Dragonfly Energy’s impressive growth curve is poised to continue in 2023 and beyond as the company continues to refine current manufacturing processes and cast an eye toward new product development.
The company founded by Chief Executive Officer Denis Phares in 2012 in a small warehouse off White Fir Street in northwest Reno has exploded over the past decade. Dragonfly Energy went public on its 10-year anniversary last October (Nasdaq: DFLI) and currently operates out of a 100,000-square-foot facility on Trademark Drive in South Meadows. It also has a 15,000-square-foot research and development center in Sparks.
The advent of a new cell manufacturing process, which will be done in-house to control cost and supply, could send Dragonfly Energy soaring to new heights, though.
“We are in the process of deploying a new manufacturing process that we invented, and we are able to apply this new process to make a type of cell that has a solid-state electrolyte, which makes it non-flammable,” Phares told NNBW last week during a tour and discussion of Dragonfly Energy’s South Meadows operations. “That makes it very unique. The new process affords us the ability to make a type of cell that nobody else can make and adds a whole new line of operation.
“If you go to any battery cell manufacturing facility, you will see gigantic vacuum dryers that are there to reclaim nasty solvents that are necessary for making lithium-ion cells,” Phares added. “The process we invented eliminates those nasty solvents. It is basically a powder-coating process to make lithium-ion cells, which means we could make a cell manufacturing facility at a fraction of the cost in a much smaller footprint. That’s significant, and it will revolutionize the energy storage business.”
Dragonfly Energy’s roots are in providing lithium-ion battery storage systems for the RV industry. Dragonfly Energy’s batteries can fully power a RV, so there’s no need to use a noisy generator for supplement power. They also are about one-fifth the weight of lead-acid batteries and have a much shorter charging time, Phares said.
Although producing batteries for the RV industry remains Dragonfly Energy’s main source of revenue, Phares said, the company’s fastest-growing sales channel is producing off-grid solar-powered battery storage systems. Dragonfly Energy in mid-January announced its newest product, the Dragonfly Wing. The expandable power storage solution is intended for home, mobile and industrial users. The product was a natural progression from making RV battery storage systems, said Phares, who envisions a day where utility-mandated storage systems are part of every U.S. home to help utilities store energy in times of low renewable energy production.
“That is what is great about providing systems for RVers and boaters,” he said. “Now we will be doing something very similar for utility companies and homebuilders.
“The whole notion of providing storage for RVers to run their appliances is directly applicable to homeowners,” he added. “RVers have demonstrated the ability to live off the grid. For a utility company with a lot of solar on the grid, it is important that in times of low energy production that energy is still available for customers. If you have got distributed energy storage all over the grid, that is the buffer that is required.”
Dragonfly Energy also expects to begin selling more lithium-ion batteries to the marine industry in wake of new industry standards and regulations for lithium batteries for marine use, Phares noted.
In addition to developing a new cell production technology, Dragonfly Energy plans to move cell production in house and add new levels of automation to its manufacturing processes. Currently, the cells that make up the heart of any lithium-ion battery are imported. Dragonfly Energy is expected to deploy a pilot cell manufacturing line later this year, Phares told NNBW.
“Our core business of assembling battery packs to replace lead-acid batteries is an enormous market, and we have been growing dramatically over the last several years,” Phares said. “We focus heavily on automation as a technology company. We have been investing in automation to increase the efficiency of our operations – that is the technology that got the company going, and we try to do it as efficiently as possible.
“Whenever we have a bottleneck in our process, that is the next process to be automated,” he added. “Right now we have a gluing process where we seal the batteries and terminals, and that is done manually but will be replaced with an automated system. We won’t stop automating things that are done manually, and we will keep growing our capacity to produce more and more batteries.”
Dragonfly Energy also largely avoided the logistical and supply chain nightmares that plagued countless U.S. manufacturers and companies, Phares added. Dragonfly Energy has multiple sources for every component that goes into its batteries, both imported and domestic, he said.
“The diversity of our supply chain made it so that we never suffered in our ability to supply products. We did remarkably well, and our business grew dramatically through COVID due to the popularity of RVing.”
Another developing chapter in Dragonfly Energy’s story is its focus on vertical integration – Phares said he moved to Reno from Los Angeles a decade ago in order to bring Dragonfly Energy closer to domestic supplies of lithium. The company has agreements with two Reno-based lithium suppliers, Aqua Metals and ioneer, which is developing the Rhyolite Ridge lithium mine near Tonopah.
“We are trying to keep the infrastructure here in Nevada,” Phares said. “There’s an opportunity for Nevada to reap the benefits of this new green economy, which is going to be focused on storage. The accessible lithium is here.”
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