The company has just opened a mass production plant in Dresden, Germany, the largest ultracapactior plant in Europe, setting its sights on the coming generation of electric vehicles.
“If you talk about €1bn revenue potential, we need to do significant capex investment and expand our manufacturing footprint,” said Madiberk. “We are not only focussing on the passenger vehicle automotive market that requires significant up front investment but we have already established a stable business in market with shorter sales cycles in trucking and buses and industrial equipment.”
“We expect to see the volume production in 2020. If you make an impact you will create value and the value is financially important but this is not what we are aiming for, but growing the business and generating sales. In 2020 to 2022 sales will be measured by several hundred million euros and that’s the starting point for higher volumes from there,” he said.
“In ten years’ time we will have a major impact on hybrid electric vehicles at 48 V and ultracapacitors will be dominant technology choice for tier one suppliers, and Skeleton Technology will be at the forefront of that market,” he said.
Skeleton was founded in 2009 as a spin out of an Estonian research institute looking at 3D carbon materials and energy storage for clients such as Samsung SDI and Toyota for storing hydrogen.
“We made the choice early on to focus on the application that was closest to commercialisation which was ultracapacitors,” he said. “We put the focus on ultracapacitor materials with the European Space Agency (ESA) as one of our first customers in 2011, and then we moved up the value chain from materials to cells to management systems and now we for example in the UK with Sainsburys supermarket we have a full system.”
“Now we are over 90 strong with two main locations, in Estonia for cell assembly and R&D and manufacturing in Germany which increases our capacity to 4m cells a year,” he said.
“Our customer base is mostly focussed on transportation and industrial equipment and we see very strong market pull and we have the manufacturing capability to fulfil these orders – we are the only ultracapacitor company to have the whole chain,” he added. “We have our own curved graphene material. Most manufacturers use activated carbon made from coconut and the ash content and variability is quite high so we decided to go a different route. We synthesise curved hexagonal structures from inorganic materials to form the ultracapacitor.”
Rather than licensing the technology, Skeleton decided to produce it themselves, building cells and modules, which meant thinking carefully about how the material could be used in production. “This is the key to our advantage – that we use a different type of material and we found a way to scale it.”
“Together with partners we have developed production equipment by ourselves which was a key part of the development. It’s a composite which makes it scalable without separate aluminium layers and that has allowed us to scale the material parts with competitive costs. That’s where the company started,” he said.
The vertical model from material to system only works for some markets such as hybrid electric buses and full electric buses, he said.
“But clearly our main market is automotive with hybrids with 48V systems,” he said. “If you look at analysts reports by 2025 then 25 to 50% of all new vehicles will have a 48V hybrid system and ultracapacitors have a key role to play. If you take the same size ultracapacitor and Li Ion battery while the ultracapacitor energy capacity at start of its life is lower, because of the longer lifetime you get 22 times the energy out over the lifetime. And that power is available in 1 to 2 s – we are quite excited about this opportunity,” he said.
“48V in mass production will not be possible without ultracapacitors,” he said. “So we are not competing against other ultracapacitor suppliers but lithium ion batteries, but this is not the enemy as the combination of the ultracapacitor and li ion battery means you can increase the lifetime of the battery pack by 50%, give 20% more range or downsize the battery. In the long term, 10 years from now, this will be the dominant technology for car, buses or trucks,” he said.
The Sainsbury deal in the UK is a demonstration of this. Skeleton has retrofitted the supermarket delivery vans with a kinetic energy recovery system (KERS) based on its ultracapacitor and software developed in-house. “We purchased the motor and inverter and developed the software for the KERS ECU,” said Madiberk. “A key part of the development was software and software integration, how to integrate that with the power electronics and power systems and that provides 25 to 30% fuel savings in urban delivery.
“We have two options – the KERS system always requires modification of the vehicle, while our engine start module is a drop in replacement or add in pack that allows you to get the vehicle started for dead vehicles or in -40 ˚C temperatures.
Volvo service centres are selling that to fleet owners and customers today, he says. “Almost 60% of roadside assistance issues come from dead batteries and with our ultracapacitor you can harness the remaining energy in the ultracapacitor and get the vehicle started. This is also an issue in hot countries where the power is used for air conditioning and charging laptops for example,” he said.
The challenge is moving from a component supplier to a system supplier, especially in the automotive market. “When it comes to passenger vehicles we do not plan to act as a tier one supplier,” he said. “For the bus and truck industry where we position ourselves as tier one and a half – we can do our own systems but are also open to working with tier ones.”
This takes significant funding, which is where Madiberk comes in. He was the former chairman of the national railway company and studied law at university with his co-founder Oliver Ahlberg. But there was a family link with his father working in the Institute so he knew about the technology.
“In our case the key benefit was we managed to sign the first cornerstone partner with ESA and automotive tier one companies early on when our burn rate was really low. The first round of financing is always the most difficult and after that what helped us was very strong customer traction. At the moment the financing climate is really good – we have built up the technology and manufacturing and a clear cost structure.
“We are backed by a number of institutions including the European investment bank, and we are quite proud of the fact that they put faith in us, especially as several automotive suppliers are also customers of theirs.”
In the meantime industrial applications provide income. The company recently launched a series of 19in racks that provide megawatts of short-term power. The SkelGrid family has maximum power ratings ranging from 520 kW up to 1500 kW to provide backup power.
“In the semiconductor and electronics industries power quality is of utmost importance,” said Madiberk. “A power outage lasting for under a second can damage all the products on the production line, and the losses are compounded by the unavoidable downtime of clearing the backlog and setting everything up again.”
Getting the right mix of staff for the expansion is also important. “We have managed to bring in ambitious young people but also more experienced people,” he said. “Globally there are 4m vehicles with ultracapacitors on the road and our business development manager was responsible for 3m of those, and our CFO comes from Global Foundries and Infineon, so we have tried to pair our young ambition with specific industry experience.”
With the manufacturing plant in Dresden and major vehicle customers in Germany, does the headquarters have to move?
“Even today if you look at our management team it’s a good mix of Estonian and German – I would not comment on moving headquarters,” he said. “We also see with German customers from a logistics point of view having manufacturing and inspection closer provides a benefit. The supply chain is definitely a factor. If you factor in supply chain costs then it makes commercial sense to be right in the heart Europe and scale manufacturing.”
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