Battery Mates: Modular Energy Devices executives show off their lithium-ion battery. From left are Farshid Bakhtyari, vice president of engineering; Stephen Eaves, battery inventor; and Mark Dingley, business development director.
COMPANY PROFILE
Modular Energy Devices Inc.
OWNERS: Stephen S. Eaves, K.M. Abraham, Farshid Bakhtyari, Mark A. Dingley, Slater Technology Fund, EnerSys
TYPE OF BUSINESS: Produces specialized lithium-ion batteries for military, aerospace and commercial uses.
LOCATION: 271 Post Road, Westerly
EMPLOYEES: 5
YEAR FOUNDED: 2002
REVENUE: WND
Market for industrial-strength batteries is estimated to be $2-$3 billion
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Before laptops hit the mainstream, the small lithium-ion cells that power them cost about 10 times as much as they do today. By 2000, mass production had caused a sharp decrease in price, and a Charlestown electrical engineer named Stephen Eaves saw a big opportunity.
Though the price had plummeted for the laptop cells, the larger lithium-ion cells used in aerospace and defense systems remained expensive. To solve the challenge, Eaves built a large-format lithium battery using many laptop-sized cells – with a twist.
When one cell in a lithium pack goes bad, the rest of the units can eventually succumb to the defect. So he invented an electronic card that monitors the voltage and status of the cells and can switch off a group of problem units before they affect the rest of the pack.
“It was a combination of electronics that made the small-cell approach work,” Eaves said. “Before, [lithium] batteries were just electrochemistry with wires connecting them together.”
With the new technology, Modular Energy Devices Inc. was born. But the engineer needed to do more than invent a cheaper and more reliable lithium pack to wiggle his way into the multibillion-dollar industry.
First, he assembled a team of top techies that included Farshid Bakhtyari, a software and computer engineer, and K.M. Abraham, an electrochemist who helped develop the first lithium-ion cells in the early 1980s.
The men took the invention to trade shows and pitched the product to venture capitalists, but got no immediate investors. Then in 2003, the Slater Technology Fund – which invests in early-stage companies with public funds – chipped in $150,000 to get Modular off the ground.
Richard G. Horan, executive director of Slater, said the fund invested in Modular because Eaves and his team had the right credentials and “a big idea” to address a growing need.
With Modular’s battery, an electric scooter in May 2003 went 55 miles on a single charge during the Northeast Sustainable Energy Association’s Tour de Sol in Trenton, N.J., winning the race and shattering a previous record of 20 miles.
In early 2005, Slater provided another $160,000, primarily to hire Mark A. Dingley, a consultant with experience brokering deals in the electronics and chemical industries.
Dingley led efforts to secure a contract with the U.S. Army, to apply the company’s lithium-ion packs for use in military Humvees and land-based radar systems. John Riendeau, the R.I. Economic Development Corporation’s defense industry manager, helped link the company to Army officials.
Right now, according to Eaves, the Humvees have lead-acid batteries that often require the vehicles to be running to keep their electrical systems in operation. The running engine exposes the vehicles to an enemy’s heat sensors. A lithium battery, he said, would enable the electronics to run longer without the engine on.
The company is targeting several markets. Hybrid cars use batteries to supplement their fuel engines. Eaves said huge demand also comes from the Voice over Internet Protocol (VoIP) industry, which needs the batteries to keep phone systems alive during power outages.
In fact, the Federal Communications Commission began requiring VoIP carriers last year to have backup energy supplies to maintain 911 services. Dingley said the FCC rule, which took effect in November, has boosted demand for lithium batteries.
Lithium batteries also are used in uninterrupted-power-supply (UPS) systems that power computers during outages. Dingley said the UPS and VoIP systems make up a $2 billion to $3 billion market for batteries.
To add to its lead-acid and nickel-based lines, major battery maker EnerSys in February bought a controlling interest in Modular. Sanjay L. Deshpande, a vice president at Reading, Pa.-based EnerSys, has become vice president and general manager of Modular.
Currently, Modular plans to hire Aldotech Corp. in Warwick to manufacture 100 of its lithium batteries to use in trials to gain approvals needed to bring the packs to market.
While awaiting patent approval, the company also is in the process of moving from Westerly to Warwick to take advantage of the central location.
