Exclusive: ‘I’ve seen this movie before’: A Michigan-raised ex-Tesla exec raises $45 million to break China’s grip on batteries

Steven Prast is old enough to remember when a mobile phone came in a bag.

It was too heavy to carry around, so most people mounted it in the car.

Prast argued in a Zoom interview with Fortune that what eventually shrank it into something you wear on your wrist was more the battery than the transistor, holding up his own phone as proof.

“What took us from that to this is the battery,” said Prast, a former Tesla manufacturing leader who is now chief operating officer of the battery-materials startup Holyvolt.

By his reckoning, lithium-ion technology is at best 20% of the way through its maturity curve, maybe 10% by conservative estimates.

The West won’t win the rest of that curve, he said, by fighting with China over the part that’s already finished.

“We will not be able to out-China China on the battlefield that China has defined,” Prast said.

“They’re the world champions at being China.” Holyvolt is putting $45 million behind the alternative, all in equity.

The Stockholm-based startup told Fortune that it has raised the round from Fifth Wall, Zone II, CC.VC and several angel investors from the defense and finance industries to hunt for battery chemistries China doesn’t control.

The round values Holyvolt at $245 million, according to a person familiar with the company.

The gap Holyvolt is trying to jump is enormous.

China makes about 85% of the world’s cathode active material, the part of a battery that largely sets how much energy it stores and what it costs.

It makes about 80% of the world’s battery cells.

Its lead comes from scaling the two chemistries that dominate today, NMC and lithium iron phosphate, or LFP.