ASPN (Aspen Aerogels) makes super-advanced insulation materials using aerogel technology. Here's what they do:
Core Business: Two Main Products
1. PyroThin Thermal Barriers (~68% of 2024 revenue)
What it is: Ultra-thin insulation material that goes between battery cells in electric vehicles
Why it matters:
Prevents thermal runaway - when one battery cell catches fire, it stops the fire from spreading to other cells
Think of it as a firewall between battery cells
Also provides mechanical cushioning/vibration dampening
Key customers:
GM's Ultium platform (their main customer - Chevy Equinox EV, GMC Hummer EV, Cadillac Lyriq, etc.)
Honda Prologue & Acura ZDX (made by GM)
Toyota bZ4X
Scania trucks
Audi, Stellantis, Mercedes (coming)
Porsche (design award)
Content per vehicle:
$900-$1,000 per vehicle (GM large batteries)
$300-$350 per vehicle (prismatic cells - European OEMs)
2. Energy Industrial Products (~32% of 2024 revenue)
What it is: Aerogel insulation for extreme temperature applications
Where it's used:
Cryogel - insulation for super-cold applications like LNG (liquefied natural gas) facilities
Pyrogel - insulation for super-hot applications like oil refineries, subsea pipelines
Carbon capture facilities
Power generation
Market position: They're in 23 of 29 global LNG export facilities
What is Aerogel?
Aerogel is one of the lightest solid materials on Earth:
99% air, 1% solid
Extremely low thermal conductivity (amazing insulator)
Lightweight
Can withstand extreme temperatures
Why ASPN's Technology Matters for EVs
The Problem: Modern EV batteries pack thousands of cells together. If one cell overheats/catches fire, it can trigger a chain reaction (thermal runaway) that destroys the entire battery pack.
ASPN's Solution: Their PyroThin material:
Is only a few millimeters thick
Slows heat transfer between cells dramatically
Gives the battery management system time to shut down before disaster
Meets strict automotive safety standards
Competitive advantage:
Very high barriers to entry (IP, manufacturing expertise)
Already validated by major OEMs
Designed into platforms (hard to replace once selected)
Business Model
Manufacturing:
Plant 1 in Rhode Island - makes aerogel blankets
Assembly plants in Mexico - cut and assemble parts for specific vehicles
External manufacturing in China - for Energy Industrial products (and now potentially PyroThin)
Revenue Model:
Sell parts to OEMs for every vehicle produced
Multi-year design awards (once designed in, typically stay for life of platform)
Energy Industrial is project-based + maintenance contracts
Why Investors Cared (Past Tense)
The bull case was:
Huge TAM: Every EV with pouch/prismatic cells needs thermal barriers
Winner-take-most market: First to market, validated solution, hard to displace
Operating leverage: Once fixed costs are covered, very high incremental margins (50%+ drop-through)
Growing attach rate: More OEMs adopting as EVs scale
Current Reality
The business worked great when:
✅ GM was ramping aggressively
✅ EV mandates forcing production
✅ $7,500 tax credits driving demand
Now all three tailwinds reversed, leaving ASPN with:
❌ Massive fixed costs built for growth that isn't happening
❌ Single customer concentration (GM = ~70% of thermal barrier revenue)
❌ Plant 2 investment halted
❌ Uncertain EV regulatory environment
In simple terms: ASPN makes the fireproof insulation that keeps EV batteries from exploding. Business was booming when EVs were hot. Now EVs are cooling off, and ASPN is scrambling to survive until the EV market recovers.
