Ellicott Factory Financing Package Nears Completion

The Electrovaya plant on Precision Way, Ellicott, is pictured. Electrovaya officials are optimistic a financing package for the plant will be finalized soon with an eye toward beginning manufacturing in 2026.
P-J file photo by Christopher Blakeslee

Electrovaya expects to secure more than $40 million by Sept. 30 to finance work on its Gigafactory in the town of Ellicott.

Company officials recently discussed the company’s third quarter financial results with investor analysts – a discussion that included much discussion of Electrovaya’s redevelopment of the former Acu-Rite plant at 1 Precision Way, Ellicott.

“On the Jamestown front, we anticipate things are moving very quickly right now with the U.S. government agency that we’re working with,” said Ras Das Gupta, Electrovaya CEO. “And in fact, they’re visiting us day after tomorrow (Friday) here and in Jamestown. So that’s moving quickly. Let’s say, we’re aiming to form an agreement with them by the end of the fiscal year as well. Of course, there’s many factors that can come in on that. And the objective is to have battery production out of Jamestown, New York, in 2026.”

Das Gupta has talked several times this year about the final piece of the puzzle to build the gigafactory in Ellicott – government-backed construction financing. This week’s announcement that a financing deal is close brings more certainty to the project. The lengthy process to secure financing has pushed the plant’s opening back late 2023 into 2026 according to this week’s conference call. Electrovaya is projected to employ up to 250 people at the Ellicott plant.

The Ellicott facility has been in the discussion phase since 2022, when news broke that the New York Power Authority had approved a more than 1.5 megawatt low-cost hydropower allocation for Electrovaya. Empire State Development announced it was providing up to $4 million through the performance-based Excelsior Jobs Tax Credit Program and $2.5 million in Regional Council Capital Funding. County officials have approved around $3 million in financial incentives for the project as well.

Third quarter revenues for Electrovaya were reported at $10.3 million, a $300,000 decrease from the third quarter of 2023. Revenues lagged, company officials said, because some orders that are part of construction projects have been delayed by customers, though the orders have not been canceled. Electrovaya’s gross margin increased to $3.5 million, compared to $3.2 million in the third quarter of 2023. The company notched an operating loss of $600,000 in the third quarter of 2024 after recording operating income of $900,000 in the third quarter of 2023; a change Electrovaya officials said is related to one-time costs for engineering and development activities.

At the same time Electrovaya is securing government-backed financing for the Ellicott gigafactory, it is working with a North American-based bank to restructure its debt. The company is in late-stage negotiations with a major North American bank to refinance its working capital facilities. This refinance, if successful, is expected to lead to significantly lower debt servicing costs, provide Electrovaya increased working capital availability and a new long term financial partner. The company expects to close the refinancing by September 30, 2024.

“I mean all financing is somewhat interrelated,” Das Gupta said regarding the Ellicott factory financing and the debt refinancing. “However, they are separate parties and will have limited interaction with each other. So, in one case, it’s a large bank. And that refinancing is really to take out our existing working capital facilities, add further capability to grow our working capital with them and of course, lower the cost of that debt. That’s a big portion of it. So we’re very excited about that opportunity. John and I are working quite hard in getting that over the line. The Jamestown financing is, of course, it’s dependent on the strength of the business overall, right? They wouldn’t be looking at providing this capital if Electrovaya was in a position where we’re unable to service their facility.”

Through Aug. 12, 2024, Electrovaya has an order backlog totaling $40.2 million, all scheduled for delivery within the next 12 months. Earlier this year, Electrovaya announced it had established a supply agreement with Sumitomo Corporation Power & Mobility , a 100% owned subsidiary of Sumitomo Corporation. The supply agreement will initially cover the supply of battery modules to leading Japanese construction equipment manufacturers, with shipments expected to begin in 2025.

“My vision for Electrovaya remains to become the world’s leading lithium-ion battery manufacturer for heavy-duty, mission-critical applications. I’ve absolutely no doubt that we will achieve this goal. While we are disappointed that we did not hit the top line targets that we set out last year, fiscal 2024 is most definitely on a path to be a foundation year, and the company is today in a better position than it ever has been,” Das Gupta said.