Jimmy Rojas | High Throughput Electrolyzer Manufacturing

In this episode of the Hydrogen Innovators podcast, we welcome Jimmy Rojas, founder and CEO of Evoloh, an innovative company transforming hydrogen production through advanced alkaline electrolyzer technology. Jimmy shares his journey from academia to entrepreneurship, highlighting how Evoloh uniquely reduces hydrogen production costs by using standard, high-throughput manufacturing techniques and 100% domestic supply chains. He explains Evoloh’s strategy of focusing exclusively on stack production, designed explicitly for compatibility with low-cost, commercially available equipment, drastically cutting the cost of hydrogen. He dives deep into the challenges of electrolyzer manufacturing, global hydrogen markets, and the importance of flexible load-following technologies for renewable integration. Tune in for insights into Jimmy’s leadership philosophy, inspired by fostering growth within his team, and hear who personally motivates him in his remarkable career. A must-listen for anyone interested in the future of green hydrogen and cleantech innovation.

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This article is part of the series: Hydrogen Innovators Podcast

Transcript

[00:00:00.00] [MUSIC PLAYING]

[00:00:03.05] JIMMY ROJAS: What we bring to the table is a low cost stack that is made with high throughput manufacturing techniques, using 100% domestic supply chains. At Evoloh, we bring the cost of the factory down very significantly using machines that are completely standard, not custom made, machines that are used in other industries, completely standard equipment, easy to finance. If one of the major OEMs in the industry gives you stacks for free today, completely for free, the levelized cost of hydrogen would still be very high.

[00:00:47.24] [MUSIC PLAYING]

[00:00:56.99] KAREN BAERT: Welcome to the Hydrogen Innovator Podcasts. This is a podcast series is produced by the Stanford Hydrogen Initiative, where we spotlight bold innovators in hydrogen across academia and industry. You can find our podcast series Hydrogen Innovators on Spotify and on Apple Podcast. I am Karen Baert, entrepreneur and Stanford MBA graduate, and today I am really thrilled to welcome Jimmy Rojas as a guest. Jimmy, welcome to the Stanford Hydrogen Innovators Podcast.

[00:01:27.87] JIMMY ROJAS: Thank you very much for having me.

[00:01:29.40] KAREN BAERT: So Jimmy is founder and CEO at Evoloh. He started his career a while back at MIT, where he obtained two different bachelor degrees. Then he moved over to the West Coast to attend Stanford, where he attended two different master's degrees, as well as a PhD on hydrogen production and energy systems. He worked in the venture capital space as well, looking at hydrogen technologies, until the early 2020s. And that's when he started Evoloh.

[00:02:00.37] So, Jimmy, let's dive straight into it. We actually have heard from multiple electrolyzer companies on this podcast. We've heard from Cummins a while back, and more recently we also heard from electric hydrogen. Now, as far as I understand, Evoloh approaches the electrolyzer industry from a different angle. Really focuses on high throughput manufacturing of electrochemical stacks, and that drastically reduces the manufacturing cost when you produce these electrolyzers. Can you tell us a bit more about Evoloh's unique value proposition?

[00:02:34.80] JIMMY ROJAS: Absolutely. Thank you. First of all, just to make sure we're all on the same page, let me remind people that an electrolyzer has two components. One is the balance of plant. The other one is the stack. The BOP includes the power electronics units, the heat exchangers, pipes, wires, everything else. The stack itself is the box that actually makes the hydrogen. The reason why I'm saying this is that at Evoloh, we make stacks. Only the stack. So what we bring to the table is a low cost stack that is made with high throughput manufacturing techniques, using 100% domestic supply chains.

[00:03:16.57] So let me go a little bit more into the details why we chose this path, which is very unique. Why stacks? It turns out that about over 90% of the projects under development are EPC managed. What that means is that they buy stacks, not packaged solutions. Now, packaged plants are only useful up to maybe 10 to 15 megawatts. Only a few percent of the total fall under that category.

[00:03:48.64] Plants on the order of 20, 30 megawatts may have the major equipment supplied by an OEM, but an EPC, engineering, procurement, and construction company, would still do the installation, the civils, the interconnections, and so on. Another reason is that the margins for the stack are significantly higher than the margins for when it comes to selling hydrogen or deploying a full project.

[00:04:16.72] And so the question now is, did we figure out all of this before everybody else? No, not at all. Actually, everyone understands this. The issue is that even though they know the benefits of selling stacks only, the strict stack requirements really forces them to provide full packaged solutions. Since state of the art stacks, for example, require custom built balance of plant systems, some startups have to raise hundreds of millions just to build power electronics and electronics units that can work with their high risk, high current density stacks. So they are forced to sell those full stacks.

[00:05:00.73] Now, why can Evoloh do this, but not everybody else? Well, because we redesigned the stack completely from scratch so that it can use available low cost commercial systems that everybody knows how to build. So, for example, we went to power supply companies and we told them, what do you want us to use? As opposed to the other way where we tell them, we are looking for x, y, z. We did the same for the water management system, for the heat exchangers, everything else.

[00:05:34.48] And so by the end of the day, why does this matter? And the answer to that is if one of the major OEMs in the industry gives you stacks for free today, completely for free, the levelized cost of hydrogen would still be very high. And so at Evoloh, on the other hand, we take a very comprehensive approach to reducing the LCOH, Levelized Cost Of Hydrogen. The stacks are cheaper. OK, that's great. But they also allow you to use a cheaper balance of plant. OK, that's even better.

[00:06:10.79] EPC expenses are also lower. Installation, maintenance, everything is cheaper. Even better. And finally, operating expenses are lower because of efficiency and load following capabilities. We only make this stack. But that stack was designed so that everything else comes down in cost. So that is what we bring to the table.

[00:06:34.22] KAREN BAERT: Very interesting. So you don't sell the full electrolyzer to the customer. You sell the stack. But you've designed the stack, and you're manufacturing the stack in a way that you very much think about the full picture and try to reduce ultimately the hydrogen production costs to optimizing the stack for a cheap balance of plant and high efficiency.

[00:06:57.26] JIMMY ROJAS: That's exactly right. And just to reiterate, this was requested by our customers. It was not just our idea. They are the ones that came to us. And they said we need stacks. No sells the stacks. We have this three party going on. One is the OEM, Evoloh. The other one is the developer. The other one is the EPC. And the EPC knows how to build everything except the stack. So that's exactly why.

[00:07:26.84] KAREN BAERT: And you don't sell to the developer. You sell to the EPC. They are your direct customer.

[00:07:32.39] JIMMY ROJAS: That's an interesting question, because you can go both ways. Sometimes we have developers come directly to us, because the technology is very interesting, because there are many advantages. And then they find an EPC or sometimes we have the EPCs come to us because they want to offer this solution to their clients. In other words, the developers. There is always this three party situation going on.

[00:07:59.08] KAREN BAERT: Very interesting. And in some ways, it's a very effective way of selling if the EPC kind of pushes your solution towards the developer. Great. I think that gives us a good initial perspective on the product that Evoloh is offering. Let's talk a little more about the technology itself. So the type of electrolyzer, the type of stack.

[00:08:19.03] So if we look at low temperature electrolysis to split water into hydrogen and oxygen, there's two key technologies out there. You have the proton exchange membrane and the alkaline electrolyzer. The key difference is whether it's protons, so H+, or alkaline ion, so OH-, that diffuse between your anode and the cathode of the electrolyzer. Now, how would you describe Evoloh's technology and how does it differentiates itself from other electrolyzer technologies?

[00:08:49.77] JIMMY ROJAS: We aren't commercializing an advanced alkaline electrolyzer stack. So the chemistry is alkaline, just the same way you described it. You have an OH moving across from one electrode to the other. But the outside of the stack looks like a pen. So if I don't tell you what it is and I give it to you, you might think, oh, this is a very low cost pen stack. But it's actually an alkaline stack.

[00:09:19.77] And so here are some details of what we actually bring to the table. Every single repeating component in our stack is made using roll to roll manufacturing techniques. These are very, very old techniques. They were developed for completely different industries, from the textile industry to printing newspapers to making solar cells to making batteries. So we are adapting those technologies, which are low risk, low cost, easy to scale to electrolysis for the very first time. So that's number one.

[00:09:58.28] Number two, 100% domestic supply chains. This is a very important point, and it is not just because of national security, but it's a good long term way to do it simply because of the following. Think of an alkaline system. It's much lower cost than a pen. It is fairly low risk, and it uses a lot of nickel. Is that an issue? Well, nickel is not that expensive. It could be fine.

[00:10:29.08] But nickel is processed in China. Processing nickel is one of the most polluting processes in the industry. Then you take all of that nickel from China all the way to the West, and you build an electrolyzer. And you produce hydrogen and you call it green hydrogen. So not only are you using those very problematic supply chains, but you're also polluting the environment and then you call it green.

[00:10:55.06] So there are many issues in the supply chain right now. That is just one example. Then you have the classic example, which is iridium and then platinum and gold and ruthenium and titanium. And there are just so many problems. We don't have any of those issues. It's very easy for us to put some nickel. It's going to probably perform better. But we don't do that. We use steel, use carbon, plastics, some aluminum. That's it. I actually just shared everything that we have. That's pretty much it.

[00:11:27.28] It also means commodity materials. So again, it is not just a national security concern. It's the fact that we are dealing with commodity materials. So the cost of this stack down the road is actually the cost of those commodity materials, plus a little bit of the manufacturing, the cost of the factory, which we're going to talk about it a little bit.

[00:11:53.74] Long story short, that is what drives down the cost significantly. It's the use of commodity materials and nothing else. And then finally, behind the meter operation. Our stack is designed for behind the meter load following operation. At the end of the day, the levelized cost of hydrogen, a big chunk of that is operating expenses, which is electricity costs. So if you can operate behind the meter, which is really challenging, and alkaline systems struggle to do it. And those that can are actually very expensive. We are actually seeing [INAUDIBLE] systems struggle to do load following as well. So those are all the details of the technology.

[00:12:40.30] KAREN BAERT: Super helpful. And I think this is a great transition to talking a bit more about the famous LCOH, so hydrogen production cost. So indeed, for green hydrogen to reach widespread adoption, we need to get the LCOH, the hydrogen production cost down. That means two main things. One, we need cheap, renewable electrons. And what you mentioned there on the ability to load follow renewables is definitely one key lever to get that cost down. The second piece is we need to get the CapEx cost of the electrolyzer down. You talk quite a bit about different levers that you pull there through using cheap materials, but also getting manufacturing costs down.

[00:13:23.96] So looking at the DOE's latest targets, I believe they have a goal of $210 per kilowatt, all in installed costs for the electrolyzer. Based on what you see at Evoloh today and maybe more broadly in the market, how far are we from that and what will it take for us to get there?

[00:13:45.50] JIMMY ROJAS: So this is an interesting conversation. We start normally by talking about operating expenses and then capital expenses. But everyone always forgets that EPC expenses are huge and they are normally ignored. So that's my first message. Let's not ignore those. And we do $200 all in CapEx. Yeah, in the future, hopefully. There are pathways to get there. But again, I feel like every single time talk about that, the EPC costs are ignored.

[00:14:18.80] Electrolyzers outside China are going up in price. So you think it's going to behave the same way as solar behaved, where it just keeps getting cheaper and cheaper and all you need to do is wait. But last year they went up in price. What is happening? Supply chains. Manufacturing. China controls a big part of the supply chain. We were just talking about that. So we are far from that target, but it's not because we don't understand where the operating expenses go or how to reduce capital expenses.

[00:14:52.44] The remaining piece of the puzzle that I believe no one is talking about is the cost of the factory that actually makes the electrolyzers. Not the factory that makes the hydrogen. We know how that works. But the factory that makes the electrolyzer stacks. Right now, you need hundreds of millions of dollars to build what the industry calls a giga factory.

[00:15:15.24] It is not scalable. There are no economies of scale. That's not going to happen, because then you start to realize, well, not only things take time for us, OEMs, but things take a lot of time for developers. And how are you going to match these two? What if those guys get delayed? And now we have this huge factory that somehow has no revenue. Now we're in trouble.

[00:15:39.67] So the way to address all of these things is by coming up with a new factory design, which is exactly how we accomplish everything that I described in the previous question. At Evoloh, we bring the cost of the factory down very significantly, using machines that are completely standard, not custom made, machines that are used in other industries. Completely standard equipment, easy to finance. We don't need new buildings. So we're talking tens of millions, at most hundreds of millions.

[00:16:13.75] So are we far from that target at this point? Yes. Yes, we are. Do we understand the LCOH? Yes, everyone understands it. But that would be my message. People are forgetting of this important parameter, the factory that makes those stacks. Otherwise, you're going to build a factory, and it's just going to sit there and do nothing.

[00:16:33.33] KAREN BAERT: Very interesting. So if I understand it correctly, what you're talking about is the cost from basically going from just the components slash raw materials of your electrolyzer to ultimately fully produce stack and then a fully produced like electrolyzer that can be installed in the field. Can you give us a feel on if the total installed cost of the electrolyzer is 100, what share of that would go to the EPC cost, to factory cost, just to get a sense of order of magnitude here?

[00:17:09.67] JIMMY ROJAS: What we are targeting at Evoloh is that the costs that are related to the factory that made those electrolyzers are pretty much negligible. That's it. Now, EPC costs, we have seen many numbers from hundreds of dollars per kilowatt to thousands. So it is a very wide range and it varies from project to project and the size and the location. All of that is different.

[00:17:36.16] But by the end of the day, when it comes to how much you pay for a stack, most of that should be materials. The remaining should be warranty, performance guarantees. People don't talk about that as much as they should. Cost of the factory that actually made those electrolyzers should be pretty much negligible. And that is what we are promising at Evoloh. And the remaining should be, as you can expect, the gross margin for whoever is developing the project.

[00:18:06.61] KAREN BAERT: And I said, that's helpful. Well, let's talk about these factories. Today Evoloh has raised around $40 million. You've tested stacks at tens of kilowatts, and soon you'll be testing hundreds of kilowatts. And the goal is to test around megawatt or megawatt stacks in 2025. In December, you also announced a supply agreement with a large renewables developer for half a gigawatt with a non-refundable deposit, which is a big deal. Congratulations.

[00:18:36.46] What did you get to get to that agreement while you're still kind of scaling up testing and manufacturing facilities? And maybe a broader question. You alluded to this earlier, but there's a challenge of to get orders in, you kind of need to show that you have the capacity to build these stacks. And at the same time, you don't want to over build manufacturing facilities before having the orders. So how do you deal with the right balance there of being able to meet demand while not ramping up manufacturing capacity prematurely?

[00:19:10.01] JIMMY ROJAS: There are a couple of ways to answer that question. First of all, how do you secure such a deal? Well, the way you do it is you put yourself in their shoes and you acknowledge the fact that no one knows how this is going to be, when this is going to be built, who is going to provide the warranty and the performance guarantees.

[00:19:35.00] We have actually talked to multiple banks. At the beginning of the conversation, they say you need this many hours. At the end of the same conversation, they change the number to something completely different. I think the whole industry is learning how to do this, but that is number one. Understanding that this is very risky for everybody. So what you do is you say, this is what we bring to the table.

[00:19:59.90] Yes, it is going to change completely your finances when it comes to developing this project, because we're very good at what we do. But you know what? You're going to pay if Evoloh accomplishes x, y, z. So these are contingent agreements. Yes, they are binding. But at the same time, they are contingent. And so that makes it very friendly for the developer or the EPC. And it makes the conversation a lot easier. They take the risk. There is a deposit. But at the same time, they know that we need to deliver.

[00:20:41.43] The second part of the question is around manufacturing, and it really goes back to the previous question. How can you do this if this is going to cost $400 million just to build the factory? And then on top of that, I need to deliver on time, but I don't know when I need to deliver, and you don't know when you want my stacks. So how do you do all of that?

[00:21:05.77] To be honest, I don't think anyone knows. But the way we are addressing them is by saying, look at the manufacturing steps that we have. We have de-risked pretty much all of that. We need to assemble the entire assembly line, integrate it, all of that. It's going to take this long, and it's only going to cost this. If it takes you longer, that's OK. It is actually very cheap to build. If you need it faster, that's OK. We can deliver this much by hand in a not fully automated line. So this conversation gets a lot easier and you're actually reusing costs of the factory, which is why I broke that up in the previous question.

[00:21:55.62] KAREN BAERT: That's super helpful. Thank you for laying that out. Let's transition to talking a bit more about the market. There's been a lot of movements, of course, in the green hydrogen world recently, some project cancellations. But I feel that sometimes it's difficult to separate the noise from the signal. And we sometimes forget that, yes, there's a lot of project cancellations, but there's also a lot of projects actually moving forward. Where do you see the biggest demand coming from for electrolyzer stacks and hence green hydrogen projects, both in terms of geography and the types of customers?

[00:22:30.06] JIMMY ROJAS: This is another interesting point where if you Google demand versus supply, you're going to hear all sorts of things, and they all contradict each other. But let me give you a couple of interesting numbers. We have been looking at the data in the past few days, and about 4% of all the projects under development at different stages of development, about 4% of everything that we found is taking place in the United States. So that is very, very little. Now, that is the number of projects. If you do it by kilograms, the number is a little bit different, but not too far.

[00:23:11.69] And so what that means is that the growth is actually happening in North Africa, the Middle East, in Australia, in South America. But they all have something in common, and that is extremely cheap renewables. So when you look at that, you say, OK, you need a solution that is very good at load following. Now, when you deploy something that is going to be operating 20% of the time, 25%, 30% of the time, CapEx all of a sudden matters a lot. And so that is what we bring to the table.

[00:23:52.60] Again, it is not something that is going to blow up your finances. It's actually something that makes them look fantastic by reducing the capital expenses, allowing you to load follow, and becoming basically an enabler. Hydrogen becomes an enabler, where now you can monetize all of these renewables, let's say in North Africa. Now you can convert all of that to ammonia, ship it around the world. That is perhaps the application that we are the most excited about, where we're not even touching the grid. We're completely off the grid, and we're monetizing all of these renewable resources that they have and actually creating a new source of revenue.

[00:24:41.32] KAREN BAERT: That's super interesting. And I think you touched upon a really good point here, because often the critics of hydrogen say that if you have renewable electrons, it's better to use them directly than turn them into hydrogen or other derivatives. But what you're saying here is being able to build electrolyzer projects in areas of the world with abundant renewables is actually additional, because otherwise, that renewable potential would not be leveraged.

[00:25:11.15] And so what we're doing here is in areas with abundant natural resources, we build large renewable projects. We turn that into hydrogen, and then we use that hydrogen. We basically ship it probably to areas in the world where we need that renewable energy.

[00:25:27.61] JIMMY ROJAS: Here's another reason why all of that is so important. The US transmission system is in gridlock. And this is not the only country that is suffering from that. Looking at the statistics in the past few months, I believe it's about two terawatts of clean energy capacity that is completely on hold.

[00:25:50.15] And the average queue time just to access the grid is about four or five years. And so know if you can just skip all of that and do it completely off the grid, it brings many advantages and your electricity is cheaper. You don't have to pay for all of those transmission costs. But at the same time, you need a stack that can actually do that. And that's really hard from a technical point of view.

[00:26:19.31] KAREN BAERT: Yeah. And that flexibility, that ability to ramp with renewables, as you said, that's hard to do. But in some way, both from a technical perspective as well as from a techno-economic perspective. From a technical perspective, you need to have that flexibility. And it seems like that's one thing where Evoloh really stands out, where Evoloh stacks stand out. On the other hand, you also need a low CapEx. So that's from a techno-economic perspective. It makes sense to maybe run these systems at a lower capacity factor.

[00:26:53.30] JIMMY ROJAS: Actually, what you just said is the answer to the whole policy conversation that is going on right now. We're in the middle of a transition from the Biden to the Trump administration, and people are worried. People are asking what's going to happen with the hydrogen support. And by the end of the day, it shouldn't matter.

[00:27:15.54] Focus on extremely low cost solutions, solutions that can do load following. And if the market inside this country takes a little bit longer to ramp up, that's OK. You can still manufacture in the US or you can go manufacture somewhere else in target. All of those amazing applications, again, North of Africa, South America, et cetera. So that matters a lot. Low cost.

[00:27:42.16] KAREN BAERT: Yeah, absolutely. And you're set on only 4% of the green projects are actually in the US proves that point for sure. Great. Jimmy, I'd love to transition to some more personal leadership questions. And the first one there is looking at your resume before you started Evoloh, you spent most of your adult life collecting a range of degrees. I think multiple bachelors, both in mechanical as well as in nuclear engineering, multiple masters, again, in mechanical engineering and also management degree and a PhD in mechanical engineering. Tell us a bit more about your journey from academia to starting Evoloh.

[00:28:21.42] JIMMY ROJAS: Yeah, absolutely. I actually worked in the venture capital community, in the VC industry, but always looking at hydrogen. Hydrogen deals, understanding the hydrogen landscape. And it is quite interesting, because I ended up reviewing maybe a dozen potential deals, and I've rejected every single one of them. I said no to every single one of them. And they made fun of me. They said I was a terrible investor, and they were probably right.

[00:28:52.74] But the issue that I saw over and over is that people weren't addressing things like a better catalyst or maybe slightly higher efficiency, slightly higher current density. If you read the first Wikipedia page on electrolysis, you can come up with. These things were obvious and they led to incremental improvements. So thinking about it over and over and over, I came to realize that things that are not that exciting or attractive, like supply chains and manufacturing, were significantly more impactful.

[00:29:36.09] And so from the VC space, I went into industry by starting Evoloh in April 2020. And the rest is history. We have raised a little over 40 million. We have 35 plus people. And things are going pretty well with orders already closed.

[00:29:57.64] KAREN BAERT: Well, that's exciting and that's a very cool journey. I very much echo your perspective that sometimes in the VC world, we tend to focus a lot and maybe too much on the flashy technology innovations versus really looking at what do we really need to reduce the costs of these climate technologies. I like to think that the reputation is not what you say about yourself, but what others say or think about you. And I have heard multiple people in your team and who work with your team say that you're a very strong and thoughtful leader at Evoloh. So I'm curious to hear what principles you rely upon as you lead Evoloh to the next stage of growth.

[00:30:43.06] JIMMY ROJAS: Well, that's a nice question. I would like to share one that I think has helped me quite a lot. It's the idea of letting those that you work with grow as much as they can and help them grow. Because by the end of the day, they are the ones that are going to help you grow and help the company succeed. The thing is, as the CEO, you speak many languages. One day you're talking to lawyers, another day you're talking to VCs, another day you're talking to scientists.

[00:31:15.74] And so I actually very much enjoy teaching the scientists how the VC world works, the VCs how the technology works, and so on and so forth, and really treating them as best as you can so that they can grow as fast as they can. Because I really believe that the growth of a company is limited by the growth of the CEO. And if I can help them grow as fast as they can, they're going to help me grow and therefore Evoloh will grow. So I spend a lot of time just trying to help everyone and teach random things to everybody.

[00:32:01.25] KAREN BAERT: I love that perspective. I'm hearing an empowering leader, but also a strong focus on bridging different roles. Jimmy, I'd like to end with a question that we ask every guest on this podcast, actually. The strong belief that we all stand on the shoulders of the giants who came before us. Using Isaac Newton's words, standing on their shoulders is what makes us see further. And in that context, who inspires you? Who inspires you most and why?

[00:32:30.08] JIMMY ROJAS: Oh, that's an interesting one, but I think that's an easy one. I remember I was nine years old. And I grew up in Costa Rica, so I was back there in Costa Rica. I was nine and I saw this Costa Rican come back in his last mission from the International Space Station. And this was the first Latin American astronaut. His name is Franklin Chang. And I said at the time, I don't know how or when, but I'm going to be like this guy.

[00:33:01.43] And he actually went to MIT. So I managed to go to MIT. One day I met him. We have a whole story there. But it really is inspiring, and I look up to him quite a lot. Interestingly, he joined Cummins at some point and began the whole hydrogen project at Cummins. And that was complete coincidence. But to this day, he continues to be a huge inspiration.

[00:33:33.75] KAREN BAERT: Fascinating. So an astronaut that went into the hydrogen industry. Jimmy, I know that this weekend I will do some reading on Franklin Chang, because you really sparked my curiosity. With that, unfortunately, we're at the end of the podcast episode. I want to thank you for your time and for all the great insights. 2025 is going to be a turbulent year, but I have a lot of confidence that you will continue to steer the Evoloh ship into the right direction despite all the storms. Thank you so much for your time today.

[00:34:07.41] JIMMY ROJAS: This was a pleasure. Thank you so much.

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