Outside circumstances make this a good time for ZPower Inc. to get its silver zinc batteries into consumer electronic products. The company markets its product as an alternative to the ubiquitous lithium ion battery the type Sony recalled in 2006 after several laptops burst into flames and the type on which the federal government has just imposed new restrictions relative to how they can be carried on airplanes. ZPower claims not only a safer battery but also one that is environmentally friendly. The company will recover and recycle the silver and zinc and use them in new batteries. Heading the company is Ross Dueber, a former Air Force veteran with a techno-entrepreneurial background. That is what ZPower needs at this stage of refining its battery technology and commercializing it. “That requires experience in both areas,” said Dueber, who joined the company as president and CEO in 2005. A privately-owned company founded in 1996 as Zinc Matrix Power Inc., ZPower has received investments from Intel Corp., PowerVentures, and OnPoint Technologies, a strategic private equity firm funded by the U.S. Army. Last spring the company consolidated its dispersed Camarillo operations under one roof and boosted its staffing by 20 percent. Research and pilot production takes place there. A contract manufacturer is ready for high-volume production in Asia. Dueber is mum when it comes to the company’s first client, a major manufacturer of laptop computers releasing a new model this summer using the ZPower silver zinc battery. ZPower targets mobile electronic products, primarily laptops and cell phones, for its batteries although Dueber said they could find their way into military equipment, medical devices, emergency service radios and possibly hybrid electric vehicles. “It really is a journey to bring in new battery technology,” Dueber said. “Lithium ion has been out there approximately 10, 15 years. It’s gotten to the point where it’s in over 95 percent of consumer electronics. We’d like to be in that same status.” Q: You were at the Consumer Electronics Show in Las Vegas this month with the batteries. What’s been the interest shown there? A: It’s very high. The desire for a better battery is one of those things that is always going to be there. There was a tremendous amount of interest in the battery when is it coming out, what are its capabilities, what are its benefits. We can look at a couple of recent events with lithium ion batteries from a performance standpoint and they don’t seem to last long enough for the next generation of electronics. There is the safety aspect of it. As of Jan. 1 the FAA and the [U.S.] Department of Transportation issued new guidelines on what you can do and what you can and cannot bring in terms of lithium ion batteries on airplanes. Our chemistry has been exempt by the DOT so we are not subject to those constraints. Q: Does the general public even know these batteries exist? A: Not yet. These have not made their way into any product. Our first product is going to be out in the summer in a new laptop. I can’t name the customer. That will be the first use of silver zinc batteries. Once they get out there in the public, they will be able to see the differences. Q: With the new FAA regulations did you think to yourself, “This is good for our company?” A: With those, we knew they were coming down for half a year now and are not surprised by it. In general, it raises the public’s awareness on the safety issue of the lithium ion battery technology. There are so many devices that have them. The downside is they do have this inherent capability to explode and burst into flames if there is any type of malfunction. Q: How does the ZPower battery differ? A: Our battery is safer because of the materials used. Silver and zinc are energetic in that they can supply the equivalent or better in energy performance versus lithium ion. But the materials in there are not flammable. The electrolyte we use is water as opposed to what is used in lithium ion which is a flammable organic liquid. The materials we use for the electrodes are more stable so the chances of the battery heating up to a high level and igniting the liquid are much lower in our battery technology. Q: What’s your relationship with electronic device manufacturers to get them to use your battery? A: A key to the acceptance of new battery technology is to work closely with the electronics manufacturers. When you introduce new battery technology into the marketplace it will generally go into new products. There is no backward compatibility with existing products. You really have to work with the manufacturer to get it designed into their new products. That’s the first step toward success. Once you have established what I call a beachhead with an existing customer, the other manufacturers will start the adoption process themselves now that the technology has received some validation in a commercial product. It makes it that much easier for the rest of them to accept and adopt the technology in the marketplace. Q: Will the manufacturer of the laptop using the ZPower battery play up it’s using a new type of battery? A: That will be one of the primary features of the finished product. There are others, of course that will go into this laptop, which in an ultra-thin advanced technology computer. Q: Are there any benefits to having ZPower in Camarillo and southern California? A: There is a readily available talent pool and expertise in the technical area. We are able to recruit from Southern California universities, which are all high caliber. That’s a plus for us. Recruiting to the area has been relatively easy. Camarillo in particular is a business-friendly municipality for what we need here; they’re very accommodating. Q: Any particular challenges you faced when you came on board? A: The challenge for this company was transitioning what was an R & D; focused facility into an engineering, manufacturing and commercialization of the technology type company. It had to be built up beyond the core science and technology that was here. We had to recruit staff. We put in place public relations and marketing capabilities. We built strategic alliances with manufacturing partners. And we’ve taken our story to our customers and we picked up our first design win. That is what really sets us apart from a number of other start-up battery companies; we have a customer on board ready to deploy the technology. We’ve accomplished tremendous amount to put us in this position. Q: Are there competing companies making a similar battery product? A: As far as battery technology for consumer devices, we are the closest by far to commercializing new technology that can compete and replace lithium ion batteries. We don’t see anybody else out there even remotely close to us in that respect. There are some other new battery technologies out there being considered for applications like hybrid electric vehicles and power tools. Those battery technologies are not suitable for use in consumer electronics. They are designed for high-power applications, where you are turning an electric motor, for example; where you need a strong burst of energy as opposed to a long slow, drink of energy. Q: Where do you see the company in the next three to five years? A: The company’s roadmap is to initiate the adoption of this technology in the marketplace and become leaders in the industry. What we will do is work with our contract manufacturer and customers to make it as easy to adopt as possible. We’d like to IPO the company in late 2009, probably 2010. We will be in a great position to do that. Dr. Ross Dueber Title: President and CEO of ZPower, Inc. He’s also a member of the Board of Directors for ZPower. Age: 47 Education: B.S. Chemistry, 1982, Air Force Academy; M.S. Chemical Engineering, 1988, Stanford; Ph.D. Chemistry, 1993, Oxford; MBA, 1994, University of Colorado. Career Turning Point: Becoming involved in venture capital investment and start-up companies while at Emerson Electric. Personal: Married, with two children. Most Admired People: Colin Powell.
