Battery Revolution Clubhouse Recording - The Emergence of On-Device AI Applications and Impact on Battery Life

0:00Transcript

0:00And hello everyone, and thank you so much for listening to the Battery Insiders podcast. My name is Dr. Simon Engelke, the founder and chair of Battery Associates, and one of the co-hosts of this podcast. And today I just want to use these few moments to tell you about today's topic, which is the very timely on the emergence of on AI device AI applications and impact on battery life. We had Dr. Raj Taluri with us, who's the president and CEO of the InnoVix Corporation. And yes, so we had a really nice deep dive on looking at what happens to the energy requirements and power requirements of devices with all of this emergent on the edge, on-device AI. And then also looking what that means to the battery, what kind of battery chemistries have an impact there, etc. And also have a bit of a look at their company and what they're doing in the space with InnoVix. And yeah, this was a really fascinating discussion. I think very nice kickoff to the year.

0:54And yeah, with this, of course, we hope you had a wonderful start to the new year. Year 2024. If you're curious, we have run this podcast for about three years now. So there's quite a lot of recordings you can find on this channel, either on Spotify, Apple Podcasts, or wherever you listen to it. Feel free to rate it and give your feedback there. We really appreciate it. And you can also subscribe to get notified about upcoming sessions, which we record live on Clubhouse if you go on batteryinsiders.com. And yeah, we hope you enjoyed today's session. There are going to be quite a few more coming. We're going to go back to have them more regularly, about once a month, live recordings. And there's also quite a few other recordings we shared for the last couple of months, which are live podcast recordings in person, mostly, but also some on Zoom or online, from great leaders also in the battery space. And we have been using the opportunity to talk to lots of them at a lot of events we participated in for the past year, including the Financial Times Future of the Car Summit, but also the European Battery Show, as well as the Future Battery Forum in Berlin.

1:56So yeah, there's been quite a few great events we've been participating in, and we hope you enjoy all of these discussions. If you have a quiz and want to give feedback or come on the podcast, or maybe also sponsor a future session, please get in touch with us either via LinkedIn or any other platform where you can find us on. And now let's get to today's episode. Great. I think with this, we can get started. And I'm sure some other people will join us later on as well. And just for everyone to be aware, this will be recorded as part of the Battery Insiders podcast, just in case anybody joins later on stage who wants to share anything, that you're aware that this will be part of the recording, and also that the replays are on. You should be able to see on the top left, just for you to be aware. Fantastic. I think with this, I can quickly introduce today our session, and then Mariam can maybe pass on to the topic, and also to our fantastic speaker.

2:52We're really thrilled to have you all here. Happy New Year. It's the first recording, first podcast recording of the year, 2024. And thanks so much for joining the Battery Insiders podcast. And we have these discussions here on Clubhouse, the Battery Evolution Clubhouse discussions with some thought leaders in the space of batteries and related topic. And it's really an exchange, right? So we'd love to have it interactive. So we'd love to have you later on asking your questions. So if you feel like you have any questions, we can either put them into the chat, and then we can bring you up to stage, or we can also ask the questions on your behalf. And my name is Simon Engelke, founder and chair of Battery Associates, and co-moderator of these sessions. I'm very thrilled to also have Mariam with me, another co-moderator. And maybe, do you want to quickly introduce yourself and another speaker for today? Indeed. I co-host the podcast with Simon here. I am a co-founder at a company called Pulsanix.

3:48We characterize battery cells. And so I live and breathe performance data for batteries. And this is always a fun time to learn about all the different aspects of battery technologies. We have Raj, Dr. Raj Taluri, who will be sharing insights on a very relevant topic in today's world, which is related to the effect of the use of AI on battery life. And I'll kick it back to Simon to introduce Dr. Raj. But this is quite a timely topic for us to be discussing today. Thank you so much, Mariam. And yeah, as you said, it's really a timely topic. And maybe you also spend your holidays and you play around with all these nice new AI tools. And yeah, I'm very thrilled we have a discussion and think about it also in the battery context. Because I think that's definitely quite helpful. And yeah, I mean, I don't want to say too much of our speaker because I'm sure he can do a better job. But I want to really find fascinating about him.

4:54He has been quite involved in, I think, the tech industry from Texas Instruments, quite a career there, Qualcomm, and many other really fascinating companies. And now being the president and CEO in Norwich Corporation. So very excited to have him with us. And maybe you want to kick it off, Raj, and introduce yourself a bit on the topic of today. Yeah, thank you, Simon. And thank you, Mariam. It's really my pleasure to be here to talk to, you know, all the people on this channel about batteries and battery tech. And more importantly, the demands that the new applications are placing on the batteries. Just in the quick, in the way of introduction, again, my name is Raj Tilleri. Currently, I'm the president and CEO of a company called Inovix Technology. We are, this company is based in Fremont, California. And we are a battery manufacturer. We manufacture lithium-ion batteries. Before coming here, I spent almost 30 years in the technology industry. I did my PhD at UT Austin, then joined Texas Instruments, was there for 16 years building various processors that went into many consumer electronic devices.

6:09And towards the end, I was working on, end of my stay there, I was working on the OMAP application processor, which some people may remember was a processor that was in the first Droid phone. And then I was at Qualcomm for about nine years. I built the Snapdragon processor franchise there, leading the application processor technologies. As you guys might know, as your listeners might know, Snapdragon powers many of the leading smartphones today. I spent another five years after that at Micron Technology, where I spent most of my time leading the effort to sell DRAMs and NAMs into all the mobile phones. So I've been in mobile phones and consumer electronic devices for 30 years. And towards the tail end of that building process, I realized that the next big problem to be solved is actually the batteries. Because as we'll go through, you know, some of the material in this talk, the process got faster, the memories got faster, the displays got bigger, the cameras got better, but the battery hasn't quite kept up.

7:12And now with all the AJI applications coming in, the demands of the battery life has become even more. So Inovex is a company that's making a new kind of battery by using new kind of material that promises to deliver much higher battery life, you know, battery capacity and energy density than the current lithium-ion batteries. So with that, thank you so much for the introduction and looking forward to, you know, questions. Fantastic. Thanks so much, Raj. And I think maybe to kick it off a bit, right? So why is it so relevant right now? And I think, you know, maybe what's a bit of a trend you're seeing? Because I mean, you have quite a bit of an experience, right on the hardware side, on the shipped side. But now what you can see from a device perspective is all of the AI, you know, because maybe not everyone is really familiar with this topic. It would be great if you could maybe introduce us a bit.

8:00Yeah. So, you know, I just actually came back from Consumer Electronics Show last week in Las Vegas. And the big theme at the tour really is AI and in particular, generative AI. You know, it's really taken it by storm. There are PCs now introduced that's got special AI functions and there's almost all cell phones have a tremendous amount of AI. You know, one thing, maybe I'll kind of motivate it really quickly. The best AI applications, a lot of times people ask, what are the new applications of AI? Why are they so relevant? And actually, most users are already using a lot of AI in their day-to-day life. For example, if you, you know, take pictures with a smartphone, very quickly what has happened over the last many years is a lot of AI processing has already kept in to the smartphones. You know, whenever you take a picture, the phone, for example, tries to figure out the auto exposure, auto-wide balance, auto-focus, tries to detect if there are any people in the scene, you know, find, track the faces, focus on that, adjust all the lighting and take a picture.

9:08That function of just simple act of taking a picture, you know, I've been in this industry for a while, has gone from just taking a simple amount of processing to a tremendous amount of processing to actually detect the face, find where the face is, track all the faces using AI and machine learning techniques. So every time you take a picture or every time you, you know, up-sample a video or edit a video, every time you, you know, use TikTok or Reels, you're actually using tremendous amount of AI processing to make that video or image look good. And that is eating up at your battery life and eating at your, you know, at the amount of battery you have because the processing power needed in terms of the CPU speed and the amount of memory that's consumed and the amount of, you know, large language models that are actually stored on the phone that are exercised in any of these functions is actually tremendous. And we've done some work, you know, benchmarking some of these applications to see what kind of battery draw they have when the AI functions are turned on versus not.

10:11And it's huge. So I think it's very relevant even more so now that we need much better battery in these edge devices because of this, lots of the AI moving to the edge. Thanks. Maybe you can expand a bit on that, right? Because I think a lot of us maybe use the AI, right? We use it on our computer and our laptop and, you know, we were just using, you know, going through the browser, right? And it won't be done on the device at this point. A lot is in the cloud. So maybe, why do you think this is changing and why do you think this will come more onto the computer or on the phones? Yeah. So, you know, a lot of people now still think of when they use AI as a cloud-based processing. But actually, the trend that's happening a lot in the industry now is what's called edge AI, which means that the functions that used to be done on the cloud, quite a bit of them are actually moving to the edge.

11:01Of course, the cloud will always be there and a lot of these functions will be hybrid. And one of the, and a few reasons why it moves to the cloud, I mean, these are in, like, no particular order why it moves from the cloud to the edge. One of them is privacy. Many times, you know, you have pictures that you're taking and you have, you know, you're talking, your voice and the information you're storing. You don't really want a lot of that on the cloud all the time. So you really want the processing to be done locally. And you, and that's a big care about for many people. So I think in those cases, you really want the processing locally on the edge device, which is either the phone or the computer. The second one actually is the cost. People don't quite realize how expensive cloud-based AI is. For example, if you used some of these generative AI programs, you know, for example, like DALI or, you know, some of those ones where you actually create a picture.

12:03I know initially it starts, I mean, even Adobe Photoshop with a generative fill. They start allowing you to create a few images at low resolution for free. But very quickly it kicks into a subscription model where you have to start paying $10, $20 a month to use that function. And if you start looking at all the applications that you actually want to use, very quickly your bill is going to be higher than your phone bill. But you already in your hands have a very powerful phone or a computer that's got, you know, heavy amount of processing, heavy amount of memories, and a lot of storage that you already paid for. So many people actually want to utilize that. So the trend that we saw quite a bit at, that we're seeing quite a bit in many consumer electronics is this concept of edge-based AI where the AI functions are moving into the edge. But many times edge devices are, you know, portable devices and they run on batteries.

13:00So those actually need a much better battery to make that to happen. I'll give you an example. You know, one of the products that actually won the Best of the CES Show Award I just saw was this portable translator. It's actually a pretty amazing device. It does simultaneous translation into many, many different languages. As you speak, it comes to a pair of headsets. You put them on and somebody's talking Chinese or Japanese and it translates simultaneously into English or any language you choose with a little display on it. It's a beautiful device. It's expensive. It's $700, $800 but it's completely battery operated. So those are the first of the few devices coming. So you can kind of think about how convenient it is to have a device like that when you go into meeting in different countries. So that's one of the reasons we feel that a lot of the AI functions are actually moving from the cloud to the edge and in some form a hybrid too.

13:59Raj, this is very interesting to me because I you know I had understood of course that cameras were getting smarter and our smartphones were getting smarter but the processing power that's required for things like taking pictures even which now we take for granted we take for granted that we can take pictures quite easily on our phone etc. The advent of this edge computing associated with the consumer electronics that we all use. My question is why is battery life the important metric here? Would capacity or other performance metrics also come into play or is edge computing really taxing on the lifetime of the battery and if so what are the consequences to someone who's using a phone for instance if their battery life is reduced dramatically? Yeah so maybe I'll add a little bit of color to let's just take phone as an example you know an area that I've been associated for a long time almost two to three decades now so if you look at the smartphone it's in its current instantization that we all use you know the functionality in the smartphones has grown tremendously you know one of the things you notice of course is how much better the pictures are that you take now but you know the displays have gotten much much bigger I mean they used to be small displays now they're like you know huge minimum you know four inches across kind of displays and the display resolution has gone up from you know VGA type resolution to now you have 2K displays in your hand and if you look at the number of cameras it used to be one camera in the back now you have three to four cameras in the back and a couple of cameras in the front you know you integrate we have integrated things like GPS you know the maps is now in there we integrated banking you know that's in there with the security we all watch videos on these devices we stream you know music we stream videos you know we play high performance games so the phone as a device has grown tremendously in terms of both functionality and utility it's almost indispensable to many people but what people don't realize is that to provide that kind of capability the processors have gotten really really fast I mean it used to be you know when I first started it used to be a few hundred you know kilohertz to few hundred megahertz processors now we have between three and four gigahertz processors and we have like six to eight of them you know to run this and the memory used to be just a few megabytes to now like you have gigabytes of memory storage and that is what has kind of enabled this great functionality that we all are able to enjoy now for example when you take a picture now many times you find that you want to take a perfect picture you know you have your kid blowing out your birthday candles and you used to struggle with oh shucks I missed the shot I missed the shot now you almost never miss the shot because almost every cell phone camera takes a rapid burst of pictures and some people call it you know the iPhone it calls it live pictures or whatnot but basically it has taken so many pictures quickly that you're able to choose the one you want that is tremendous amount of processing going on there and the resolution of the cell cameras has also gone up a lot now how did the battery keep up when all these things went up one of the secrets that a lot of people don't realize is that the capacity of the battery if you ask yourself how big was the battery before how big is the battery now in terms of let's say milliamp hours it's gone up tremendously now you have like 5000 milliamp hour batteries in your phone and they started you know like just a couple hundred milliamp hours sometime back so we actually did some work to analyze what's the trend of how much the battery has grown and what we found that the battery is actually grown about 11% CAGR year on year now that 11% CAGR in capacity that came about mainly by increasing the size of the battery actually so what I mean by that is if you actually divided the you know the volume of the battery the capacity of the battery by the volume and you said how many watt hours per liter was there in the phones I don't know 10-20 years ago and now how much is there now you'll find that the watt hours per liter only grew 2-3% which is actually stunning if you think about how fast the memories grew and processing grew and displays grew and cameras grew so the battery technology has really hasn't kept up with the demands but now what has happened is you cannot make the phone any bigger because it's not convenient anymore now we're suddenly finding out that the bottleneck is the battery because so far it has been kind of hidden behind the size of the battery growing and what we've also done is we've got all the users to accept that they're going to charge the phone every night and then they're going to start again next morning well now with the AI applications coming what we hear all our customers tell us is it's no longer possible to go a whole day you know charge on single charge of the battery in your phone because of these new applications that are coming at such a big rate so there's a lot of demand to actually make the battery better without making it bigger because making bigger is no longer quite an option in this phone so that's why the battery has become the bottleneck now and that is the problem we are addressing at Inovex where we actually make a much higher performance battery by replacing the graphite anode in the battery with the silicon in fact we're material agnostic we can use silicon oxide we can use silicon carbide but any of these silicon materials when you put them inside a battery they do hold a lot more lithium so you get much higher energy density and much higher capacity but the problem is the silicon when it absorbs lithium swells up and becomes physically larger you know almost to the point it'll pop the back cover of your phone off if you don't do something about it so at Inovex we have a way now to actually constrain that swelling by a clever mechanical constraint and there's a lot of excitement in the industry of being able to provide that so we think we can get to 20-30% higher energy density than the current current forms now so Raj if I'm understanding them correctly is that the ability to actually use silicon now instead of graphite while curbing essentially the limitations that were previously associated with using silicon which is the swelling allows you to actually now improve the performance but keep the size the same the size of the battery exactly exactly so you know what we do is kind of interesting what this company has been there for about 16 years what we've done is instead of just making batteries as traditionally been made which is jelly rolls when you take an anode and a cathode and you know put the electrolyte and separate it in between and roll them we cut the batteries we cut the anodes and the cathodes into really thin strips if you go to our web page you'll actually see some videos and so on it's much easier to watch it visually than my explaining it but we basically cut them into really thin strips using lasers and then we make really thin batteries and then we stack them into a 3D stack and then put a mechanical constraint around it so that now when the silicon tries to expand it expands on the thin side not the thick side so we're able to hold it down with this constraint so now we're able to get much higher energy density but not cause the swelling problem that silicon does and super exciting to see that and we believe that silicon actually can hold nine times more lithium than graphite so as we continue to innovate in different kind of materials and different kind of battery cell architectures we should be able to solve this problem much more effectively than ever before thanks we had quite a few sessions in the past on silicon and also for the listeners if you're curious feel free to listen to some of the other approaches by other companies also in the silicon space there's definitely quite a few actors in the space I have one question maybe also for you to just understand a bit better with a look at other technologies because I think we can also see in the chat people are really curious and I think it's a very topical very timely discussion right to be had about what do we do now if this edge computing comes to the devices from energy density and battery performance standpoint but how do you see it also compared to other technologies I know we have some very knowledgeable people here in the audience on solid-state and of course there's also other technologies that lithium metal either in solid-state or liquid electrolyte so just a bit of understanding why do you think silicon is the way to go or is it just because you think it's one of the options just curious to get your thoughts on that yeah absolutely you know we at we are actually material agnostic so we can put silicon in our architecture we can put lithium metal in our architecture we can put solid-state electrolytes we're not so limited to using any one kind of material I was just talking about silicon because that's the one that's actually most popular right now you know most closest I would say to production and you know again when I say silicon I mean like you said I think your audience is pretty knowledgeable these are not just I'm not talking about metallurgical !

23:46silicon these are some form of silicon compounds we're using silicon oxide we just made an announcement recently that we're also working with another company that does silicon carbide so there's different forms of I would say engineered silicon that many companies are developing you kind of see lots of new battery companies making different kind of materials we work with you know all of them to see how we can how we can put different kind of materials and what we found is that different materials have different advantages for example once you start talking about a battery and a battery application in a device it's not just energy density that's important like for example in a phone one of the things that's important is energy density clearly but also fast charge so people need these things to charge really really fast so rate is another big one and the other one is you know how many cycles does it go for like you know many times you buy a phone you want to charge it every day let's say keep the phone for three days three years now you want something that goes for 800 to 1000 cycles before you before you get to your next one so you need fast charge you need high energy density you need long cycle life so some materials can do one or the other and some can do both and some can do three so what we do at Enomics is find different combination of you know silicon material and then cathode and then you know the different separators and then the various kinds of electrolyte mixes that go in between them to allow us to hit all those metrics that are kind of important so that's the key innovation here is to be able to find the right materials for the right solution thanks for that maybe just a quick follow-up question right because I find it fascinating on the cycle topic right because also if you go on the website right and you can find some of the example cells there right example cells and it says like you know 100% active silicon right with an iron cell I mean that's super impressive right and I mean because you talk about cycles because I know for example emprios right and this is one of the other companies and we have seen them might being used maybe like in the drones from Airbus that's public right and as far I've seen they've been quite limited on the cycle life right I don't know 300 plus cycles but not in the thousands so maybe I don't know if you can share anything on that and maybe how can you achieve things or whether maybe anything you can share yeah absolutely I mean I think what we find is that you know different kind of silicon materials have different ability to cycle and we find that some kind of materials you know like the silicon oxides and the silicon carbides we're able to put them in our battery architecture and go for a long cycle life because what happens is a lot of times in some of the silicon materials they're what is called the roll-off problem so after a certain number of cycles it just drops off like it clicks because the silicon material kind of breaks down when the electrolyte goes out and you know it just falls apart we have been able to avoid that by finding the right combination of electrolytes and anodes and cathodes and how we charge and discharge them because for us to be able to replace graphite with silicon batteries you have to solve the cycle life issue like most of you now if you go and buy a laptop you'll see the requirements are actually thousand cycles and most cell phone requirements are 800 cycles so if you're only able to achieve 300-400 cycles we will not be able to replace the graphite cells with silicon anode based cells so it's very important that we're able to do that so I mean the state we are in right now is we are now building a factory in Malaysia I see some of the questions and where we are in the chat where we're able to make these batteries using different silicon materials different anodes different cathodes different electrolyte combinations at different sizes and just sample to our customers so this year we're building the factory and we will start sampling them like in like in April time frame and our hope is that we will be in production in some smartphones and so on next year Raj you had mentioned something very interesting in the beginning which was that you have new data from tests that you had conducted looking at the cycle life between batteries that are essentially being used to support edge AI applications versus non-edge AI applications are you able to share the delta of additional battery life or additional capacity or additional battery performance that's required to support edge versus non-edge applications yeah absolutely we looked at things like we actually took some of the current popular phones like Apple iPhone 15 or the Samsung Galaxy S23 and we looked at things like for example let's say we wanted to record 8K video at 60 frames per second and we said what's the battery life used now with AI and without AI for example many times when you use AI in a video recording it does up sampling and it does smoothing of the video and it does frame tracking and so on some of these use cases we find is almost two times as much battery life is consumed with AI versus without AI sometimes it's even three times and like if we looked at something like a stable diffusion and we ran that and we also looked at something like Llama 2 you know the 7B version chatbot and you see that that actually goes like five to six times more so we kind of looked at various applications and hopefully we'll try to produce a report or something that can be shared more broadly but clearly anything that consumes more imaging or video or photo editing or video recording or video streaming or mobile gaming consume a lot of battery life when you add AI on top of that to actually improve the user experience and many times people add AI in these applications to make the user experience better so that actually consumes a lot like in many applications like for example Lanza or Facetune you know they're just huge in terms of how much they take great thanks so much Raj maybe you know give you a quick break to get some water maybe you know love talking and I will just kind of in the meantime want to encourage also everyone to you know put your questions in the chat or also feel free to raise your hand because yeah now we're going to go to the fun part where you can also ask your questions and we already have a couple of them in the chat so we really appreciate that but again you know we have quite a bit of time still so we can you know use that to ask your questions and from experience in the end it always fills up rather quickly so in the end there always are questions we cannot get to so if you want to make sure your question gets answered feel free to put them into the chat now so we can make sure we can address it before we close the room so yeah maybe we can go already now and invite also some people up so essentially if you want to ask your question directly you know which can be fun and you can ask a bit of follow-up there feel free to raise your hand you should find the option at the bottom you have this hand raising option I saw for example Helen earlier was trying to do that if you have a question we'll come to do so again then we can also bring you up on stage especially if you have submitted a question in the chat otherwise of course we can also ask the question on your behalf so I think yeah so I think we're now going to start inviting some people of you to speak there as well and but yeah if you cannot come on stage no problem at all we can ask the question on your behalf okay Raj are you back yes amazing perfect so yeah there's a couple of them so maybe we can go with the first one from CM don't have the full name there but I think you know there's a bit of a you know he's talking about you know that all the need for battery power but he's asking for some milestones of confidence I know we spoke about this earlier here today we're not talking about anything future you know look into the future especially not anything financial related but I guess if there's anything you want to share Raj on maybe on the journey as well people are always curious about the journey right on yeah if there's anything you can share that would be great absolutely so you know this company has been around for 16 years and the founders have been working on trying to make better batteries for a long time I took over the CEO about a year ago and what we've done so far is to be able to make samples of these high energy density batteries in our Fremont facility which is a small maybe more like a pilot facility and we were able to give it to the customers and we were able to validate the high energy density that we were able to offer and also the quality of the battery and all the tests and the safety that have to be done so we feel pretty good about the about the technology and the customers like it too now the next challenge is to be able to make them at scale like when I scale I mean millions of batteries so to do that we need a factory that can produce at that rate and we've you know because of the unique way we make these batteries we have to first make the machines that make the battery and then make the battery right if it makes sense because these are not standard machines that actually cut the electrodes using lasers so we've now got those machines made and they're in different stages of what we call factory acceptance which means we like the machines they're working well the speed is good and the yields are good and so on and we expect to complete that part early this year and the factory where we're going to put these machines is actually in Malaysia we have a very good support from the Malaysian government and we were able to hire a good team there so we're actually building the factory in Malaysia now and that factory we expect to produce you know samples from that factory you know in April May time frame and those we expect to give it to our customers and once they that's another big milestone to be able to give actual samples from the from the manufacturing high volume manufacturing factory and it typically takes our customers nine months to 12 months depending upon what stage they are and to validate that so our expectation is that you know next year later part of next year we should be able to have batteries in in products that's kind of the journey we're on now it's a good question there to get some clarity on that.

34:39So Raj very curious actually so the the next big milestones of course the serial production so is there a timeline for when you think that you would have this factory up and running? Yeah you know there's there's two stages in making a factory you know one stage is you know getting what is called factory acceptance test that means that all the machines that we are ordered we have to accept them from the vendor and tell them hey it looks good we'd like to take them and that should happen in the next couple of months and then we put the machines in the site in Malaysia and there's something called site acceptance where we basically say okay the machines are good they're on our side they're working well and that one is in the April time frame I guess two to three months from now and then we start producing samples so you know our expectation is that the samples will come out in April and those are the ones that we will give to our customers but then as the customers start using them and testing them they give us more feedback what they like what they want us to improve and so on and we continue to improve our factories to run to higher speed better quality and so on that goes on through this year so by end of this year we should be in like high volume capability meanwhile the customers also should be you know qualifying the batteries and making sure they're working well in their phones or laptops or you know other IoT devices wherever they use them and then next year is when we expect to be in production so that's kind of the journey that's great thanks and maybe just one quick for clarification I think already touched on it a bit but because you just mentioned Malaysia right and I'm curious is there like any specific reasons because of people I know people go into all kinds of different regions for scale up manufacturing but is anything you can share on that yeah I mean you know what we found was that most of the material that we use in making of this factory in batteries you know many of the suppliers are in the Asia region you know in Korea in China in Japan and and so on and then many of the customers of ours who actually want to take these batteries and put them into products are also in that part of the world manufacturing is quite a bit there so it made sense for us to have the factory there rather than you know move all the materials here make the batteries and ship all the materials back the other way that is one reason we put it in Asia the other one is the way we make the batteries is a little bit also people intensive because these are mechanically constructed batteries I mean there's machines running but there's still people operating the machines and so on and that kind of talent of high volume manufacturing you know has been set up in Malaysia for many many years in the chip industry for example I came from Micron and Micron had a big factory there making SSDs and my chief operating officer Ajay he came from AMD AMD had a large number of factories there Intel had factories so for those in the chip space they're quite familiar with Malaysia as a as a very you know friendly and talent a lot of talent in manufacturing that has been set up so it made sense for us to to be there Raj I'm seeing quite a few questions in the chat so I guess we'll go to the next question the next question is from C I think we can all agree there's a risk for more so we already had that one so I think we can go to the next one that's right to Gary Gary's question what are the Evernox patents and innovations yeah so we we have you know now in the company I think close to 400 patents you know over the last 16 years that we've done and we recently we acquired another company that does coating and makes graphite batteries called Road Jetty who's also part of our company now we have a very strong patent portfolio on on you know the way we construct the battery and the materials that we choose and how we make them safely and the idea of laser patenting electrodes and stacking them together and putting them into constraints and every aspect of our manufacturing technology we have patented quite a bit so we are pretty we feel very good about the patent portfolio of the company great thanks and then maybe for the next one so then here Ian was asking as I understand lasers create patterns and electrodes what are these patterns for yeah so maybe I didn't explain that very well so basically what we do is we we buy you know electrode in electrodes in rolls you know these are big rolls that come out and you know this cathode as you know is a metal and then we coat the cathode you know lithium and all that on top of that similarly silicon comes you know in a in a metal strip on which we coat the silicon anode so now we have these big rolls of electrodes we we use lasers to make patterns on the electrodes so that they're really thin strips that's the pattern so then we punch the strips out so basically since we're making very thin small batteries the patterns are actually each pattern on top of a roll is a very thin electrode and then we punch the electrode out and then we put that together so if you actually there's some videos on our website if you see I think it'll kind of make it very clear how that works the patterns are basically little electrodes that we cut out of a big electrode roll that makes sense yeah Raj just just to follow up on that so the idea that they're they're cut into these very thin electrodes what characteristic does that allow or optimize for in terms of performance and especially in terms of how it can prevent some of the mechanical issues right so so let me let me answer this way if you didn't cut it into thin electrodes and if you just basically took a big electrode electrode and you just stack them or you put them in a jelly roll then what happens is you now have silicon you know instead of graphite and when when silicon when you charge it when you put lithium and silicon it starts swelling up and it becomes really big so and it pushes on the flat surface and you need almost 2,000 pounds of force to stop it from not swelling but when you cut them into really thin electrodes like this and you stack them on the side now when the silicon expands it pushes on the thin side because they're all like really thin electrodes stacked on the side so now we only need 200 pounds of force to hold it so basically we're able to put a you know a steel constraint and hold it down so the idea of cutting them into smaller electrodes is to be able to reduce the amount of force that we need to apply to hold it from swelling thanks for sharing that and then next going for the next question is from mark can you talk about costs for these batteries and a bit more about how you engineer the silicon for example yeah the cost of the battery firstly we don't engineer the silicon we actually buy the silicon from from silicon oxide you know silicon carbide various forms of silicon from people who make silicon materials and then we you know as I mentioned we cut them into little strips a little electrodes to put them together that's the engineering part is actually cutting them to strips and putting it together you know the cost of any battery is you know predominantly dominated by the material cost I mean 60% of the battery is actually material cost maybe sometimes even more we do add a little bit more cost because of the constraints we put in but over time as we get to scale these are these that we should be extremely competitive in terms of price now we're not going to be the cheapest battery clearly what we're going after is higher energy density high performance battery and and most of our customers are comfortable paying the premium for that thank you so much Raj in terms of our next question Mariano is asking it seems like the you know battery production it seems like they are more tailored or custom projects so how do you scale such a model yeah it's a really good question we you know what we find is that in what we're making our custom batteries right but if you think about markets like smartphones markets like laptops markets like watches they're all custom batteries I mean because the shape of the battery is dictated by the shape of the device I mean people decide I want to make a phone like this I want a battery this size so you pretty much have to make a custom battery in high volume batteries they're not you know they're not cylindrical batteries you know they're not triple A batteries you know so but that's actually where a lot of our patented technology is that we are able to build these machines that we can quickly reconfigure to actually make a different size batteries so that's actually the innovation of the company is to be able to scale that so we do have the capability to make different batteries very quickly great thanks and then for the next question we have here is from Greg would you update us on the status fat or zones two and three yeah it looks like you know there's a lot more details about the company absolutely it's going well and it's in the you know it is on schedule and I think we gave out the schedule of what we plan to do expect to do and we will we will put it out you know as and when those are done they're right going going quite well right now and of course anyone from the audience if you have a follow-up question to your question raise your hand we'll bring you up to the stage or feel free to ask it in the chat the next question is from oh who is asking you know about a comparison uh your with your battery compared to the solid-state so how much better or how much worse is your battery compared to a solid-state yeah I mean look as I mentioned we are a battery manufacturer we got material we're material agnostic so for example if the solid-state electrolytes become real and close to production we can put that inside our battery and but you know it's still that's not what we are focused on right now because we're going after consumer batteries consumer markets still use liquid electrolytes and not solid-state so it's not so much of a comparison with solid-state but whenever solid-state batteries are ready we can also use them in our material you know in the way we make batteries that's more of a material versus a battery comparison great so 3d water integration right I can't afford you describing there so I'm not sure do we already have Helen yet or not yet right I think yes not yet so she's asking other growing concerns around restrictions what's from sporting lithium-based goods considering conflicts around the Red Sea that break flow technology solves I'm sorry I didn't get that question very well where is that just looking for transport conflicts I guess more general right how conflicts may be influenced on a transport perspective yeah not not not really I think mainly red seed that break flow technology solves I'm not quite sure well let me say this way you know there are always restrictions on how you can transport lithium-based ones you you know I'm not quite familiar with what the Red Sea part is but the break flow technology solves a problem of the batteries being more safe so for example if you were to go you know have a have a mechanical short inside the battery for some reason we have a technology called break load that that actually makes our battery much safer because it actually makes it not go off into thermal runway by providing an alternate path for the current so that so that the battery doesn't go and become unsafe so clearly that's it that that helps battery be safe not just in transportation but any kind of mechanical shorts that might happen so certainly certainly certainly certainly certainly certainly certainly certainly So clearly that helps battery be safe, not just in transportation, but any mechanical shorts that might happen.

46:46Thanks. Mayim? So we're seeing some questions, Raj, around some of your competitors. Are there any type of solutions like yours, which is really innovation on the manufacturing side and also on the mechanical support for the batteries that are out there? No, the main competition we have right now is mainly from existing graphite battery suppliers. And they are now, you know, in order to increase energy density, adding a small percentage of silicon on top of graphite, you know, so that they can, the silicon can absorb more lithium. But we've only seen that in the few, you know, kind of single digit percentages, because if you add more than that, the silicon swells again, and you have the same problem that you got to solve. We are using 100% active silicon because we can handle that swelling. So the main competition we're seeing is really existing graphite batteries, a little bit of silicon. And of course, they'll continue to get better. But to really get to the type of energy density increases we're talking about, we need a totally new way of manufacturing as we are doing it.

48:00Thanks. And there was also a question about EV, right? Like, yeah, there's an EV. Is this an application which would make sense? Something you'd be curious about or looking into? Yeah, that's a great question, actually. You know, what we are finding in EV is that, yes, energy density is important. People want to go much farther on one charge. But more than that, the bigger question on EV is really how quickly can you charge? Because, you know, as if you guys have an EV, when you drive, you know, this is whole, more and more EV stations are coming up where you can charge this coming up, where you can charge your battery in the car quickly. But the quickly part is not there yet because it still takes, you know, hours to charge your battery fully. And one of the main reasons is when you start charging an EV battery really fast, it heats up quite a bit. So that's the problem. What we found is an interesting advantage our battery has is that it's able to dissipate the heat much, much faster than a conventional wound cell because of the way we constructed the electrodes.

49:01And there's some EV companies who are very interested in that. So we are actually working with a couple of companies to, you know, really prove out that advantage. But we're not building a factory for EV size manufacturing right now. And we are focused on consumer. So that could be something in the future. But we think, you know, we could potentially license this technology to somebody who is making EV batteries once it's proven. So definitely, you know, good interest there. But manufacturing, we're first solving the consumer problem. So Raj, on that note, in terms of the heat dissipation, Mariano is asking what cooling systems are necessary to maintain optimal operating temperatures. Now, I'm not sure, Mariano, if Mariano means in the manufacturing line or if it's in an actual consumer device. We don't use any coolings. We don't need any cooling systems. In manufacturing, we don't need any cooling systems. I mean, the way we manufacture is pretty straightforward. So, I mean, we don't need any cooling.

50:03And the whole idea of, you know, the fact that we can, you know, get out of the heat quickly is really the reason why people want to use our batteries. So they don't need these cooling systems. There's some questions on Group 14, as you're saying. As you see in the chat, I probably should explain that. So Group 14 is a great company that produces silicon carbide. And we are able to now, we announced a collaboration with them where we want to use, you know, Group 14 material as one of the options in the batteries that we make. Instead of silicon oxide, we can use silicon carbide. Other people have used Group 14 material in graphite batteries, but a small percentage. The advantage we have is we can use 100% of Group 14 material for the silicon anode. And that's where we are able to really get that advantage of using that type material. Again, as I mentioned, different materials give different advantages in terms of fast charge, you know, cycle life and energy density and so on.

51:10And this is one of the material stacks that we're using. Again, the collaboration was that unlike previously seen in consumer where silicon carbide has been used in small percentages, we are able to use it 100% and stop it from swelling with our innovative way of constructing the battery. Great. Thanks. And also, I think that's helpful context for others. And again, explains your focus. And maybe just one quick question. I'm not sure if you can share much on the silicon oxide, what kind of silicon oxides there are, because, of course, there's a range. And I spent my PhD a bit on that, so I'm curious. I'm not sure if you can share anything because, I mean, the things I know is, right, so some of them, I mean, if you have high oxidation state, it's more stable, right? But the capacity drops and otherwise versa, right? So I'm just curious. Yeah, I mean, you probably know a lot more about this than I do, but there are some material sciences in my company.

52:04But the way I understood is that different silicon-based compounds have different properties. And the trick is to match the right electrolyte and the right cathode and the right voltages so that you're able to get the cycle life and the energy density and the fast charge all at the same time. But I think maybe someone from my team can answer more precisely to you and we can set up that conversation with our PhDs in the company. I'm afraid I'm a little bit beyond my depth to be able to answer that deep. Absolutely fine. I think it would be very, I mean, very impressive if you would know all of these details. But I appreciate maybe I have to follow up chat later on. Certainly. There's someone else asking, you might have a bit of a bad idea here of agility line. I'm not sure if that speaks to you. Yeah. So, you know, I mean, so what happens in this, maybe for the rest of the audience who's not that familiar, you know, we, I think there was a question about how do you scale?

53:08How do you make different shape batteries? One of the key things that we found out in this battery manufacturing is that when we go talk to our customers, different markets need different size batteries. I mean, we make rectangular batteries, but still people want, for example, different X dimension, Y dimension and Z dimension of the battery based on where it's going. If it's going in a phone, they want a certain size battery. If it's going into a, you know, watch, they want a different size battery. So we came up with this line, which we call the agility line to distinguish it from the high volume manufacturing line, which has the ability to make different size cells very quickly. So you could, for example, we could reconfigure that line to make a watch battery and X number of hours later, we could reconfigure that line to make a cell phone battery or a laptop battery. That is the first line we are building because we want to be able to sample these batteries to many customers.

54:05And that is the agility line. I think the question is about, you know, will you be producing 1.5 batteries on agility line? I'm not sure what 1.5 is. Probably that's, you know, a question about our recipe that we're using. But our agility line will produce, you know, is independent of the, of what recipe we use. And right now we are using a recipe called EX1. Then we'll be using, you know, EX1.5. And then we'll be using EX2. And absolutely, yes, the question to the answer is we will, our agility line will produce EX1.5. And you can also produce EX1 based on the customer interest and the different, different markets we're trying to serve. So Raj, maybe you can help me out here with this question from Greg. What is the time frame to move from Gen 1.5 to Gen 2? Is this on the agility line, the EX1.5? Or is this related more to different specced batteries? Yeah, I assume this is about the, I assume the question is about our recipe, which is the EX1.5 to EX2.

55:13You know, we, I think, as I mentioned, I think some of my calls, maybe some people listen to my earnings calls and so on. EX1.5, you know, is, you know, as I mentioned, we have EX1 today. And we talked about EX2 as something that we'll make by end of the year. EX1.5 is something we are working on that we can sample, you know, middle of the year based on the different requirements of the customer. So what are the requirements? The requirements that we are focused on are energy density, cycle life, and fast charge. And we have various customers asking for different combination of those. And we are addressing a particular set of that with the EX1.5. Typically, we can go from the EX1.5 to, you know, EX2, I would say in six months. So from where we are looking at right now. But we are working on parallel in both of those. Maybe one question here also is, how long does a customer usually take to testing and verify the battery before placing an order, right?

56:12So I think, not sure if we can say anything about that. Yeah. Typically, in this market, you know, is between nine and 12 months based on what product it is. Like laptops, for example, will take a lot longer. Some IoT devices can take shorter. Cell phones are probably somewhere in between. But the way this works is, as soon as we have samples, we give them and they can do some amount of testing ahead of time. Like they can test safety. They can test drop tests and things like that. But things like cycle life testing, for example, takes longer because if you want to test if something is going to 800 cycles or 1,000 cycles, they have to cycle the battery 800 to 1,000 times. And that takes X number of months. So it varies based on the application. But I would say between nine and 12 months is probably what we are seeing in these consumer applications. And Raj, are they ever sharing their results back with you?

57:11Oh, absolutely. I mean, these are very, very close collaborations. You know, we have weekly meetings. We have monthly meetings. And they give us the results of what they are seeing. And we give them results of what, how it is. And, you know, the other thing you got to remember is that when you make batteries like this, you have to test them in the application. Like, for example, you have to take the battery, put it inside a phone and see how it cycles, not just cycle it in a vacuum, you know. So actually at CES, we showed a smartphone. We removed the existing battery and put our battery in there and have it boot and function. And we showed an action camera where we removed the battery and put our battery in there. So we're doing a lot of testing at system level so that it actually functions in the end application it's supposed to. To be able to do that, you have to collaborate closely with the customers to see how to put them.

58:01So it's a very collaborative development process. So I actually have a follow-up question. This is not in the chat, but it's related to testing, which is because you have, you know, the agility line. And you also have the ability to reconfigure your equipment to be able to manufacture in mass quite a lot of different battery architectures with different materials and so on. Do you need different test protocols for each of these applications? And would the onus be on you to figure out these test protocols? Or does X client come and say, I want you to run these test protocols and provide a report card with all of these metrics before I go on and I do my own tests? Yes, that's a great question, really. Because that is the heart of the matter of evolving into a high volume production company is to really understand how the battery will get used in the end product and understand from that how it needs to be tested before it goes into the end product.

59:09So we actually have test protocols from all our key customers and we test that metrics before we sample them. And then, of course, they will do a few other tests which are proprietary to them and then they give us the feedback. But clearly, our goal has been to collect a lot. I mean, we now have a larger repository of tests for different applications, like a phone gets tested differently versus a laptop gets tested differently. And the good news is, you know, I have very strong relationships with the key people at many of these companies because I've been in the industry for a long time. So after joining the company, I was able to visit these customers and get from them how they test the batteries, what they expect to happen, so that we are able to now put that into our testing methodology and before we sample them. So that's really a key aspect of how we make sure that what we give them will meet the requirements and also go to production quickly.

1:00:03Because if you don't test it like how they test and give it to them and then you find out, oh, they tested it this way, it didn't quite work, then you have to go back and test it again and give it to them one more time and it eats at a time. Thanks. I think there's a couple of more questions. We want to go there. And I think there's one also, another one from Mariano was asking a bit more. He was from Malaysia, right? Kind of the most important aspects. And you touched a bit on it, but I guess anything else you can share? I mean, I think you already mentioned the government support and some of your links, some of your team experience. But yeah. Yeah, really, I think government support, the ability to be able to hire strong talent that is experienced in manufacturing. The fact that it is close to our supply base and also close to our customer base. You know, English speaking country, it's much easier for us to manage.

1:00:52We have experience there, both myself and my CEO. So we were able to very quickly hire a lot of people. And we were able to find a good partner who had some facility available and stuff, you know, breaking ground and building from scratch. We were able to quickly take over that building and then, you know, turn it into a battery factory and move some of our machines there. In fact, you know, just recently, the prime minister of Malaysia came to Fremont and I came to the Bay Area. And, you know, we were invited to meet with them. And we were in the elite company of, I think, you know, Google and TikTok and us. So we have a lot of interest from the Malaysian government in seeing us succeed. Great, thanks. And maybe I can, there's a couple of questions now, which are very, as you said, very knowledgeable listeners, which is fantastic. And they know a lot about, you know, your plans and probably listen to what you're saying very carefully.

1:01:46Maybe you can batch them a bit together, right? I think it's a bit more, I guess, about the scale-up. Again, there's some numbers in there which probably make more sense to you among these different steps. But I guess, I don't know if you can share a bit on that from manufacturing, I guess, here for, you know, looking at expansion. And again, I know you can have your talk future, especially on the financial side. So I guess, is there anything you can share on the upcoming plans and these different lines? Yeah, I mean, I think, as I mentioned, you know, just continuing to communicate what I've communicated before, which is the facility we have can hold up to four lines. And we put one line in, we are working on when to make the next line. And, you know, we haven't talked about where the next facility would be. But clearly, we have the opportunity to expand in Malaysia if you wanted to. We have access to some more space there with our partner.

1:02:46But really, we are looking to make sure that the first one we build goes well and we're able to make good samples, give it to customers, get it qualified before we start expanding more and more. So we have a lot of, you know, the demand is there, right? I mean, you know, 1,200 million smartphones sold a year, you know, 200 to 300, you know, million laptops. Each of them takes three to four batteries. So there's a huge appetite because of what I talked about in the beginning of the AI applications coming to the edge. So it's really time and making sure we do everything correctly and we do everything at scale. We get the customers what they need. So it's just a process that we're going through. And Raj, it seems like there is some anxiety here around how are we going to actually service all of these different edge devices, the smartphones, the laptops. When I say anxiety, I mean just from the general public, knowing that we have to scale up so many different new types of innovations on the battery side, on the manufacturing side, et cetera.

1:03:52This is more of a general question and I see some of these ideas being asked in the chat directly or indirectly. But what are your thoughts on consumer electronic companies, you know, having a limited number of suppliers or choices that are able to service these new types of applications or these new types of manufacturing practices for the AI edge devices? You're talking about in terms of batteries or in terms of talking about just consumer electronic devices itself? Just the batteries for the consumer electronics. Yeah, I mean, you know, I think when I took over as CEO, I mentioned in some of my earnings calls that we were sampling batteries to hundreds of customers. There's a couple of hundred customers I think the company had sampled over its time. All kinds of different applications. A few months ago, you know, I made a decision to focus on a few customers that can ship a high volume first. And then expand into broader markets exactly for the point you're making.

1:05:01Because if you go after every single consumer electronics device, you know, from a speaker to headset to a smartphone to a laptop to any IoT device, there are so many different form factors, so many different products. It's going to be really difficult for an early stage company to address all of that at the same time. What I felt was most important is to actually adopt a little bit more of a vertical strategy, which means we go after a few vertical segments that drive a lot of volume first. And once we prove out the technology, build our factory, we can then take that battery and sell it horizontally into a bunch of other markets. And the few verticals that we picked were smartphones, you know, computers or laptops, and, you know, some maybe wearable devices after that. Because those drive a lot of volume in just a few form factors. For example, a model of a phone could ship, you know, one and a half to two million units in just one phone model.

1:05:55So we could make one battery that could ship a couple of million. And if we made, you know, three or four models, we could quickly get to shipping multiple millions. And that gets the factory working, and we understand what's going on. Then we can figure out how to make the next model and the next model. That's why the strategy was to make the agility line where we sample different batteries. But we go to high volume production in a few, and then slowly expand to different shapes. Make sense? Mm-hmm. Absolutely. Great. Thanks. And I'm also looking at a bit of time and want to make sure we can still address a bunch of the questions we have here. We also have one, Refund Selene, she's asking, how big is the market today? And then 2033 in gigawatt hours for silicon and nodes. Not sure if there's anything you can share on that? Yeah, I don't look at the market as much on gigawatt hours. I look at it more in terms of number of units.

1:06:47Because we're not trying to make huge batteries. We're trying to make smaller batteries that have a lot of potential. Like I said, I think 2023, 1,200 million smartphones, each of them has a 3,400 milliampere battery. I mean, it's a 3,000, 4,000 milliampere battery, I would say. A couple of hundred, 200 to 300 computers, each of them has three of those batteries. So you can kind of calculate from that just quite a bit. But I do see one thing, which is, of course, EVs is a huge market. As silicon anode goes there, I think that dwarfs everything. Like I read somewhere, one car needs enough battery for like 10,000 phones. So that by far is the largest market. But I do think that the market is moving more and more towards silicon anodes from graphite. Because graphite seems to have kind of run its course in how much energy density it can pack. So I wouldn't be surprised if in time more and more of the market, you know, just becomes silicon anodes rather than graphite.

1:07:47Raj, I'm seeing here a couple of questions. I'm reading through, it seems like exactly what you said, which is people are wondering about the applicability of your innovation to different applications that would require batteries like EVs. You had touched on that. But there's another question related to ESS, just stationary energy storage. So, of course, right now you're focused on consumer electronics. Beyond that, I guess people are asking, can this be applied to these different applications? Yeah, absolutely. I think that the applicability of the technology is in anywhere where there's lithium and battery. There's really no, you know, most of the applications that can be used. I think the most important thing for a small company like us who are just getting to production is focus, right? I mean, if you go after all these markets, you're going to get distracted and not be able to do one thing well. So that's why, you know, we are focused on consumer first. But a lot of other markets, we have opportunities to expand into that through licensing, through partnering, through teaming up with other people and so on.

1:08:54So, you know, again, I think one thing to keep in mind is, you know, when you're running a business, it's important to understand the gross margin profile. The gross margins for batteries are much higher in consumer electronic devices than EVs or ESS, just the nature of it. You know, for example, if you go into a smartphone, you know, $1,000 smartphone, let's say $600 for all the electronics in their bill of material. The battery is typically, you know, $8 or something, and you can sell it for $10, $12, and still get a very good, nice premium and good margin because you're such a small piece of the total of bill of material. So that's kind of important in how we choose these markets. You have to choose the right business. ESS, for example, is much, much tougher to get margin. Well, I think that makes a lot of sense. And I've always been amazed by the, you know, like even the, you know, from the look at the batteries for your headphones, airports, and things like that.

1:09:55I mean, there's definitely so much margin in that area and costs. And I think another topic is, and I'm not sure if we can speak to that, right, because I'm not sure what's public, but there's quite a few questions on customers. Right. And I'm not sure, because you mentioned also this new strategy and focusing on a few more, on a few, right, very selective ones. Are there any ones you can share maybe also from the history from the company? Or is it something you can share at this point? There was an earnings call, I think, second quarter of this year where I mentioned that we got permission from a few key smartphone OEMs that we can announce that we are working with them. We were working, I think, Vivo was one of them, Oppo was one of them, Xiaomi was one of them, Lenovo was one of them. But it's fair to say that in the history of this company, we've sampled to many, many customers, and they're all in different stages of validation.

1:10:47You know, in terms of announcement of when battery is going to be in a phone or in a laptop or whatnot, typically in consumer electronics, those announcements come, you know, pretty close to production. Because people don't announce a year before or a year and a half before that, hey, we are using this one, right? They might let you say we're working with them, but typically those come much closer to production. But I can tell you as much the interest is there from almost every consumer electronics company, you know, we just have to pick and choose the ones we can, you know, satisfy the requirements very well and get few to high volume production before we expand. It's a valid point, right? Because we definitely know also, I mean, the process, right, for in other sectors where, you know, people would get all kinds of purchase orders, but then you have to fulfill them, right? And you have to be able to hit all the KPIs at the right price point.

1:11:36And as you say, you know, that's, you know, you want to be smart about it. And you want to have a factory that can produce at scale. I mean, that's the other thing you have to balance. Exactly. And there's, but I think there's an interesting question. I'm actually curious about myself because I know a bit of the timelines, right? Like, especially in automotive, from a battery, how long it takes, you know, to get into the process. And the nice thing about an automotive, you have quite a long development cycle, right? Eight years, et cetera, right? Where you get your next vehicle, so you have a bit of time. I would assume, you know, smartphone market being a bit more faster. So maybe you can talk a bit about the development cycles and how long does it take, right, to be integrated, tested, but also how quick, you know, from idea to real product might be required or is possible because, of course, it allows quick iteration if it works.

1:12:22Yeah, I mean, you know, one way to think about it is if you look at the smartphone market, it's an existing market. Phones are shipping and there's graphite batteries in them, right? So what we need to do is to replace that battery with a silicon or newer material battery that's got higher energy density. So in that sense, the problem is a little bit more defined, right? So you know exactly the space you need to go into. It's a two-terminal device. You need to work with the customers to make it work. But one thing that's important is safety is very important. So people have to test the battery, they have to cycle it for X number of cycles to make sure it works. They've got to test the energy density. They've got to make sure it's working well with the power management system. They've got to make sure, you know, the modems, the processors, everything works well with them. So, you know, like I said, from the time we get the samples to time to get to fully qualified is typically nine months to nine to 12 months.

1:13:13Much faster than cars, but it's not like two to three months, you know. That's great. Thank you. I think we can take one more question here looking at time. But we have a few questions related to the full life cycle of a smartphone, essentially from the time of production for all of the components of the smartphone to the time it goes to market. Okay. So with that timeline, how far in advance would your batteries need to be produced in order to land in one of those smartphones? This is something that you can share. Yeah, exactly. Like I was saying, I think typically it's nine to 12 months, right? So we have to sample them nine to 12 months ahead of time and they will do the testing. They will, you know, meanwhile, they'll be choosing, you know, what kind of display they're going to use, you know, what kind of cameras they're going to use, you know, what kind of processor will they put in, what power management systems goes in there and so on.

1:14:15So all those things move parallelly and many times they qualify a battery in something like a technology evaluation platform where they make sure everything is okay. And then they give us the exact size and dimensions that they want and we give them samples in that. Then they put it in a test phone, they test it, they validate it. And by the time they're ready to go to production, it's anywhere between nine and 12 months. Okay. So Raj, you're saying including you being ready to essentially manufacture their products and everything, this would be nine to 12 months, not just the testing and validation. Okay. That's correct. That's correct. That's correct. So the way it works is as soon as you get to make samples, you give it to them. And meanwhile, we're working on our production side. They're working on their development side. And then by the time both come together, it could be nine to 12 months. Okay. Great. Thanks. And I think also we're probably going to wrap it up soon.

1:15:05So if you have any urgent question, now's a good time to bring it in because we're going to wrap up the room in the next five to eight minutes or so. And just to kind of quickly add this, a few questions. So one is, and I think maybe we can even connect some of them because I think one was on supply chains, you know, looking at, you know, cathode being a big issue. And, you know, how readily are they available, right? Because you now got agreement with group 14 on the silicon side, on the unknown side. But what's about the cathode? Maybe if you can quickly share something and then I'll ask the second question from Salim. Yeah. I mean, we are also working with multiple cathodes, not just one. And there's multiple suppliers that provide cathodes. I mean, we're not buying a lot of materials still because we're still an early stage company and we're mostly doing testing and sampling. So it hasn't been so much of a concern for us in terms of getting material.

1:16:01But I also, in general, think that the amount of material we need for small batteries is very small compared to the material needed for the big EVs. So, and the margin profile is much better. So, so far, I'm not seeing any real issues in the supply chain side. But it's something we closely keep track and we have multiple sources and we make sure we don't get into that issue. Thanks. I mean, I agree on the volume, right? It's definitely smaller if you go into consumer electronics. Okay. And then there was also a question from Salim about key market trends, regulations, you know, see, relative to market size now in 10 years. Yeah. I mean, you know, there's a lot of, you know, I would say the need for energy density is only going to keep going up is my prediction. Because, you know, we're just at the beginning, you know, kind of tying back that conversation to where we started. We're just at the beginning of the edge-based AI applications.

1:17:00I mean, they're just barely scratching the surface and coming in. And we see them coming really, really fast and also coming in ways where you won't be able to tell which application is using AI versus not. You just like the application because it does something very useful for you. And by the way, it demands a lot of CPU, GPU, memory, and hence it consumes a lot of battery. So I think in that sense, I think the demand is going to be continued to grow. So in terms of regulations, we are, you know, seeing people asking, like from EU and so on, that batteries go longer so we don't, you know, clutter the world with, you know, low cycle life batteries. So increasing the cycle life of a battery is very important so that this lasts for a longer time. And that is a challenge for the battery industry is how do you keep increasing the cycle life while also increasing the energy density? And that's where we feel we have an advantage that we're able to do both of those.

1:17:59And of course, fast charge is an important thing because people quickly want to charge and go about their lives. So I think doing all three at the same time is the key. And that's kind of the challenge for the industry that we are focused on. And I also think there's also some discussion about replaceable batteries. I think that somebody mentioned to me, I haven't read it fully yet, about the EU ruling on how a lot of consumer electronics need to have replaceable batteries so we can recycle the old ones. That's another advantage for us is if we can make a higher energy density battery that can easily replace an existing one that may actually also expand the market. Great. Thank you. And I think there's some questions which are probably better for another earnings call. But I'm not sure if we can share a bit of, you know, I'm not sure how much you can share about this from a history, right? And because we had some other companies, right, who went public maybe through a SPAC.

1:18:51And, you know, it's not always easy, right, to be a public company in topics like that. And I'm not sure if we can share anything on that, a bit on your personal experience as well. You know, like how you operate, does it change things? Just curious from a personal standpoint, is there anything you can share? Yeah, I mean, look, I think SPAC was a great vehicle for a lot of technology companies to get to public markets and access the benefits of public markets, like raising funds and building factories and, you know, getting opportunity for a lot more investors to participate in early stage companies. So I think the concept, I think it was really good. And, you know, unfortunately, not that many SPACs have been successful because, you know, to be a public company, you also have to have a lot of structure in place and season management teams that understand how markets work and how to lead teams. And, you know, sometimes it takes time to build those kind of processes and structures and get the right kind of people to run these things.

1:20:00And many times early stage startups don't quite are successful because they move quickly and they do what needs to get done. But then setting up all this process is not their primary strength or motivation. So it's kind of good and challenging. But, you know, I feel good about the team I brought on board after I came along. You know, I've had a lot of experience, you know, working at leadership positions in large public companies and my team does too. So it's a good mix, I feel. And I'm quite happy with the situation. But, you know, it's tough to be in the public markets because it comes with its own overhead. But at the same time, it's good because you have access to public markets. Thank you so much, Raj. And I can see that we, you know, we've had quite a few questions. People are very, very curious and we've learned so much. But we also got some comments in the chat. For instance, a comment, Raj, thank you for doing this.

1:21:01Not many CEOs would be so comfortable and transparent. The world needs a better battery. So I think it comes from all of us to say thank you for your transparency and for going into the details that allowed us to understand a new perspective on the battery market here. Yeah, it's really my pleasure. Happy to talk to the audience. Thank you for having me. Thank you, Raj. Thank you so much, Raj. And, yeah, and also thanks again, everyone, to listen. And, yeah, also just to mention to anybody here who is curious or maybe who joined later during the session, you can also listen to the entire recording on our podcast, the Battery Insiders podcast, which you can listen on Spotify, Apple Podcasts, and anywhere else you listen to your podcasts. We also have been running this for about three years now, so quite some time. There's also quite a few other episodes you can listen into if you're curious. We also have some video podcasts there as well for some recent events we participated in.

1:21:55And, yeah, there's quite a lot of material, again, on other technologies and policies and recycling and, you know, all kinds of other topics. So if you're curious, feel free to have a listen. And, yeah, wonderful to have you all here again. And we're going to have another session in about a month's time. So please look out if you want to get notified about the next session to come up, go on batteryinsiders.com. And there you can also, you know, put your email in there. Then you also get notification when we have the next session to appear. With this, we do want to thank you all. Thanks so much for joining. Thank you all so much. Thank you.