As electric vehicles (EVs) begin to take off in the worldwide pursuit of reducing CO2 emissions, AKASOL AG of Germany has positioned itself as a key battery supplier, primarily for commercial vehicles. They specialize in liquid-cooled, compact battery systems. Most of the company’s current market is in Europe, where more and more cities are mandating the transition to low- and zero-emission vehicles. But with one major U.S. partnership in hand (the details are confidential) and a belief in future potential here, the company is searching for the site of its first American manufacturing plant.
AKASOL completed an IPO last year and is on firm financial footing for the investment they’ll need for their anticipated growth. According to financial analysts, revenues will increase to $200 million by 2022, from about $70 million this year.
The company has been at this a long time. They were originally founded as a non-profit back in 1990 at Germany's Technical University of Darmstadt. But they came to batteries in a very round-about way. “Our original goal was to participate in the world championships in solar car racing,” said AKASOL’s CEO Sven Schulz. The founding group of researchers – Schulz and three partners – was soon heavily involved in racing. “We won three times in a row!” Schulz boasted.
But the group got bored with racing and decided to focus instead on EV technology. They successfully developed and built a variety of EV components through 2007. In 2008, they decided to spin off as a commercial entity. The new organization remained involved with a variety of components, including power trains and battery charging systems, but focused primarily on the batteries themselves. “There are so many challenges [with batteries] if you want to operate a vehicle 24/7 – safety, range, and so on,” Schulz said. Today AKASOL’s sales volume includes only about 10% non-battery components.
Today the company faces a list of challenges lots of people would love to have. Order backlog is one. The company has orders for $1.7 billion worth of batteries from 2019 to 2024. “I think this is actually a luxury situation,” said Schulz. “We have the contracts; we have the clients. We just have to execute.”
To do so AKASOL is quickly growing their production capacity. From 200 megawatt hours (MWh) per year in battery manufacturing capacity today, they expect to grow to 300 MWh by mid-year and to 800 MWh next year.
Similarly, AKASOL is busy growing their supply chains logistics capabilities. “We’re working on finding the right people at the right time,” Schulz said. “We’re also working finding the right suppliers, who can get us what we need now, and who have the ability to handle our expected growth.”
Battery technology itself is a challenge. “Almost every day there’s someone announcing a new miracle, a save-the-world technology,” said Schulz. “But there’s no one-size-fits-all battery. We have technology with different specs, different chemical solutions, and different features. Our tech has a great future, with a variety of solutions. Our customers ask us if we have the right technical solution for them, and we can answer an emphatic yes. That’s a difference between us and other battery suppliers – others are focused on just one technology.” AKASOL has retained a close tie to the Technical University of Darmstadt as a research partner.
Right now Europe is the main driver of AKASOL’s business growth, specifically in commercial vehicles such as buses. Numerous European cities have passed mandates requiring a transition to zero- or low-emission vehicles only in coming years. While the U.S. doesn’t have that level of political pressure, the company has a confidential partnership in place with a global commercial vehicle manufacturer from Europe with major activities in North America. They intend to build a close business relationship together, and to meet their partner’s requirements, AKASOL will be establishing their U.S. manufacturing site. “We’ve narrowed it down to two possible locations,” said Schulz. The company expects to make their final selection later this year – though Schulz also shared that in the long run, AKASOL may have two American locations.
Schulz anticipates even great coming opportunities in the battery business. “People should know about the tremendous disruption that’s coming in commercial vehicles,” he said. “It’s not just about EVs – but includes hybrid and fuel cell as well. The potential is huge. It’s not just about environmental protection, but about the total cost of ownership.”
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