The chief of the oh-so-buzzy fuel cell company Bloom Energy, K.R. Sridhar, told Reuters at the media company’s climate conference this week, that in a few months Bloom Energy will have ramped up production enough to produce one Bloom box per day. That might not seem like aggressive growth for an 8-year-old company that has raised over $400 million in funding, but given Bloom has only deployed 50 Bloom boxes to date, that boost is significant.
My major question, though, is at what point will Bloom have reached any economy of scale of manufacturing to be able to start cutting its production costs? Bloom currently sells Bloom boxes for between $700,000 and $800,000, which is only proving to be economical in states like California that have aggressive subsidies.
But Bloom Energy investor Scott Sandell, a partner with NEA, told me earlier this year that he thought Bloom could drop the cost of the Bloom Box by 60 to 70 percent over several years. When production costs go down, Bloom can start selling Bloom boxes, or even smaller versions of the current Bloom box, for a smaller sticker price.
Right now Bloom boxes are made of a lot of custom parts, produced in low volumes. Sandell told me that when production is ramped up, Bloom can order parts from suppliers in larger volume and then suppliers can give Bloom lower costs per part. The other part of cutting cost will be continued innovation, said Sandell.
To reach some of its cost cutting goals, Bloom is reaching out to old school industry experts. Kleiner Perkins, Bloom’s investor which basically incubated the company, actually hired a commercialization expert to its team with a long history in the fuel cell biz: Operating Partner Jan van Dokkum. Van Dokkum was president of fuel cell maker UTC Power for seven years and worked at Siemens for 17 years.