Tesla’s Ex-Battery Chief Just Raised $140M to Replace 100-Year-Old Grid Tech
Tesla’s Ex-Battery Chief Just Raised $140M to Replace 100-Year-Old Grid TechHonestly, the thing holding back AI data centers isn’t chips — it’s a piece of equipment invented before your great-grandma was born.
Drew Baglino spent 18 years building Tesla’s energy division. Now his startup Heron Power just pulled $140M from Andreessen Horowitz and Breakthrough Energy to manufacture solid-state transformers — because over 50% of US grid equipment is older than 30 years and transformer lead times have ballooned from weeks to 3+ years.
The guy who designed the Model S dual motor system and launched every version of Powerwall and Megapack thinks the grid’s most boring component is its biggest bottleneck. And a16z apparently agrees.
🧩 Dumb Mode Dictionary
| Term | Translation |
|---|---|
| Solid-State Transformer (SST) | A transformer that uses semiconductors (fancy chips) instead of copper coils and oil. Smaller, smarter, faster to make. |
| Medium-Voltage AC Grid | The “highway” part of the electrical grid that moves power across neighborhoods and cities. |
| Power Semiconductors | Silicon chips that handle high voltages — think of them as the brains that replace the brawn in old transformers. |
| Giga-Scale Manufacturing | Building things at absurd volume, Tesla Gigafactory style. The “giga” is doing a lot of heavy lifting. |
| Interconnection Queue | The waitlist power plants sit in before they can plug into the grid. Currently backed up for years. |
| Lead Time | How long you wait between ordering a transformer and getting one. Currently: pain. |
📖 The Backstory: Why a Tesla Lifer Is Chasing Transformers
Honestly, Drew Baglino is about as credentialed as it gets for this kind of play. Dude joined Tesla in 2006 — back when they were still building the original Roadster in a strip mall. Stanford EE grad. Rose to SVP of Powertrain and Energy Engineering. Built Tesla’s entire energy storage business from scratch (Powerwall, Powerpack, Megapack — the whole lineup).
Then in April 2024, he quit. Like, midnight-tweet-on-X quit. Eighteen years and gone. By early 2025, he’d founded Heron Power in Santa Cruz, CA, raised a $38M Series A from Capricorn Investment Group, and started building what he calls “the grid’s most critical bottleneck fix.”
His pitch is simple: too much of today’s electrical infrastructure is “passive, clunky equipment designed decades ago.” Okay but seriously — he’s not wrong.
🔧 What Heron Link Actually Does
The product is called Heron Link — a modular solid-state transformer that connects low-voltage DC stuff (solar panels, batteries, AI compute racks) directly to medium-voltage AC grids. No traditional transformer needed.
What that means in practice:
- Eliminates entire tiers of legacy electrical gear — think of removing three middlemen from a supply chain
- Uses latest-gen power semiconductors instead of copper coils wound around iron cores soaked in oil (yes, that’s how traditional ones work)
- Modular architecture — snap them together like Lego instead of ordering one custom-built behemoth from a factory in South Korea
- Faster, more efficient, more reliable — and crucially, actually manufacturable at scale in the US
It’s like going from a mechanical typewriter to a laptop, except for power distribution.
📊 The Numbers That Make This Make Sense
| Metric | The Situation |
|---|---|
| US grid equipment over 30 years old | 50%+ |
| Transformer demand increase since 2019 | 116% (power), 274% (generator step-up) |
| Current lead time for large transformers | 128-144 weeks (2.5-3 years) |
| Price increase since 2022 | 4-6x |
| Supply deficit for power transformers | 30% shortfall |
| Heron’s target factory capacity | 40 gigawatts |
| Series B raised | $140M |
| Early customer interest | 40+ GW |
Honestly, the demand curve on this looks like a hockey stick that someone drew while falling down stairs. You can’t build data centers for AI without transformers, and you can’t get transformers because everyone wants them at the same time.
💰 Who's Backing This
The $140M Series B was co-led by:
- Andreessen Horowitz (a16z) — specifically their American Dynamism Fund (the one that bets on “hard tech that matters for America”)
- Breakthrough Energy Ventures — Bill Gates’ climate tech fund
Existing investors that came back for more:
- Capricorn Investment Group
- Energy Impact Partners
- Valor Atreides AI Fund (yes, like the Dune family — VC branding is something)
- Gigascale Capital
Dave Danielson from Breakthrough Energy put it bluntly: “Heron is reengineering one of the grid’s most critical bottlenecks with next-generation solid-state transformers, manufactured at scale in the U.S.”
That’s VC-speak for “we think this is a real business, not a science project.”
🗣️ The Competition & Context
Heron isn’t the only one going after solid-state transformers, but they might have the best shot at scale:
| Player | Angle |
|---|---|
| Hitachi ABB | Incumbent. High-voltage focus. Moves slow. |
| Siemens AG | Big portfolio. Not exactly startup-speed. |
| DG Matrix | Startup competitor. Just raised $60M. Focuses on data centers/microgrids. |
| GridBeyond (UK) | Modular designs for microgrids. Smaller scale. |
| Amperesand | Academic spin-out from Singapore. Early stage. |
The SST market is projected at ~$170-205M in 2026. That’s… small. But this is a classic “the market doesn’t exist yet because the product didn’t exist yet” situation. Traditional transformer market is worth tens of billions. If SSTs eat even 10% of that, we’re talking serious money.
Heron’s bet is that being first to 40GW manufacturing capacity in the US — with a founder who literally built Tesla’s energy business — gives them an unfair advantage. It’s the Tesla playbook: build the factory, then outproduce everyone.
⏰ Timeline & What's Next for Heron
- Now (Feb 2026): Series B closes. $140M in the bank.
- 2026-2027: Building the 40GW automated US manufacturing facility
- Early 2027: Pilot production begins
- 2027-2029: Production ramp over two years
- Already: 40+ GW of early customer interest from energy infrastructure developers (Intersect named as one)
The question isn’t really “will this work?” at a physics level — solid-state power conversion is proven tech. The question is whether they can manufacture it cheaply enough and fast enough to matter before the incumbent transformer makers catch up.
Cool. The Grid Is Getting a Silicon Upgrade and There’s a $140M Factory Being Built. Now What the Hell Do We Do? (ง •̀_•́)ง
⚡ 1. Build Grid Intelligence Dashboards for Utilities
Traditional utilities are drowning in aging infrastructure and have no idea which transformers are about to fail. Build monitoring tools that use IoT sensors and simple analytics to predict transformer failures and prioritize replacements.
Example: A software dev in Lagos, Nigeria built a grid fault detection dashboard using open-source IoT frameworks and Python for a regional power distributor. Started as a $2K pilot, scaled to $8K/month recurring across three utility districts.
Timeline: 3-4 months to MVP. Utilities have budget for this and procurement cycles are shortening because everyone’s panicking about grid reliability.
🔌 2. Start a Power Infrastructure Consulting Practice
Data center developers are desperate for people who understand both the electrical engineering and the permitting/interconnection maze. If you have any EE background — or even project management experience in construction — there’s a gap here.
Example: A former electrical contractor in São Paulo, Brazil started consulting for colocation data center operators on power capacity planning and interconnection paperwork. Charges $150/hr and books 25+ hours/week from three clients.
📊 3. Create Transformer Lead-Time Tracking Tools
There’s no good public tool that tracks transformer availability, lead times, and pricing across manufacturers and regions. It’s all phone calls and PDF quotes. A simple SaaS that aggregates this data would save utilities and developers thousands of hours.
Example: A product manager in Krakow, Poland scraped publicly available procurement data and built a transformer supply intelligence platform using Airtable + custom API. Pre-sold to 4 energy companies at $500/month before writing a single line of frontend code.
🏭 4. Sell Maintenance & Retrofit Services for Aging Transformers
While Heron builds the future, somebody needs to keep the existing 50%-past-their-prime transformers running. Oil testing, thermal monitoring, partial discharge analysis — these are real services that utilities outsource and can’t find enough vendors for.
Example: An electrician in Johannesburg, South Africa got certified in transformer oil analysis and thermal imaging. Now runs a team of three doing preventive maintenance for mining companies and municipal utilities. Revenue hit $15K/month within the first year.
📚 5. Create Educational Content on Grid Modernization
The intersection of AI, data centers, and power grid infrastructure is white-hot but poorly understood. Technical explainer content — YouTube, newsletters, courses — targeting electrical engineers, project developers, and investors has almost zero competition.
Example: A retired grid engineer in Melbourne, Australia launched a YouTube channel and paid Substack covering grid modernization tech. Hit 12K subscribers in 8 months and now earns $3.5K/month from subscriptions plus $2K/month in sponsored posts from grid-tech startups.
🛠️ Follow-Up Actions
| Step | Action | Resource |
|---|---|---|
| 1 | Read up on solid-state transformer basics | IEEE Power Electronics Society papers (free) |
| 2 | Monitor the transformer shortage crisis | US DOE Transformer Supply Chain reports |
| 3 | Explore grid-tech startup landscape | Y Combinator Energy companies list |
| 4 | Learn power systems fundamentals | MIT OpenCourseWare 6.061 (free) |
| 5 | Follow Heron Power’s hiring page | heronpower.com/careers |
| 6 | Track data center power demand growth | IEA Data Centres and Energy report |
Quick Hits
| Want to… | Do this |
|---|---|
 Understand the transformer crisis |
Search “transformer shortage 2026” — the numbers are staggering |
 Get into grid-tech consulting |
Get familiar with NEC codes and interconnection standards |
 Build grid monitoring tools |
Start with open-source SCADA frameworks + Python |
 Track this space |
Follow @DrewBaglino and @heronpower on X |
| Go deep on SSTs |
Search “solid-state transformer tutorial” on IEEE Xplore |
The grid hasn’t had a real upgrade since your grandparents were dating. Turns out, all it took was one burnt-out Tesla exec and $140M to finally hit the refresh button.
!