Midwest Energy Policy Series Series 3: Economic Development ZAF - - PowerPoint PPT Presentation

Midwest Energy Policy Series

Series 3: Economic Development

ZAF Energy Systems Inc. 8165 26th Street Joplin, Missouri, 64804

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Battery demand to see historic growth rates:

• Electric Vehicles – PHEV, EV, start/stop, hybrids
• Utility Infrastructure – distribution, renewables integration, UPS
• Microgrids – distributed power in developing countries
• Consumer Electronics – increasing power/energy demands
• Industrial – data centers, robotics, trucking, UPS, etc.

“Performance Gaps” exposed as technology evolves

• Capacity – longer run times in smaller packages
• Power – more power required for commercial and industrial users
• Life – demand for longer cycle life and shelf life
• Safety – customers in key markets place a premium on safety
• Complexity – operations require advanced electronics (BMS)
• Cost – widespread deployment of storage requires < $200/kWh

Market expected to exceed 1 TWh by 2025

The Energy Storage Dilemma

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Lead-acid shortcomings

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Lithium-ion problems

Source: Avicenne Energy, 2018

ZAF’s Message

• The way we use energy is changing dramatically and rapidly and electricity

storage is enabling this change. Today lead acid dominates and lithium-ion is

• gaining. Our message is simple; tomorrow nickel-zinc changes the game.
• Our technology is sound, the market is ready, our

solution economical, and in an era where we need to really be focused on caring for our planet, we make a positive difference to the environment.

• After thirty plus years in high-reliability/high-quality manufacturing and nearly

a decade in the battery business I’m as excited about ZAF’s prospects as I’ve ever been about any product launch with which I’ve ever been involved.

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Randy A. Moore President & CEO ZAF Energy Systems, Inc.

• Zinc batteries have

been around a long time.

• NiZn for ~120 years.
• Most chemistries take

20-30 years from feasibility to commercialization.

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Nickel-Zinc Batteries

Nickel-Zinc Batteries

• Nickel Zinc Battery patent first awarded in US

to Thomas Edison in 1901.

• Zinc-based batteries -> 1900’s for EV’s.
• Railroad locomotion -> 1930’s - 40’s.
• Fell out of favor due to low cycle life.
• Resurrected -> 1970’s - 80’s again EV’s.
• Again fell out of favor, due to cycle life, with

the onset of Lithium-Ion popularity.

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Historic Problems Limiting Cycle Life: Electrolyte Dry Out – Zinc “Shape Change” – Dendrite Growth

ZAF IP: Novel NiZn Battery Technology

• Four methods for Zinc stabilization, leading to long life batteries:
• Patent pending bulk additives for stabilizing shape change
• Trade secret nucleation site additives for growing zinc evenly and

suppressing zinc dendrites

• Patent pending electrolyte for stabilizing zinc and suppressing

morphology (shape) changes

• Trade secret separator for suppressing dendritic shorting
• Recombinant battery technology enabling long cycle life
• Patent pending low-cost recombination coil designed to recombine hydrogen and
• xygen generated during charge to prevent dry-out
• Electrodes engineered for best in class manufacturability, power, and capacity
• Multiple trade secret recipes and processes to provide optimal power,

capacity and manufacturability

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Why Nickel-Zinc Batteries, Why ZAF

Technology: ZAF’s nickel-zinc battery design solves historic problems…

• Electrolyte dry out
• Zinc migration
• Dendrite growth

BETTER VALUE

More Power 2x Capacity 2-3x Cycle Life

1x Lead Acid +2x Nickel Zinc

50% Size Reduction 50% Weight Reduction SAME Performance

+1x Nickel Zinc 1x Lead Acid

ZAF NiZn Products Designed for either:

Performance OR Cost

NiZn G31 Capacity and Power Comparison

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Battery Data ZAF G31 NiZn Capacity Odyssey G31 AGM ZAF G31 NiZn Power Unit Capacity (C/20)

177

100

155

Ah Capacity (C/3)

170

84 151 Ah Mass

28

35.3 26 kg Cycle Life (80% DOD)

700

400 700 Cycles CCA Current (30s)

850

1150 1200 A Specific Energy (C/3)

73

27.4 69 Wh/kg Energy Density

140

70.9 124 Wh/L

Capacity ••• Power

Zinc/Nickel/Copper 54% Plastics 15% Other Recoverable 16% Non- recoverable 15%

When “Recycling” Isn’t a Good Thing . . . and, When It Is

9 A man in Indonesia uses an axe to break up old batteries by hand in order to extract the valuable lead within. In the “breaking” process toxic lead is spilled everywhere and spills into the water table. (#1) A child pours lead into an open-air crucible for smelting. Lead particle emissions drift into the air where some are breathed in and some come back down to pollute the ground surface. (#3)

Lead-acid batteries are the most recycled commodity in the history of mankind—about 99% of all lead acid batteries are recycled. Experts say that the recycling of lead batteries is the #1 world’s worst pollution problem with the lead smelting that follows being the #3 world’s worst problem.

ZAF’s nickel-zinc battery. The world’s greenest battery.TM

• No battery can be successful without a recycling solution—it is one of the

largest barriers to commercializing new battery technology.

• The NiZn chemistry starts out environmentally safe and remains so.
• NiZn battery recycling has an economically positive value proposition.
• NiZn systems do not require large decommissioning costs.
• The recycling process does not require smelting.
• The recycled nickel output is “battery-grade”

and ready for use in a new battery.

85% Material Recovery Yields 40% Reduction in Battery Cost

Source: “2016 World’s Worst Pollution Problems”

Safety Matters

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Li-Ion Ni-Metal Hydride Nickel,

el, KOH

Lead Acid Lead,

, HSO SO4

Ni-Cadmium Cadmium, KOH ZAF NiZn Nickel, Zinc, KOH ZAF ZAF Zinc Zinc-Air Air Zi

Zinc, , KOH

RoHS Restricted Substance

• Disruption Opportunity - ZAF’s nickel zinc (“NiZn”) technology targets the $50 billion lead-acid

battery market

• Performance - ZAF’s NiZn battery dramatically outperforms lead-acid batteries in every metric

including power output, size, weight, environmental friendliness, recyclability, and cycle count

• Market Acceptance - Early adoption from trucking and equipment OEM

plus testing by top battery manufacturers indicates market readiness

• Framework - ZAF’s Research and Development facility is located in

Bozeman, Montana and ZAF is finalizing construction of its Low Rate Initial Production (“LRIP”) facility in Joplin, Missouri

• Proven Leadership – President, CTO, VP Manufacturing, VP Engineering,

and founders represent decades of experience in manufacturing business and transitioning technology introduction

• Proprietary Technology - The company has a robust intellectual property

and patent portfolio

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Introduction - ZAF Energy Systems

Aircraft

Marine

Automotive

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Profitability Market Size

Military

Heavy Trucking

Stationary

(Data Centers/ Telecom)

Behind the Meter ESS

Industrial

Emergency Vehicles

$50B in 2017 – 7% CAGR Predicted

Markets sizes and profitability placements estimates August 2017 Current Targets Future Targets

Markets: Lead-Acid (Nickel Zinc Replacement)

G31 - Universe

Medical

Trucking

• Over $1.2 billion market billion market in the United States alone
• Commercial trucks make up 12.1% of all registered vehicles
• Regulations forcing change: New anti-idle requirements
• Initial acquisition cost equal: 4 NiZn for $2,400 vs. 8 AGM for $2,400;

five year operating cost lead-acid $7,200 vs. NiZn $2,400.

• For the tractors, 4 NiZn batteries replace 8 AGM batteries

(GR31) with estimated weight savings of 400 lbs. battery and 50 lbs. structure

• Fully supports 10-hour cycle for mandatory rest periods,

regenerative braking, eliminates need for engine driven accessories.

• NiZn has greater than two times the projected life

versus AGM reducing operational expenses.

• NiZn is ideal for lift gates, refrigeration and safety

lighting applications.

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Priority Target Market - Trucking

NiZn is a Clear Winner

• Lowest Cost solution over 20 year life
• HALF the cost of lead acid
• 33% lower cost than new pure lead acid
• 20% lower cost than lithium
• Operates at higher temperatures reducing air

handling and safety requirements

• Reliable – 10 year warranty
• SAFE – non-toxic, non-combustible, non-

explosive, RoHS compliant, fully recyclable

• Highest IRR – Combination of performance,

reliability and cost provides the best value

• Increased White Space Revenue

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Data Centers

Naval Underwater Power

• Naval underwater batteries are a $50M+/yr market
• Submarines have particularly astute problem
• Formerly flooded lead acid batteries lasted 7 years
• Now VRLA lead acid batteries last 3-4 years
• New Columbia-Class submarine’s systems too much load for lead acid
• US Navy looking for NiZn replacement for Columbia-Class and the

rest of the fleet

• NAVSEA worked with major lead-acid company
• Using competitor’s NiZn technology
• Reportedly, not adequate to accomplish mission
• NAVSEA reached out to ZAF – asked regarding performance
• ZAF currently meets or exceeds current specifications

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2016 2017 2018 2019

1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

• 1. Identify Opportunity
• 2. Produce Prototype
• 3. Customer Test
• 4. License Supplier
• 5. Orders Placed

1 2 3 4 5 1 2 3 4 5 5 Successful Test

Customer Testing Has Validated Technology

1 2 3 5 5 5 3 3 1 2 3 4 5 1 2 3 4 5

Trucking OEM Contract Mfgr Battery Mfgr Battery Distr Indust Equip OEM Int’l Battery Mfgr DOD Major Cmd Battery Mfgr Battery Mfgr Customer n+1

Economics of NiZn Batteries

• Jobs in Missouri @ ZAF ~ 250.
• LRIP Sales of $102.9M and Gross Profit of

$42.7M in 2023 on specialty batteries alone.

• EBIT of $162.5M in 2023.
• Approximately 10,000 jobs across

JV/Licenses.

• Partner’s revenue of $2.8B – represents

approximately 2.1% penetration of projected combined rechargeable battery market.

$M $B

$- $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $(6) $44 $94 $144 $194 $244 $294 2018 2019 2020 2021 2022 2023 EBIT Total Cost License Partner's Revenue

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Thank You for Listening to How ZAF is Changing the Way We Power the World™. Questions?