Catalyst with Shayle Kann - Seeking the holy grail of batteries (Rerun)

Episode Date: August 24, 2023

If there were a holy grail of electric vehicle batteries, it would be low-weight, long-range, and fast-charging. It would last a million miles and cost less than anything produced today. So in the booming EV battery market, what kind of battery will check all those boxes? Who will invent it? And do we really need all those features in one battery in the first place? In this episode, Shayle talks to Sam Jaffe, vice president of battery solutions at E-Source. They trace the history of the two major competing lithium-ion chemistries: Lithium Iron (or ferrous) Phosphate (LFP) and Nickel Manganese Cobalt (NMC). Sam and Shayle also discuss the factors that shaped this competition, like China, Tesla, and access to capital. They discuss new partnerships between battery manufacturers and automakers, including LG and GM, Samsung SDI and Stellantis, ACC and Mercedes And they cover questions like: Who decides which chemistries to develop — automakers or battery part manufacturers?  Will a small number of chemistries dominate or will there be a rapid diversification of battery chemistries to meet different needs? Is fast charging a nice-to-have or need-to-have? Will the rising costs of battery materials, especially lithium, slow the adoption of EVs?  Plus, Sam explains why he is no longer bearish on vehicle-to-grid (V2G) charging. Catalyst is a co-production of Post Script Media and Canary Media. Are you looking to understand how artificial intelligence will shape the business of energy? Come network with utilities, top energy firms, startups, and AI experts at Transition-AI: New York on October 19. Our listeners get a 10% discount with the code pspods10. Catalyst is supported by Antenna Group. For 25 years, Antenna has partnered with leading clean-economy innovators to build their brands and accelerate business growth. If you're a startup, investor, enterprise, or innovation ecosystem that's creating positive change, Antenna is ready to power your impact. Visit antennagroup.com to learn more. Catalyst is supported by RE+. RE+ is more than just the largest clean energy event, it’s a catalyst for industry innovation designed to supercharge business growth in the clean energy economy. Learn more: re-plus.com.

The fall conference season is right around the corner, and we've got two events that you need to put on your calendar. On October 19th, we are back with Transition AI, New York. Transition AI is the leading B-to-B event for energy practitioners and artificial intelligence experts. The New York event will explore current use cases and deployments within electric utilities. The role AI can play in streamlining project development, maximizing revenues, and integrating DERs. Plus, I'm going to do some live interviews and storytelling on stage. We'll present some deep market research, and we'll present some deep market research, and we'll have a workshop on use cases.

Our listeners get 10% off by using the promo code PSPODs 10. Come join me, our journalists and researchers, and a bunch of experts in Manhattan for Transition AI. Register at the link in the show notes or go to transition dashaI.com. And for you West Coasters, Canary Media is holding another Canary Live. This one is in Berkeley, California. It is on October 3rd. These events are super fun.

We've hosted a couple of them with Canary. Panelists are handpicked by the Canary editorial team, and they'll dive into all things related to the energy transition, the Inflation Reduction Act, technology, and innovation. Drink, eat, socialize with clean energy leaders, investors, inventors, public leaders, and advocates. You can follow the link in the show notes to get your tickets to Canary Live Bay Area today. Transition AI, New York, Canary Live Bay Area. Put them on your fall calendar for October. We'll see you there. everyone. Shale here. So, as you know, there's a lot going on in battery world right now. There are billions of dollars flowing into new factories for everything from lithium refining through cells and modules and recycling. Automakers are getting into the mining business, and we're even exploring the bottom of the ocean for critical minerals. If you want to understand why we have the battery landscape that we have right now, I think you'll want to listen to this episode. Last year, I had a conversation with Sam

Jaffe, who was at the time the VP of Battery Storage Solutions at eSource and is now the Senior Director of Business Development at Battery Technology Company at Eonics. But it's a conversation that is definitely still illuminating today. We talked about the origin stories of different chemistries like LFP and NMC, why those differences matter for the types of vehicles that they fit best, for the countries that dominate each chemistry, and also who in the supply chain actually makes the key decisions about which chemistry to develop for a particular model. So even if you know a bit about batteries, which I suspect many of you do,

you will still, I think, walk away from this conversation feeling a better grasp of the complicated dynamics that are at play here. We'll be back next week with a new episode, but for now, here's Sam. From the studios of PostScript Media and Canary Media. I'm Shail Khan, and this is Catalyst. We're in the midst of an unprecedented industrial expansion. You know, I really struggle with finding any example of something like this.

Maybe the beginning of the car industry back in the 1910s, something like that. NMC, LFP, LMO, NCA, lithium metal, solid state, silicon anode. There are only three possibilities. One, you already know what I'm talking about and are very excited for this episode. Two, you don't know what I'm talking about and are soon to be very excited about it. And three, you're in the wrong place. When utilities need flexible capacity they can count on, they turn to Energy Hub. Energy Hub works with more than 170 utilities, coordinating over 2.5 million devices

to manage 3.4 gigawatts of flexibility built for the moments when utilities can't afford uncertainty. Energy Hub builds and operates virtual power plants that utilities actually stake their grid planning on, coordinating EVs, batteries, thermostats, and more through a single platform built for utility scale. Predictive, verifiable, and designed to perform when it counts. Learn more at energy hub.com. Trillions of dollars are flowing into clean and critical infrastructure, but those investments aren't driven by technology alone. They're shaped by markets, by policy, by capital, and by the institutions that connect them. I'm Alfred Johnson, CEO of Crux, and host of a brand new podcast, Critical Capital. Each episode, I I talked with people deploying capital, shaping policy and building the clean economy.

Tune in as we unpack how progress is actually made. Listen to critical capital on Spotify, Apple, or wherever you get your podcasts. I'm Shale Khan. I'm a partner at the venture capital firm, energy impact partners. Welcome. So battery chemistry. So very important. So very busy with announcements and so very complicated.

But this is what it's all about. Let's step back for a second. So fundamentally, here's what I think most folks think we want. We want an electric vehicle battery that offers long range at low weight, lasts a million miles plus, charges much faster than today's batteries, and costs significantly less than today's batteries. But actually, is that really what we want? Do we need all of those things?

What is it going to take to get to the point where we feel like we've settled the question of what chemistries and what types of batteries should we put in our vehicles. The thing is there's still so many different chemistries and architectures and configurations. Each one has its own trade-offs. There's hundreds, literally hundreds of companies pursuing different solutions here.

It's really complicated. So let's take a spin through EV Battery Tech World. Our guide this week is Sam Jaffe. Sam is the VP of Battery Storage Solutions at ESource and has been for years one of my most trusted voices on the rapidly evolving world of batteries and the companies that are building them.

So no further ado, here's Sam. Sam, welcome to Catalyst. Thank you very much for having me. Excited to have you on because there is, as always, I think, so much to talk about in the world of EV batteries. Let's start with the lay of the land. Can you kind of walk me through a journey through the current world of EV battery chemistries?

What is dominant? Who's doing what? Why did we end up where we are today? So the very first EV batteries in that T-0, that sports car that was, they essentially took laptop batteries and put them in and made it made the very first electric vehicle run were laptop batteries. They were lithium cobalt oxide. Lithium cobalt oxide is basically a big hunk of cobalt, which is one of the most expensive materials you can mine out of the earth.

But it works. It makes laptops run, and for about half an hour, it made a car run. But you want something that's cheaper, first of all, that is not going to, we're not going to run out of the raw material that makes it, i.e. the cobalt, secondly. And that is energy dense enough to make the car run for an appreciable and necessary amount of range. So where the world moved towards was in two directions. One was lithium iron phosphate, which is usually the acronym used for that as LFP, F being for Fero, lithium-ferro phosphate. Fero, another word for iron.

But it's essentially a big hunk of iron with some phosphorus in there and a little bit of lithium. And lithium iron phosphate has its very cheap, earth abundant materials. And the problem is it's not very energy dense compared to other options. The other direction that we headed in was towards what are called in the industry, turneries. And they're called turnaries because they're usually a conglomeration of three different elements. and those three elements usually are nickel, manganese, and cobalt. And the term that's used, the acronym that's used for that is NMC for the nickel,

the manganese, and the cobalt. Another commonly used one is nickel-cobalt aluminum or NCA, but those and various formulations of those are used under this heading. of ternary cathodes. And by the way, I'm describing the cathode part of the battery. The anode part of the battery is traditionally all graphite, although now silicon is starting to make its way in there too. But in terms of the main types of batteries,

we've got some moving in cars, some moving towards lithium iron phosphate or LFP, some moving towards the ternary, such as NMC, and the main difference between those two is energy density. You get a lot more watt hours in your kilogram of NMC batteries than you do in an LFP battery. The other main difference is cost. Iron is a lot cheaper than nickel. And so the LFP batteries tend to be cheaper but heavier.

and take up more space than the ternary batteries. So what's the rough split today in the EVs that are coming off the line between LFP and the Ternary batteries? And is it just, is it simple enough to think of the heuristic as being lower cost, lower range vehicles are probably going to use LFP, higher cost, higher range vehicles are probably going to use NMC or one of the Ternary's? It's not because there's also a geographical split too. And again, it goes back to this history. And if you can bear with me, I'm going to try to go back to the dawn of time or the dawn of lithium ion time. And originally we had lithium cobalt oxide and the NMCs and the other ternaries were the clear next step. But then John Goodenough at the University of Texas discovered LFP, and it looked like it might be a kind of a, you know, a leapfrog over the traditional methods of making cathode materials.

And this was back in the 90s, and at the time China, China Inc. was planning its, it's, ascension into the lithium ion space. At that time, very few batteries were made in China. They were mostly made in Korea and Japan. And the Chinese technocratic state made its decision, hey, we're going to go all in with LFP. And this is going to be the Chinese cathode. And so they put all of their development effort and all of their capital allocation towards LFP. And that worked reasonably well. So you had a lot of the first cars in China were LFP-based cars. And you had a lot of the Chinese battery manufacturers essentially putting all their poker chips on the LFP spot.

But then you saw Tesla be so successful with using the NCA turnery chemistry. And that caused a bit of a panic in China where they decided to turn the aircraft carrier. And now we're talking about the 2017 timeframe and say, hey, let's move back to the turneries. We're going to shift all of our development and all of our attention and resources towards making NMC-NCA-type batteries for cars. And so at this point in China, you've got about a 50-50 blend of LFP cars, which tend to be the smaller cars and tend to be the plug-in hybrid cars versus turnery-based cars, which tend to be the larger or higher-end cars. What's interesting is that now we've got a reverse somersault going on where that leapfrog has happened. backwards towards LFP, and we suddenly have a resurgence and a renaissance in LFP that is causing China to recommit towards LFP and causing others to consider it also.

I guess two related questions to that that I always have when I hear about these trends in battery chemistries, one being like who drives the decisions? Is it the auto OEMs who are saying, no, I want to order LFP batteries for this next model that I'm going to roll out off the line in a few years. Is it the battery OEMs who are pushing them onto the market saying, no, we've made decisions strategically. We think that NMC is the cathode chemistry we like. And then they're pushing it on the auto EMSs. Like who, who's the decision maker there? And then second, like, how long does it take to turn that ship? Is it a matter of, okay, we need to build, if we're going to, you're going to you know, shift an entire line of a series of models of new EVs to a different cathode chemistry.

We need a bunch of new gigafactories to spin up in order to do that. And so it's a multi-year time horizon where, like, today, we could predict what it's going to look like three, four years from now because we know all the CAPEX decisions that the battery OEMs are making, or is it quicker than that somehow? Yeah, I think that's an interesting question that goes to the heart of why this is so confusing and why it's taking so many strange turns. Is that, you know, go back to 2007 when the Chevy Volt was first being designed. And, you know, historically in the car industry, the car OEM dictates exactly what goes into that car and tells the support. suppliers, this is what you're going to do, and this is what we want. But what happened was you got to the point where the carmakers decided we're going to make electric vehicles, and they went to the battery manufacturers, and the battery manufacturers said, what batteries do you want in them?

And the car maker said, whatever, we don't care, because the key IP and all this is going to be the battery pack itself. The drive train integration is, what we want to own. The battery cells themselves are going to be commodities, so you just do whatever you want to do. And then, so we ended up with quite a bit of confusion there because of that kind of the car industry's reluctance to get their hands dirty with battery chemistry. That changed with Tesla's success because Tesla certainly got very involved in battery chemistry. and although Panasonic made all their battery cells, Tesla and Panasonic developed their product very closely together.

And they proved the template for this is the car company's role. The car company is not going to make the batteries, but it is going to be extremely involved with their Tier 1 supplier of batteries in developing, designing, validating the battery that's going to go be the core of this car. And that's what we've learned in the last 10 years of the development of the electric vehicle is that the car is the battery. And it's not just the battery pack.

The car is the battery cell. The car is the battery chemistry. And for the car company to just slough off the responsibility of whatever, who cares what's in it, was a really critical mistake on the part of some of the car OEMs. And they're all changing their tune now. So now you have Volkswagen announcing last year that they're actually going to be manufacturing batteries as well as buying batteries that are developed very closely

in coordination with their suppliers. And you have General Motors doing a joint venture with LG. The Ultium line is going to be a joint venture between LG making the batteries and GM very closely developing and designing those batteries. Same thing with Samsung SDI and Stalantis, ACC, and Mercedes. All of the companies are going towards that template where the car company now is going to be, in the future, the determinant of exactly what those batteries are composed of. And that sort of speaks to another thing that I've wondered, you know, you see all these,

what we'll get into the sort of future chemistries and what might change in a minute, but we see all these companies that are pursuing some new chemistry, cathode or anode or solid state or whatever, new electrode. And who they have to engage is never as clear an answer as you'd like it to be. Because they both, you know, you've got, the auto OEMs are often like looking to test, pouch sells or whatever it might be. At the same time, they figure they're probably not going to sell directly because the auto-aams aren't going to buy directly from some startup in most cases. So do they also need to engage with the LGs of the world or CATL or whoever it might

be? Like, what's the, how is the supply chain for batteries and sort of who dominates it evolving? Well, I think, you know, from a startup company's perspective in the battery space, it's everybody has the same sad tale, which is, I've developed this miracle powder that makes batteries great. Here, let me sell it to you, car company. And car company says, no, talk to our battery company. Battery company says, no, talk to our cathode company. It turns out the secret is they're all involved. And you have to have deep relationships with each layer of the supply chain in developing that.

But the tail gets sadder because your miracle powder is a battery is a, you know, it's a very complex ballet going on between multiple components inside that battery. The anode, the cathode, the electrolyte, the separator. And anytime you make one small change to one of those with your miracle powder, the everything else changes too. So a company that develops a new anode material, for instance, quickly finds out we have to become electrolyte experts because you're going to change your electrolyte formulation to optimize for this anode. They become electrolyte experts. And then they realize this is changing the cathode interface too.

We have to become cathode experts. And pretty soon you are becoming a battery company, even for a company that is still focusing on one component of the battery, they have to become complete battery experts with an electrolyte department, a cathode department, a full cell assembly department, all of that, to the point where they're essentially a battery company, not a powder company, even though they're trying to sell that powder. Which is why you don't typically succeed as a seed scale company. don't get a $2 million a round and start selling to and start a building a company after

two years of development. You need $100 million a round to be able to sell a powder into this industry. And at the same time, on the business development front, you're developing relationships with every part of that supply chain because you're not selling to one company. you're selling to a consortium of companies who are deeply embedded with each other and deeply coordinated with each other with how they're developing their products. Yeah, you're actually getting at one of the interesting dynamics from a sort of venture capital in this space perspective that I think has played out over the past couple of years, continues to,

which is, to your point, like, these are inherently like very complicated, setting aside how difficult it is to actually, like, develop the technology, manufacture it consistently and so on, which is notoriously difficult in battery world. But beyond that, it's also just like a very capital-intensive and very long enterprise. And so that used to be a sort of source of defensible advantage for the few players that were able to attract sufficient capital and over a long enough period of time. So companies early sort of pioneers in like new battery chemistries, companies like Quantum Scape and Sela, nanotech, and a couple of others, you know, one of their advantages was, well, we've proven we can raise the capital that we need.

to take this to the next step, and not everybody could do that because the amount of money is sort of staggering. But then we had this wave of investment over the past, I don't know, three years probably that culminated in a SPAC boom and a bunch of solid-state companies going public and all that. And the money started flowing in in a way that it never had before. And so now there's lots of companies that have raised hundreds of millions of dollars. And so capital is not really a defensible advantage anymore, the technology and ability to execute will potentially be. But now we're back in this slightly more capital-constrained environment, and it'll be interesting to see whether the next wave of companies are sort of back where we started, where a few of them will attract most

of the money and the other ones will struggle from that perspective, if no other. So that used to be my cheat, is there's over 60, the, the, the, the, the, the, the, the, the, the, the, the, the, ecosystem of silicon startups is there's over 60 of them. And to be specific, you think just silicon anode, right? Over 60 just in that space, right? Set aside everything on the cathode, all the other chemistry is just silicon anode. Just silicon anode. Over 60 companies that we track and try to make an analysis of this is where they stand

within the competitive market scape. And that's really hard to do with that many contenders. So, but I was able to cheat because in our ranking matrix, the single most important factor was how much money have you raised? Not how good is your technology, but how much money have you raised? And there's inevitable pushback saying, well, wait, how does that speak to their technology or whether it's going to work or not? and I would answer, it doesn't matter because the fact that you've raised money gives you a way to solve problems that other people that haven't raised money can't solve problems. So it gives you an inherent competitive advantage.

And so I could kind of cheat on the analysis by saying the ones that raise money are in the lead because they raise money. that went away in the last two years because everybody raised money with a handful of companies that have gone out of business. It's true. But pretty much everybody has raised some amount of money. Some of them have raised obscene amounts of money. And I shouldn't say obscene because I wish every startup founder has the problem of of having obscene amounts of money.

But it's, it's, that's no longer a differentiating factor is, is the level of capital you've raised. However, you're right. I think we are entering a, a winter in that regard. And those that did raise money and inevitably, you know, didn't spend it perfectly in a perfectly optimized, efficient way, are now going to be weeded out. And we're back, I can't cheat on my analysis anymore.

Sorry. Sorry, you lost that clever hack in your rankings. I mean, but it's another thing we probably should spend a minute on, which everybody who's in this world knows already, but the sheer volume of companies trying to tackle problems in EV battery chemistry is is sort of staggering. I mean, you mentioned 60 in silicon anode alone. I don't know, how big is your over, like if you include everything that you're tracking, how many quote-unquote startups are started-ups do you estimate that there are?

In, it's definitely over 100 of, and by that, I don't mean, you know, university labs or somebody that's got a friends and family grant. I mean people that have raised A rounds at the very least is we're well over 100. Silicon is an especially fertile area because there's so many ways that somebody can propose to make a synthetic particle of silicon, usually a silicon carbon composite. The main areas of concentration of startups are silicon anodes. lithium metal anodes, and as a subset of lithium metal anodes is solid state, but lithium metal anodes is, we've got a good, close to 30 companies that we're tracking and following.

Can I just pause in that for one second? This is one thing I think a bunch of folks don't understand. You hear a lot about solid state batteries. Solid state, so solid state is often used in order to get a lithium metal anode. that's like sort of the one of the purposes of a solid state battery is that they pair well in theory, but you can also do lithium metal with a liquid electrolyte. And so there's, so lithium metal is sort of the umbrella category under which falls most of the solid state companies and some lithium metal liquid electrolyte companies. Right. Right. Exactly. The real prize with solid state is getting to a

lithium metal batteries. There's other advantages too, some of which, are very interesting and are only beginning to be explored. But the big prize is getting to the ideal, the ultimate anode material, which is lithium metal, which is just pure lithium. The lithium ions travel across to the anode side, and then they just plate as metal on there. So you don't have any extra material that's used to house the lithium ions. You don't have anything that in the way

and you get the most energy-dense possible anode you could possibly get with a lithium metal anode. So I guess one last thing before we move on to this next category of what's coming down the line, it's been a heady time and kind of a crazy time in supply chain for everything. But EV batteries have gotten wrapped up in that as well. And we've heard lots about the cost of the raw materials

like lithium and cobalt, nickel spiking. There's also supply chain bottlenecks. They're sort of plaguing every industry. Where are we today in EV battery supply chain world? Is it a huge crunch at the moment? And is it going to delay the rollout of new vehicles or just raise prices? Or does it feel like it's starting to smooth out a bit?

We're experiencing two different phenomena. One is just the general inflationary trends of everything. Everything is getting more expensive. And that includes the commodities that go into batteries like copper and aluminum. It includes things like PVDF, which is a chemical that's used as a binder. It's a very small component that goes into the battery, and it's an industrial chemical that's used in hundreds of industries. But it's up 80% over the last year too, not because of the battery industry, but just because everything's more expensive. The second phenomenon is that is the battery world is undergoing inflation on steroids.

Lithium is up 900%. There is a severe supply squeeze of lithium. There's the spot market in China for lithium is in the $70 a kilogram for, lithium carbonate equivalent, which is the feedstock material that goes into the batteries. And, you know, that's not normal inflation. That is the effect of an extremely high growth battery market that's going on. So those are two separate but related phenomena that we're undergoing at the same time. And I think that the macroeconomic inflationary trends are starting to subside a little bit. I do expect lithium pricing will decline. It's not going to stay in the stratosphere where it is now. And I think that it's going to return. I think expensive lithium

is going to be sticky. It's going to be with us for the next decade in terms of where historically the price of lithium has been, it's going to remain expensive over this next decade. But it's going to come down from the stratosphere. What concerns me is when we look at our demand forecasts for 2025, 2025, 2026, 2027, and the amount of lithium that's going to be required to supply all of those batteries that we're expecting to be coming, And now is the time, if you are allocating capital, now is the time that you start building these mines or these expansion projects at existing mines to supply the lithium, to be ready for 2025 requirements. And we're seeing a massive build out of lithium.

All of the majors, the Algrammaro and Wyvent and SQM are all expanding dramatically. We're seeing a lot of new mines. Lithium Americas is building a mine in Argentina and another one in the U.S. And we're seeing others that are getting our beginning construction now. But it's just not enough to meet those 2025 demands. So we think there's going to be another run on lithium. in that 2024, 2025 time period that's going to be as serious as today's price bubble and is going to result in demand destruction in that time period.

So we actually pulled our forecast back in 2020, our battery forecast back in 2025, 2026 because of lithium shortages, expected lithium shortages. So you're saying that will flow down to less EV demand in those years because prices will be so high? Correct. The EV demand outside of China, because China is going to be less affected by this, because the Chinese investment in lithium has kept track with future demand requirements in 2025. But outside of China, we think that we have pulled back our EV forecast by between 5 and 10%,

depending on the country and region. But we think that it is going to affect the demand for EVs. Virtual power plants are becoming a reliable way for utilities to manage capacity. But enrolling devices is just the start. What really matters is confidence, knowing those resources will perform when dispatched and being able to prove it from the control room to the living room. Energy Hub's platform handles the full picture.

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but the future of energy isn't shaped by technology alone. It's shaped by markets, by policy, by capital, and by the institutions that connect them. I'm Alfred Johnson, CEO of Crux, the capital platform for the clean economy. Join me for my brand new show, Critical Capital, as I talk with people deploying capital, shaping policy and building projects.

Together, we unpack how risk is priced, how incentives are structured, and how progress is actually made. Listen to critical capital on Spotify, Apple, or wherever you get your podcasts. We've talked about the sort of current state and maybe a little bit about some of the possible future changes to battery chemistries and EVs. One question that I have at the high level, you know, as it stands today, the vast majority of EVs, as you said, they're using a great number. graphite anode, liquid electrolyte, and one of two versions of a cathode, either an LFP cathode or this category of cathodes, includes things like NMC. Moving forward is the general wisdom or is your view that we always have a very, sort of a small number of chemistries that dominate the market?

Will most batteries look fundamentally similar to each other in EVs, or is there going to be this like, you know, Cambrian explosion of different solutions for different vehicles that have different needs in terms of range and fast charging, all this kind of different stuff that where the different chemistries have different characteristics. I think we are moving towards essentially three buckets of cathodes, specifically. And on the anode side, it's going to be, for this next decade, we're still going to be living in a graphite-dominated world with more and more silicon coming into the anode, but it's still going to be mostly graphite. But on the cathode side, we're moving towards three buckets of anodes, and you're seeing this being repeated by multiple car companies, starting with Tesla, then VW said it explicitly. and Stalantis has also said that this is their vision too.

And those three are LFP, back to our original topic, LFP, high nickel NMC or NCA, but the high nickel ternary chemistries. And then the third one is going to be the middle market, and that's going to be manganese-rich, lithium-rich cathodes. And that's a really interesting brand-new area. It's not brand new. It's a derivation of the ternary's of the ternary cathodes, but it's essentially replacing nickel for replacing the nickel with manganese.

So there's more manganese, less nickel, less cobalt in that cathode. And manganese is a inherently cheaper material and is going to end up, if they can make that middle bucket work really well, is going to be the, I think, the most common chemistry of choice for cars by the end of the decade. I notice, I guess maybe this is the timeline that's driving this, but to put a finer point on, I notice what you're not saying is going to start to creep in in the next decade is lithium metal and or solid state. I think that to get lithium metal slash solid state into the car industry by the end of the decade, the clock is ticking.

And we might be running out of time to see it become a major part of the car industry before 2032. I do believe that that is the future and that's where we will be headed eventually. But it's to, you know, because of that extremely long timeline of, battery cell validation, really you're talking about a five-year timeline from the moment that the battery is completely designed and the design of the battery is finished to the moment that they produce the first car rolling off the assembly line with the battery in it is five years. So to get that in, we need to get those batteries designed on it in a production environment, level of design in, you know, essentially by 20, within the next three years. And that's the

race that's happening now for companies like QuantumScape and Solid Power, which are, which are, you know, very, as advanced as any company is in developing an automotive level battery for that. So really, they've got three years to get to that design. and production capability point in order to show up in cars within the decade. I think that lithium metal batteries are going to result, are going to be about 150 gigawatt hour market by the end of the decade, but they're going to be in other things outside of cars, mostly. They'll just start to be appearing in cars at the end of the decade.

Let's take a step back for a second. We've talked a little bit about energy density, which translates to range, which is one of the major characteristics on which we should be comparing all these different chemistries. I think the other things that people care about as they evaluate new types of batteries and new configurations are fast charging ability and durability. How long will the battery actually last? Are those the right additional metrics to be looking at? Am I missing anything in terms of sort of the core comparative dynamics between these batteries? I think there are strings attached to those two requirements. In terms of fast charging, most people that buy electric vehicles,

their demand for fast charging gets pretty watered down once they're used to driving an electric car, charging it at night on a level 2 charger. And their use of fast charging is few and far between in actual real world usage. So fast charging is something that a new is going to appeal to a new buyer that's never owned an electric vehicle before. But once they get used to it, they realize this is a nice to have, not a requirement. And how does that boil down into actual specs of the batteries and the priorities of the car makers of how they make the batteries is still to be determined? Because obviously the faster you can charge, the more attractive the car is no matter what. But I'm just questioning when you're going to sacrifice other things such as cost, such as energy density.

and other elements in order to bring about a fast charge, a truly fast charge battery. So, yes, if you can give me a faster charge and I don't have to sacrifice anything else, I will definitely take it and be with a smile on my face. But I'm questioning whether we're moving towards a world where that becomes a primary requirement. Interesting, before you move on from that, it's interesting if you say that, because I've heard, I've heard the opposite argument made, which is that in actuality, we're sort of hitting a asymptotic value in terms of range already now, where the, you know, electric vehicles are basically, they have enough range for the duty cycle that most people need. And so now at this point, what really matters is the ability to fast charge because you've got enough range for your daily usage. So who cares if you get a little bit more range? What you care about is those situations in which you are going,

you're going to be on a highway or road trip or whatever it might be. In those situations, you really do care about ability to fast charge. And so I've heard it argued that like all of this focus on energy density and increasing range beyond where we already are, maybe unnecessary if we in exchange can get faster charging. Do you think that argument holds any water? I think the core tradeoff in electric vehicle, design is range versus cost.

And if I've reached an asymptote in range, then therefore I can put less batteries in the car at that range. If I get more energy density, I put more batteries in the car or fewer batteries in the car and keep the same range at a lower cost car. That's the core proposition and fundamental calculus of how to design an electric vehicle. add fast charging on top of that and it gets a little bit more complicated than that too. But I think that that's what you start with. Okay, and then I interrupted you before you talked about durability.

Yeah, durability is another one with strings attached because to a car buyer, a million miles really is kind of meaningless. Who drives their car a million miles? to a car manufacturer, a million miles is, that's frightening because that means that you're not going to, that buyer is not replacing that car for another, for 10 times the amount of time than they would originally. So who is really benefiting from that million mile, from being able to do a million mile car? And by the way, I'm not saying that we really are at the stage where you can have a million mile car, but that's what people are discussing and deciding what are we going to trade off for a million mile car. I think, you know, and obviously at that point, the battery just lasts far longer than the car itself. So it's a really difficult thing to get, you know, to, to,

to kind of grasp where the value is and who should pay for that value. The other, you know, a million-mile car brings up the possibility of repurposing that battery pack once the car no longer functions, repurposing that battery pack for stationary storage. But I'm very skeptical about that proposition. At that point, you've got an old device that you're, you're putting into an environment that has a very demanding duty cycle, and you're competing against brand new batteries that are less than $100 a kilowatt hour. So, yeah, if it's free, you've got an advantage.

But if it's free, what's to motivate you from even pulling it out of the car and spending the money on actually repurposing it? So that's a really delicate and challenging business model to make sense of repurposing of batteries. What I think is the future is vehicle to grid. And if you truly do have a million mile battery, the idea that you can use the heck out of that battery, not just to drive it, but as a stationary storage device while it's in the car, becomes a very real prospect. And we don't know what shape that will take, how that will play out.

But I think that is a, that is what a durable, a truly durable battery really represents, is the ability to do, use that battery constantly. while it's in the car. That's interesting to hear that you're bullish on vehicle to grid long term. By the way, I was very much a bear on vehicle to grid. I was much more dismissive of it, even more so than repurposing for much of my career. But these new battery results, these new academic papers that are coming out showing some just tremendous results of durability in the battery with relatively minor changes to the

chemistry inside the battery. I'm a convert. So what you're saying is that the reason you were bearish on vehicle to grid historically was one of the arguments against vehicle to grid in general. And by the way, vehicle to grid, just to get our terminology right, we're talking about discharging a battery into the grid, discharging an EV battery into the grid. There's also like vehicle to home, which is sort of what Ford is doing with the F-150 lightning, where you can use your vehicle as whole home backup.

in lieu of a stationary storage device, like a power wall or something like that. So this is specifically in the context of discharging it into the grid. And one of the arguments against it has always been it's just not worth, the juice is not worth the squeeze because the value that you're going to get out of the grid services that you will provide compared to the cost to the longevity of your battery. And setting aside also the sort of losing some charge in your battery, if you may want to use it. But set that aside for a second.

Just the cost in terms of the lifetime of your battery has never been worth it. And you're saying, look, if the battery is going to outlive the car anyway, maybe you don't actually really care if you lose a little bit of, if you run some cycles by discharging the battery into the grid, because at the end of the day, you'll get some value out of that via those grid services, and you'll see no difference in terms of your ability to drive the car as long as you want to. Yeah, and I think, you know, both vehicle to grid and vehicle to home are both solid applications that are, you know, that I'm thinking of them as, you know, as being two sides of the same coin. but I think the reason for bearishness in the past was that you had you're going to damage the battery.

The more you use it for something else, you're going to damage it as well as you're you want that above all else range is what you care about in your car. You don't want to be stuck on the side of the road because you ran out of battery. and if you're putting yourself in danger of doing that, then that's a definite negative. What's different is the batteries are better and they can endure usage much more than they could in the past. Number two is the batteries packs have gotten bigger. If you have a 40-kilow-hour Nissan Leaf battery

and the electric utility says, hey, can I borrow 10 kilowatt-hour? I really need it right now, you're not going to do that because that really affects your driving range. If you have 100 kilowatt hour Tesla and the utility says, can I borrow 10 kilowatt hours, that is a big, that's a legitimate choice and a big change to that calculus. All right. So just to close out, you talked about what you think the sort of dominant chemistries will be over the next decade. In terms of the landscape of who makes EV batteries,

how do you see that evolving over the coming years? Obviously, we've had the rise of some of the large Chinese EV battery OEMs like CATL and others over the past 5, 10 years. We've seen that story play out in other industries. But meanwhile, in EV batteries, you know, there's still also a ton coming out of Japan and Korea with companies like Panasonic, which just announced another plant with Tesla and Kansas that they're going to build,

LG, obviously. What's the trend line there look like, you know, five, ten years out? We're in the midst of an unprecedented industrial expansion. You know, I really struggle with finding any example of something like this, maybe the beginning of the car industry back in the 1900s, 1910s, something like that. But the scale of manufacturing buildout is just jaw dropping in the battery industry. The industry is literally increasing by almost doubling every year. And we'll continue to do that for the next five or six years.

And doubling off of a huge base now. So, you know, you'd think this is boom times and hundreds of startups are being created. no. There are a handful of new battery companies like North Volt in Europe that are appearing. But this is really the last chance for a brand new startup battery company to be able to compete with the majors. What's really happening is we're moving more and more towards consolidation. And we now have a handful of seven or eight large companies that produce 85%. of the batteries that are being made. And that trend is only increasing, not decreasing. All right, Sam, super informative as every conversation I've had with you has been.

Thank you so much for doing this. All right. Thanks very much, Dale. Sam Jaffe is the VP of Battery Solutions at eSource. Well, what did you think? Wunky enough for you? Let us know. You can find the show on Twitter at At CatalystPod.

You can find me there, too. We always welcome your feedback. If you really liked it, then, go over to Spotify or Apple Podcasts, wherever you get your podcasts, and leave us a rating and review. This show is a co-production of PostScript Media and Canary Media. You can head over to canarymedia.com for links and more info on today's topics. And as always, PostScript is supported by Prelude Ventures, a venture capital firm that partners with entrepreneurs to address climate change across a range of sectors, including advanced energy, food and ag, transportation and logistics, advanced

materials and manufacturing and advanced computing. This episode was produced by Daniel Waldorf and Dalvin Abouaji, mixing by Greg Vilfrank and Sean Marquand, theme song by Sean Marquand. Our managing producer is Cecily Meza Martinez. I'm Shail Khan, and this is Catalyst.