Livermore-based battery technology company Sparkz Inc. has leased a new building in Metro Air Park to manufacture battery components domestically for electric vehicles, home battery storage and utility-scale storage.
Sparkz signed a lease for a nearly 130,000-square-foot industrial building recently completed in Metro Air Park, said CEO Sanjiv Malhotra.
“We will begin working in weeks, not months” on tenant improvements, he said of the new building near Sacramento International Airport.
“We have customers asking us for products,” he said. “It’s a good problem to have.”
The new building was completed last year by La Jolla-based Badiee Development.
Sparkz has its production equipment in boxes and crates at its offices in Livermore and with vendors, and it wants to start assembling the production lines in Sacramento and have them making product by the end of this year, Malhotra said.
Malhotra said that inexpensive power from the Sacramento Municipal Utility District was a key factor in Sparkz's decision to locate in Sacramento.
"SMUD is the reason we are in Sacramento," Malhotra said, adding that its location will need to get even more power from SMUD as it ramps up operations. Malhotra said SMUD's electricity is significantly less expansive than most areas of California. The three things needed for battery production are access to affordable power, space and a workforce. Sparkz will be working on local workforce training and recruitment efforts, he said.
The company will have a handful of workers in Sacramento in months and the first building will employ about 250 people, Malhotra said. If it expands, it could grow to 500 employees by 2025.
If production goes well, Malhotra said, the new building he just leased is surrounded by other new buildings, and he might end up leasing one or both of them.
When it does start its production line, Sparkz will be the only domestic manufacturer of cathodes for batteries. Most are made in China, he said.
“There is no cathode production in the U.S. We are looking to change that,” he said.
The cathode represents about 40% of the cost of a battery, and it is the most expensive part.
Sparkz is also working on a cheaper technology.
It developed technologies and production methods to manufacture cathodes for batteries using lithium iron phosphate. That is one of the kinds of lithium-ion battery, with the other being nickel manganese cobalt, or NMC. Both are used in electric vehicle batteries and for power storage.
The iron phosphate battery technology has less energy density, but that type of battery can cycle successfully more than twice as much as NMC batteries before it's spent. Also, iron phosphate is cheaper to build, and that is the future of batteries, Malhotra said.
“Mobility and the EV sector is in transition. The first adopters were all interested in range. Now, it is all about cost. A less expensive battery means a less expensive car,” he said.
Also, if a manufacturer uses Sparkz domestic-built battery, the car can be eligible for a $7,500 tax credit under the Inflation Reduction Act of 2022.
The lower cost of the battery materials along with the tax credit for domestic production provides Sparkz a "big advantage," over imported competition, he said.
Malhotra founded Sparkz in 2019, after leaving the U.S. Department of Energy, where he served as the inaugural director of the Clean Energy Investment Center. Sparkz incubated in Tennessee and partnered early on with Oak Ridge National Laboratory in Tennessee on research. It licensed technologies to produce lithium-ion batteries made without cobalt, that can be used in zero-emissions vehicles and for grid storage.
Two years ago, it opened its headquarters and pilot facility in Livermore, after getting support from the California Energy Commission. In total, Sparkz has received more than $15 million in grants from the CEC. Last year, it won a $5 million grant from the Governor’s Office of Business and Economic Development’s California Competes program for a full-scale facility.
Three months ago, Sparkz was selected for $12.9 million from the Inflation Reduction Act Qualified Clean Energy Project Credit for domestic production of cathode active material for lithium iron phosphate batteries.
Last year, Sparkz had been interested in developing a campus at the former Aerojet Rocketdyne headquarters off Highway 50, but the company needed to move faster, Malhotra said. The Metro Air Park building is nearly ready to move into.
Malhotra said he's still interested in the Aerojet property, but that Cold War-era complex needed significant improvements, whereas the brand new building is ready now.
“Aerojet is a great site, but it was going to take too long to develop,” he said. “We have customers asking us for product now.”
