The main criticism of increased funding to zero-emission fuels by legislators and businessmen around the United States is the high financial risk involved. The Michigan Strategic Fund and the Michigan Economic Development Corporation have shown faith in Sakti3 in contrast to this criticism. Sakti3 recently received a $3 million grant from the Michigan Strategic Fund to create a Center of Energy Excellence devoted to improved lithium ion batteries. Sakti3 was given a $2.3 million tax break over the next decade by the Michigan Economic Development Corporation earlier in the year to encourage investment in the Ann Arbor economy.
Sakti3′s story shows that a small startup designing batteries for all-electric vehicles can grow into a substantial business. The Ann Arbor-based startup began as a project at the University of Michigan before it became a private enterprise owned by Khosla Ventures. The venture capital firm provided $2 million to Sakti3 to advance the startup’s development of lithium-ion manufacturing processes. While the University of Michigan still owns the rights to Sakti3′s hybrid battery supply project, the startup has the right to offer sublicenses on its production processes to larger manufacturers. It seems likely that Sakti3 will take advantage of sublicensing to scale up its production processes though it may be careful to weed out companies without the same vision for electric-drive vehicles.
The aforementioned investment by the state of Michigan in Sakti has yielded new jobs for Ann Arbor. Michigan has been notable as a bellwether state in the current economic downturn due to the crumbling integrity of the American auto industry. Sakti3 represents a new hope for the state as it has produced 112 new jobs in 2008 with Khosla planning to add another 158 jobs in the near future. These modest job gains will grow as Sakti3 reaches out to Michigan automakers to produce lithium-ion batteries for electric vehicles.
While Sakti3′s success has been limited to this point, the state’s flagship university and legislature have shown a glimmer of hope for alternative fuels in a place where Henry Ford made his millions. The major automakers are still king in Michigan but the introduction of another homegrown source for long-lasting batteries will deflate arguments about the production costs for fuel-efficient vehicles. If General Motors, Chrysler and Ford aren’t able to see the future, foreign automakers will gladly look to Sakti3 as another source of fuel for the future.
I’m hoping that these findings will lead to higher product of hybrid or possibly even all electric vehicles.