New lessons from the epic story of Moli Energy, the Canadian pioneer of rechargeable lithium battery technology
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Sep 18, 2020
Emma Jarratt

B.C.-based Moli Energy is renowned as a technology innovator that spawned great ideas and great talent — including today’s industry leader Jeff Dahn — then collapsed. Thirty years on, with potential growth in the offing, is its story again pointing Canada forward?

A young Jeff Dahn checks an experiment in the Moli lab, watched by then Governor General of Canada Edward Schreyer

B.C.-based Moli Energy is renowned as a technology innovator that spawned great ideas and great talent — including today’s industry leader Jeff Dahn — then collapsed. Thirty years on, with potential growth in the offing, is its story again pointing Canada forward?

For professor Jeff Dahn, one of the most thrilling tales never told is the story of how a tiny Canadian battery lab in the 1980s became a central global player in the lithium battery development race.

For those who don’t know, Dahn is a leading international authority on rechargeable lithium batteries — a professor of physics at Dalhousie University, the NSERC/Tesla Canada Industrial Research Chair and an active champion of the Canadian battery space R&D.

Ever own a laptop, use a cordless vacuum or drive an EV? Chances are you’ve held a piece of Dahn’s life’s work in hand — and the journey all started in 1977 at Moli Energy Ltd., in the quiet Greater Vancouver Area suburb of Burnaby, when a small team of scientists, including at one point then-student Dahn, set out to commercialize the world’s first rechargeable lithium battery.

“Back then we were finding out what worked and what didn’t work…[but] we developed lithium-ion technology at Moli Energy.”

Professor Jeff Dahn

Lessons for today

Moli’s successes, setbacks and reinvention are part of the fabric of Canadian technology startup culture. Yet the potential lessons to be learned for current and future research and development, and the accolades due to the early pioneering Canadian scientists, risk being forgotten.

“It reads like a thriller. This little Canadian company won the race,” says Dahn, of Moli’s global first in successfully commercializing the rechargeable lithium metal battery, in an exclusive interview with Electric Autonomy Canada. Dahn worked at Moli as project leader for material science and then research director from 1985 to 1990, and has trail blazed in lithium-ion research since his Moli days.

“Back then we were finding out what worked and what didn’t work…[but] we developed lithium-ion technology at Moli Energy.”

One part heady quest to reach new scientific horizons, one part misadventure of a lost opportunity and one part call to action for Canada as it maps out the decade ahead on the path to a green, zero-emissions future, the Moli story is required reading for Canadians.

Spun from the lab

Dahn’s name is synonymous with lithium-ion technology today. But in the 1970s it was Dahn’s mentor and PhD supervisor, former University of British Columbia physics professor Rudi Haering, who was the industry leader in lithium-metal research.

Moli Energy Ltd. was formed in partnership between the University of British Columbia, Haering and Teck Mining Corp., with then-chairman Norman Keevil Sr. as the lab’s head investor.

The concept for Moli hinged on the rechargeable battery research coming from Haering’s lab.

“[Keevil] called me one day and asked whether he might come to see me,” recalls Haering, who acted as director and head scientist for Moli, in letters to Electric Autonomy Canada. “Before he left he told me that he and Teck were interested in commercializing our research. I was very excited by this prospect.”

Haering now enjoys a quiet retirement in B.C. where he keeps abreast of the latest advancements and maintains a watchful eye on his former protégés and peers. But his start in the field began in the 1950s with a PhD from McGill University and eventually a move to Simon Fraser University in 1964 and then onto UBC in 1972, where he set up his own lab. In 1976, the year prior to setting up Moli, Haering was awarded the Order of Canada for “his many achievements as one of Canada’s leading physicists.”

Rudy Haering: the concept for Moli hinged on his research

Moli Energy was formed not to invent a rechargeable lithium battery, but to be the first company in the world to commercialize it. The team consisted of a handful of employees — most of who were affiliated with Haering — and they decided to focus on lithium-metal batteries. Prior to the mid-70s, battery chemistry had been nickel-cadmium, which had a usage life of two to six months. By comparison, Li-metal boasts an eight-to-10-year shelf life.

Early promise

It would take the lab almost a full decade to produce its flagship product: the 1984 Molicel, a 2.2-volt battery that was capable of powering laptops or cellphones — and another four years before that product hit the market. But the promise was evident early on. A 1978 Employee’s Magazine article, found in the BC Hydro archives, predicted the potential of Moli’s technology — namely, the possible energy storage, electric vehicle and load levelling opportunities.

The article reads, in part, “anything which could operate at present on battery power, but doesn’t because of the weight, size, or power limitations of existing battery systems, should be able to do so with the new battery.”

That potential attracted a lot of private financing and government funding. By 1984, the company had over 75 employees, plans to build two manufacturing plants — one in B.C. and one in Ontario — to produce 20 million MoliCels per year and interest in energy storage technology from utility BC Hydro which offered lab facilities for additional R&D capacity.

It was a period in which the global tech sector was booming. Moli appeared to be advancing alongside the likes of IBM, which released the first IBM PC in 1981, and Apple, which launched the Macintosh in 1984. In 1985, this country’s first-ever cellphone-to-cellphone call was held as a publicity stunt between the mayors of Toronto and Montreal on Canada Day.

“We are in the midst of a technology-driven revolution…We must not be afraid to compete internationally.”

Rudy Haering speaking in 1986

A technology revolution

“We are in the midst of a technology-driven revolution, which is producing changes at an unprecedented rate,” said Haering in a convocation address at Memorial University in 1986, the same year Moli was listed as public company on the stock exchange. “We must work effectively and hard because others against whom we are competing are working effectively and hard. We must not be afraid to compete internationally.”

In 1988 and 1989, Moli’s books showed spending of $1 million per month. Its new production plant was open in nearby Maple Ridge and producing Moli’s flagship battery: a 2.2V Molicel earmarked for NTT cellphones and laptops in Japan. But Moli’s high overhead and the challenge of building bigger sales in a discerning, demanding market was weighing on market confidence.

While the business side might have been shaky, David Wainwright, Moli’s development manager and employee number six, says the lab was a dynamic environment where it felt like history was being made. “It was one of the greatest learning experiences. It seemed the only real effort [in batteries] being made outside of Japan, was Moli.”

The fall

The fateful blow came on August 10, 1989, the day a Japanese cellphone caught fire and caused minor burns to the user. An investigation determines the cause of the accident is the phone’s battery — a Molicel.

Ten thousand cellphones were recalled and Moli began its own investigation. According to a press release issued two days after the incident, the early findings revealed an internal short circuit happened due to damage sustained during battery cell manufacturing.

The final findings months later showed lithium-metal is an inherently unstable material to put in a battery and not compatible with the types of discharge and recharge cycles personal electronics have — discharging slowly over a period of days and recharging in a matter of hours.

“It was like running into a brick wall,” says Wainwright.

In October, with Moli’s sales halted and its cash depleted, the Toronto Stock Exchange suspended trading of its shares. Moli laid off 56 of the company’s 192 employees. In February, the province of British Columbia called in a loan and the company went into receivership.

Quick sale

However, within 48 hours of its loan call, the government announced a deal that saw Moli bought by a consortium of Japanese tech companies for just a fraction of its earlier value. The translated into a $5-million price tag for a company that had received $120 million in investments and still held more than $58 million in assets. An article in The Province called it a “B.C. government giveaway.”

“I am still mad about the role the B.C. government played in this,” says Haering. “B.C. had given Moli a loan of some $20 million and had received Moli’s patents as security. When they called the loan, Moli was driven into bankruptcy. Less than two days later they proudly announced that they had saved the jobs at Moli by making a deal with the Japanese.”

Haering — and many others — believes the deal was fraught. A former Moli employee turned battery industry consultant, Nelson Shen, said in a March 1990 interview with the Vancouver Sun the deal between the provincial government and the consortium was “handing over our future on a gold-plated platter.”

“It’s obvious that this deal was made before the bankruptcy announcement,” writes Haering. “Calling the loan was part of it.”

“[We] became the first manufacturer of lithium-ion cells in North America”

Brian Way, Chief Scientist, E-One Moli

Moli rebranded

Once the sale to the Japanese consortium was finalized Moli Energy stayed below the radar in terms of public profile and R&D output for the better part of a decade. What started off as Moli Energy Ltd. in 1990, was renamed Nippon Moli Energy Corp. in 1994 and again rebranded as NEC Moli Energy Corp. in 1997.

In 1998 Moli merged with Taiwanese company, E-One Technology, and newly minted E-One Moli Energy Corp. was formed with fresh purpose.

“Through the ’90s we transitioned to lithium-ion technology and became the first manufacturer of lithium-ion cells in North America,” says Brian Way, one of Dahn’s PhD students and chief technology officer at E-One Moli.

“In the early days of lithium-ion with us we were focussed mostly on laptop computer application, but as laptops got thinner they went to polymer cells. We transitioned away from laptops and in the mid-2000s, we were the first to get into large-scale power tools.”

E-One Moli is once again a company that hits above its weight. It produces roughly 10 million battery cells per month and has major supply deals with NASA, Dyson and medical ventilator companies around the world.

“The plan is to bring manufacturing back to Maple Ridge… this would bring another 90 to 100 million cells to our production annually”

Frank So, Executive Vice President, E-One Moli Energy

New boon for Canada?

Now, ironically, that international success could translate into a new boon for Canada.

Despite decades of turmoil, Moli’s original R&D facility in Maple Ridge has remained opened and in operation. E-One Moli is now actively exploring the option to open a manufacturing plant nearby — going as far as looking at equipment to purchase and applying for federal grants, through it has not secured premises yet.

“The plan is to bring manufacturing back to Maple Ridge. This is something we have been working on for well over a year and have been in touch with the Canadian government for funding. The plan is to build a manufacturing facility similar in size to what we have in Taiwan. So this would bring another 90 to 100 million cells to our production annually,” says Frank So, E-One Moli’s executive vice-president. “It will be the largest lithium-ion battery manufacturing facility in Canada. We will be the largest private employer in the Maple Ridge area.”

If it happens, that news would garner excitement not only locally, but across the country as many companies in the clean tech space are calling for the Canadian government to put an emphasis on battery manufacturing in this country.

It would also ensure that the Moli Energy story is remembered more for what was gained rather than what was lost.

© 2020 Electric Autonomy Canada

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