Electroflow promises to make LFP material for 40% less than Chinese producers

The battery world has fallen head over heals for lithium-iron-phosphate cells, a cheap, durable chemistry that can lower the price of a vehicle by thousands of dollars. Tariffs and anti-China regulations have complicated the picture for American automakers.

“We think LFP is the missing ingredient for energy prosperity. The problem is it’s literally 99% made in China,” Eric McShane, co-founder and CEO of Electroflow, told TechCrunch. “If we want to have a chance of competing, we’ve got to flip that script.”

McShane and his co-founder, Evan Gardner, have developed a technology they think is capable of undercutting Chinese producers on cost by cutting out several steps in the production process. If they can deliver, they could cut the cost of a LPF battery by as much as 20% while building a domestic supply chain.

“We looked at the whole process of mining, starting from the rock or the salt water and getting all the way to a lithium chemical. We were like, man, that’s like ten steps,” he said. “That clearly is not the best way to do it.”

Much of the world’s lithium comes from salty water found deep underground. When pumped to the surface, those brines can be processed to extract the lithium they contain. Brines in the United States contain millions of tons of lithium, enough to produce millions of EVs per year. The potential is so large that ExxonMobil is developing a site in Arkansas, but refining costs make competing with Chinese suppliers difficult.

LFP powered from China sells for around $4,000 per metric ton today, about one-third what it costs in the United States. But McShane said that once Electroflow is at full-scale production, he expects the company will be able to produce it for at least 40% less than the Chinese producers, all while doing it in the United States.

“In our V1 system — end of this year — our goal is to be about a $5,000 per [metric] ton production cost point, and we’re going to scale up and get this to less than $2,500 per [metric] ton,” he said.

Electroflow recently raised a $10 million seed round, TechCrunch has exclusively learned. The round was led by Union Square Ventures and Voyager with participation from Fifty Years and Harpoon Ventures.

The process developed by Electroflow takes just three steps to transform salty water into LFP material. The startup recently proved the technology worked on salty brines extracted from a pipe at a geothermal site in California.

Electroflow’s technology is based on lithium-ion batteries themselves, not surprising given that both McShane and Gardner previously researched batteries and battery materials. “We just were really fascinated by the idea of using newer technology, like battery technology, and applying it to other industries beyond batteries. Applying battery tech to mining, turns out, is really fruitful,” McShane said.

But the true inspiration for Electroflow came to Gardner one day when he was riding Caltrain to work in the Bay Area. As people were getting on and off the trains from the platforms, he pictured them like ions moving between different chambers of a device.

“He sketched it out on a piece of paper and brought it over to me,” McShane recalled. “I was like, oh man, that actually works.”

The startup’s key technology is a cell which contains anodes that, when run in one direction, absorb lithium ions from brines and then, in another, release them into water containing carbonates. When both passes are finished, the result is lithium carbonate that’s ready to be reacted with phosphate, iron, and other reagents to produce LFP powder that’s ready to be shipped to a battery factory. For manufacturers that want to make something other than LFP, Electroflow can stop the process early and just send them lithium carbonate.

The system runs entirely on electricity, and producing 50 metric tons of lithium carbonate per year would require only as much as one U.S. household, McShane said. The water used in the carbonate step can largely be recycled, too. “We don’t use a ton of electricity. We don’t use a ton of water,” he said.

When the full-size system is complete, it will be packed inside a 20-foot shipping container and be capable of generating 100 metric tons of LFP material per year. 

“We’re going to churn out these electrochemical cell stacks and really be able to process a lot of brine across the U.S.,” McShane said. He’s confident the company will be able to undercut Chinese producers, even in a few years when Electroflow reaches commercial production. 

“Unless methods in China change to be a complete blank-slate, clean-sheet solution like we’re doing, they can’t get much lower than this,” he said.