All right. Thank you, everyone. My name is Jeff Elliott at Three Part Advisors, for those of you who do not know me. Our next presenting company is Electrovaya, trades under the ticker ELVA. Here with us today from the company, we have Raj DasGupta, the CEO, and Jason Roy, VP of Investor Relations and Corporate Development. Electrovaya is actually a new client of Three Part Advisors. They started with us in November, so if anyone would like a meeting or a follow-up, please reach out to me directly. Happy to help set that up. With that, I will just turn it over to Raj.
Hey, good afternoon, everyone. Great to be here in Dallas. Today I'm going to talk about Electrovaya and our lithium-ion battery technology and where we're headed as a company. Thanks, Jeff, for the intro. We're very glad to be a new client of Three Part Advisors. It's an exciting conference. Electrovaya, let me—where is the—what do we do? We're a battery company. We make lithium-ion batteries. We've made lithium-ion batteries for over 20 years and are one of the pioneers of lithium-ion battery technology. However, the current incarnation of the company really stems from 2018 onwards, and that's what the business is today. In 2018, we developed a technology which we now refer to as the Infinity Battery Technology. What this is, is it's a lithium-ion battery technology agnostic to chemistry. It can be paired with a variety of cathode-anode chemistries.
Chemistries, but what it provides is it enhances the cycle life of the battery by a significant margin. We get, with the same chemistry, we extend that cycle life by about a factor of four. What is cycle life? Cycle life is the number of charge/discharges you can do on a battery before it reaches its end of life. Of course, you're very familiar with your phones, and your phones will die after about two years of one cycle a day kind of usage. That's roughly 800 cycles. An Electrovaya battery will do at 100% depth of discharge 10,000 cycles, and at a normal utilization, 15,000 cycles. Not a good technology for your phone because then you might keep your iPhone for a little too long. A great technology for things that operate nonstop.
Think forklifts, think robotics, think certain energy storage applications where the battery needs to be on all the time. It needs to have full performance all the time and can't be losing performance at any given moment. The other attribute we bring with this Infinity technology is safety. If you look at lithium-ion battery safety or lithium-ion battery fire, you'll see lots of videos, lots of buses catching fire, batteries catching fire in planes, et cetera, et cetera. Someone actually mentioned it this morning that the airline was saying, "If you have a battery that's catching fire, please let us know." I thought it was interesting. To mitigate battery safety issues, we have a full ceramic separator technology. We're the only battery company that I know of that has commercialized something like this. We've scaled it. We've deployed this technology in 30,000-plus battery systems.
That includes forklifts, robots, cars, et cetera. Safe and long-lasting batteries, we make them in smaller quantities. They're a little bit more expensive. We focused our efforts on applications which will pay for that performance. That is not necessarily—we decided it was not cars. We went after material handling to start with. This is an industry which is very large, mature. Most of us do not know about it too much because you do not see it. You order from Amazon, and magically, your goods appear. Inside those warehouses, the forklifts are operating 24/7. They are moving your e-commerce goods. They are moving your dog food. They are moving your groceries. They are working all the time. Inside these distribution centers, the batteries are doing multiple charges per day. I drive an electric car. I will charge my car once a week.
It sits parked 23 hours a day and is moving one hour a day. That is pretty typical for a passenger car. A forklift would be the opposite at one of these sites. It is operating 23 hours a day, and it is parked for one hour a day. Batteries that are safe, operating within buildings, and have high performance is what these customers are after. That push from the company into that space has been successful. We now power 16 Fortune 100 companies' operations. A big part of that is retail, the largest retailers in the world are using our batteries in their operations at over 300 warehouse sites in multiple continents. That success has led into the financial results. We have had 10 consecutive quarters of positive EBITDA. A battery company that makes money is unusual, especially one of our size.
We're going to be likely in net profit for the full year of 2025. Last couple of quarters have demonstrated that as well. We are now expanding the company. We're growing our manufacturing footprint in the United States in a place called Jamestown, New York, a beautiful place, but also close to hydroelectric energy. We have low-cost power, which is important for making batteries. That site is under construction. We have a direct loan from the EXIM Bank. That's the Export-Import Bank of the United States. We actually won Deal of the Year from EXIM, even though the plant's not finished yet. Last year's winner of that award was a company called Beta Technologies, who's doing an IPO right now. Fundamentally, we're solving these two key problems: battery safety issues and cycle life, key, key issues for these mission-critical types of applications.
There have been issues in the space. There have been multiple warehouses that have burnt down. Burning down a warehouse is very costly, as you can imagine, and something that these companies do not want to do. Burning down data centers as well from backup power from poor-quality batteries, right? Data centers, as you may guess, are very expensive, and you do not want to burn them down either. We feel our technology is at the right time, right place, and is proven. In terms of competitive advantages we bring, in addition to safety and longevity, we also have that domestic production, which is becoming a competitive advantage on its own, especially with certain applications, defense being one of the most important. Markets we are targeting, of course, include our current bread and butter, but it is not the only one that is going to be there for us.
We're launching products into robotics. We're going from zero, essentially, revenue in robotics in 2025 to expected multi-million revenue in 2026. We're launching products for airport ground equipment. We're launching products for energy storage. Defense, we've been working with two defense contractors, which are starting to scale, again, starting in 2026. We grew nicely from 2024 into 2025 on the backs of material handling. We expect material handling to carry on growing, but now we're adding on these other segments. Just the battery space is complex, right? If you look at the newspaper, there's a new chemistry frequently mentioned. There's a new gigaplant that's being built here and there. Here, I'm trying to simplify the space for you. If we want to look at it, there's the traditional lithium-ion battery manufacturers. These are companies like CATL, LG Chem, Samsung, Panasonic, the list goes on.
These companies are doing great work. They're building very big plants. They're vertically integrating. They're driving the price of batteries down. They're focused on one or two key markets. The most important market they're after is automotive. The key metric that this market is looking for is how much range you can get on a car per dollar, right? It's dollars per kilowatt-hour. That's the most important metric. It's a commoditized market, raced to the bottom to some extent. Electrovaya is not going after that space at all. It's too competitive, and we don't have the scale. That said, we're leveraging the same chemistry that that space does. We buy the same electrodes that are used in that space, so highly qualified and mature materials, which we leverage, but we enhance with our separator and cell technology.
I'll come back to that in a second. The other area that is getting a lot of news is silicon anode, solid-state battery technologies. We also have our foot in that space a little bit. There are a large number of publicly listed companies who are participating in that, companies like Amprius, Innovex, SES, a long list of them. They're generally getting good valuations. They're after markets which need very, very high energy density in a small space. Think drones that go up in the air, perhaps consumer electronics, things like that. Electrovaya is participating in this other section, which is this mission-critical, heavy, heavy-use applications, perhaps drones that go underwater or submarines, military vehicles that are on land, applications which need better safety, better cycle life. There is actually a dearth of competition in this space.
This is actually a very large, addressable, growing market. As I mentioned, material handling, that's been our first space we've gone after. Robotics, launching, we've developed products already and have about four or five different robots that we're going to be powering from next year. GSE is airport ground equipment. Why does that make sense? Airports need very safe batteries, and they also have a high-duty cycle. Airports are generally starting to electrify the ground airport ground equipment. The good news here is there are only really five large customers in the space in North America, five large airlines. Those airlines make the purchasing decisions. We're currently being trialed by one of the top four U.S. carriers. We're optimistic that that is going to become a significant space for us as well. Lastly, here is the defense space.
Again, why does it make sense? We have both the domestic production, but importantly, these high-performance batteries are very important for things like submersibles or if you're looking to hybridize military equipment that needs very safe batteries, which aren't a hazard to the personnel. Lastly, energy storage is a market. We're developing a product. We're going to deploy it in small amounts in 2026 with an intention to scale it in 2027. We're targeting applications which are looking for backup power. Not necessarily the bulk energy storage, but the energy storage which is going to be located close to critical infrastructure, like data centers, like distribution centers, and looking at shorter-duration power backup. Higher power quality, reliable energy. Now, Electrovaya is a relatively small company, but we're powering and we're partnering with the world's largest companies.
Our largest end customer here is not listed there, but they're in the retail space as well. In terms of OEM relationships, we have a relationship with Toyota Material Handling, which is by far the largest manufacturer in that space. We are white-labeling our technology in a number of their platforms. Robotics, we have a partnership with Sumitomo Corporation in Japan. Electrovaya is actually shipping batteries from North America to Japan. That is the opposite direction batteries normally travel in. That is really a testament to the technology and how we can differentiate ourselves from the commoditized-driven battery companies. It is well proven. The very first batteries, every battery we've produced in the material handling space is still in operation. The very first ones were deployed at Walmart in Canada in 2018. We replaced lead-acid batteries with our batteries.
Just giving you an idea of how they were looking at things, each forklift there was normally powered with one 2,000 lb lead-acid battery. They would have another lead-acid battery for that same vehicle charging and another one ready to go. Every eight hours, they'd be swapping these batteries. Even with that shared duty cycle, those batteries would last about three years, three or four years. They'd have to replace all of them again. In a 10-year span, you're looking at at least nine batteries per vehicle. In our case, the battery we deployed in 2018 outlasted the forklift they were installed in. They're in their next vehicle, and they're still at 95% capacity. Really, really demonstrating the longevity of the technology and how we can provide significant savings to the customers.
On the safety end, we passed the most stringent safety tests you can throw at batteries. The most interesting test here is actually the blue battery there you see in that corner. In that battery, at that moment, there's a cell in that pack. This is a large pack, which was built for Toyota, where we purposely set a cell on fire as part of this test. Normally, what would happen is that cell would catch fire. Of course, the rest of the cells would quickly catch fire and you'd see a lot of smoke and soot. In this case, it just looks like a perfectly positioned battery. That fire stayed in that one cell and didn't propagate. Really a testament to this technology. Why does it work so well? It comes down to ceramics.
We make the world's only ceramic separator that's really been commercialized today. Ceramics are stable at high temperature and provide that thermal stability. Typical lithium-ion batteries, in fact, all of them otherwise, would use polymer-based separator materials. The job of a separator is what its name implies. Its job is to separate the cathode and anode in a lithium-ion cell and at the same time allowing the lithium ions to go through it. It is a porous membrane. Generally, those polymer materials work great, which is why you all have them in your pockets and are not too worried. However, if they get too hot, that separator will shrink. Too hot is about the temperature about 100 degrees Celsius normally, which is a relatively low temperature for anything going wrong, right? If something goes wrong and that cell gets too hot, that separator will shrink.
That cell will then have a short circuit. It will catch fire. Making matters worse, neighboring cells will get exposed to the heat. Their separators will shrink. They will catch fire, and so on and so forth. This is generally why lithium-ion battery fires are so difficult to stop once they start, because keeping a fire below 100 degrees Celsius is next to impossible. That is the challenge in the industry. In our case, that separator membrane is ceramic, stable at high temperatures, and will remain intact during such an event. Ceramic separators are also important for solid-state batteries. A solid-state battery gets in the news quite a bit because it has potential to increase the energy density, so the amount of energy put into the battery by a significant margin.
That is because the idea is you eliminate the use of liquid electrolytes in your lithium-ion battery, and you also enable the use of using pure lithium as one of the electrodes. Again, going back to your phones, your phones have graphite as one of the electrodes. If you replace that with lithium, your energy density goes up significantly. The reason that is not used today is lithium is highly volatile and cannot be used with liquid electrolytes. Solid-state batteries, the idea is the separator itself is acting as that ion exchange membrane. We have been developing one ourselves using the same techniques we have already used for our Infinity battery. We are making small cells right now. We recently did an equity raise. Part of that purpose was to start scaling this project.
An issue, a good problem to have, is we have this battery which lasts an extremely long time. Repeat business. Going back to that Walmart case, that battery keeps going and keeps going. They're not necessarily going to replace it for a very long time. Getting recurring revenue is something we're looking to grow. We've launched some software solutions as well, which Walmart, as an example, is a customer of. Analytics is a part of it. We're looking to increase that with demand response software systems. A new foray would be energy as a service. Instead of just selling all these batteries, we would keep some of them ourselves and subscribe them to customers. Now, the large customers, which are the bulk of our business, the large Fortune 100 type companies, they probably will not take part in something like that.
This would be more for third-party logistics companies who are looking to pass on services, which they already provide their customers. Generally speaking, our strategy overall is leverage the strengths we've developed. We've developed also relationships with the world's largest corporations, which enable us to sell other technologies, energy storage, batteries for robotics, etc. We believe we are well positioned to become the leading battery player for this type of mission-critical, heavy-duty type of application. Our goal here is to continue scaling it. The Jamestown site in New York, which I'll come to, is a big part of that strategy. Jamestown, we bought this 52-acre land. It has a 140,000 sq ft building on it. We've already started to or are well underway on the construction effort. Today, we have the direct loan from EXIM , which closed in March 2025.
We are anticipating to start cell manufacturing at the site around this time next year. Equipment will start turning up at the site, actually, by the end of this year, this December, with the bulk of the cell manufacturing equipment showing up in the spring. There is a startup qualification period over the summer with the objective to start commercial operations in the fall. This site is not just going to increase our battery manufacturing capacity. That is its primary goal. It also gives us that domestic content, which is incredibly important for certain segments that we are targeting. On top of that, we are going to get production tax credits that remained in place under the new administration's recent bill. That was a nice surprise. In addition, output from the facility will be eligible for investment tax credits for energy storage.
Those investment tax credits can be up to 40%. In terms of financials, we'll have another update on financials in a couple of weeks. Our Q4 results should be out by about the week of December 8th. We pre-announced our Q4 quarter, though. On a revenue standpoint, it was about $20 million. We're continuing that growth trajectory. We're in a very favorable position. In terms of financing future growth, we have, of course, the facility from EXIM that's just only dedicated to supporting the Jamestown, New York expansion. We have a working capital facility of $25 million from BMO. That's also extremely helpful for our future working capital capabilities. We recently did an equity round about two weeks ago, which was for $28 million. Overall, the balance sheet is very, very healthy. Most importantly, we're making money, right?
That is really key. That is ultimately the objective in our plan to sustain that even with the growth trajectory that we are on. Margins-wise, our battery systems are sold at probably one of the highest margins for lithium-ion batteries. They have been consistently around 30%. We expect those margins to further improve with the domestic manufacturing because it will all be vertically integrated. Again, we are selling on performance. We are selling on technology. We are not selling on price. This cap table will also be updated when our Q4 numbers come out. There are a few more shares now. With that, I would happily take any questions. Yes.
The business has a lot of values. What is the cost differential between the ceramic and the traditional polymer separator? Maybe you also talked about the price differential. The customers really want to have an extra piece of traditional.
Great question.
The question was on the cost differential on the separator technology that we offer versus the conventional. There is a significant cost differential there. However, if you look at it on the cell level, if you look at the overall cell bill of materials, while our separator may be, let's say it's double the price of the polymer separator, it's still ranked number four or three in the bill of materials for a lithium-ion cell. The most expensive material is the cathode, followed by the anode. Typically, that's followed by the separator. Our separator will still be ranked three, but it'll be more expensive than the polymer material. The second part of your question, which was the cost differential to the customer, there are two parts of it, which is there.
One is we make a smaller quantity of batteries, and we will not be equivalent to an Asian competitor on price, right? Our starting position will be higher. Our commoditized batteries are being sold at gross margins under 10%, and we're selling at over 30%. There is a sale price differential as well. Ultimately, customers would be looking at maybe a 25% premium to use our technology. If you're in the business of warehouse automation, for instance, or let's say you're an e-commerce company, and your job is to move goods in and out of buildings as efficiently as possible, and one battery is 25% more expensive than the other, but it's going to last four times as long, it's not going to catch fire, and you can rely on this tool more than that tool, you're going to buy it all day long.
That's what we find. If that customer is a consumer looking at a car, and this car battery is 25% more than this battery, and it goes 100 mi in both cases, this one's safer. It's not going to burn down your house, but I'm going to take that risk probably and buy the other battery. That is why the mission-critical applications are so important. The sophisticated B2B sales is really what we see as our future.
Right now, going to the warehouse and so forth, is that a leading domestic visit or down the global reach? Also, with regards to the tones that are being tested by the airlines, does that have a potential to be expanding, say, in Europe or South America and other airlines other than, say, the major U.S.?
On the warehouse side, it's most definitely global at this point.
Our largest customer is in e-commerce. We're powering warehouses in three countries currently. That probably will grow. We have batteries in South America and Asia and North America, etc. The United States is our market by far, but most definitely not the only one. With regards to airports, we would start with the North American market to start with and consider expanding beyond that.
If they adopt it, they like it, then they'll probably use it. The international carriers, I guess, kind of learn their own.
Correct. The carrier that is testing the solution right now is, you couldn't have a better carrier to be testing it. They have, generally speaking, they're the first mover for new technology. Yes.
I guess staying on this subject and your strong portfolio of intellectual property, how much of your operation is focused on research and development and training and sales?
Great question. Research and development is the reason we are where we are today. I come from that background myself. I have a PhD. A lot of our team comes from that background as well, including our head of sales has a PhD as well. Focusing on continued development of new IP is core in our DNA. We have been filing roughly about two to four patents per year and will continue to make that a priority. That said, patents are only a portion of the effort here, right? Patents, to some degree, are for the competition, looks like a cookbook in a way, right? You can only patent so much.
A lot of the IP is around know-how. The complexities of know-how, you do not necessarily want to write it all down. There is a bit of both taking place. Yes.
Do these batteries have the same charge density at temperature or distribution?
In fact, they charge faster because they can run hotter. The higher the temperature of a cell, the lower the internal resistances. You can charge it faster. Going back to use of proceeds from this recent round, robotics is a key focus of mine. I think that is a space that is going to go, this is the time to get designed into these devices. Robotics, there are some of them when we are speaking with some customers, especially those in e-commerce, they want those robots to charge in under five minutes. That is a challenge and challenge accepted.
That's something where we have to work on. We're planning to, we're working to develop something that can charge that quickly. Yes.
Expand to you or there's a lot of the automated material handling of the MSI European companies that export their assets out. Are you in discussions there with Toyota? You mentioned Toyota, they want to be behind. What's your footprint on the European side?
Great question. Our core focus has been the North American market because we're physically located here. Europe, we're well aware, is a market that we should eventually get to. We do have this relationship with the Toyota Material Handling Group. Just giving you a perspective, in the North American market, they're over 50% market share. Right. Some of them are automated. Not in automated.
They have their own automated group too, but it's a fraction of Dematic who's out of Belgium, I think. However, we had, it's like being married, right? You can't necessarily flirt too much with the competition. That situation for us is changing a little bit. If you look at us a couple of years back, when we started this relationship with Toyota Material Handling, we were in a vastly different position than we are today. We had negative shareholder equity. We had massive debt, lots of losses stemming from 20 years of struggles. Today, we're in a completely different position. That enables us to be a little bit more aggressive with pursuing other opportunities.
It sounds like you're the only player with the ceramic separators. I'm very curious about your pricing power.
If you were to increase prices by 10%, would your customer base change at all?
We have no, they'd probably stick with it. They would give us a little bit of a hassle. We've generally we want to keep everyone. I think the pricing level we have right now is high enough to allow us to make profits, invest in the business. We potentially have pricing power to increase things further. Our core objective in the near term is growth. Growth will come from working closely with those customers. Those customers have the ability to bring us, they've been introduced to this technology in the forklifts to start with. Some of those customers have data centers. They have robots. They have robotaxis. We want to foster goodwill, long-term relationships where this technology can really expand far beyond where it's starting from. This thing is flashing red.
I don't know if we have Dan here, but yeah, it's spot on. Okay. Perfect. Thank you.