All of this work -- Xing's and the other ARPA-E projects -- occurs in the context that an interesting battery isn't always a useful one. For electric cars to succeed, ARPA-E reckoned, they need batteries that can be mass-produced. Moreover, they have to drive like gasoline cars without costing more.
So when ARPA-E offered funding, it set a few conditions. "Breakthrough" batteries should cost about a quarter of what car batteries cost today, while more than doubling the energy they can hold in the same area. This disqualified batteries with pricey ingredients like gold or platinum, for example, and other batteries that are cheap but pack no punch.
ARPA-E would give special consideration to batteries made differently than Asian competitors do and to batteries that show potential for mass-manufacturing on U.S. soil. "At the end of the day, we want the scaling in the United States of these successful technologies," said Majumdar, the ARPA-E chief.
By some indications, this is actually an area where the United States is several steps ahead of other countries. Japanese, Korean and Chinese companies are more focused on today's technology, fine-tuning the manufacturing to cement their lead in lithium-ion batteries, according to venture investor Dhiraj Malkani, a principal with RockPort Capital Partners. "There's not much disruptive innovation going on, on the technology side," he said.
That plays to a U.S. strength: the ability to discover cutting-edge ideas in universities and research labs. It also highlights a U.S. weakness: the tendency to find these ideas, then lose them to overseas developers. The missing link is often the lack of patient, private investors.
Majumdar and others say cutting-edge energy technologies are so risky and unmarketable that companies and investors won't play. So this is where ARPA-E comes in, Majumdar says. After three years of funding, an awardee should have enough science for a venture capitalist to say "yea" or "nay." The riskiness of the prospect becomes far less daunting.
Malkani, the venture investor from RockPort, agreed that many of the ARPA-E awardees, especially the ones coming from universities and labs, are too immature for him to take on right now.
"We just haven't found the right pick for us, from the standpoint of a technology that's really disruptive," he says. "We are tracking a couple things that fit that bill and look very promising."
Lithium-air fits the term "disruptive," but there's a reason he doesn't mention it. It has to do with the term "exit."
The role of the venture capitalist
Venture capitalists think of their investments as short-term relationships. When someone like Malkani sees a disruptive technology, he checks if the inventor has resolved the basic science questions and can actually do, in the lab where he controls all the conditions, what he says he can do.
If it checks out, he funds the inventor's startup company. Then he becomes one of its executives. Venture capitalists often join a company's board of directors; that lets them gauge, and guide, the company's progress. The goal is to turn an inventor's prototype into a product.
If that works, Malkani would help the company issue stock to raise more money -- "going public" -- and head on to his next project. Or he'd hand it to a larger company that thinks it has promise. This is normally where the venture capitalists "exit."
Venture capitalists generally want the process to take five years, but Malkani says seven to 10 years is typical. Lithium-air isn't near these timelines.
For the moment, venture investors are focused on lithium-ion, the lightest, most cost-effective battery for electric cars today. Matt Nordan, a vice president at Venrock, says that worldwide, companies and governments have plunged $4 billion into new lithium-ion factories in the last five years. "They're not going to abandon those facilities in short order and jump to a different kind of technology," he said.