With management. The presentation is going to be led by Raj DasGupta, CEO, who's also joined on the call by John Gibson, Chief Financial Officer, as well as Christopher Filewski with Bristol Capital. If you'd like a copy of today's presentation, simply email me at glen@bristolir.com. We'll break for questions at the end of the formal presentation. When we do break, we encourage those questions. As a reminder, we're only going to take questions through the webinar portal. If you happen to be listening over the telephone, please access the web link that you would have received earlier today. Remember, you could submit a question using the text box within the portal at any time. I'll ask the questions on the air for everyone to hear, and Raj or John will answer. I'm not going to reference any names, but simply read the questions asked.
As we do have a very large audience today, if I cannot get to your question online and it has not yet been addressed during the call and can be, I will come back to you through email. I will not read the forward-looking statements, but I do state that they apply, and I reference them on page two of this PowerPoint. With that said, once again, thank you for joining us. Remember, this is fairly informal, and we do encourage questions to help you better understand the business and its growth path. Now I will turn the call over to Raj to start his part of the discussion and presentation.
Thanks, Glenn. Thanks so much for the introduction and hosting today's webinar. Pleased to be back here for our second webinar. The last one, I think, was nearly about six months ago. A lot has happened at Electrovaya over that period, and we're very excited about the overall trajectory of our business. As Glenn just stated, we're going to be going through a presentation which will mention forward-looking statements. As such, we would take this safe harbor statement as read. Of course, we're listed on both the NASDAQ and the Toronto Stock Exchange under the ticker ELVA. Now, just for those who don't know, Electrovaya, we are a lithium-ion battery manufacturing and technology company with a lot of exciting technology, which we're deploying today. We're highly differentiated from our competition.
As those who follow the lithium-ion battery space may know, the industry is heavily dominated by Asian, especially Chinese battery companies. Those companies are very much focused on scale and cost. On the vertical thereafter, it's really the automotive industry that is the primary target. Electrovaya has participated in those industries, and we found we can leverage our proprietary technologies and sell our battery solutions on performance as opposed to being a commodity-driven product. As a result, we focus on mission-critical applications for our lithium-ion batteries. These are applications where they need better safety and better longevity and will pay more for that. We have consistently achieved over 30% gross margins in an industry which typically has under 10% margins. We are supplying some of the world's largest companies, including 16 of the Fortune 100 corporations in the world.
Just this morning, we announced a follow-on order from one of such companies where we've received over $16 million worth of orders from them just in the last few months. We're targeting at large, addressable markets which need better safety and cycle life. This includes industries like material handling, where warehouses, especially e-commerce warehouses, which operate 24/7, need batteries which last longer and do not catch fire. We tick both those boxes clearly. We're also targeting other key markets, including defense, certain commercial vehicles, airport ground equipment, and more recently, we're starting to look at energy storage. In terms of domestic manufacturing, that's something that's becoming more and more important as time goes on. Electrovaya clearly made some intelligent decisions a few years back. We're well underway in setting up a large gigaplant in Jamestown, New York, which will be our main manufacturing base.
Our products, therefore, will become all made in the U.S. In terms of financial performance, we've had some key inflection points achieved over the last several months. Today, we have demonstrated eight consecutive quarters of positive EBITDA. Our last quarter, which was announced just last month, was a first for profitability. We had a net profit. We also demonstrated 40% year-on-year growth, which we expect to continue across the remainder of the fiscal year. This type of revenue growth positions us for sustained profitability going forward. Again, highly unusual in the lithium-ion battery and cleantech space. Where does Electrovaya land in the competitive landscape? We have two very strong competitive advantages with regards to performance. The first is around safety. Electrovaya batteries feature a proprietary ceramic separator technology, which we've deployed in over 30,000 battery systems with a perfect safety record.
Not a single one of our battery systems with this technology has had any type of battery safety event. The second is on longevity. Our batteries will cycle much longer than typical lithium-ion batteries. Those of you may be fairly familiar with your phone. You may do one cycle a day on your phone, and within two years, maybe a bit longer if you're lucky, that you need to get a new battery in that phone. Putting that into perspective, that might be 1,000 cycles. Our batteries in various applications are designed to do 10,000-15,000 cycles before they reach their end of life, making it a huge advantage for robotics, for material handling, many types of applications that need longer cycle life. The next two is production.
The domestic supply chain that we have developed is also becoming a competitive advantage, especially as geopolitical situations are making it more difficult for companies to procure from China, especially, and gives us a leg up over many of our competitors. Lastly, our products, while they be more expensive on a capital cost basis, when you take into account lifecycle costs, we have a lower-cost option here. Our batteries, when you look at lifecycle cost, are less expensive than typical lithium-ion batteries. When it comes to safety, lithium-ion batteries have had a checkered history. Lithium-ion batteries all have a problem where if a fire starts in a lithium-ion battery cell, it is very difficult to stop that fire from continuing and propagating. In the battery industry, they are referred to as thermal runaway. There are many instances of this. You can look online.
Typically, let's say a lithium-ion cell catches fire. What happens, or if a short circuit happens to that cell? What is common is the cell gets too hot. The separator within that cell will start to shrink once you hit temperatures above 110 degrees Celsius. When that happens, that cell gets a full short circuit. It's on fire. The neighboring battery or neighboring cell will get too hot as well. That forms sort of this chain reaction. That is a major problem in this industry, one where our technology solves it. We have, instead of a polymer separator, which will be thermally unstable at those temperatures, a fully embedded ceramic separator, which is stable at high temperatures and makes it much, much less likely for you to have a safety problem. Our cells pass the most stringent of safety testing, including nail penetration testing.
We've done fire propagation testing in battery systems where we physically set a cell on fire in a pack and demonstrated that it doesn't propagate. Onto the cycle life advantage. Here you can see this is real data of an Electrovaya Infinity cell demonstrating over 14,000 cycles until it reaches its 80% of its initial capacity. That is a groundbreaking result for an NMC-type chemistry. This technology is chemistry agnostic. It doesn't really matter what chemistry you use. Electrovaya's technology will allow that significant improvement in cycle life. Now, is that important for all industries? Maybe not. If you put our battery in an electric vehicle, you'll do over 3 million mi in that electric vehicle. Maybe you don't need that there. An electric vehicle typically is doing one cycle a week, maybe two cycles a week.
While if you look at a robot in a warehouse or a forklift in a warehouse, they will be often doing two, three cycles in a day. Cycle life really matters for a lot of different applications, especially the heavy-duty mission-critical ones which we're after. In terms of addressable markets, these are large markets. Material handling, warehousing in general, it's very quickly growing, especially with the further prolification of e-commerce. Typical warehouses, the goods inside those are moved by electric vehicles. Whether those are electric forklifts or electric robots, what's common is they need batteries which last all day and can charge multiple times a day and also do not have a fire risk. That's why that's such an important market for us and one where we're doing very well in.
Now that the company has reached some level of stability and growth around that market, we are looking at the other segments which have commonality in terms of the need for better safety and cycle life. That includes applications like defense, certain energy storage applications, mining, and construction, amongst others. Now, our technology is not brand new. We are growing the deployments over the last five years. We are now powering over 200 warehouses across multiple continents. These are operating 24 hours a day. It is a proven technology for very heavy-use applications. In terms of customers and partnerships, we probably have as blue chip a roster as you could have. We are partnered with the Toyota Material Handling Group in North America and supplying multiple brands under their organization. We are also supplying a number of brands in the robotics and AGV segments.
In terms of who's using our products, you have an extensive list. As I mentioned, over 16 Fortune 100 companies using our batteries, including some of the world's largest retailers and e-commerce companies. We are also partnered with Sumitomo Corporation out in Japan. Through them, we have started working with a number of multi-billion-dollar construction OEMs, construction vehicle OEMs, and are seeding additional opportunities in the Japanese market. We have a number of new products which we are also launching. We have a new module which is designed specifically for heavy-duty construction and mining vehicles, which was designed with one of the Japanese OEMs in mind. That is just about to ship. That is called Forest 2P. We are also launching some robotic battery systems for various new robots which are getting launched. That is that second image there. A third, it is sort of an adjacent market to material handling.
This is ground support equipment used in airports. We are launching a product there which will be deployed next month at a major airport. Finally, most interesting here is our energy storage product, which is well underway in development, which we will deploy next year. We have a number of customers who already use our batteries in their warehouses who have asked us for this type of product to support the warehouses and other infrastructure these companies are building out and where they want safer, better batteries, which they have already seen operate in their warehouse facilities. That is a product we are very excited about. We are putting significant efforts in that.
It will be a class-leading product with regards to both better safety, which is becoming more salient as an issue, especially with major fires in some large battery energy storage projects, as well as the cycle life is a key advantage. Another new product which we're pleased to discuss here is our demand response system. We have already deployed in a typical warehouse maybe up to 5 megawatt-hours of batteries. These use a lot of power in warehouses. We have seen an opportunity to deploy an intelligent AI-driven demand response system, which we are planning to launch later this calendar year with one of our major end customers. It is an exciting product. It gets us into virtual power plants, demand response, as well as it's a sort of a SaaS-driven revenue generation model. We are looking to grow our recurring revenue as a company.
These batteries, they last such a long time. That makes our customers very happy. We do want to find ways to grow recurring revenue. The SaaS product is one of them. We are also looking at a combination of lease rentals, which will provide more of a subscription-based energy services product. We are looking to get about 10% of our revenue from recurring streams hopefully next year or probably more likely fiscal 2027. In terms of global reach, we have our operations in Canada and the United States. We are also seeing so much activity coming out in Japan. We are planning to launch an operation there. That will be announced when it is announced. With Jamestown, New York, this is our largest investment in terms of production capacity, in terms of capital equipment, and just strategically in general.
This plant will provide our Infinity products made in the U.S. with a supply chain which is very domestically oriented. If it is not domestically oriented, it is friend-shored. We have successfully reached funding from the Export-Import Bank of the United States worth a $51 million direct loan. We have also enabled strong incentives from the state of New York and the county. Some other key facts about this facility are, number one, it has very low-cost electricity, less than $0.05 per kilowatt-hour delivered, very important for battery manufacturing. Second is it has room to expand. We have over 52 acres of land there. We can easily expand this building as demand and capacity grow. Finally, this facility will enable us to do over about $200 million in additional annual revenue in terms of our manufacturing capacity over time.
That is clearly important as this company continues to grow. In terms of other products in R&D, I'd say the Infinity Battery Technology, which is based on a ceramic separator, has been very successful and will continue to be so. It fits that heavy-duty mission-critical part of the market. We expect it to become the leading technology for those market segments. We are also developing another ceramic separator. However, this one will be for a solid-state battery. That ceramic is being made in-house. We are making that separator with a similar direction in terms of its production process, so it is scalable. We have cells cycling in the lab right now, making more and more consistent results.
This is a product we're very excited about for potentially defense applications, drones, consumer electronics applications, which really need very high energy density and, of course, are willing to pay for better performance. I'll let John jump in on our recent financial trajectory.
Thanks, Raj. This slide essentially shows some of the major financial metrics that Raj discussed earlier. A snapshot of the last five quarters showing the trend in revenue as we increase into Q2 2025, where we had just over $50 million of revenue and just over $100,000 of net profit. Obviously, the positive EBITDA that we've had over the last eight quarters is not enough for us. We want to continue that trend, continue to grow EBITDA, to grow net profit as we push past the break-even point, which is roughly $50 million in revenue per year.
From a balance sheet perspective, you'll see over the last 12 months that we've increased our total assets and decreased our liabilities at the same time, increasing shareholder equity considerably by almost three times in the last 12 months. What we see is this puts us in a solid position financially to continue this growth that we've discussed to hit our targets for 2025 and to hit our targets for 2026 and beyond.
Yeah. In conclusion, I'd say Electrovaya is on the right path. We're executing exactly to what we said we would do. I think during the last webinar, we said we were targeting closing our EXIM facility, refinancing our working capital debt, and reaching profitability in the near term. We've done all three of those things.
The working capital was replaced in tandem with closing the EXIM deal, that working capital facilities with Bank of Montreal, which is a very strong bank for both sides of the border. We are very pleased to see that $15 million generating already $2 million in EBITDA and over $800,000 in net profits in the last quarter. As we continue to grow our revenue, those metrics will continue to improve. We see ourselves becoming that leading heavy-duty mission-critical battery technology for a growing number of segments. With that, Glenn, we would be happy to take some questions.
Super. Thanks, Raj. We do have quite a few questions in the queue already. To our audience, if you do have a question, please use the question text box within the portal. The first question, Raj, is maybe a little bit of history of the company.
You were founded in the 1990s. Maybe the evolution of the technology when you first became commercial and any sort of critical milestones.
Yeah. As I started out saying, the battery industry is very competitive. Electrovaya has been a leading member of this industry from its early days. If you look at the North American battery space, at least most of the early players came and died. Electrovaya has survived that entire span of time. When I joined the company in 2009, our focus was automotive. We were supplying Chrysler at the time and later even Mercedes-Benz through their smart car. However, that space itself is supplying in the automotive industry is intensely competitive and intensely focused on continuous cost reductions as the main objective.
We may have had a sell, especially around 2015, 2016, which was significantly superior to our competition for the automotive space. Automotive was really focused on dollars per kilowatt-hour. That is when you are getting driven into commodification, and that is where it is very difficult to compete against larger Asian players. Around 2017, 2018, 2018 is when we pivoted this company around this ceramic separator technology, which enabled better safety and cycle life. That has today become the Infinity Battery Technology. It has got a long way to go. I think we are just getting started. Batteries, it takes time to get qualified. It takes time to get customers comfortable with the technology. That is just generally how it goes. I think we are in the early stages of the adoption of our Infinity technology, even six, seven years after we developed it.
Super. Thank you.
I guess talking to the Infinity technology, are there any other competing technologies deliver the same safety, longevity results as your proprietary ceramic separator?
There's nothing really quite like it in the market in terms of what we're providing is safety, cycle life with energy density and performance similar to the best of the industry. There are much lower energy density technologies available, like lithium titanate-based technologies, which also provide very good safety and very good cycle life, but are substantially more expensive and much lower energy density when compared to our Infinity technology. I think we're in a class of our own for what we do. I think it's getting recognized now.
Super. I guess on the same topic, how and where do aerogels perhaps come into play as a competitive threat?
For instance, Aspen Aerogels sells into the EV battery users, GM, etc., to prevent thermal runaway.
Our technology is about stopping thermal runaway fundamentally in the cell, right? That is from the ceramic separator technology. We have demonstrated that very, very clearly. When you make a battery system using an Electrovaya cell, you do not need to use aerogels or anything around the packs to make it safer. There are other ways, of course, of mitigating fire propagation, including that. I am not here to say one is better than the other. I would not say it is even a competition in that sense. We are not targeting the automotive space because of the margins available in that space compared to mission-critical heavy-duty applications. I would say we are, again, focused on other things.
Okay. Perfect. Good segue into the next question.
How are you prioritizing your TAM within the various target verticals, example, defense, energy storage, etc., to capture the largest market share? What is your timeline amongst the targets? Are you entering any new verticals later this year or in 2026?
The TAM on our core material handling market is very large. The adoption is still at the beginning. I'd say we're at maybe 10% of new vehicles being outfitted with our batteries. There's obviously significant room to grow. What we're also seeing is OEMs like Toyota are rapidly transitioning to electrified vehicles from their mainstay, which used to be internal combustion. Toyota Material Handling, just for those who do not know, are building a new plant in Indiana. They're spending hundreds of millions of dollars. That is to increase capacity for electric forklift production.
We see the TAM for the core material handling market is large and growing. In terms of robotics, this is, again, a segment which is rapidly growing as more and more automation takes place around the world, whether that's moving goods in warehouses, monitoring stores, or even cleaning your streets and buildings. Everything that's powered by needs batteries if it's using a robot. That's another segment we're very excited about. Defense, we have our batteries in a number of defense applications already. It takes time for these applications to scale up. The reasons companies want to use our batteries is because of the safety, the performance, and the domestic supply chains which we're developing. That's, again, another key market. The one segment which we were not targeting earlier, which we are now, and I mentioned in our presentation, is the energy storage segment.
That was a segment where commoditized Asian battery systems were prevalent, especially in these grid-scale storage systems. However, we see an opportunity as companies and customers become more aware of the safety hazards with lithium-ion batteries, especially batteries which are near or being co-located with expensive distribution centers or other types of infrastructure, including data centers. We see a demand from our customers for our energy storage products for those types of applications. That is another new vertical that we are going after. We also have orders in hand from OEMs in the construction vehicle segment. There is a wider array of verticals being targeted, which I expect to start generating meaningful revenue in fiscal 2026.
Okay. Super. Do you currently source your lithium in the U.S. or elsewhere? Maybe to expand on that question, talk a little bit about your overall supply chain.
We don't get involved in the actual chemical procurement. We would procure our cathode and anode materials from large corporations. These are typically located in countries like Korea. Those companies would be in charge of the raw material procurements.
Okay. I guess, on the same topic in terms of raw material and lithium, I mean, the price has jumped around quite a bit over the last couple of years. Can you just discuss how the current price of lithium impacts your business and how you see that moving forward and, in general, sort of the lithium supply price chain?
Again, Electrovaya's battery products are not commoditized. Movements in commodities do not really affect our margins nor our sales price.
Okay. Have you begun using the Jamestown facility? What is a typical project this facility is used for versus manufacturing capacity outside of the facility?
Is it larger-scale projects or specific areas?
We already have a team in Jamestown. We're already utilizing the facility for some of the assembly processes of our battery systems. We may produce a certain portion in our Mississauga facility and a certain portion in our Jamestown facility. We're getting the team up to speed on how to make battery systems. Of course, we're growing the team and getting talented individuals located in Jamestown in preparation for the big start of production, which is the cell and module production, which starts around this time next year.
Okay. I think you touched on this during the demand response portion of your presentation. I guess the question is, can you talk about your ability to monetize the cycle life advantage?
The cycle life advantage, we are already monetizing it to some degree.
For instance, with Toyota Material Handling, most of their sales on forklifts and with the power as well were leases, right? They would lease the forklift and lease the battery to an end customer. When they would lease a lithium-ion battery, typically the residual value of that lithium-ion battery after five years was very, very low. As a result, leasing the lithium-ion battery typically did not make sense for the customer. What we developed in partnership with Toyota was taking a look at the cycle life results, not just at the cell level and pack level, but also looking at data from the last five years of deployments. With that, we were able to increase that residual value on the battery significantly, making the lease very competitive and driving a lot of new business our way.
This was just launched late in 2024, November 2024. We have already seen the impacts of that with a lot of new smaller-sized orders which are being driven through this program. That is one way of leveraging the cycle life advantage. The other is in terms of energy as a service, we are starting to see opportunities to scale that where an end customer will want to take a battery but pay for it as they use it. Because the cycle life is so good, the returns for Electrovaya over time are substantial, especially if this battery system is a 10-plus-year asset. You are looking at really astounding results, again, taking advantage of that performance. There are various ways we are already monetizing it and looking to monetize it more so over time.
Thank you. Question relates to today's press release for $6 million of new orders.
Was the order received today for replacement of other battery types?
It was a combination of new sites and replacement of other battery types.
Thank you. Does the IP around safety for Infinity apply to the solid-state product with no fires and maybe just touch on your solid-state R&D work?
A solid-state battery is a lot more energy in a smaller space. At this point, it's hard to say whether it's going to have similar safety results as the Infinity Battery Technology. However, it's our priority to make it as safe as we can, which is why the ceramic separator is so important with a lithium metal anode. We're making progress there. It's slow but steady. About a year and a half ago or nearly two years ago, we changed directions with our solid-state battery efforts. That direction change is showing results right now.
We're making small pouch cells about one amp hour, getting more and more consistent results. As we engineer our battery design, we're getting more and more confident that this is a commercializable product.
Okay. Thank you. Raj, how cost-competitive for the power storage market is the product on a total cost basis? One would think that large-scale utilities and hyperscalers would consider that, plus the anti-thermal runaway feature, would make this a layup for large-scale storage facilities.
We think so. I think there's clearly a life cycle advantage stemming from our cycle life advantage. That safety element is, I'd say, a key driver from some of the interest we're seeing today, which is why we've put this product on the fast track in development. We already see significant customer interest for it. We will have it to market next year.
We'll have our first deployments early next year.
Thank you. Can you please speak to the battery management system? How much is battery chemistry or performance, and how much battery management? Thanks.
The fundamental Infinity Battery Technology is a chemistry technology. It stems from the ceramic separator, unique electrolyte, and cell design. That's fundamentally the backbone of our technology. We have a large team on making battery management systems. We're on our fifth-generation battery management system. It's core as well to the battery system products that we produce. It's a great piece of technology, but they're somewhat independent of one another. The battery management system's main job is to interface with the vehicles and user device and also ensure the battery's operating within its safe operating window.
Okay. Thank you.
How does your battery or how do battery prices compare to a competitor like Plug Power that produces hydrogen fuel cells for warehouses? Do you have enough pricing power if lithium prices were to rebound?
I think our technology offers the current end users, which also consider hydrogen in their warehouses, I think we're very competitive. They obviously like our product. Otherwise, they wouldn't keep ordering it. I'm not too familiar with Plug Power's pricing, so I can't really comment further.
Thank you. Does Electrovaya see potential market with robotaxis that are working 16 hours a day?
Oh, for sure. A robotaxi is like one of these robots or forklifts in the warehouse. That's a change in automotive. I have two electric cars, and they sit parked 23 hours a day.
A robotaxi, on the other hand, needs a battery which can keep up with multiple cycles in a day. And there is a potential opportunity in that type of segment.
Thank you. Can you speak to the current interest rate environment and how that may impact the business's ability to expand over the next two years if rates remain elevated? Please touch on the refinance risk over the next few years as well as how that will impact margins.
Our interest rates have come down substantially. The biggest change was moving from a small private lender to Bank of Montreal. We saw, John, correct me if I'm wrong, but close to about a 500 basis points reduction in our interest rate right off the bat there. We also secured this facility with Export-Import Bank of the United States.
That is also below market rates, significantly below market rates. I'd say we see this as a significant improvement in our cost of capital.
Yeah. I'll just add to that that we have some flexibility with where we actually hold our working capital cash as well. We can hold it denominated in US or Canadian. We can pick and choose the interest rate that we want. We can lock some in for a longer period, for a 30-day period, to reduce the interest rate impact as well.
Thank you. Some more questions related to pricing and, I guess, variables around pricing. How are you being affected by raw material costs, and how are you trying to mitigate any impact of price increases?
Raw material prices fluctuate all the time. Some go up, some go down.
What we've found is, again, our product is heavily engineered. It's not a commoditized battery. As a result, those movements in commodities really have not a significant influence on our margins or our sale price. As we increase our capacity, as we increase our production, we're seeing more power in our buying power. We expect overall margins to remain robust and grow as time goes on.
Thank you. One more question on this topic. Can you clarify the response on the lithium price? Are you saying that if lithium prices rise, you could just pass that on to the end customer?
Lithium price movements have very little bearing on the overall cost or sale price of our units.
Okay. Thank you. If you don't win bids, can you talk about why? Is cost ever involved?
We're quite happy to lose bids if it comes down to cost. We have a very robust pipeline of orders already and that's growing every week. If someone wants to buy a cheaper battery, they're most welcome to.
How far down in the manufacturing process does Electrovaya go? Are you buying cells from Korean suppliers and then fabricating those cells into batteries? It sounds like they are primarily supplying the separator.
We manufacture the cell. Now, this is a very complicated process where we buy materials from many different suppliers. Fundamentally, it's an Electrovaya cell. That is the core building block. We make battery systems out of that cell. The Jamestown facility will assemble that same lithium-ion battery cell by using more and more domestic supply chains on the input materials.
Thank you.
Can you talk about the core strengths of your IP portfolio and who are the closest competitors with other materials?
IP, of course, is very important to us. There are two aspects of IP. There are the patents themselves, and then there is the know-how. In terms of patents, we have about 100 patents, thereabouts. We have continued to file new patents. There are currently four or five new patent applications under review, and most of those new patents are currently around solid-state batteries. We have about 30 patents around lithium-ion battery ceramic separators. Going to the know-how portion, that is really where most of our IP really sits. If you patent things too much, your competitors see the products more and more over there.
A lot of the protection is really in how you manufacture using ceramic separators or how you assemble these lithium-ion batteries rather than physically what it looks like.
Okay. Thank you. Can you comment on your view of longer-term gross margins when you take into account capacity utilization ticking up?
Yeah. We expect gross margins have been very steady around just over 30%. We expect them to slowly creep up, and we're targeting around that 40% number. More important now that we're generating strong EBITDA, I would focus on the EBITDA percentage as time goes on and, of course, net profits.
Okay. Thank you. How are you approaching global demand and expansion outside of Japan and North America? Will you seek to enter other markets that may present opportunities?
We'll be opportunistic, but we don't want to get ahead of our skis either.
Electrovaya has had a conservative approach to our business, and that has panned out well for us. For instance, the Jamestown facility, there was a lot of pressure on us to upsize that facility from day one. I think we made a conscious decision, which was the correct one, of sizing it to what we could fill up in terms of demand very, very quickly and then scale it as time goes on. The same thing is for other geographical markets. We are looking at Europe. We are looking, of course, at Japan. We will play things slowly. We want to see that demand being very clearly there before we make those types of decisions and investments.
Okay. Super. I guess this question really delves into the whole lithium-ion recycling conversation and specific to your batteries. Do you get involved in that at all?
Or I guess, are any of your customer batteries coming to the end of life, and they have to do something with them?
So the Infinity battery systems were launched in essentially 2018. Not one of them has been recycled for reaching end of life. The only recycling that we really do is if batteries are involved in a physical accident or they don't meet our quality standards. When that happens, we have relationships with recyclers. Our technology is such a long-lasting battery, the recycling component is much less significant than typical lithium-ion batteries.
Since your batteries are in vehicles, do companies need to seize or shift operations to provide VPP grid services?
We have not seen that yet.
Okay. Again, to our audience, if you have a question, please use the question text box. We've got a few questions remaining.
Are any of the recent announcements of new battery technologies coming from the Chinese or GM, LG of any concern to your future business? If not, why not? And will your solid-state battery keep tech ahead if successful?
Electrovaya is focused on what we're good at, and that's being a platform technology. Chemistries evolve, and will continue to evolve. Cathode-anode chemistries will improve over time. We want to be in a position to leverage those improvements as they come. What's different about us is we make those chemistries into a safer, longer-lasting battery. That is what we will continue to focus on. The same is true for our solid-state battery. The focus there is on the electrolyte and separator, just as it is on the Infinity battery. As cathode materials become more energy-dense or lower cost, we can leverage those improvements.
Okay. Thank you.
As you think about potential U.S. expansion, are you looking at Jamestown or other locations?
If we're to expand our U.S. production beyond this first phase, it would be in Jamestown because we have the 52 acres. We would just make the building larger.
Okay. Which module type will the energy storage offering use and how many megawatt options?
It's a specific module design that we're working on. In terms of the block size, it'll be 20-foot containers, and these can be scaled as necessary.
Thank you. What is the warranty program you offer? Have you typically reserved for warranty expense and have claims been at all meaningful or beyond estimates at any point? How old is your oldest battery in the field?
I'll start that, and John might conclude. The oldest battery in the field is now seven years old, I think, around that.
It's outlasted the vehicle it was installed in, and it's on its next forklift. In terms of performance, it's lost less than 5% of its battery capacity over that period. It's demonstrating that result. In terms of warranty claims, they've been very light. We've probably allocated more than we needed to for that. John may.
Yeah. That's exactly it. We do provide for warranty. It's just good accounting practice. Historically, we've not seen any significant claims or anything outside of the ordering.
Thank you. How is Electrovaya going to benefit from 45X and other U.S. tax incentives? What is the potential margin uplift to battery system producing in Jamestown when incorporating these types of incentives?
We've been watching the new bill go through in the United States. It's not 100% clear what's going to happen with 45X.
From the initial bill which passed in Congress, 45X is remaining, which is a good sign and a good thing for Electrovaya. The restrictions on 45X seem to be against supply chains relying on China, which we are not. We believe that that production tax credit will benefit production coming out of Jamestown. By how much? It is hard to say. It could be about a fairly substantial benefit to us.
Perfect. We have reached the end of all questions, Raj, John. Maybe some closing remarks by you, and then we will end the presentation.
Glenn, it was a pleasure. Great questions, as usual. John and I are very pleased to see what is happening with the business as we continue to track according to what we laid out.
We are looking forward to a number of major further advancements next year, namely the most important of which is the start of production in Jamestown. Of course, continuing the trajectory with regards to improving profitability and revenue as time goes on.
Super. Really appreciate it, Raj, John. To our audience, thank you very much for joining. This concludes this presentation. Thank you so much. Bye. Thank you.