More Value, Not More Cells: Qnetic’s Storage Strategy

Qnetic wants to redefine energy storage — without lithium, without degradation, and with a spinning carbon-fiber rotor. In this interview, CEO Michael Pratt explains why he sees flywheel storage as the next generation of grid infrastructure, and what role AI, geopolitics, and billion-dollar investments play in it.

Mr. Pratt, Qnetic began with a 3,700-mile bike trip. Why did you start thinking about energy storage on a long journey of all things?

Michael Pratt: Let me correct something right away: I wasn’t the one on the 3,700-mile bike trip — my co-founder Loïc was. He quit his job and spent three months on the road by bike while I laid the groundwork for our company in Shanghai. We had already decided to found a company together before that. We’d known each other for years, had repeatedly taken on projects alongside our day jobs, and had realized how well we work as a team.

During his trip we were in constant contact, discussing a single question: what do we really want to build? We deliberately thought not in quarters or years, but in decades. We asked ourselves what we’d one day look back on with pride. That long-term view opened up room for big ideas. Again and again, we landed on energy. It became clear to us that the real challenge of the energy transition no longer lies in generating electricity, but in storing it efficiently and reliably.

Before we get into the details: what does Qnetic do? What’s the concept?

Michael Pratt: Qnetic is developing a kinetic energy storage system that, from the user’s perspective, behaves like a conventional battery. You charge it with electricity, and it releases the stored energy again when needed. The decisive difference lies in the storage principle. Instead of storing energy electrochemically, Qnetic relies on pure mechanics. The electricity fed in accelerates a rotor to very high speeds, which stores the energy as rotational motion — the faster the rotor spins, the greater the energy content.

This is made possible by a virtually loss-free design. The rotor floats without contact on an active magnetic bearing inside a vacuum chamber, reducing friction losses to a minimum. When fully charged, the rotor can keep spinning for about 20 days. When energy is needed, the process runs in reverse: the rotational energy drives a generator and is converted back into electricity. The result is a comparatively simple, yet extremely efficient approach to energy storage.

Looking at the storage market today: what already works well, and where is the biggest gap?

Michael Pratt: The energy storage market is currently dominated by a single technology — lithium-ion batteries, the same kind used in electric vehicles. Systems like Tesla’s Megapack have become established and operate efficiently. Even so, there are both technical and geopolitical limits.

From a technical standpoint, the main issue is unavoidable degradation. With every charge and discharge, storage capacity declines — an effect consumers know from smartphone batteries, but one that weighs far more heavily in grid storage because of the daily full cycles. Then there are safety considerations. In the event of a fire, lithium-ion blazes are nearly impossible to control, so affected facilities often burn down completely. After roughly ten to fifteen years, battery systems generally have to be replaced as well.

The second major challenge is dependence on Chinese supply chains. The vast majority of battery cells produced worldwide come from China, and even many systems manufactured outside China contain Chinese components. Against this backdrop, more and more operators are looking for alternative technologies and a broader supply base. In the long-duration segment in particular — with discharge times of more than four hours — there is still no solution that has established itself as a clear industry standard.

So this isn’t only about technology, but also about supply chains and politics?

Michael Pratt: Absolutely. We have to break this paradigm of dependence on foreign actors. The best way to do that, in our view, is to switch technologies. There are companies that have spent many billions on gigafactories in Europe and the U.S. — and lost billions and gone bankrupt in the process. It’s extremely hard to compete with China on cell manufacturing when China has such a head start. New battery chemistries often work brilliantly in the lab, but there’s an enormous gap between the lab and manufacturing hundreds of millions of cells. That’s where we show up and say: you don’t have to compete with China at all. You can choose Qnetic.

What is lithium-ion technology good at — and where do you see structural limits?

Michael Pratt: Lithium-ion batteries are a mature and proven technology today. The first large-scale systems went into operation around 2018; by now they are considered bankable and technologically mature, reliable, and they keep getting cheaper. That’s why many operators are happy to go with this solution. Still, their fundamental weaknesses remain. Every charge and discharge causes gradual aging of the cells, so capacity and performance decline over time. This degradation cannot be fully engineered away.

At the same time, grid operators increasingly want to stop relying on a single storage technology. There’s demand for more robust and more diverse solutions. That’s exactly where we see our approach. We avoid the typical problems of lithium-ion systems — from degradation to costly retrofits to complete replacement of the storage assets after a few years.

What is Qnetic’s real strength compared with lithium-ion batteries?

Michael Pratt: Our biggest advantage is that our system can be charged and discharged virtually without limit, with no loss of performance. The reason is simple: with our technology, there is no degradation. And it’s precisely that aging that limits the economic use of lithium-ion batteries today.

What many underestimate is that operators of such storage systems are effectively limited to one charge-discharge cycle per day. Manufacturers typically provide warranties for around 365 full cycles per year. Use the battery more often and you risk voiding that warranty. That also caps the revenue potential, because operators only make money when the storage system is actually in use.

With Qnetic, that constraint disappears. Depending on demand, our systems can be charged and discharged two or even three times a day without shortening their service life. That significantly increases potential returns. Ultimately, operators evaluate storage projects by the present value of their future revenues. If a system enables two or three cycles a day instead of one, that considerably raises the economic value of the project.

So this isn’t just a technical advantage, but an economic one.

Michael Pratt: Absolutely. And to add to that: it’s not only about cost. Many people say that if you don’t beat lithium-ion on cost, it doesn’t work – but it’s not that simple. At some point the cell itself becomes a smaller and smaller share of a project’s total cost and matters less and less. It’s not just about cost — it’s about value.

The idea of flywheel storage isn’t new. What are you doing differently?

Michael Pratt: It started with an offhand remark. I said to Loïc: what about flywheel energy storage? He started running the numbers and sketching, and it snowballed from there. What exists so far are physically small systems with very low storage capacity, because flywheels have historically been used for uninterruptible power supply — short duration, low capacity, high output, expensive. That’s not what the grid needs. The grid needs very high capacity, long discharge duration, and low cost. We started with a blank sheet of paper and designed a system one to two orders of magnitude larger than anything out there today. Most conventional flywheels are like sports cars — high performance, limited utility. We’re building a semi truck: enormous capacity, built for long distances.

The biggest enemy of a spinning system is physics. What was the greatest challenge?

Michael Pratt: Probably what you’d call dynamics. At high speeds, enormous forces act within the rotor system. The way to minimize those forces is balancing. Every rotating object has some imbalance — you know it from a washing machine in the spin cycle, or a jet engine that’s loud at first and then goes quiet. We build the rotor and then balance it very finely. You also don’t want to draw energy out of the system while it’s vibrating. A rigid mechanical bearing would create losses with every revolution. Instead, we have an air gap around the shaft and an active magnetic bearing that centers the rotor on every rotation. On top of that, we support it on permanent magnets, so we don’t consume energy levitating the entire mass. That way the rotor floats fully in three-dimensional space. Mastering that across the whole speed range and through all resonances, mechanically and in software, is a big task — but we have exactly the right people for it.

Is all of this patented?

Michael Pratt: Yes, we’ve filed four patents so far. Two of them cover the architecture of our magnetic bearing system, a third the design and engineering of the rotor, and a fourth the technical design of the suspension bearing.

The rotor itself is the heart of our technology. Its geometry has been consistently optimized for maximum economic performance — with the goal of storing as much energy as possible per dollar invested. What matters to us isn’t just technical performance, but above all the ratio of cost to stored kilowatt-hour.

This is made possible by the use of a lightweight carbon-fiber composite. Whereas a steel rotor would have to weigh several hundred tons to match the storage capacity of our first system, we achieve the same performance with just five to six tons of material. An optimized fiber orientation and the hollow, thin-walled construction are what make that efficiency possible — an approach that couldn’t be realized with steel.

Is this also a mobile solution — for vehicles, say?

Michael Pratt: That question comes up again and again, but that isn’t a goal for us at all. We’re focused on grid storage — large arrays of flywheel systems supplying entire communities, cities, and regions. The second use case is commercial and industrial users, above all AI data centers. They’re extremely power-hungry, and their demand swings by hundreds of megawatts within milliseconds. That’s hard for the grid to absorb, so they need buffers. Today, that’s lithium-ion batteries, but they have cycling limitations. Qnetic can go from zero to any number of megawatts, with no degradation and no thermal issues.

You say lifecycle storage costs are well below those of lithium-ion. How solid is that figure?

Michael Pratt: We did a study with Imperial College London in 2024 and arrived at a specific number — around 38 percent cheaper. Since then we’ve recalculated using current lithium-ion figures, and we took a more aggressive approach because we were able to factor in multi-cycle capability. The result: we’re at about half the levelized cost of storage compared with lithium-ion. That metric captures everything — from installation to operations and maintenance to decommissioning, including retrofits and replacement of the lithium cells. And it’s a projection out to 2030, so we’re accounting for the expected price decline in lithium-ion. Our upfront price is competitive — but it’s in operation that our advantage really comes through.

How independent is Qnetic really from Chinese supply chains?

Michael Pratt: Our materials are largely readily available engineering materials produced worldwide: carbon fiber, steel, aluminum, magnets, copper. Carbon fiber is made in Japan, the U.S., and Europe; steel and aluminum are available everywhere. Magnets are the one area strongly dominated by China — but the quantities we need aren’t significant when measured against global consumption of neodymium magnets in motors and electronics. So we’re barely exposed there. And there are interesting alternative technologies to neodymium now emerging.

Fire safety is another advantage. How does that help in conversations with customers and investors?

Michael Pratt: The fire safety of lithium-ion is a nightmare. In the planning phase, fire departments raise objections; in New York State, installations are effectively banned in individual jurisdictions because people don’t want these things there. There are examples of huge lithium-ion fires that rage for days and can’t be extinguished — everything destroyed, needing to be rebuilt from scratch. Qnetic has no electrochemistry at all; at its core it’s a mechanical device. There are no volatile chemicals. In permitting, that’s a big advantage. Fire departments love it.

Let’s talk money. You’re in the middle of a funding round. How much do you need?

Michael Pratt: We’re currently running a $5 million funding round — the maximum amount that can be raised under U.S. Reg CF rules. It’s an equity round at a set company valuation, in which investors acquire shares in Qnetic directly.

With the capital raised, we’re financing the next development steps: building the alpha prototype, the beta systems that follow, and preparing the first pilot projects, which are slated to begin in early 2027. Those pilot installations mark a decisive milestone. For the first time, our technology will be tested under real operating conditions at customer sites. Successfully demonstrating its performance should pave the way for broad market entry and the first commercial orders.

You have letters of intent worth around $110 million. When does that turn into real business, and what are the milestones?

Michael Pratt: This year, several milestones bring us closer to actual orders. First, we’ll publish performance data from our prototype — initially at lower speeds, later at full speed and full functionality. But the real lever that converts the letters of intent into orders is the pilot projects early next year, under real customer conditions. We have excellent partners handling the testing and the reports. I can’t name them publicly yet, but test reports will go out to the entire energy industry across the English-speaking world, carrying that testing institution’s stamp. One advantage of our position is that our architecture is new, but the underlying technology isn’t — flywheel storage has been around for decades. So there are fundamentally no doubts about the bankability of the technology.

When do you reach break-even?

Michael Pratt: Qnetic is in hard tech, and the maturation time for new technologies isn’t as short as in software. And we’re in the energy sector, which is conservative and slow. I’m not building castles in the air here. The 2027 pilot projects are decisive for converting into orders. From order to commissioning typically takes at least a year, more likely two. So smaller, pilot-like projects enter the pipeline in early 2027, and the larger, fully commercial projects one to two years after that. We need to be sufficiently funded to get through this phase — and we can’t assume we’ll be profitable right after a pilot. We need investors who are in it for the longer term.

Are we as a society investing too little in energy storage?

Michael Pratt: Probably yes — though I’d qualify that somewhat. Enormous sums are already flowing into expanding storage capacity worldwide: in the U.S., the U.K., Germany, Saudi Arabia, Australia. Billion-dollar projects with long-term investment programs are emerging everywhere. Even so, demand is still growing far faster than supply.

When we founded Qnetic, an estimated one percent of the storage capacity needed worldwide had been installed. Put differently, roughly 99 percent of the market still lay ahead of us. The U.S. market segment alone that we’re targeting with our long-duration storage is worth around $300 billion. Globally, we’re talking about roughly $3 trillion.

Then there’s political pressure. To meet the climate targets of the Paris Agreement and achieve net-zero emissions by 2050, renewables have to be complemented by high-performance storage. The global build-out of such storage systems is therefore not an ordinary infrastructure project, but a race against time.

With the AI boom, investors are moving from software into energy. Are you seeing that in your conversations?

Michael Pratt: Yes, we see it very clearly. Data center power demand is likely to roughly double by 2028 — growth the energy industry hasn’t seen in decades. Where electricity consumption used to rise by just one or two percent a year, an entirely new source of demand is now emerging within a few years.

The responses to it are remarkable. Major hyperscalers are now investing directly in nuclear power — a step that would have been almost unimaginable a few years ago. Other companies are going further still and developing concepts for data centers in space. That shows how seriously the energy problem is now being taken.

The shift is visible in the capital markets too. Venture capital is increasingly flowing not only into software, but back into hardware and energy infrastructure. More and more investors are recognizing that the real bottleneck of the AI boom isn’t computing power itself, but available energy.

That’s exactly where we see our strategic advantage. Deep-tech companies are far harder to copy than pure software providers. Just to certify our system, we needed specialized test infrastructure. Because our roughly 20-foot-tall storage unit couldn’t be tested in any existing lab given the enormous amounts of stored energy, we designed and built our own test cell for around $1 million. To our knowledge, it’s a facility that’s unique in the world. Any new entrant would first have to create comparable infrastructure before it could compete on equal footing.

Finally, looking ahead: what’s your goal for the next ten years?

Michael Pratt: Our vision is to make Qnetic energy storage a fixed part of the energy infrastructure — ideally on the edge of every city and every community. We’re convinced that decarbonization has to be thought about regionally above all. The decisive question, in our view, isn’t how to decarbonize individual industries, but how entire cities and regions can be supplied with climate-neutral energy.

Renewables alone aren’t enough for that. Only high-performance storage makes wind and solar power reliably available around the clock. That’s exactly where our technology comes in. Inside our system, a rotor spins at speeds of up to Mach 3, in virtual silence in a vacuum chamber, storing enormous amounts of energy. From the outside, almost none of it is noticeable.

The path from here leads from the first prototypes into industrial series production. Individual demonstration units should become hundreds and later thousands of systems. Because climate change is a global problem, production has to be set up internationally as well. It starts with our plant in Sacramento; over the long term, additional sites in Malaysia and Saudi Arabia, among others, are conceivable. Our ambition is to contribute worldwide to replacing fossil power generation with renewables combined with high-performance storage.

In your view, what’s investors’ biggest misconception about the energy storage market?

Michael Pratt: Many investors assume that alternative storage technologies can’t prevail against lithium-ion batteries because lithium-ion prices keep falling. I consider that a crucial fallacy. On upfront price alone, lithium-ion is indeed hard to beat. But the real competition won’t be decided on cost — it will be decided on economic benefit.

That’s precisely where our advantage lies. While lithium-ion systems are in practice usually limited to one charge-discharge cycle per day because of aging, Qnetic can complete two or even three cycles a day with no degradation. That substantially increases revenue potential for the operator. In the end, what counts isn’t which technology looks cheaper on the spec sheet, but which creates more value across its entire service life. It’s less about cost than about performance and economic value added.

About the interviewee: Michael Pratt is the co-founder and CEO of Qnetic, a New York–based developer of grid-scale flywheel energy storage systems, with operations in Sacramento, Shanghai, Singapore, and Germany. The company’s co-founder and Chief Technology Officer is Loïc Bastard. The questions were asked by Thomas Feldhaus, business journalist at SQUAREVEST AG.

About Qnetic

Qnetic is developing advanced flywheel energy storage systems that deliver safe, durable and cost-effective long-duration energy storage for the modern electric grid. The company’s proprietary technology combines high-performance mechanical energy storage with advanced controls to support renewable energy integration, grid flexibility, microgrids and industrial resilience. Headquartered in New York, Qnetic is advancing a new generation of energy storage systems engineered for decades of operation with minimal degradation. For more information, visit www.qnetic.energy.

Investor note

Qnetic’s current crowdfunding round in partnership with DealMaker offers retail investors an opportunity to participate in the company’s next growth phase. To review offering documents, risk disclosures, and investor FAQs, visit https://invest.qnetic.energy.

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