Koch Industries, the biggest privately held company in the United States, has seemingly become dedicated to the future of clean energy.
According to a report in The Wall Street Journal, citing FactSet data, regulatory filings, and press releases, the conglomerate — which has its roots in the oil and gas business — has poured $750 million through nearly a dozen investments into the U.S. battery industry over the past year and a half.
Koch’s investment focus is on the battery supply chain and electric vehicle (EV) segment, giving it the distinction as one of the biggest backers of the battery market, excluding carmakers.
A far cry from the refining of oil and gas that Koch is famous for, the pendulum swing has the potential for game-changer status in the transition from fossil fuels to renewable energy sources, experts say.
Koch’s timing is opportune — pandemic-fueled supply chain issues are currently plaguing the battery market.
Elon Musk, CEO of leading U.S. EV maker Tesla, recently addressed his industry’s chip shortage, which he expects is a “short-term” phenomenon that should work itself out by 2023.
However, he is not optimistic about the industry’s battery shortage, saying it will become a “limiting factor” for production up ahead. While Musk has urged suppliers to step up production, he has also taken the matter into his own hands as Tesla explores in-house battery-cell production.
Tesla alum Vivas Kumar, who runs a lithium-ion battery parts startup, is in awe of Koch’s newly diversified portfolio, telling the WSJ, “it’s stunning just how many different battery supply chain players they’ve taken a stake in.”
Among the companies that Koch has invested equity and convertible debt include:
- Aspen Aerogels, an aerogel tech platform focused on sustainability.
- EOS Energy Enterprises, behind “sustainable zinc-powered energy storage systems.”
- Standard Lithium, a lithium company.
- Li-Cycle, behind lithium-ion battery recycling.
Koch Industries’ Commodity Roots
Wichita, Kansas-based Koch Industries is no stranger to making equity investments in other companies, where it typically parks its capital for as long as two decades.
Koch’s focus has historically been on commodities, which is where it has its roots with founder and chemical engineer Fred C. Koch’s creation of an “innovative refining process” in 1927.
However, Koch Industries has built a reputation on the opposing side of the climate change debate, reportedly directing billions of dollars to political organizations skeptical about the shifts in weather patterns.
As a result, the company has often been the target of environmental groups like Greenpeace, which keeps a running tally of the donations made by the Koch Foundation to what it describes as “climate denial groups.”
Russian Roulette
Koch Industries is currently trying to navigate its presence in Eastern Europe, particularly subsidiary company Guardian Industries in Russia. While many U.S. companies are fleeing Moscow, Koch Industries President and COO Dave Robertson have taken a more controversial stand.
Robertson declared that winding down Koch’s two glass-making facilities there would mean handing control over to the Russian government, which would do “more harm than good” and place its six hundred-plus employees “at greater risk.” As such, the company has elected to maintain operations there.
