Earlier today, I had a chat by phone with Alex Gruzen, who is the chief executive of privately held WiTricity, a young hopeful in the wireless power market.
Like Energous (WATT), whom I wrote about last week, WiTricity’s world has felt the impact of Apple (AAPL), which last week said it would back a competing wireless technology standard, called “Qi.” Despite that fact, Gruzen was upbeat and enthusiastic about a number of initiatives his company has going, chief among them being charging at a distance of electric vehicles.
WiTricity, based in Watertown, Mass., has developed a technology called “magnetic resonance.” It is similar to the “magnetic inductance” offered by Qi, which is found in many devices Samsung Electronics’s (005930KS) Galaxy line of phones, and Apple’s “AirPods” wireless ear buds. Chips for inductance are supplied principally by Integrated Device Technology (IDTI).
WiTricity’s technology is a sort-of cousin to inductance, as it, too, is based on principles of a magnetic coil transmitting power, like inductance. But resonance brings several benefits versus inductance, including the ability to make charging plates where a device doesn’t have to be perfectly aligned with the magnetic coil inside the plate.
In the auto market, WiTricity says its plates will transmit power to the underside of a car chassis from a plate on the ground, over a distance of a foot or more. that makes possible charging while simply parking the car, without having to physically connect it to anything.
I last met with Gruzen at the Consumer Electronics Show in Las Vegas this past January, after having profiled WiTricity and Energous in a Barron’s magazine cover story almost a year ago about “actuator” technology.
Today’s discussion was an update since that time.
Regarding the Apple news, Gruzen noted Qi has had limited uptake from consumers, and he expects even the Apple faithful may demand something more down the road:
In Phones, Apple has put down their marker. Qi has been around a long time, but the customer acceptance has been mild. We’ll see how it gets picked up by the Apple community. You know, we’ve had direct customer feedback about that technology [Qi] for years now, and obviously, our push has been to evolve beyond it. That’s going to capture a lot of the attention in the coming year. In the end we’ll see how customers react. The deficiencies are well known, but it will end up being somewhat ubiquitous because of Apple. I’m hopeful over time some aspects of our technology will come to the fore. People will want higher power and positional flexibility. And if they have a case on their phones, they’ll want to have it still work. We’re still supporting out customers, they’re developing products, and we’ll wait and see how that shapes up. We’re ready when customers want a little more.
I asked Gruzen what he makes of Apple’s announcement of another product, a charging mat called “AirPower,” which Apple says will come out in 2018. Apple says the mat will let you charge multiple devices “without requiring them to be fixed in one spot.” That sounds like WiTricity’s premise. I asked Gruzen how he feels about Apple trying to help the Qi camp to make Qi more nimble.
Gruzen thinks it’s not clear Apple and Qi can resolve all the limitations of Qi technology:
I think one drawback of Qi has been lack of positional flexibility — need to be very precise about how you position the phone — the resulting uncertainty for customer of whether the phone really did charge; it appears from AirPower that that’s what they’re working on trying to give a little more surface area. That’s all I can I tell; what I don’t know is whether some other issues of Qi in terms of distance will be helped. Certainly, thinks such as not being able to mount it under a table. You’re still having a pad on the table. But even on a more practical basis, an Otterbox case, or something like that, will it still work? So there are still some unknowns.
Leaving aside Apple and Qi, Gruzen was very enthusiastic about what he calls the “bread and butter of our business,” serving the auto makers as they equip vehicles with wireless charging. WiTricity has financial backing from Toyota Motor (TM), which is a licensee of WiTricity’s technology. And WiTricity has an important relationship with Nissan Motor (7201JP).
The company is working with nine of world’s top ten auto makers, either directly or through those car makers’ auto parts suppliers, the so-called “tier 1” parts makers, companies such as Delphi Automotive (DLPH). Products are in development, and Gruzen expects the first vehicles using WiTricity charging technology will be on the road in the first half of next year.
“The vast majority of my team and our efforts is dedicated to this electric vehicle opportunity,” Gruzen tells me.
“Things are awesome,” Gruzen says of those efforts.
We just signed another large Japanese Tier 1 [auto parts] supplier to the automotive industry, and we’ve got the majority of the world’s top auto makers moving forward to electric charging. If you asked me a few years ago what was the big variable for us, I knew back then that we had the technology for charging vehicles; and knew we had the engagement with auto makers for programs; the question was really how fast would EV as a category move forward. This past year has been just remarkable, how the whole industry mindset has shifted to EVs being the primary technology of the future. If you went to the Frankfurt Auto Show last week, you would have seen there how every auto maker was trying to outdo each other with how many cars in their line are EV. Saying things like, we’ll have 25 vehicles in our lineup [being EV] by 2025, etc. That’s pretty exciting. That’s moving kilowatts of power to charge an electric vehicle, at the same speed as if you had plugged it in.
Among the things Gruzen cites as the most important developments is a “major effort globally” to standardize the wireless charging of vehicles, being developed within the Society of Automotive Engineers, known as the “J2954” task force.
That effort will make possible not just to eliminate worries about “range anxiety” for EV owners, but also to enable autonomous vehicles that gas up without human intervention:
Today, depending upon the country, you have to have a different connector [for charging an EV]. The car makers have universally come together and said, never again! Wireless charging will be a global common standard. We, WiTricity along with Nissan, have submitted a proposal for this. The J2954 is run by a great leader who was fromBMW, SAE member Jesse Schneider. That task force is defining the whole interface, everything from frequencies and magnetic fields and the handshake protocols between them, the ground assembly, exchange messages, like “I’m ready for power.” It’s like a complete definition of the protocol for transferring power, including turning it on, authorizing it, etc. You want to ensure that all the German cars and Korean cars and American cars all could charge from a common ground assembly. It’s all using magnetic resonance.
Here’s why it’s really important: so far, it’s only a small percent of users that have purchased electric vehicles. It’s very early adopters, people so far who are very motivated personally to make the choice. Their willingness and interest to plug in every day goes along with their early adopter status. But they [auto makers] need to reach 15% to 25% of consumers by 2030. In some of these countries, they need to reach 100% of new sales. They’re saying, We need to take this new customer behavior, and the fears of range anxiety, out of the equation. Wireless charging means not having to create a new customer behavior. You park your car, and it charges. You don’t have to worry about coming back in the morning to find the car didn’t actually charge. So part of it is recognizing they’re going to get over 200 miles of range in these battery packs, and you park it naturally. For the vast majority of people, they will never, ever have to think about the act of charging at all. For those who need to drive super long distances, there will be fast charging stations along highway corridors, like San Francisco to L.A., where you will pull over to the side of the road, and you’ll tolerate it on those super long distances. The day to day, you will never have to think about it. But Part B of this is autonomy. The two massive themes are electrification and autonomy. There’s just not going to be fleets of autonomous vehicles without wireless charging. Those two things together are why I ended up putting the bulk of our resources into moving this forward.
More on J2954 is available on the SAE Web site.
Doesn’t a standard produce more competitors for WiTricity? I asked.
Sure, but “We want as much supply capacity, and people building the stuff as possible,” says Gruzen. “They’ll need a license to our technology if they participate,” he observes, given WiTricity has “over 100 essential patents,” so competition can boost license revenue.
“First let’s build this market.”
Regarding which auto maker will ship first next year, Gruzen is “not at liberty to say,” and he quickly adds “I don’t know if I ever will be,” given that auto makers tend to be secretive about their technology suppliers.
He notes the “strong relationship with Nissan,” which are “the global leader today in selling electric vehicles.” WiTricity has also “had an announcement of working with General Motors (GM) to test its Chevy Volt.”
“But most announcements tend to be with Delphi and TDK, and IHI in Japan, and other Tier 1 suppliers.”
“The other exception would be Toyota, since they are an early investor in us, and a licensee as well, though I can’t say too much about their activity with us — I wish I could!”
Gruzen noted that “the whole electrification of the industry” is “turning everything upside down, in terms of auto makers and their Tier 1s.”
WiTricity, which you can consider a “Tier 2” supplier, has “a level of direct engagement that would have been unheard of a few years ago.”
You’re seeing that across the board for electric companies. They’re engaging with companies that are making Lidar and radar and optical processing, and all kinds of things. Ten years ago, the auto maker would just have gone to a Delphi and said, Give me this whole system. Now, they’re really seeing their role more as having to engage directly with the technology providers, to understand the technology, to evaluate it, to specify, and then end up telling the Tier 1s what they want. Our business model kind of reflects that. There’s a whole educational stage where we are working directly with the auto makers. That’s happening with nine of the top ten automakers. We are selling them bench systems for their labs, we are doing modeling with them. They may end up specifying with their Tier 1s, we want to launch on this model, and these are the specs, then they’ll go get them [suppliers] to sign a technology transfer agreement from WiTricity. And we, in turn, sell them the reference designs, we do a full technology transfer, and they sign a license for our technology, and we help them get to production. And then we have recurring royalty when they get to production. We also will sell components. So, right now we are in this phase of licensing, and technology transfer, and enablement. From 2018, we shift into the phase of recurring revenue.
Gruzen hasn’t signed definitive agreements with all of those top OEMs; some “are still evaluating,” he says. “But I have a launch map of a sort of platform that runs from now through 2022,” he adds, “With more and more and more platforms with each year.”
Gruzen notes this is a very different market structure from the personal computer business, where he previously ran consumer market efforts:
It’s exciting, but for a startup like us — like, I came out of the PC industry — we had three full product cycles a year. We were thinking about Dads & Grads, about Back to School, and about the Spring Refresh. It was all about how do you develop a whole new notebook computer in 28 weeks. Now, in this world, we’re engaged and working on a car that’s going to launch in 2018, and one in 2021, and it’s a totally different world. But once you’re in, you’re in for a good long time.
The other part of the business is the consumer electronics business. In January, at CES, Gruzen had shown a newly introduced Dell laptop for business customers, containing the charging capability the “Latitude 7285.”
Gruzen said “they seem very pleased with the solution we helped them deliver,” regarding Dell, adding “they will be extending across other products in future.” I asked if he could give me any sales figures for the 7285, but Gruzen said he didn’t have any data he could share.
Working with Dell is for Gruzen analogous to working with the auto makers: a multi-stage process of defining goals.
I described that business model, how we engaged with the brand, and enabled the automotive Tier 1s. And the work with Dell was similar. We engaged with the brand, and came up with the performance metrics, and the user experience they wanted. Then we enabled the supply chain in Asia to build these products. The thing that was exciting about what Dell did is, in the same way autonomous vehicles want wireless charging, and EV customers need to have a certain experience, what Dell did really well was to shift the conversation to the wireless workplace, as opposed to wireless charging, to think about it as part of an experience. What they did was they combined wireless charging with the WiGig standard for wireless displays. And we’ve always had wireless keyboard and mouse, and since the Centrino days, we’ve had Wifi for wireless data. So, it was combining all these things that lets you have this experience were you walk up to a desk, and throw your notebook down, and your keyboard and mouse are active. You have your next meeting, you just grab it and you go. There’s no more docking, there’s no more plugging in cables, there’s no more putting your system to sleep. That was the vision, that’s what they want to extend now.
Dell is the only announced consumer electronics customer for WiTricity, in terms of actually shipping product, and so I asked Gruzen if he has any deals with other manufacturers aside from Dell, to which he replied, “Yes, but I can’t tell you.”
“There will be more small-device consumer electronics makers,” he said, noting that The AirFuel Alliance, the consortium promoting wireless power, of which WiTricity is a member, “is active, and there’s been a big push in Asia, to engage with the communities, and there are a bunch of new companies there that joined as members,” who can be future customers.
The challenge with consumer electronics, notes Gruzen, broadly speaking, is that it is “a space where standards are in a lot of flux,” for wireless power.
“Solutions are spread between what you do for wearables, and phones, and PCs.”
And then, there’s the hype, he says.
“And, there’s just a lot of companies out there that talk about wireless power but not a lot that have ever productized a product on a global basis.”
I asked Gruzen if he meant any one company in particular.
“I wish there were just one!” he replied. “There are a whole bunch of them. I end up having to deal with, and to address, a half-dozen small companies around the world that make lots of claims about wireless power but that have never shipped anything. It sets customer expectations very high.”
I asked if he was referring to Energous in particular. Gruzen said he gets on well with Energous’s CEO, Steve Rizzone. “You know, actually, I like Steve, we have good conversations.”
Then he took an indirect swipe at the company, saying that “the challenge with a lot of companies is, you know, being crisp about the user experience, and then delivering on it; most of these companies have been all over the map, versus what you actually can really do.”
Gruzen mentions a positive example of a startup, Ossia, saying, “I like the team, the founder is a sharp guy, and they are also competing in that RF [RF Power, like Energous] space, but they have been very measured and practical in terms of what they say is possible.”
“I think in the end they will likely deliver something that works, and delivers on what he promised; that’s quite the contrast to the approach Energous has taken.”
Regarding funding, WiTricity’s last round was in 2015. Gruzen said there is no further funding planned at the moment, as “we have plenty of capital to go pursue the business.”