What Automakers Are Missing Inside EV Batteries | Ep. 86 [Efrat Avnet Steinberg]

What if the biggest problem in electric vehicles is something manufacturers can’t even see? In this fascinating episode of Industry Ignited, Dr. Leeanne Aguilar interviews Efrat Avnet Steinberg, the CEO of INNER, a company pioneering breakthrough CT scanning technology for EV battery inspection. Together, they dive into the hidden defects impacting EV batteries, why traditional quality checks are missing critical failures, and how microscopic flaws inside battery packs can lead to recalls, warranty losses, safety risks, and even fires.

Efrat explains how Inter is developing real-time battery imaging systems capable of operating directly on production lines, helping automakers identify problems before defective batteries ever reach consumers. The conversation also explores battery recycling, second-life energy storage systems, predictive maintenance, and the future of battery diagnostics across the entire EV lifecycle. Whether you’re passionate about electric vehicles, advanced manufacturing, energy storage, AI-driven diagnostics, or startup innovation, this episode offers a compelling look inside the technologies shaping the future of transportation and energy safety.

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Transcript

Dr. Leeanne Aguilar 0:06

What if the future of electric vehicles depends not just on making better batteries, but on finally being able to see what is happening inside them before failure, waste, or fire ever occurs. Welcome to Industry Ignited. I'm Dr. Lianne Aguilar, and today I'm joined by Efrat Ovnet Steinberg, CEO and co-founder of Inner, a company developing breakthrough CT technology to detect microscopic faults inside EV battery packs and modules. Efrat, welcome to the show. Hi, thank you for having me, Lianne. Yes. So tell me, your career has moved from law to business development, product development, innovation, and now deep tech entrepreneurship. What has connected all those chapters for you?

SPEAKER_01 0:51

Wow, what a question. I think first and foremost, you need to be a really curious person. I think that really is common to all of those things that I've done. You need to constantly learn new things and really be passionate and love learning new things. I think it's also you need to be analytical. There's a lot of information, there's a lot of data, and you need to really be able to quickly discover what is important and really be able to focus on that. I think what I always found out is that I really love technology. I'm not a technological person, as you said. I my education to begin with was legal, but I really love learning from technological experts and be able to translate the technological story into a story, into a verbal story, and to be able to communicate it to the other partners. I think what I also found always common is loving people and loving, building relationships and building a group of people to really do things, amazing things together. Right.

Dr. Leeanne Aguilar 1:52

Yeah. So do you feel like your law background benefits your business these days and how you communicate, how you tell stories?

SPEAKER_01 1:59

I I think so, definitely. Uh, the ability to analyze um a story, a text, a situation, and to really focus on what's what's the essence of it, what's the core of it. And I think this is something that I use every day now. Okay, interesting. Yeah.

Dr. Leeanne Aguilar 2:15

Now you've said that you are drawn to beginnings, clean slates and building something from an idea. When did you first realize that creating new ventures was where you thrived the most?

SPEAKER_01 2:25

I think it started when I was still working in a corporate. Um, I was given a task of starting a new project, really from the beginning. And it was really a non-core project. It was a big uh telecommunication group, but the project that I was given was really, it's hard now to imagine a world without it, but it was a mobile wallet. Talking almost 20 years ago, so nobody was even close to having it. And the idea was really thinking of what was the best, could we could we do it, and what was the best concept for us. And we started building a group of people around us, and I fell in love with this concept of convincing people to stay away from for a minute from their recurring core job and actually making them fall in love with something completely new. And that was really against all odds. So I actually fell in love with it and building a huge group of people around me with a lot of passion and a lot of drive to build something new. That was the first time that where I felt that actually building something from scratch was so much more interesting than just running an ongoing business as somebody else formatted. Right. And later on, when I started working with startups as a consultant, I discovered that that's that's what startups do. And I just naturally found my way into the startup world.

Dr. Leeanne Aguilar 3:44

So, out of curiosity, because I know people are in in general are resistant to change, and not only that, like getting first adopters, you know, to try out a new technology, is often a big challenge. So, how did you approach that? How did you overcome that?

SPEAKER_01 3:57

I think it's first listening. You need to really learn what the other party, whether it's a business partner or a colleague or just uh any kind of stakeholder that you're uh trying to engage, what is their interest? What is their need? Is there a problem that they're trying to solve for themselves that by collaborating with you, it's getting solved? So I think it's really listening, talking to people, understanding what they need, is really the best strategy. And oftentimes the interests align. So that's I think that's usually the best strategy that worked for me.

Dr. Leeanne Aguilar 4:31

Yeah, right. So finding how finding out how your interests align and then really listening and finding out what they're they're experiencing over and how to help them overcome their issues, perhaps with the new technology. Okay, see how it or letting them know how it benefits them. Exactly. You know, identifying that those advantages. Exactly. Yeah. So you mentioned that you work for a large telecom company. How did your experience in telecom, corporate innovation, and city-level economic development prepare you for leading a highly technical battery imaging startup?

SPEAKER_01 5:01

Yeah. So it's really being able, again, to learn, to deep dive and learn very, very quickly to new technologies. So although the previous companies were not directly involved in uh in imaging, in my case, but they were advanced software companies, very complex business settings. So the ability to build partnerships there to really understand the technology and know how to work closely with technological people really uh built the right background for that. When I joined forces with my co-founders that are imaging and diagnostics experts, come from technology, combining forces together built what is really the strong founding team that we have. Because we were combining this general background of uh of different perspectives into technology and business with the domain expertise of imaging and diagnostics. Um, and this together is exactly the complete picture that is needed to get our business going.

Dr. Leeanne Aguilar 6:02

What was it specifically about this technology and this problem that made you say, I'm not just advising on this, I want to build the company around it?

SPEAKER_01 6:10

Yeah, I think the the ability or the opportunity here to really make an impact. We found a problem that nobody was able to solve. And we see it, uh we see it because the quality problem in batteries is really clear. The industry uh experiences that. You see it when you look at the warranty reserves and the warranty claims that are over 100 billion of warranty reserves, uh, which is which is crazy. This immediately impacts all of our pockets when we're buying a vehicle today. So the moment we learn about this problem, it was the opportunity to actually make an impact and solve this problem uh that was so uh attractive and so irresistible, I think, to us.

Dr. Leeanne Aguilar 6:53

And so for listeners who may not realize how big this issue is, tell us more about what is happening inside EV battery packs today that traditional quality checks are missing.

SPEAKER_01 7:02

Yeah. So of course a battery is a complex object that goes through mechanical, electrical, and chemical processes the moment it hits the road. Um and those processes are causing degradation and a lot of problems. That a better structuring of the battery, a better formation of the battery is going to limit. Of course, you can never really stop. The battery will deteriorate and the performance will deteriorate over time, but we can really delay this process and make sure that at least the first few years is going to be a very highly performing battery. And today, testing uh at the production line are failing to see if there's already a mechanical problem, physical change, if it does not impact the performance. So the abuse tests and the electrical tests that are done on the production line are not necessarily going to catch it. And when you uh talk to the industry, they talk about they talk of over 2%, uh, and some of them are even talking about 5% of batteries that are sold to the public with a problem from day one, which is quite insane. Yeah. And this, of course, as we said, impacts the performance. And if I give I can give you an example, and we are talking about the assembly process of battery cells into battery models and packs. So if we're talking about the phenomena of a loose wire, for instance, if we have a wire that's been welded between the cells and it's a little bit loose, if you test it electrically, it will pass the test. And then, but once the battery is assembled into a car, now the car drives on the road for uh miles and miles, it hits um uh bumps in the road, and a lot of mechanical pressure is is of course impacted, and then the wire might get loose and then performance is affected. But that's too late, right? Because we're not testing the battery for that at the moment. And then you will see phenomena like recalls that are over 100,000 batteries every year across all brands, and you see a lot of other types of failures that are not a reason for a recall, but still, warranty, as we said, warranty is impacted. The OEM is uh now collecting the battery from the customer, the customer is issued with a new battery, and this is of course is a very high cost. So traditionally, every OEM would reserve around between 600 and 700 battery on their books to get make sure they're prepared to take care of that phenomena. When uh EVs are coming and you see over time, for an EV, they would put aside between 1,000 and 2,000 already. So we're seeing a growth in those in those funds that are reserved and a growth in the claims that are paid to customers. And this is exactly the type of problem that we tackle that we want to help the industry face.

Dr. Leeanne Aguilar 9:49

Yeah, very expensive problem, I'm hearing. And not only that, but inconvenient for the customer and even a safety, you know, issue. Of course. Right. So why is it so so difficult to detect microscopic faults, swelling, cracks, or like you mentioned, faulty wiring inside assembled battery modules impacts using current methods?

SPEAKER_01 10:08

So, as I said, the electrical methods many times uh do not uh catch those phenomena on the production line. And the the best way to really look inside matter has been always good old-fashioned x-ray. And then what was the problem is that it takes a long time to really because we're you're trying to scan through an object which is quite big, a battery module. I don't know if people are yeah, I'm trying to see how I can demonstrate that, but a battery pack is really the size of a car, right? It's really holding the chassis, holding the chassis of the vehicle. So we're talking about a very big one. A battery module would be you would have in a battery pack or um, it depends, but let's say 10, 12 modules are uh building the pack. So it's a it's a very big object. And to penetrate uh through such a module, looking for things that are 100 micron, 200 micron, it means a lot of data. Usually, traditionally, scanners that are existing in the industry would take a long time. So none of them would be part of the production line. You would use them for lab research or for sampling from time to time or to investigate after you already know that there's a problem, and nobody was really offering something that would do it at the production pace. Therefore, you would miss those problems because if you do sampling for something that's already existing in 5% of the modules, your chances of catching it are very, very slim. In order to catch something with that type of uh uh um uh existence, then you need to really scan every single one. And that was the challenge that we are uh solving because we built our own solution to be at the perfect optimization between image quality and the production pace. We will never slow, of course, a production line down because then nobody would use us. We understand it, we need to accommodate the needs of the OEM, and that's exactly our strategy optimizing image quality with the production base.

Dr. Leeanne Aguilar 12:12

Okay, great. And like you mentioned, inner focuses on modules and packs rather than cells. Yeah. So why is that distinction so important? And where do you see the biggest quality gap in the market?

SPEAKER_01 12:24

Um both exist. There is an issue, of course, with uh cell analysis as well. There are companies that specialize on that. We found the challenge of pack assembly and module assembly much more interesting uh for us because we had expertise in analyzing large amounts of data very, very quickly. Uh, and uh solving that uh that part uh was the most interesting for us. At the same time, we collaborate also with other companies that focus on cell analysis, and who knows what will be the future. There are interesting collaborations on the table already, but most of those companies are unable to do a module impact analysis, so we felt that was the place for us to shine and bring value where others are struggling.

Dr. Leeanne Aguilar 13:14

So Ener is building a CT scanner capable of inspecting large battery systems in real time on the production floor. What makes that technology possible now when it hasn't been before?

SPEAKER_01 13:25

Yeah, so um the largest uh challenge, first of all, was to be able to do fast computing, fast processing, and image processing very, very quickly, again, to fit the production line uh pace. For this, we developed uh our own proprietary technology. And that's uh um that's what allows us to introduce this solution. It's also interesting to mention and to highlight that usually, of course, to build um a new machine learning-based um solution, you need to have a lot of data. And what is unique here is that the data that's available in the world today is cell-based data. And the access to information, to data that analyzes modules and packs is very, very low. So we had to develop our technology based on uh the data that was available and to produce our own data and to generate our own data to be able to make progress and to uh to do diagnostics. And we have done that by introducing a service offering. That's what was really what we were busy with in the last couple of years. So to collaborate with OEMs around batteries that are failing already with them, and to do those service offerings. And we actually do it with our partners at Fraunhofer in Germany, where we do scans using their equipment and doing our own analysis. This allowed us to see a lot of phenomena that usually is not available, that this data is usually not available. So we learned a lot from that and collected data, yeah.

Dr. Leeanne Aguilar 14:58

So you're finding it or found a new way to just to collect data that hadn't been previously collected. To bridge the gap.

SPEAKER_01 15:03

To bridge the gap.

Dr. Leeanne Aguilar 15:04

That makes sense. So you're combining imaging, software, and data processing at industrial speed and scale. What has been been the biggest technical hurdle in making that commercially viable?

SPEAKER_01 15:15

I think it's um it's basically the the lack of data, as I mentioned. The lack of data was really uh a challenge. But as I said, we've been creative. You have to be. As a startup, you always need to be creative in bridging the gap, in finding creative ways to make progress in your technology, and also to allow the industry to slowly learn about what you're building, to build a name, to build a reputation, to build your scientific credibility. So we found a way to go around it.

Dr. Leeanne Aguilar 15:46

Yeah, yeah. Now you mentioned your service projects with industry partner of the Fraunhofer and how it's helped validate your technology. What have those early projects taught you about the real needs of OEM and battery manufacturers?

SPEAKER_01 16:00

First of all, it allowed us to see the phenomena. That's that's the best. People say the image speaks more than a thousand words, right? So it's really this case. If you see a swelling of a battery and then you analyze it, you measure it, you write a report, but then you say, But you know what, after a week, let's go and see it again, and then you see it even swells even more. That's a very interesting phenomena for the team to see. You know, it's it's really hands-on. Uh, so that was amazing. But I think it's also helped us tremendously to learn about the industry problem. Because I remember that about a year ago, I was in a very important conference in um in Detroit, actually, it was uh last year. And then I started pitching to the OEMs. Um, I thought we would focus at the time we fo we thought we were going to make the most impact on the use case, uh, use batteries uh use case. So I pitched repair and I pitched Second Life, and I really was I had a lot of examples and a lot, and they kept on asking me, that's amazing, but you're building, can you do it on the production line? Can you do it on the production line? So I think those kind of projects and this kind of talking to OEMs constantly about what we do, but then again, listening to the kind of questions, listening to the use case that they bring to us really helped us focus. And this is why we're starting from the production line. We learn from them where the biggest pain is. So that's constantly a growth process, talking to the customer, potential customers all the time, seeing the kind of problem that they bring to you, but also learning from them where you can help them the most.

Dr. Leeanne Aguilar 17:38

Interesting. So I'm hearing that your actual business model changed then in that that process.

SPEAKER_01 17:42

The the beachhead. I think it's really zoning on the beachhead because we knew all along that we are able to help and do diagnostic along the whole life cycle of the battery pack. So we we knew from the beginning that we can help from the production line, and then later when there's a repair or a recall, and then later when we we can scan a battery steel as part of the vehicle if you buy a used car, and then also in the second life, after the battery is removed, you build a battery energy storage system for a building, and then a recycling. So we intended to really follow along the life cycle of the battery pack and help and add value and add this kind of clarity at every decision point. But I think the conversations with the OEM, the OEMs, really helped us to understand where is the starting point for us. And this is how we really focus on the production line and decided that that's going to be the day one, the beach head for us.

Dr. Leeanne Aguilar 18:38

Yeah, right. So it's also saying like they're they're experiencing these failures, like you said, at the beginning of the process. And so it's causing them major pain point, you know, there. And and as you mentioned, I mean, two to five percent, up to five percent of batteries are you know, experiencing these these failures, and yeah, which is hard. So if they can identify them when they are, you know, happening on the production line, you know, on the factory floor before they are sent out, that's like the most value to them, is what I mean. Yes. Yeah, yeah. And so it's great that you can also help them in in the you know, remanufacturing of them or the yeah, you know, repair, et cetera, and warranty claims, but they're most concerned about the quality issue at the beginning of the production. Exactly. Yeah. So as you move toward production line integration, why are partnerships with factory integrators such a critical part of your go-to-market strategy?

SPEAKER_01 19:29

Yeah. Um the system integrators are the ones that are building the production lines for the OEMs. So this is why the system integrators are the ones that are already partners with the OEMs. So we defined already uh some time ago that that would be the easiest way, the most productive way to get into the production floor. We already established a partnership with a very big and important uh Korean integrator that we hope to publish really in the coming uh few days, where we are going to introduce an inline uh module scanner at the end of the production line, which is a great milestone for us that we're very proud of. Of course, the ability of a system integrator to distribute and to sell is is of course um um much more advanced than our ability. And it helps us to be able to focus more on our on the RD side uh and uh on other projects uh in parallel. So it's really, really a great uh strategy for us. So yeah.

Dr. Leeanne Aguilar 20:30

Yeah, very exciting. Well, in the next few days, we'll we'll have to keep an eye out to see how it is.

SPEAKER_01 20:35

Yeah, exactly. Yeah, it's a it's a great way. Uh of course, in parallel, we are talking to the OEMs as well ourselves. We're talking to the cell producers ourselves. We think uh it's very important for us to build this direct uh connection and to learn uh all the time about the problem, as we did so far. Uh, but it's much more uh effective. You can imagine also there's a there's a production line, there's a conveyor belt, there is a line being built. So if you want to be part of that line, it's uh it's much more effective to collaborate with uh with the integrator that's building the line.

Dr. Leeanne Aguilar 21:10

That makes sense. Now, as we were talking about, technology is not just about manufacturing quality, it also has implications for resale valuation, remanufacturing second life applications, and delaying raw material recycling. How do you see battery intelligence reshaping the full life cycle of EV batteries?

SPEAKER_01 21:29

Yeah. I think we're standing in all of those topics just before the big wave is coming because we see there are so many batteries uh already in the world. Most of them are still new, but later on, the need for repair, repurposing for all of that is just going to grow. And what we also saw see is that um this is a highly unstandardized industry. Uh we visited and we saw uh in a few occasions how a workshop for Second Life. Looks like. And in many cases, it's it's funny to say, but it's many times a couple of guys with a screwdriver. That's not the way to scale. That's not the kind of standardization that you would expect in this industry. It's not very professional. So we aim to help this industry to standardize, to be the sort of industry 4.0 for this industry, um, and to set a new standard. That's that's exactly where we we aim to be. And that's the way to make it scalable.

Dr. Leeanne Aguilar 22:31

Right. I love that. Yeah, setting a new standard. It's introducing a product and or a process, part of a process that's gonna help elevate the standard for batteries in in general. And so, Efred, as more EVs and stationary battery systems enter the market, what role will predictive internal inspection play in preventing safety incidents and extending economic value?

SPEAKER_01 22:53

Yeah. It's uh it's exactly as I said, it's setting a new standard for better prediction. Uh and we we cannot allow incidents like fire incidents that we've seen in urban areas. That's that's completely preventable. And also, the more we rely on renewable energy, we're going to see more and more battery energy storage systems in office buildings, in urban areas. So the standard of safety needs to be uh much higher. Um, and exactly as we are already used to doing in the medical world, where we take care of our own health and we are making a huge effort to predict and prevent things before they become a problem, to make sure that our quality of life of life and health is of the highest standard. That's exactly the same way. And um, you would never trust the hospital if the doctor tells you, I'm just going to check your temperature and your blood, but I'm not going to use imaging. And uh you would never trust a hospital like that. So there's no reason for you to not use imaging when it's available to you, high-quality imaging when it's available to you to analyze uh the phenomena that are happening inside the battery that are unpredictable from the outside.

Dr. Leeanne Aguilar 24:06

Right. Yeah, yeah, you make a great point. And now that it is available, it I think it would be irresponsible, really, of companies to not use the technology because of the risks involved. And yeah, yeah, definitely. So finally, Ephra, you lead a highly international, multidisciplinary team and clearly love building culture from the ground up. What have you learned about leading people through ambiguity, deep tech complexity, and startup growth?

SPEAKER_01 24:32

I first of all, I think that the role of a leadership in a startup is to be the most optimistic and positive person in the room. There are so many challenges, there are so many no's or so many walls that you hit. You need to be always inspiring the team to look for other solutions, to never say no, to never accept a failure, to just push through. And um, we are very lucky to uh to have a great team around us. We're a very strong team of founders, and we built a very strong team of people, young talents around us. We're uh yeah, we're taking this uh seriously, and I think we're doing so far a really good job. Also, you mentioned international. It I think it's also when people are coming from all over the world, and I think we have at least 10 nationalities uh between us. What is beautiful is that people find the most common language very, very quickly. So it just builds a very positive atmosphere of collaboration. We also have people that are coming from different disciplines of science, of business, of marketing, and it's just beautiful. And I just love it. I think it's uh building something from scratch, a new culture, a new business, a new solution is just uh amazing. It's the best job. It's the best job in the world.

Dr. Leeanne Aguilar 25:51

Yeah, so I'm hearing a bit like you said that at the beginning, you're responsible for basically setting the mood, setting the tone and shaping the culture from the you know, from the top down. And so are you um intentional about creating an international team as well? Is that something that you're looking for in order to shape that culture?

SPEAKER_01 26:08

I think so. We're based, uh it just uh I think the the setting and the atmosphere here around me enables that. The Netherlands, specifically Eindhoven, where we are based, uh, is the deep tech capital of the area. We have ASML here, which is of course a huge magnet of talent and of uh data, and Philips as well. It's a very deep tech region. So there's talents here from all over the world. So, really from the Americas, from Asia, from all over Europe. So it's really it's amazing. It's a very, very inspiring culture, inspiring environment, and also a nice balance between uh men and women, which is also an important uh thing to have in a deep tech uh startup. So it's uh yeah, I think it's it's really great.

Dr. Leeanne Aguilar 26:53

Yeah, that's awesome. That's inspiring. Well, Ephrat, thank you for joining me. How can listeners learn more about you and Inner?

SPEAKER_01 27:00

Uh so first of all, we're you're more than welcome to visit our website, that's uh innertech.ai, and follow us on LinkedIn. We try to post very um interesting posts all the time. And feel free if you uh think you could be um a partner or just want to learn more about what we do, feel free to reach out uh to me uh at yeah, Efrat at the inner tech. I'm always happy to meet new potential partners or to collaborate. Awesome.

Dr. Leeanne Aguilar 27:30

Well, yeah, stay tuned for the next few days for the announcement coming out, right? Yeah, yeah. Well, thank you again, Efrat, and thank you to our listeners for tuning in to Industry Ignited. Be sure to subscribe and join us for the next episode. Until next time, stay bold, stay curious, and keep igniting industry.