Swedish battery start-up Holyvolt has raised $45 million to develop materials designed to reduce the industry’s reliance on China, with plans to begin commercialising a new chemistry for unmanned aircraft in 2027.
The Stockholm-based company said the all-equity funding round was backed by Fifth Wall, Zone II, CC.VC and angel investors from the defence and finance industries. The investment values Holyvolt at $245 million, according to a person familiar with the company.
Holyvolt is targeting battery chemistries that are not controlled by Chinese manufacturers, which dominate the production of cathode materials and battery cells. Steven Prast, the company’s chief operating officer and a former Tesla manufacturing leader, said the West would struggle to catch China by simply replicating its existing technologies.
“We will not be able to out-China China on the battlefield that China has defined,” Mr Prast said. “They’re the world champions at being China.”
China produces about 85 per cent of the world’s cathode active material, which helps determine a battery’s energy storage capacity and cost, and about 80 per cent of battery cells. Its position has been built around the two dominant chemistries, nickel manganese cobalt, known as NMC, and lithium iron phosphate, or LFP.
“If we take LFP and we try to out-LFP China, we will lose,” Mr Prast said. “We’ll lose that every day.”
Holyvolt’s battery chemistry bet
The company’s approach is to develop alternative materials and manufacture them in Western markets. Mr Prast said he believed there could be “another dozen cathode materials that humanity just hasn’t figured out yet”.
Holyvolt’s first intended product is DRX, short for disordered rocksalt. The cathode material uses neither nickel nor cobalt and, according to Mr Prast, is designed to offer performance comparable with NMC while costing roughly the same as LFP once delivered in North America.
He said a central requirement was for DRX to have an “entirely friendly” supply chain, although Holyvolt has not identified its suppliers. Performance data has been presented at scientific conferences, including the International Battery Conference in March 2026.
Holyvolt plans to bring DRX to market in 2027, initially for unmanned aerial vehicles before pursuing mobility applications. It is also developing formulations for carmakers and another intended for data centres, where processors can require rapid bursts of power as graphics chips start up.
The timetable coincides with a US defence procurement restriction due to take effect on 1 October 2027. Section 154 of the fiscal 2024 defence authorisation act will bar the Pentagon from buying batteries from CATL, BYD and four other named Chinese manufacturers, as the US military expands its use of drones.
Laboratory testing and machine learning
Holyvolt’s research platform comes from its merger with Wildcat Discovery Technologies, a San Diego company founded by Scripps chemist Peter Schultz. The deal was reported at $73 million in March, a figure Holyvolt confirmed as accurate.
Wildcat has developed a high-throughput system capable of testing thousands of battery materials in parallel. The company says it has completed more than 225 projects for over 85 customers, including BMW, and tested more than 500,000 cells during its 18-year history.
Mathias Ingvarsson, Holyvolt’s Swedish founder and chief executive, said the company was using that accumulated data to train models and feed their predictions back into the laboratory. Each cycle of physical testing is intended to improve the next set of predictions and accelerate the search for new materials.
“We’re coming from the other side, which is very, very difficult to build,” Mr Ingvarsson said, referring to the company’s data and testing base. “Take years and years and years.”
Holyvolt says Wildcat’s laboratory already operates ten times faster than conventional research and development, based on a customer case study. Mr Ingvarsson said linking the laboratory more closely with the company’s models should increase that advantage.
Mr Prast said the company believed battery development could not be solved through computation alone. “The problem for battery is that it’s a chemistry problem and not a physics problem,” he said. “If it were a physics problem, you’d have Moore’s Law.”
He said physical experiments remained essential because chemistry still contained “huge mysteries”.
Scaling beyond the laboratory
Holyvolt does not intend to build gigafactories itself. Instead, it is considering licensing arrangements, toll manufacturing and joint ventures, leaving industrial-scale production to partners.
Mr Prast, who grew up in northern Michigan in a family with a long history in the car industry, said the company’s goal was driven by concerns about excessive concentration in a single country as well as by competition.
“It’s unstable when you have too much concentration in any one place,” he said.
Mr Ingvarsson said the strategy was not motivated by hostility towards China, noting that Volvo Cars, Sweden’s best-known carmaker, is majority-owned by China’s Geely.
For Holyvolt, the immediate challenge will be moving from a faster discovery process and promising laboratory results to reliable industrial production. “The transition from there to actual industrial scale is the killer,” Mr Prast said.
