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Green Energy: The Story ofElectrovaya
Dr. Sankar DasGuptaCEO, Electrovaya
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March/April 2010
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Disclaimer: Forward Looking Statement
This presentation contains historical and forward-looking statements. The forward-looking statements involve risks and uncertainties. Forward looking statements appearing in this presentation represent management’s current estimates and these may change significantly as new information comes to hand.
The information contained in this presentation has been obtained by Electrovaya Inc. from its own records and from other sources believed to be reliable, however no representation or warranty is made as to its accuracy or completeness. Reference should be made to the Company’s most recent Annual Report filed with
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made to the Company s most recent Annual Report filed with Canadian securities regulatory authorities (and available at www.sedar.com) for a description of the major risk factors.
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“One million plug-in hybrid carsby 2015”
President Barack Obama
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Company Overview
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Experienced Management Team
Dr. Sankar Das GuptaChairman & Chief Executive Officer
Paul L. HartChief Financial Officer
Founded company in 1996 with Dr. James JacobsExtensive business experience in the technology sector at Electrovaya and HSA Reactors Limited
Tom LaSordaSpecial Advisor to the CEO& Member of the Board of Directors
Joined Electrovaya in March 2010Former CEO, Chrysler Distinguished 23-year career with GM including President of O l Ei b h
Joined Electrovaya in 2003Previously CFO of Public/Privately Held Companies, including Bid.com (dual listed TSX/NASDAQ) and ADP Canada M&A experience for key acquisitions
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LimitedHolds a PhD in Electrochemistry from Imperial College, University of London and is an adjunct professor at the University of Toronto. He also serves as a corporate Ambassador for the Province of Ontario and is a Charter Founder Member of TIE-Toronto.
Opel, Eisenbach Recently was Advisor to Penske Automotive Group in their bid to purchase Saturn
M&A experience for key acquisitions in the financial services and venture capital industries Previously also at PriceWaterhouse-Coopers, Bank of MontrealChartered Accountant, MBA (Finance)
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Why Electrovaya?Large and High Growth End Markets- Driving the Electrification of the Transportation industry - $0 to $20B+ market by 2015
- Enabling Green and Renewable Energy – Electricity Storage $60B opportunity by 2015
Highly Differentiated Battery Technology (>150 patents)- Superior performance: High energy density cells with nanostructured electrolytes
- Lower cost curve due to reduced materials usage; smaller size and weight
- Platform Technology: benefits from other chemistry advances continuous increase of energy density
Clean and Low cost Manufacturing- World’s only NMP-Free process: NMP suspected as a reproductive toxicant (generates birth defects)
- Lower future liabilities; lower insurance and legal liabilities; improved customer perceptions
- Significantly lower CapEx & OpEx Faster build up of manufacturing capacity at fraction of Capital Cost
Global Customers and Partners- North America: Chrysler and many others
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- Asia and Europe: Major Tier 1 Partners
Strong Management Team - Strong existing team & key people already identified for management positions to drive and manage growth
Access to Growth Capital - Receipt of Grant Program: Chrysler/Electrovaya/US DOE on Ram Truck (2nd largest vehicle after the Minivan)
- Poised for Major Manufacturing Expansion: Applied for DOE loan (80%+ financing basis)
Large & Growing Transportation Market
Global Automobile Market*
~7% of Cars in 2015 to
Electric vehicles including plug‐in hybrids and pure‐electrics
2010 2015 2020
Total Units% of Total Units Attributable to
HEV, PHEV and EV Units
Be Electric*
Global Lithium-Ion Battery MarketFor Automotive**
Market Drivers
Government Regulation
$74.1
7.1%19.6%
2.1%
|6* J.D. Power (assumes ~2% global auto market growth from 2015 to 2020) and Equity Research** A.T Kearney
($ in billions)
For Automotive– Advanced Technology Vehicle Manufacturing Loan Program (ATVMLP)
– Corporate Average Fuel Economy
– Tax credits for buyers of electric cars
High Prices of Conventional Oil
Increased Environmental Awareness
$0.0
$21.8
2009 2015 2020
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Key Drivers
Alternative energy solutions such as wind and solar can provide sporadic service / energy
Emerging Stationary Energy Storage Market
Global Energy Storage Market*($ in Billions)
The stationary storage business is rapidly increasing; lithium ion is projected to gain share
$220
TAM
gy
Utility companies faced with the challenge of ensuring reliable service
Lithium ion batteries will play a key role in stabilizing the electric grid
- Act as ancillary power units to provide frequency regulation and smooth the grid during fluctuations in demand
- Store electricity during off-peak hours, making it available during peak hours
$10
$60
2010 2015 2020
Ene
rgy
Sto
rage
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making it available during peak hours
Under the American Recovery and Reinvestment Act, ARRA, the U.S. Government allocated $4.5 billion for utilities to invest on the U.S. electric grid in order to stimulate investment in smart grid technologies
* Equity Research
2010 2015 2020
Lithium-ion battery technology is expected to capture a
meaningful portion of this large and rapidly growing market
One Million Plug in Vehicles: N.American Auto Partnerships4 Chosen Tier‐1 Suppliers for this Emerging $22‐bililion global market by 2015. Electrovaya is the only public pure‐play battery company selected to supply batteries for an approved DOE project by a major North American automobile manufacturer.
Automotive Energy Supply Corporation
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Chrysler’s Strategic Battery Partner
Battery pack size: 12 kWh
Electrovaya responsible for both
cells and complete integrated
battery system
Electrovaya is the battery partner to Chrysler’s Ram Truck Plug‐in Hybrid Electric Vehicle Program
battery system
Sole provider of battery systems to
Chrysler’s Dodge Ram program:
$48mm DOE-funded program
The battery selection is the most
critical strategic and high cost
component
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p
Chrysler Announced Electric Plan
on Nov.4th 2009 where it identified
Ram Truck PHEV and Town &
Country Minivan to be
commercialized
“It’s the batteries stupid”
The Honorable R. James WoolseyThe Honorable George P. ShultzCo-Chairmen
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Our Solution
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Intellectual PropertyWe have the critical technology (Battery, BMSD, Systems, Thermal Interfaces
to Automotive) to provide end‐to‐end solutions for our customers
We have over >150 patents or patents pending
– 90 issued national patents
– 88 pending patents
– 20 issued US patents
Our patent coverage focuses on areas where potential markets / manufacturing activities make patent protection desirable and economically justifiable, specifically the U.S., Canada, Europe, India, China, Japan
Our Patents address the following areas:
– Structural technology innovations (platform)
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Structural technology innovations (platform)
– System-level designs
– iBMS® - Intelligent Battery Management System
– Nanomaterials
– Processes
Four key areas of core technology/product advantages
Key Technology Differentiators
olog
y
Nanostructure Innovation
Unique Clean Low-cost
Manufacturing Process
Large Format Prismatic Cell
Specialist
Integrated Pack / Systems
Tech
no
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• Low CAPEX• Low OPEX• Faster capacity build• No Future Liabilities• No Negative PR
• Low CAPEX• Low OPEX• Faster capacity build• No Future Liabilities• No Negative PRB
enef
it • Lower cost curve due to superior energy density
• Enables continuous improvements
• Lower cost curve due to superior energy density
• Enables continuous improvements
Preferred for Large Battery
Systems (auto, grid)
Preferred for Large Battery
Systems (auto, grid)
Higher Value-added,
Non-commoditized
Business
Higher Value-added,
Non-commoditized
Business
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Superior Energy Density & Roadmap
185 Wh/kg
= 10 Wh/kgNi k l C b lt
Nickel ManganeseCobalt (NMC)
Lithium IonSuperPolymer
(Lab)
Packaging more energy in less volume/weight enables smaller, lighter battery solutions. It also ultimately ensures lowers component cost curves. Lithium Ion
SuperPolymer(Today)
110 Wh/kg
70 Wh/kg
Lithium ManganeseSpinel and Lithium
Titanium(LMO/LTO)
Lithium ManganeseSpinal (LMO)
Nickel CobaltAluminum (NCA)
Lithium Iron Phosphate (LFP)
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Other Chemistries / Technologies
Lead Acid
Cell Integrated Pack SolutionsElectrovaya offers a complete battery system which includes integrated mechanical, thermal, electrical and power electronic subsystems. This is a high‐value added, non‐commoditized business.
Battery Systems Engineering
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Unique, Clean Manufacturing Process
Typical Lithium Ion Battery Manufacturing
Electrovaya offers “Zero-Emission Manufacturing for Zero-Emission Vehicles”
VS.
No use of NMP
Financial advantage relative to alternative – higher margins and lower capital costs
Less risk of future liabilities
Capable of manufacturing in urban
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Capable of manufacturing in urban areas
Complements customer and partners’ vision of green supply chain
Low-cost Manufacturing Capacity‣ Mississauga, Ontario Canada
– 2nd largest dry room in North America
– 155,000 sq. foot facility on 15 acres
– 2010: 100MWh / annum
– 2012: 200 MWh / annum
‣ US Location:
– 2011: 500 MWh/annum
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Images: Top: 15 acre Mississauga PlantBottom Left: Outside of dry roomBottom Right: Modular mfg. production
– Target 2014: 1000 MWh/annum
‣ Joint Venture – Europe
‣ Joint Venture – India
‣ Joint Venture – Japan
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Electrovaya: The Only Complete Solution
Nanostructure that lowers cost curve
Competitors
NONE
No other competitor offers a solution that meets all critical battery solution attributes.
Large-format prismatic cells
Integrated pack/systems solutions
Clean manufacturing process
Excellent Cycle Life
S i U bl E D it
Some
Some
NONE
Most
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Superior Usable Energy Density
Good Safety
Low-cost North American Mfg.
Most
Most
Few
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7932671 Our Customers & Partners
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Global Auto Partners in every Sector
TraditionalOEMs
Passenger Startup OEMs
2-Wheelers Off-RoadUrban
Vehicles
Electrovaya has engaged in advanced discussions with unnamed parties who have shown interest in our proprietary battery solutions. While we develop those relationships, we’ve also announced the following customer relationships:
TraditionalOEMs
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subsidiaryMiljøbil
Medium & Heavy Duty
Confidential Parties in Advanced
DiscussionsConfidential Parties in Advanced Discussions
Utility/Grid Partners Electrovaya is in discussions with many parties across the spectrum of the applicable utility storage market as detailed below. While we develop those relationships, we’ve also announced some partners also shown below.
Generation Transmission Distribution
Spectrum of Utility Applications :: advanced partner discussions
Announced Partners:
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$7.5-million total project (Feb-10)
- Intermittent (renewable) generation
- High-density urban solutions for new electric loads
- Repurposed electric vehicle batteries
Japan Partnership (Nov-09)
NKE is the only company in Japan that provides distribution equipment to all of the major 10 electric power utilities in Japan.
Members including
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Financial Overview
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Financials – Then vs. Now
2000 - Today Today Future
Heavy investment (~$100M) in R&D to d l b t i l
Aggressively develop relationships and
t t f
Test and launch batteries for new
tdevelop best-in-class technology
Government projects and consumer products drive demand but volume insufficient to require a ramp in scale
secure contracts for future projects
Demand driven through transportation and energy storage markets
Prepare for
revenue streams
Significant investment in CapEx to support revenue growth
Automated production provide lower operational costs
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Parsimonious spending (and no debt) dictated by little investment from external sources and heavy R&D burden
Prepare for production expansion through applications for funding from the government and accessing public markets
Increased scale drives pricing concessions from suppliers and leads to higher margins
Change the world
Historical FinancialsConsolidated Income Statement
Fiscal Year Ended September 30, Fiscal Qtr. Ended December 31, As of 12/31/09
(US$ in 000’s, Expect per Share Amounts) 2007 2008 2009 2008 2009 LTM
Revenue $2,344 $2,541 $3,782 $792 $920 $3,910
Direct Manufacturing Costs 3,351 1,381 1,323 445 733 1,611
Gross Profit / (Loss) (1,007) 1,160 2,459 347 187 2,299
Expenses
Research and Development 2,061 3,906 3,920 944 450 3,426
Salesand Marketing 1 562 1 503 1 740 343 346 1 743Sales and Marketing 1,562 1,503 1,740 343 346 1,743
General and Administrative 346 500 256 96 53 213
Warranty (229) 22 51 14 18 55
Government Assistance / Investment Tax Credits Recoverable (1,174) (836) (3,203) (535) (718) (3,386)
Total Operating Expenses Before Amort izat ion Expense 2,566 5,095 2,764 862 149 2,051
Earnings / (Loss) Before Interest Expense, Taxes, Amortizat ion (3,573) (3,935) (305) (515) 38 248
Amort izat ion Expense 646 565 503 115 133 521
Earnings / (Loss) from Operations (4,219) (4,500) (808) (630) (95) (273)
Interest Income (Expense) 281 159 34 19 2 17
Gain / (Loss) from Foreign Exchange (703) 386 197 637 (151) (591)
Pretax Income / (Loss) (4,641) (3,955) (577) 26 (244) (847)
Income Tax / (Income Tax Recovery) -- 100 -- -- -- --
Net Income / (Loss) (4,641) (4,055) (577) 26 (244) (847)
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Key Balance Sheet ItemsAs of Fiscal Year Ended September 30, As of December 31,
(US$ in 000’s, Expect per Share Amounts) 2007 2008 2009 2009
Cash and Cash Equivalents / Short-term Investments $7,247 $4,934 $5,614 $5,243
Capital Assets 6,672 5,923 5,553 5,662
Long-term Liability / Related Party Obligation 357 24 -- --
Shareholders’ Equity 14,867 10,144 10,117 10,220
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Why Electrovaya?Large and High Growth End Markets- Driving the Electrification of the Transportation industry - $0 to $20B+ market by 2015
- Enabling Green and Renewable Energy – Electricity Storage $60B opportunity by 2015
Highly Differentiated Battery Technology (>150 patents)- Superior performance: High energy density cells with nanostructured electrolytes
- Lower cost curve due to reduced materials usage; smaller size and weight
- Platform Technology: benefits from other chemistry advances continuous increase of energy density
Clean and Low cost Manufacturing- World’s only NMP-Free process: NMP suspected as a reproductive toxicant (generates birth defects)
- Lower future liabilities; lower insurance and legal liabilities; improved customer perceptions
- Significantly lower CapEx & OpEx Faster build up of manufacturing capacity at fraction of Capital Cost
Global Customers and Partners- North America: Chrysler and many others
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- Asia and Europe: Major Tier 1 Partners
Strong Management Team - Strong existing team & key people already identified for management positions to drive and manage growth
Access to Growth Capital - Receipt of Grant Program: Chrysler/Electrovaya/US DOE on Ram Truck (2nd largest vehicle after the Minivan)
- Poised for Major Manufacturing Expansion: Applied for DOE loan (80%+ financing basis)
Questions and Answers
Dr. Sankar DasGuptapFounder and CEO, Electrovaya
Tom LaSordaBOD and Special Advisor to the CEO
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March/April 2010