INTERVIEW | Ambitious Startup PowerX CEO Masahiro Ito on Revolutionizing Energy Storage

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Startup company PowerX is tackling critical global challenges by focusing on energy storage, advanced battery systems, and battery tankers. These innovations are vital for Japan's energy security, especially as the country strives to meet carbon neutrality goals by 2050. PowerX is gaining attention for its unique solutions, including large-scale battery systems and pioneering battery tankers — the first of their kind globally.

Launching in 2026, PowerX’s Battery Tanker project promises to revolutionize how renewable energy is distributed, addressing infrastructure limitations and lowering costs. The company's collaborations with major automotive brands, like Audi and BMW, and its rapid expansion of EV charging stations highlight its growing influence.

In an exclusive interview with JAPAN Forward, CEO Masahiro Ito discussed everything from PowerX's core businesses and competitive strategy to his entrepreneurial spirit. Excerpts follow.

From IT to Green Energy

What inspired you to transition from being a leader in an IT company to founding the renewable energy company PowerX?

During my time at ZOZO, a fashion retail e-commerce company, I encountered institutional investors emphasizing the importance of ESG policies. ESG stands for environmental, social, and governance. This prompted me to investigate the challenges of transitioning to clean energy. I then discovered Japan's ambitious goals for clean electricity and carbon neutrality by 2050. However, these goals highlighted a significant gap that couldn't be filled solely by solar or nuclear power.

Following this, I explored the idea of using ships equipped with batteries to collect and deliver electricity from offshore wind turbines. By doing so, we can avoid the need for difficult-to-install submarine cables. 

This realization, coupled with the growing need for energy storage solutions, inspired me to shift focus. I saw a significant opportunity in developing large-scale energy storage systems and grid-scale batteries, which led me to leave ZOZO and found PowerX in 2021. My goal was to create innovative solutions for storing and transporting clean energy, addressing societal needs and long-term business potential.

Could you summarize PowerX's main business areas, including batteries, EV chargers, and apps?

PowerX's core focus is on batteries, which account for about 90% of our business. Our flagship products include the Mega Power, a robust 20-foot container battery, and the Cube, a versatile medium-sized battery. For electric vehicle (EV) charging, we offer the Hypercharger, a combination of the Cube battery and a high-performance charger.

The PowerX app enables users to open their Hypercharger stations to the public and earn money by sharing their chargers. Customers can also access PowerX's own charging stations. Currently, there are over 20 locations in Japan, with plans to expand to nearly 100 by the end of the year.

We have partnered with major automotive brands like BMW and Audi for EV chargers. Recent installations include a charging station at Azabudai Hills and one in Chiyoda-ku, marking Audi's first gas-station-like EV station outside Europe. Our PowerX app is available for free, and we're currently offering complimentary charging services.

Can you explain the main uses of large-scale storage batteries and offer examples of their current use?

Large-scale storage batteries are utilized in two main categories: Front-of-the-Meter (FTM) and Behind-the-Meter (BTM). FTM systems are positioned before a building's power meter, support grids, and utilities. BTM systems are installed behind the meter, enabling facilities to manage their own electricity use.

The latter are common in factories and warehouses. In these settings, batteries paired with solar panels store energy, reducing reliance on grid power and cutting CO2 emissions. They also help manage peak demand, as seen with companies like SENKO and Prologis.

FTM applications, however, are more impactful. In Japan, nuclear plants operate at full capacity, and there is excess solar power during the day. Therefore, FTM batteries can store this cheap surplus electricity and sell it at higher prices in the evening. This system helps balance electricity supply and demand, as traditional methods like thermal power adjustments and dams face limitations. Our current focus is shifting towards FTM, with 60-70% of this year's [2024] shipments dedicated to these applications.

What are the goals and next stages for the energy transport ship project using large storage batteries?

PowerX's Battery Tanker project, launching in 2026, aims to address the challenge of balancing electricity generation and consumption. These ships will be the world's first battery tankers. Instead of using traditional methods like submarine cables, which are costly and technically difficult, these ships will transport electricity directly. The vessels will store electricity in large batteries, charge at a power source, travel to the destination, and then discharge the power. This method eliminates the need for expensive underwater cables and onshore infrastructure, particularly for connecting remote areas or islands.

The project will start with tankers capable of traveling around 300 kilometers, a practical range for transporting electricity. This innovation will efficiently distribute surplus electricity, transferring low-cost power from abundant regions to high-demand areas. It also promises to support renewable energy by linking offshore wind farms without needing extensive cable installations. Potential applications of this technology extend globally, including to countries with isolated or dispersed islands. Japan, with its high susceptibility to earthquakes, stands to benefit significantly from this initiative.

How does PowerX plan to compete with countries that are heavily investing in renewable energy infrastructure?

By emphasizing superior maintenance and support. While Chinese batteries dominate the market, PowerX distinguishes itself with comprehensive after-sales service. Our 20-foot container batteries and systems are designed and manufactured in-house, allowing us to provide rapid local support and maintenance. Unlike foreign competitors with lengthy repair times, our local engineers and service centers handle issues swiftly.

Our pricing is competitive with Chinese products, and customers value the reliability and quick response from a Japanese company. By integrating local maintenance with high-quality products, PowerX aims to offer a robust alternative to foreign suppliers. Domestic production will ensure both economic and national security in transitioning to greener energy solutions.

PowerX's business demands significant funding. Could you update us on the current status of your financing?

We have raised ¥23 billion JPY (approximately $1.6 billion USD) so far and are currently in Series C funding, which is being finalized in two parts. We've completed the Series A and B rounds and will soon announce the closure of the first phase of Series C. This funding will bring us to around ¥60 billion, falling short of the ¥300 billion target but sufficient for our needs. With this capital, we've established factories, developed products, and built service centers. We are now in mass production and focusing on inventory. This round of funding will support ongoing manufacturing as we transition from capital expenditure to operational stability and growth.

How do you envision PowerX growing in the future?

PowerX envisions significant growth driven by Japan's energy policies and market potential. According to the Ministry of Economy, Trade, and Industry, the battery market is expected to reach 125 GWh by 2040, valued at nearly ¥10 trillion (approximately $70 billion). PowerX aims to capture a substantial share, targeting 30-50% of the domestic market. 

We are focusing on both increasing our market presence in Japan and expanding our vertical services. For example, offsite battery installations and renewable energy provision through Power Purchase Agreements (PPAs) and EV charging services.

Internationally, despite strong competition from Chinese batteries, we plan to enter markets with similar geographical features. Our EV chargers with integrated batteries have attracted considerable interest, prompting us to explore sales opportunities in Europe and the United States. Consolidating these efforts and expanding our global footprint will be part of our strategy for the next decade.

Could you tell us more about your entrepreneurial drive and what your goals are for the future?

My entrepreneurial journey began in high school, driven by a passion for science and a desire to make a lasting impact. I set up my first company in 2000. As an inventor and entrepreneur, I've always focused on turning innovative ideas into businesses, like electricity transport ships and advanced batteries. Creating ventures with enduring societal benefits is my goal. Looking ahead, I hope these projects, particularly the electricity transport ships, will have a lasting impact, even beyond my lifetime. As my career progresses, I aim to focus on initiatives that make a difference and leave a lasting mark.

This article was originally published on JAPAN Forward on September 10, 2024.

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