history of providing services on environmental, social and governance issues. While the investment management team will often draw on services from and collaborate with the EAR team, they remain independent of the EAR team and are solely responsible for the investment management of the RGEIS strategy.
The Regnan Credit Impact Trust (available in Australia only) invests in cash, fixed and floating rate securities where the proceeds create positive environmental and social change. Regnan Credit Impact Trust is distributed in Australia by Pendal.
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