Element Energy closes $111M funding round to expand in BMS and second life ESS

Element Energy, a BMS technology developer focused on both first and second life batteries, has secured $111M in funding through a $73M series B equity investment and a $38M debt facility. The company has secured 2.5 GWh of used EV battery packs and is planning to validate its BMS system with a 50 MWh energy storage pilot in 2024. The investment follows an earlier funding round , also Series B, in November 2022 when the company raised $28M.

Element Energy has developed a distributed BMS technology that monitors and manage batteries on module level based on their state of health. Similar technologies has been developed by Australian company Relectrify for second life batteries and UK-based Dukosi for new batteries. The technology which can be used on both new and used batteries is first to be demonstrated in a large scale 50 MWh energy storage project where used EV batteries will be used to support a wind power farm in West Texas operated by NextEra Energy Resources. Through this project which is partly funded by a $7.9M grant from US Department of Energy and will go live early 2024, Element will collect necessary data and obtain UL certification for full commercialisation of the product.

Element Energy has also successfully sourced “nearly 2 GWh” of EV batteries from what we presume is the last batch of the Chevrolet Bolt recall (2020 and 2021 model) with cells and modules made by LG Energy Solutions. The replacements of these batteries were taking considerably longer time than the first recall and was seen as an extreme precaution as the batteries. In June 2023 the recall was put to a halt as findings verified the issues could be fixed by software instead. We also presume that the $38M loan facility the company now secured mainly will cover the battery assets.

The now announced Series B round was co-led by “one of the largest clean energy generation companies in the U.S”, presumably NextEra, and Cohort Ventures. Mitsubishi Heavy Industries,, Drive Catalyst, FM Capital, and AFW Partners also joined the round, along with existing investors LG Technology Ventures, Edison International, Prelude Ventures, and Radar Partners. Debt and equity capital was provided by Keyframe, an investor with a broad mandate seeking to solve capital market challenges.

Together with B2U Storage Solutions Element Energy is one of the few second life companies that have been able to secure large amounts of used batteries and deployed them in large scale energy storage solutions. Batteries from recalls should obviously not be a main source for this activities in the future as it comes with huge costs and reputation damage for the OEMs but when it happen this kind of solution might prove very important.