Electrovaya is hiring key staff members for its Ellicott gigafactory with production possible in mid 2025 – as long as financing for construction is secured.

The company has completed engineering studies for the Jamestown site, located in the former Acu-Rite building in Ellicott, and has also updated environmental studies. Lee Gilmore as the general manager of the Ellicott facility and other staff are being hired. Raj Das Gupta, Electrovaya CEO, told investor analysts in a conference call earlier this week that the company is looking toward 2025, when it will require additional manufacturing capacity, to open the Ellicott plant.

While the Ellicott building is in the company’s long-term plans, there is still a hurdle that remains before the project becomes a reality. Electrovaya officials are working to secure financing to pay for the expansion needed for the Ellicott project while, at the same time, working to refinance its working capital in both Canada and for the Ellicott plant. If financing isn’t secured, the Ellicott plant could find itself back on the open market.

“That said, we will pursue large-scale investments only in the event that we close the debt facility which needs to include advantageous terms with minimal impacts to operating cash flow and equity dilution,” Das Gupta said during a conference call with investor analysts earlier this week. “If we are unable to secure such financing we expect there will be limited financial impact as investments made to date are primarily land and building, which can be sold at a profit. That said, I firmly believe that this funding expansion will happen and benefit the company tremendously.”

On December 20, 2023, Electrovaya renewed its revolving loan facility and extended the term of the revolving loan facility by three months through March 29, 2024, with the aim to refinance the loan with another lender by the end of June. Electrovaya does have the option to keep its revolving loan facility with its current lender through June 29, 2024. The reason for refinancing with another lender is because the current lender doesn’t have the capability to handle business in both Canada and the United States.

The company is trying to refinance the Canadian debt and secure construction financing for the Ellicott building at the same time while also setting the stage for construction in Ellicott. Orders for equipment for the Ellicott plant will need to be ordered by the end of March in order to be ready in time for a 2025 opening. A team has been visiting suppliers in Asia to work with contract manufacturers to train on manufacturing processes that will be used in the Ellicott plant.

Das Gupta said a federal Department of Energy grant is being eyed for some of the needed construction costs for the Ellicott facility. The grant is specifically for heavy duty, off-road and other applications that fit with the Ellicott plant’s future use. The application is due by the end of March and would provide the company with significant funding toward expansion of the Ellicott gigafactory.

“There’s a lot of work that’s taking place in parallel to the financing efforts,” Das Gupta said.

Electrovaya announced 2023 revenues of $44.1 million, a 27% increase from 2022 revenues of $16.3 million, while Earnings Before Income Taxes, Depreciation And Amortization (EBITDA) increased from a $3.5 million loss in 2022 to $3.2 million in 2023. EBITDA is a measure of the cash profit generated by a company’s operations.

In November, Electrovaya announced it had executed a strategic supply agreement with two leading affiliated OEM partners for material handling vehicles and other affiliates for the supply of battery systems. The new agreement supersedes a preceding agreement from December 2020 with just one of the OEM partners and includes a longer term with larger minimum purchases to maintain exclusivity. Das Gupta also discussed at length the company’s relationship that was cemented in October with one of the four largest Japanese trading houses that will result in Electrovaya products being marketed to a host of Japanese and international OEMs to boost the company’s sales reach.

All told, the positive developments are leading Electrovaya officials to project 2024 revenues of between $65 million and $75 million. That growth is one reason the company is bullish on the prospects for its Ellicott gigafactory.

The company’s existing Canadian plant is expected to produce existing low-voltage products while the Ellicott factory will make higher voltage products. Electrovaya launched its Infinity-HV battery systems earlier this year. The first shipments were announced in late December to a global aerospace and defense company. The Infinity-HV systems target heavy-duty, high-voltage applications including buses, trucks, hybrid-fuel cell/battery systems and stationary energy storage systems.

“The intention is to build these packs in Jamestown,” Das Gupta said. “We did hire a great gentleman in Jamestown who’s going to be the plant manager and he’s well aware that this is the product that will be built first there. So the plan is to build it down there.”

According to an October investor presentation, a term sheet received in 2022 by a consortium of New York lenders covers 80% of the stage 1 costs for the Ellicott plant. The plant can currently handle about 300 megawatt hours in the building’s current footprint. Construction and expansion will boost that to roughly 2-3 gigawatts of capacity.

“The first phase of Jamestown is approximately 300 megawatt hours,” Das Gupta said. “The reason we use that figure is it takes advantage of the existing building. That’s the building footprint so that’s what we can fit into that building. And that also meets quite a lot of our requirements. However if demand continues to go up as we anticipate we will need to go larger.”