Alevo files for Chapter 11 bankruptcy
Energy storage system start-up Alevo USA and Alevo Manufacturing cited the challenges of bringing a new product to market and “poor financial wherewithal” on their decision to file for Chapter 11 bankruptcy on August 18.
The same firm had talked about making a $1 billion investment into its product’s development — a lithium iron phosphate battery using a proprietary sulfur based inorganic electrolyte — in 2014.
However, the Swiss headquartered company owns the two firms, which operated from Charlotte, North Carolina. Alevo completed its first, and only, commercial unit in January, when it deployed a 2MW system in Hagerstown, Maryland for frequency regulation in the PJM system.
The company’s website has been changed to a simple statement that says that, through Bankruptcy Court supervision, Alevo USA and Alevo Manufacturing hope to achieve an orderly liquidation of their assets and maximize value to pay their creditors.
Peter Heintzelman, chief financial officer of the Alevo group, said: “The Chapter 11 filings are a very difficult, but necessary decision.” Heintzelman joined the firm in January with a remit to turn the company around.
In 2016 the company announced ambitious plans for deployments in Texas and Delaware. Alevo said at the time the Delaware project was “the first in a series of major commercial deployments the company has scheduled for 2016”. The Lewes project involved the sale of ancillary services into the PJM.
Since then, according to local press reports, the firm has been dogged by delays in manufacturing its lithium ion batteries using a sulfur-based inorganic electrolyte that was the basis of its technology.
Heintzelman said the decision “was driven by the formidable challenges of bringing a new technology into commercial production and lacking the financial wherewithal to continue on through repeated manufacturing delays”.
“It is a sad day for our dedicated employees and partners, as well as for the promise of Alevo’s technology,” he said.
Alevo entered the US with a splash in 2014. Local newspaper reports said it had invested more than $68 million in a 3.5 million-square-foot former tobacco factory outside Charlotte.
The reports also said the firm would hire up to 2,500 workers over three years, with a potential maximum workforce of 6,000 capable of turning out thousands of megawatts of electricity storage products annually.
According to a state filing, the company plans to lay off 290 employees.
The statement said despite demonstrating the advantages of its ground-breaking battery technology, Alevo Manufacturing had significant production challenges and thus insufficient revenue to continue operations.