Summary:
- West Virginia factory now makes iron-air batteries, revitalizing local economy.
- Tesla alumni have driven $10B in clean tech investments and 10,000+ jobs.
- Tesla’s impact includes $138B in U.S. battery and EV investments since early 2022.
At a former steel mill in West Virginia, a newly completed factory is now producing “iron-air” batteries, capable of storing renewable energy for up to 100 hours at a low cost. The startup, Form Energy, is revitalizing a small town once centered around the steel industry by creating hundreds of new jobs. Founded by a former Tesla employee, the company is part of a growing network of ex-Tesla workers who are driving the expansion of clean tech factories across the U.S.
Image Credit: Form Energy
“The numbers add up pretty quickly when you look at the amount of manufacturing investment tied to Tesla founders,” says Tom Taylor.
Atlas Public Policy, which tracks new climate tech factory developments in the U.S. through its Clean Economy Tracker, highlights several notable projects led by former Tesla employees:
- Redwood Materials, founded by former Tesla cofounder J.B. Straubel, operates a $3.5 billion battery recycling plant in Nevada and is constructing another $3.5 billion facility in South Carolina.
- American Battery Technology Company, headed by ex-Tesla engineer Ryan Melsert, runs a $75-$100 million battery recycling plant near Reno and is building a $600 million refinery in Nevada.
- Form Energy, launched by former Tesla Energy VP Mateo Jaramillo, built a $760 million battery factory in West Virginia.
- Wallbox, cofounded by former Tesla employees Enric Asunción and Eduard Castañeda, established a $70 million EV charger factory in Texas.
- Sila Nanotechnologies, created by former Tesla engineer Gene Berdichevsky, is constructing a $400 million factory in Washington State to produce a critical component for improving EV batteries.
- Lucid Motors, led by former Tesla VP Peter Rawlinson, has a $300 million EV factory in Arizona, with plans for a $700 million expansion.
Altogether, these companies have generated nearly $10 billion in U.S. manufacturing investments and are expected to create over 10,000 jobs. This doesn’t include ventures by other former Tesla founders partnering with manufacturers. For instance, Lunar Energy collaborates with South Korean firm SK to produce home batteries at a Georgia factory. Additionally, many are expanding outside the U.S., like Northvolt, founded by ex-Tesla supply chain head Peter Carlsson, which operates several multibillion-dollar battery factories in Europe and has another planned in Canada.
Image Credit: Sila Nanotechnologies
Working at Tesla, particularly in its early days, was an intensive lesson in scaling up the manufacturing of a new product.
“In many ways, Tesla was not looking to recreate templates from other industries for how they did things,” says Form Energy’s Jaramillo. He worked at Tesla from 2009 to 2016, during which time the company expanded from about 300 employees to 30,000. “I had to figure out a lot of things essentially from scratch.”
It was a completely different experience from working at a large company, where you depend on established structures and systems.“At Tesla, we just really didn’t have that—you’re doing the trapeze without a net,” he says. “There’s the practical learnings that go with leading multiple development cycles in hardware. At least as important, however, is the mindset that you’re required to maintain at Tesla if you stick around for any period of time. Which is: Ambitious things should be tackled, and you might as well tackle them yourself.”
At Tesla, Jaramillo focused on lithium-ion batteries for home energy storage. However, “I always knew the market would not end with lithium-ion,” he says.
After leaving Tesla, Jaramillo began exploring alternative energy storage solutions. Form Energy developed an innovative battery technology that stores energy through a reverse rusting process, addressing the challenge of long-term, affordable energy storage for renewables. The company also discovered a new method for producing green steel. Production trials are currently underway at their West Virginia factory, with the first batteries set to be delivered to customers by the end of the year.
Image Credit: Form Energy
A passion for hard tech often drives individuals to Tesla, where the environment naturally attracts those with ambitions to start their own similar ventures. “People who intrinsically have a passion and an interest in building hard manufacturing technologies and scaling them are oftentimes drawn to Tesla because in the last couple decades, I think you could make the case that it has been the premier hard technology startup in the U.S.,” stated Gene Berdichevsky, Sila Nanotechnologies founder.
His company develops technology that extends the range of lithium-ion EV batteries and speeds up their charging. This tech can be seamlessly integrated into existing batteries, allowing manufacturers to avoid large investments in new production facilities.
Sila’s inaugural factory in Moses Lake, Washington, is nearing completion. The technology will start shipping to customers next year, with potential use in vehicles as early as 2026.
Image Credit: Form Energy
The Tesla Influence on Investors
When evaluating a new company for investment, a founder with a Tesla background often carries significant weight. “there are very positive signals from that,” says Katie Rae, CEO and Managing Partner of Engine Ventures, who spearheaded the seed funding round for Form Energy.
Founders from other tech giants like Google and Facebook also attract investment, but Tesla stands out with its unique mix of “extreme entrepreneurialism” and focus on manufacturing physical products rather than digital ones. Tesla alumni have established 61 companies and raised over $14.8 billion, innovating across fields from green hydrogen to self-driving cars.
However, having Tesla on your resume alone isn’t a guarantee of success. “In any of these situations, there are a handful of people who are extraordinary and then go on to found new things,” Rae says. “Those are the ones you want to find.”
In the case of Form Energy, the founder previously led Tesla’s energy division and successfully recruited top talent from Tesla and other firms. Additionally, the technology had a strong economic proposition. “I always call it the CFO test: Would a CFO of an organization say yes to this technology?” she says.
Image Credit: Sila Nanotechnologies
Since early 2022, nearly $138 billion has been invested in new battery and EV manufacturing facilities in the U.S., with approximately $10 billion directed toward companies founded by Tesla alumni, according to Taylor. “I think that’s a really large effect from a single company that’s actually not that old in the scheme of things,” he says.
He argues that this exemplifies the impact of domestic manufacturing. “I think that there’s this real benefit from an innovation perspective to have manufacturers and clean energy companies in the United States, because you then have this secondary innovation economy that pops up around those companies,” Taylor explains.
Recent Tesla layoffs may lead to a rise in new startups, and existing companies founded by ex-Tesla employees might also generate new ventures through their own teams. “I think we need more hard tech companies,” says Sila’s Berdichevsky. “Hopefully, in 10 or 20 years, you’re writing about the alumni of some of these companies.”
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Main Author: Adele Peters
Source: Fast Company
