BOSTON, MA – December 12, 2013 – Envia Systems, a high profile lithium-ion battery start-up, has become embroiled in a bitter and revealing set of lawsuits, one filed by a start-up called NanoeXa, and another filed by former Envia management. The Superior Court of California published court documents detailing a wide range of accusations, which GigaOm summarized. Additional primary and secondary research by Lux Research – including interviews with Envia’s leadership and analysis of third party test data – paints a more nuanced picture of this start-up’s technology, IP strength, partnerships, and challenges.
"Most are being a bit too quick to shovel dirt on Envia's grave, as NanoeXa initiated a lawsuit related to this cathode material before, and lost it," said Cosmin Laslau, Mobile Energy Analyst at Lux Research. “The courts will have to determine whether any stolen IP played into Envia’s developments, but it's certainly not a given that NanoeXa's claims are all true.”
Envia’s technology traces its roots to a high-voltage cathode material it licensed from Argonne National Laboratory (ANL), which NanoeXa also briefly had rights to. ANL then terminated NanoeXa’s license after a legal fight that NanoeXa started and lost. Moreover, although Envia acknowledges it obtained some raw material from Shin-Etsu that it mixed into its own silicon anode formulation, this work is not a differentiator – Envia will rise or fall based on its cathode technology. However, though this isn’t unique in the start-up world, Envia made a strategic mistake in aggressively marketing a technology development that is far from commercialization. The 400 Wh/kg EV cell using silicon was really only ever a lab demonstration, and its actual production-suitable graphite anode cells only reach 215 Wh/kg.
Envia claims that despite the lawsuits it still has a working relationship with GM, involving commercial terms. Nonetheless, the allegations in the NanoeXa lawsuit, particularly around IP, will be damaging to Envia if true. The start-up faces a challenging road ahead, so Lux Research is downgrading its take on the firm. In the broader context, if the allegations against Envia are true, they may deal a blow to GM, embarrass the U.S. battery industry, raise the bar of credibility for other battery start-ups, and further ding government initiatives like ARPA-E that lauded Envia, while pushing OEMs further towards more reliable Li-ion incumbents like Panasonic, LG Chem, and AESC.