Pricing Conductive Polymer CASH Cordero Lopez Alyssa Jordan

Pricing Conductive Polymer C-A-S-H Cordero Lopez, Alyssa Jordan, Shubham Sharma, Hugo Estrada, Victor Lee In tro du cti on Electric Vehicles Energy Storage Systems Discussion Background • Formulation of a unique solid-state polymer comparative to the standard liquid electrolyte found within conventional Lithium Ion batteries. • Defining characteristics: • Improved conductivity throughout a wider temperature range than standard lithium ion batteries • Inherent safety due to the minimization of electrolyte destabilization, creating a significantly less volatile battery with more applications Figure 1: The difference between a liquid electrolyte and solid polymer being used in a battery cell. Task • Quantify the incremental value of inherently safe polymer-based batteries in Electric Vehicle (EV) and Energy Storage System (ESS) markets. • Determine total revenue opportunity for Ionic Materials across all market categories • Determine the pricing strategy of Ionic Materials’ polymer for its role in enabling a safe and thermally optimized battery solution between penetration pricing or a value pricing strategy. • Determine the market approach that Ionic Materials should take with their value proposition

Pricing Conductive Polymer C-A-S-H Cordero Lopez, Alyssa Jordan, Shubham Sharma, Hugo Estrada, Victor Lee Introduction Energy Storage Systems Ele Ve ctri hic c les Discussion Figure 3: Tesla Motors stock (TSLA), with historical low due to reported Figure 2: Three-layer aluminum/titanium underbody shield protecting Tesla battery packs fire caused by battery and subsequent investigation in early 2016. Introducing conductive polymer to electric vehicle (EV) battery market will optimize battery lifespan, improve vehicle performance, and increase consumer confidence. 2013: Chain of thermal runaway events with minimal underbody damage causes Tesla to implement three-layer aluminum/titanium underbody shield to protect battery packs. • Conductive polymer severely reduces risk of explosions in Li-ion batteries, eliminating need for underbody shield • Reduces vehicle weight, improving performance & increasing consumer excitement 2019: Tesla releases software update artificially reducing vehicle range in order to cut down on battery wear and extend lifetime of battery pack. • TSLA down $6. 63/share (2. 5%), year-to-date, as a result. • Conductive polymer will both increase vehicle range and lifetime of battery. Federal regulations mandate a minimum EV battery warranty of 8 years/100, 000 miles. • Tesla: currently 8 -year/unlimited mile warranty. • Less risk for explosions could allow Tesla (and other EV manufacturers) to reduce warranties, increasing consumer security while maximizing profit. Most EVs utilize active cooling (submerging cells in liquid) or passive cooling (recycling air from interior A/C to battery packs). • Comprises a significant fraction of EV production costs. • With reduced explosion concerns from heat, less can be spent on cooling technologies.

Pricing Conductive Polymer C-A-S-H Cordero Lopez, Alyssa Jordan, Shubham Sharma, Hugo Estrada, Victor Lee Introduction Electric Vehicles En e Sto rgy Sy rage ste ms Discussion What is the incremental value of an inherently safe battery enabled by the Ionic polymer? • • Larger thermal window of operation • Substantial temperature regulation systems unnecessary • Minimal HVAC requirements, contrasts with Li-ion specific temperature needs for operation • Saves anywhere from 13% - 20. 8% on installation equipment costs depending on storage system duration Liability and warranty considerations • Decreased liability due to nonflammable, self-extinguishing technology • Less investment into fire extinguishing technologies, currently safety is built into almost every aspect of an ESS system • Decreases $/k. Wh for installation labor and equipment, balance of system, and contingency plans • Standard conventional batteries have warranties up to two years • With the polymer, warranties will be longer due to less destabilizing forces and battery risk • Increase availability and profitability of battery types and applications • Current classification as hazardous material Figure 4: Diagram showing the safety requirements needed for the conventional battery Figure 5: Diagram showing the components of the cell pack for storage system

Pricing Conductive Polymer C-A-S-H Cordero Lopez, Alyssa Jordan, Shubham Sharma, Hugo Estrada, Victor Lee Introduction Electric Vehicles Energy Storage Systems Dis cu ssi on Large incremental value due to the benefits of using a solid polymer Most conventional lithium-ion batteries work optimally at 23°C where the solid polymer can work up to 100°C. Unlike conventional lithium battery systems, there will not be a need for large-scale security and regulatory systems. Total Revenue Opportunity Ionic Materials' solid polymer is the first solid polymer with comparable electric conductivity to liquid batteries. Therefore, the solid polymer has an inelastic demand where it is better equipped for profit maximization, and the price can be easily manipulated. Value Pricing Strategy C-A-S-H recommends that Ionic Materials consider a value-pricing strategy. • The large savings in costs from the solid polymer batteries allows Ionic Materials to have a higher price, and the inelastic demand allows for Ionic Materials to have more control of the market. Market Approach The solid polymer will significantly reduce costs for companies utilizing Li-ion batteries, making them far more likely to implement it. There are several instances where capital have been destroyed in minutes due to the failure of a single battery. Total Revenue Market

Pricing Conductive Polymer C-A-S-H Cordero Lopez, Alyssa Jordan, Shubham Sharma, Hugo Estrada, Victor Lee Introduction Energy Storage Systems Electric Vehicles Figure 7: Global lithium-ion battery market by sector Figure 6: Annual Lithium Ion battery demand forecast by sector to 2030 Dis cu ssi on