Last year, venture capitalist and provocateur Vinod Khosla spoke to about 300 energy storage experts at the annual Energy Storage Association (ESA) meeting. He acknowledged the critical importance of energy storage, showed his knowledge of the sector, and had the crowd eating out of his hand. He then proceeded to dismiss many of the technologies that those at the industry gathering were working on as "toys" because of their inability to scale to truly solve grid-level problems. He also predicted that A123, the lithium-ion battery manufacturer, would not be around in ten years.

That was less satisfying for the audience (which included A123). The incoming and outgoing chairmen of the ESA were somewhat aghast at the comments, although I'm sure Khosla would say them again. Especially since he was absolutely correct about A123.

Yesterday, A123 filed for bankruptcy protection, putting the status of its proposed $465 million bailout by China's Wanxiang -- as well as its $249 million in federal loans -- in question. As Jeff St. John reported, the Waltham, Mass.-based company also said it planned to sell its automotive battery business to Johnson Controls for $125 million, though the deal could be subject to competing bids in the bankruptcy process.

That move, announced on A123’s website, would appear to put an end to a proposal from Chinese auto parts giant Wanxiang Group Corp. to invest $465 million in A123, which would have given it an 80-percent stake in the company.

Khosla described lithium-ion batteries as "toys that can't be deployed at scale." He said that lithium-ion was "too volatile" and "too expensive."  To be economical, energy storage has to be fundamentally safe -- without the necessity to wrap tons of management and safety equipment around it to keep it from exploding or catching fire.

Khosla went on to say that storage is the key to better power utilization, a more reliable grid, and not having to hassle consumers with programming their dishwasher. More local storage means fewer security requirements and fewer potential cyber-wars.


The Khosla Ventures energy storage portfolio includes:

  • LightSail - (which looks like containerized mobile CAES)
  • Sakti3 - Solid-state lithium-ion battery for automotive applications
  • Seeo - Solid-state lithium-ion on a polymer electrolyte
  • Pellion - Rechargeable magnesium-ion battery that is "inherently safe with no liquid electrolytes"
  • Quantumscape - The ARPA-E site calls it a “completely new class of electrical energy storage devices for electric vehicles that has the potential to provide ultra-high energy and power densities, while enabling extremely high cycle life.”
  • Ambri (formerly Liquid Metal Battery Corp.) builds a battery using molten antimony and molten magnesium separated by an electrolyte for utility-scale markets.

Tags: a123, batteries, doe, khosla ventures, lithium ion, vinod, vinod khosla