Why The EV Industry Has A Massive Supply Problem

Unknown: The magnitude of the waste and scrap

problem

and the magnitude of batteries that need to be recycled is shocking to most people with these cobalt-free batteries, they operate at a higher voltage and is one of the reasons why They are more susceptible to batteries. fires. Lithium is not actually a major component of battery cost, but it is like blood in the body, the chemistry behind how lithium-ion batteries work; remains the common denominator in all battery technologies, even the ones we are looking at now. Jeniece Pettitt: You're seeing bags and bags of dead lithium-ion batteries, electric car batteries, scooters for phones, laptops, tablets, cameras, you name it.

They are flammable and toxic, so they can end up in landfills. And believe it or not, these old batteries are still filled with materials that are as good as new. Unknown: Batteries are amazing in that sense because the metals and critical materials within them are highly recyclable. We recover between 95% and 98% of many of those critical materials such as nickel, cobalt and copper; Essentially, all of those metals can be directly reused over and over again. Jeniece Pettitt: This is JB Straubel. He is a long-time co-founder and CTO of Tesla. He was the brains behind many of Tesla's core technologies, particularly around battery technology.

He left Tesla in 2019 so he could focus on recycling all of these batteries. He gave CNBC a look inside his startup Redwood Materials, where he's already recycling tons of batteries and shipping some of the recovered materials to Panasonic so the battery maker can put them back in Tesla cars. Unknown: We can't just take all of these really fantastic minerals and just get rid of them. That would be criminal. I mean, we have to repurpose them Jeniece Pettitt: Fight started thinking about this

massive

and growing

problem

long before he left Tesla. Unknown: We started this, you know, because I saw this looming problem from the end-of-life vehicles that we were creating, and I started to have a deeper appreciation, you know, back then for the scale of what was to come than the fact. that, you know, I didn't see anyone else preparing for the magnitude of that problem.

I think the magnitude of the waste and waste problem and the magnitude of batteries that need to be recycled is shocking to most people; I think there's a really exciting opportunity to link recycling and solving the end-of-life problem with the

supply

chain solution, putting more materials back into the feedstock, so as not to hamper battery production. Jeniece Pettitt: Indeed, batteries are everywhere today, and demand for lithium-ion batteries has increased significantly over the past five years and is expected to grow from $44.2 billion in 2020 to $94. .4 billion in 2025, mainly due to electric cars. Electric vehicles are expected to reach 10% of global passenger vehicle sales by 2025 and increase to 58% of sales by 2040.

Unknown: Do we have enough materials to build all the Evie batteries that will be needed? Frankly, no, it's not right. The second is that we don't have enough materials in the

supply

chain today to build everything. Therefore, growth has to occur in the supply chain of all these vehicles. Much of that investment has to go to the top of the food chain to know where these materials will come from by investing in new mining, refining and recycling. We look at the materials found in cells. These are metals that are very durable. And we tried very hard to get them out of the ground.

It's not like we have an excess supply lying around that we can just mine to make cells from our excess supply that's sitting in cells that have basically reached the end of their lifespan and are ready to be recycled. So we would be really foolish not to harness the ability of older cells to create the next generation. Jeniece Pettitt: Panasonic says it produces 2 billion battery cells a year at Tesla's Nevada gigafactory, Unknown: and specifically the model three Y for the Tesla team. So in this factory we only support those two models in the United States, then we need between 20 and 25 of these around the world, but particularly here in the United States, we certainly need at least four or five six of these factories to support the automotive

industry

in general.

Jeniece Pettitt: Batteries are made up of a mix of metals and minerals, including nickel, cobalt, lithium, graphite and copper, that come from all over the world. Battery cells extracted from raw materials often traveled more than 20,000 nautical miles from the mine to the automaker, a supply chain that is far from sustainable. Unknown: Recycling has a very important role to play in the system. Inability of electric vehicles themselves. One of the largest sources of CO2 from an electric vehicle comes from mining and the manufacturing of battery packs. Lithium mining is not a very CO2-friendly activity. Therefore, there will come a time when recycling batteries to get the metals you need will be an important factor in helping electric vehicles achieve carbon neutrality.

Jeniece Pettitt: The materials and cells for Evie's batteries, for example, could have been mined in South America, Africa, Indonesia and Australia. They are then often sent to China for refining and then, in the case of Tesla, to the US for cell production at Panasonic's Gigafactory in Nevada. And in the near term, significant shortages of battery materials such as lithium, nickel, cobalt and copper loom. Unknown: Demand is currently outpacing supply. Five years later, right? That's right. How worried are you about that? I'm quite concerned that this could become an obstacle to electrifying everything that people hope to do.

You know, I think it's going to be a little bit painful when all these factories try to ramp up at the same time and recycling and being able to efficiently reuse those materials can alleviate some of the burden of needing new mines to find new resources. Jeniece Pettitt: The clunky supply chain also drives up the cost of batteries, which are the most expensive part of an electric car. Unknown: Electric vehicle cost is coming down, but still dominated by battery cost. And inside the battery. The biggest cost is the materials, it's a pretty direct link to say that the way to further reduce the cost of electric vehicles so that more and more people can afford them is to figure out how we attack that material cost within the lithium ion battery .

And as demand for electric cars continues to grow, it will put more pressure on those commodity markets, but our goal is to find a way to decouple that and provide those materials for reuse at a lower cost. Jeniece Pettitt: Redwood Materials is in the process of expanding and building new machinery to increase its capacity. Kevin Kasetsart, another former Tesla employee, is helping to oversee that effort. The first challenge the company faces is gathering all the batteries. Unknown: I like to think of the company in sort of three main groups. One is really charging and receiving right, which is what you see here.

And there are very safe ways to do it. The other is more refined. So breaking down the material, taking it out of the product that you see in its base metals, which are fully recoverable, and then converting them back into battery grade products that we can sell back into the

industry

. But currently we receive about 60 tons a day. This is about three trucks per day. And that continues to increase as we grow, the business will go through this in a couple of months. Jeniece Pettitt: Redwood recycles a wide range of lithium-ion batteries, not just those used in electric vehicles, but brings the materials together through a series of partnerships with companies such as Panasonic, the E-waste recycling giant. , Ri and Envision ASC, which makes batteries.

For the Nissan Leaf. They also partnered with Amazon, Unknown: Amazon is an interesting partner because they have batteries in many different areas of their business, you know, from data centers with AWS to consumer products with things like Kindle, we are We are discussing with them a number of different projects, but the reach and access to the consumer world could offer some really interesting opportunities. It's been interesting how some of our partners that you know are quickly overwhelmed by the problem these older products can create. When these things pile up, it becomes very difficult to deal with them.

You can't just throw them in the landfill, you can't just shred them, because it will catch fire. We've had partners come to us in a moment of panic, saying, gee, you know, we have to solve this problem, you know, can you help us, Jeniece Pettitt? But beyond the fight of its partners, the largest lithium company could be in the trash drawers of the United States. Unknown: Just, you know, there are so many geological sources of many of these key materials. And, you know, for decades, we've been digging it up, putting it into products and using it.

And a lot of these consumer products are just locked away, you know, stored in people's drawers, literally, at home, in the garage, or in a shoe box. And over time, that collection of vintage consumer products stored in people's proverbial drawer at home has become, I believe, the largest resource of these materials in the world. What do you think most people think? Do you think I don't want to throw it in a landfill but I don't know what to do with it? I think there is a lot of confusion. You only care about the data. There is concern about simply throwing it away, but there are many barriers to productively recycling it.

And the hurdle is so high right now that it encourages people to just do nothing to conserve it, but it's wasting an incredibly valuable opportunity and resource that we can take advantage of. Jeniece Pettitt: Consumers can help by dropping off their old electronics at places like Best Buy, Salvation Army or their local Solid Waste Authority. recyclers will collect it and destroy the data before restoring it or extracting materials. Once Redwood receives the batteries, they are broken down and processed in huge machines. This is one of the unknowns: the machines we use to separate the different metals from batteries allow us to very efficiently separate nickel and cobalt from things like liquid.

Jeniece Pettitt: The final product goes into these raw materials containers that will be sent to the manufacturers. Sequoia techniques recover more than 95% of nickel, cobalt, aluminum, graphite batteries and more than 80% of lithium batteries. Unknown: This is one of our finished nickel products. This is a mixed nickel sulfate product. And you can see, packaged and ready to go back to basically a battery cathode manufacturer, this would be the type of product that you would send to Panasonic, or some other battery manufacturer, now they can use exactly this Jeniece Pettitt: the market is anticipated Lithium-ion battery recycling will grow to $18.1 billion in 2030, up from $1.5 billion in 2019.

Battery recycling is not only good for the planet, it's also surprisingly good business. Unknown: We get margin in a few different places there. And it's really about, you know, initially solving the transportation and disposal problems of the batteries. And then we also took a lot of consumer batteries, you know, things that used to be, you know, in an individual's, you know, whether it was a scooter or a bicycle or a phone, these things are kind of hard to handle and have chemical and fire hazards. Then we solve that problem and you charge customers to solve it.

Well, or we can basically do it with a low, you know, low return fee. So in some cases, we actually give customers money back for batteries, depending on how much material we can recover and resell. And that's my other question. Are you already making money reselling materials? Or are you still in the startup phase where you are not making profits? Well, we are still growing very quickly. So we are consuming capital as we build the operation and the team. But the most important thing is that the unit operations are profitable. We can then take these inputs, refine them, purify them, and sell them at a profitable unit margin.

And you know, that's the bottom line: It's improving pretty quickly as we improve the technology and the scale, which encourages me that this is economical today relative to mining, even at this early stage. There has been a surprising flourishing of recycling companies worldwide,China is leading this again, the US is catching up with Europe, but recycling is kind of an unattractive industry that could be very profitable in the future, because of course we have to take advantage of those batteries, recharge them, recondition them and use them again. And that's the good news. And there are many companies working right now to meet that demand.

Jeniece Pettitt: Another major player in North America is Lifecycle, which has battery recycling plants operating in Ontario, Canada and Rochester, New York, and has plans to expand rapidly. Unknown: This is our facility in Rochester, New York. It is part of the Kodak Eastman Business Park. So one of the things we like to say about this facility is that we not only recycle batteries, but we also recycle the building. Jeniece Pettitt: The life cycle says recycling is more efficient than mining. Unknown: Long-term recycling is more efficient, that uses less energy, uses less water and uses fewer reagents than traditional mining processes.

So our cost base will always be lower. The benefit for the last cycle is that we don't set the price, the mining industry sets the price. In fact, it is the marginal operator of that industry that sets the price. And what we do is benefit from those higher prices. Now, in the long term, we can see a potential where recycling begins to impact and lower the cost of these materials. But at the moment, we are a relatively small part of the overall ecosystem, we are really unlocking the value of batteries and we are selling those materials at prices dictated by the market, which today are dictated by mining and refining, primarily. , we don't depend on anyone paying us a weight fee.

And, frankly, customers don't like that. They want to know that we are going to unlock the value of an equivalent moving mining company to produce similar materials; They would struggle to produce the same levels of margin that we can offer as a recycling company. So not only is there good sentiment and an ESG story behind what lifecycles do, but from a business perspective, it's highly profitable. This couldn't be more profitable than mining, you know, mining has fluctuations and a complete dependence on the cost of raw materials, which makes it a really different type of industry. You know, we're more focused on manufacturing and conversion cost, but you know, our business goes up and down with the commodity price or in mind.

This totally related to that, battery recycling is going to be an absolutely crucial component to this. The entire supply chain of the 21st century, here we have a couple of problems and challenges to attack. One is to get rid of the volume of end-of-life batteries that will come from electric vehicles. And that's really going to take off starting in 2025. The second thing is, what metals can be extracted from those batteries? And what they can become and what industries can use them over and over again, and that's a secondary problem. And right now there are many pioneers dealing with recycling, it's going to be a big industry.

Jeniece Pettitt: Stroble says the plan is to continue improving recycling technology and create a completely closed-loop system. So recycling can surpass geological mining. Unknown: We are, you know, actively, you know, setting up facilities and looking for locations in Europe, you know, maybe Norway, maybe Germany, and also some smaller facilities, you know, in the other corners of the US ., maybe Texas, maybe somewhere in the Midwest, five to seven years from now, we need to be able to break down the materials in Evie's space at the rate they are manufactured today. . So if there are, you know, let's say, to make rough calculations, 1000 cars are produced per day.

And there's more to it than that: we need to be able to recover and recycle at the same rate when those products reach the end of their useful life. And that's just in the Eevee space, almost everything has a battery these days. So a lot of that technology is lithium-ion cells, and it all has value that needs to be recovered and returned to the supply chain. Jeniece Pettitt: And good recycling actually replaced mining one day. Unknown: With battery recycling, you will never get enough lithium from those batteries, and in the right quality, to be reused in batteries.

That is a fundamental question for the industry that will change, especially with the demand profile constantly increasing. But the fact of the matter is that, today, it is cheaper to extract lithium than to recycle it from existing battery packs. So this is expected to continue for the next 10 years or so. Jeniece Pettitt: But still, it will be a very important part of making Evie and battery production more environmentally friendly. Unknown: Electric vehicle batteries will not end up in landfills. There are technologies available like ours, such as life cycles that are efficient, profitable, do not need subsidies and can do it like a failing and sustainably growing business.

Well, I think you know, about the perhaps distant future, when we are operating as a truly sustainable society and economy. You know, we need to productively deconstruct, you know, everything that we've built, you know, this is kind of the tip of the proverbial iceberg. We are currently recycling several gigawatt hours of energy storage per year. It seems like a large amount, but it is only maybe one or 2% of what is actually being built today. So if you look into the future you will see that in a few years we will have to operate on a scale 100 times larger than today, you know, this has to be solved, there is really no alternative.

You know, we can't just throw these batteries into the ocean or a landfill, you know, it just doesn't work. So, you know, I really enjoy working on slightly underserved problems that don't get enough attention where, you know, with a small team, we can affect a big industry in the future and we can invent some things that are going to work. have a dramatic impact on a large portion of the industry. The US government has a lithium supply problem and almost every major automaker has announced a transition to electric vehicles. Tesla delivered nearly 1 million cars in 2021, and a handful of Evie startups are finally launching new models.

To power all these electric vehicles we will need many lithium-ion batteries. The growth of electric vehicles will be responsible for more than 90% of lithium demand by 2030. But lithium is also found in our phones, computers, ceramics, lubricants, pharmaceuticals and is essential for solar and wind energy storage . Lithium is not actually a major component of battery cost, but it is like the blood of the body. It is the chemistry behind how lithium-ion batteries work. It remains the common denominator in all battery technologies, including those we are now looking at for next-generation batteries. The price of lithium is rising and establishing domestic lithium supply has become the modern version of oil security.

But today, the United States is far behind, since only 1% of the world's lithium is extracted and processed in that country. We have a lot and the challenge is whether we can produce what we need at an economical and competitive price. That's going to be difficult. I think from that point of view. We are going to be a net importer of lithium for our needs. This vital mineral in rechargeable batteries has earned the name white gold and continues to gain popularity. Several national lithium projects are being prepared. Here we have what some have described as the Saudi Arabia of lithium.

In the state of California, but they often face high upfront costs and opposition from environmentalists and locals. This is supposedly the largest lithium mine in the world. And we have to do this right. Coming to battery and electric cars doesn't seem green to me when you're destroying a beautiful mountain. This mine wants to operate for 40 years and destroy this area. CNBC explores how the United States fell behind in lithium production and whether it can ever catch up. More than 80% of the world's raw lithium is mined in Australia, Chile and China. China controls more than half of the world's lithium processing and refining and has three-quarters of the world's lithium-ion battery megafactories.

But until the 90s, the United States was the leader in lithium production, the lithium industry began in the United States and had a good track record for 50 years. So what happened? Lithium is not a scarce element, the United States has almost 8 million metric tons of lithium, placing it among the top five countries in the world. Bessemer City, North Carolina, which was the original production location in the US, was home to some of the first companies, which were Foot Mineral Company and Lithium Corporation of America. And those two companies had built their business producing lithium from spodumene.

Spodumene is a hard mineral containing lithium. But spodumene mining is not always the most profitable way to extract lithium. The challenge we have in the United States is that we do not have a high-quality lithium resource. And thus the concentration of lithium will be lower than that of traditional sources. And then it is more than likely that there will be more contaminants. That is why these contaminants must be eliminated. The other main way to extract lithium uses salty brine that is pumped from the ground. Compared to rock mining, evaporative brine extraction is quite cheap. Since much of the work of separating lithium is done by Mother Nature.

The challenge for US production was that the costs of producing it from the brine resource in Chile were much lower than the cost of producing it from spodumene. In the United States, lithium-ion batteries were invented here. Much of the technology that is being applied is licensed to companies abroad because we lost the infrastructure that we no longer have here. Around the same time that a huge lithium refining industry was growing in China, China was really the first place where Evie's revolution started to take off in a way that he hadn't in America. But now it is happening in Europe.

So the fact that a lot of the lithium conversion capacity is in China is just a result of the fact that they had to start making batteries five to ten years before the rest of us. On a per capita basis. I suspect we will be one of the largest users of lithium in the world, and frankly, shipping lithium to lithium carbonate that we make in the US and shipping it to China for further processing doesn't make any sense. We need to have that independent production. China is capable of doing things impressively, but they are not always our friends.

And if we were selling lithium batteries, that would change our ability to respond to climate change substantially. The Biden administration agrees and believes that securing domestic sources of lithium is vital to national security. Last June, the Administration released a plan to boost domestic lithium production and refining, as well as battery manufacturing, and set a domestic Evie sales target of 50% by 2030. But right now there is only one lithium in working mined in the USA in pico de plata. Nevada 85% of the lithium industry of the 2030s does not yet exist. Therefore, the next decade will see enormous growth in the lithium industry and battery materials supply chains in general.

Lithium exploration efforts are underway in the United States in Nevada, North Carolina, California and Arkansas, to name a few. Piedmont Lithium is working to reopen a former hard-rock lithium mine in the US about 25 miles from Charlotte, North Carolina. Piedmont signed an agreement in September 2020 to supply Tesla with lithium salts from its deposits. They're sending Piedmont stock soaring right now. The initial agreement says Piedmont will supply about a third of the planned 160,000 metric tons per year. spodumene Concentrate from its deposits in North Carolina, but the plan continues to be delayed due to permitting and concerns from its neighbors in its heyday from 1955 to the 1980s.

That mind supplied most of the lithium in the US. before overseas supplies became cheaper. In the 1990s, two Arkansas companies Galvanic Energy and Standard Lithium are working on extracting lithium from underground brine deposits. A similar Brian project is underway in California, Salton Sea. Lithium in California is found in an unusual form. It's in this superheated geothermal brine, which lies beneath the surface of the Salton Sea. And today, there are about a dozen geothermal power plants that generate electricity by cycling that superheated brine, bringing it to the surface and generating steam.to create electricity and then pumping it back into the ground.

So this process basically pulls the lithium out of the brine that covers it, and then the brine is pumped back into the ground, differently than how lithium is produced. In other parts of the world. Nowadays, there are places like Chile and Argentina, where they have huge evaporation ponds, which leave a pretty big footprint. So this really is the greenest way to produce lithium there is. The Salton Sea was once a hot tourist destination, but experts say it has become the worst environmental and public health crisis in modern history. The lake has been contaminated by toxic runoff from area farms for decades and is shrinking rapidly.

The receding coastline is exposing nearby communities to toxic fumes and killing wildlife. The state of California is attempting to transform the area, calling it Lithium Valley, and hopes to generate the revenue needed to restore the lake. The Salton Sea lithium resource is really radically different than the other formations you've been reading about in places like Nevada or Australia. This is not mining. This is lithium that exists in a fluid in the superheated and very mineral-rich brine, which today circulates through these geothermal power plants. So it's a very, very low-impact, closed-loop process. Imperial Valley, California and Brisbane.

Controlled Thermal Resources based in Australia is one of the companies that is close to being able to produce lithium in the area. In the first stage, a 50-megawatt power plant will be operational in 2023, followed by a 20,000-tonne-per-year lithium hydroxide facility to be delivered shortly after. Last summer, GM announced a multibillion-dollar investment in the controlled development of thermal resources in the Salton Sea and secured the first rights to buy domestically produced lithium for televisions. Controlled Thermal Resources expects delivery of lithium from the site in 2024. This product can be used here in real time as lithium hydroxide or as a battery product, it doesn't have to go ashore, we don't have to put it on a train. and put it on a ship, ship it and send it back.

So I think General Motors is a testament to their expertise in supply chain kings that they've been doing it forever. These products are produced with 100% green energy. It's interesting, a great long-term relationship. About 700 miles north of the Salton Sea project, a

massive

open pit lithium mine is in the works. The Thakker Pass lithium deposit is located within an extinct supervolcano and is one of the largest lithium reserves in the United States. Canada-based Lithium Americas is behind the project and its stocks are up 740%. As of early 2020, it is a different type of lithium resource. Mother Nature deposited this very thick layer of sediment at the bottom of this ancient lake, which was once there and was drained.

We can reverse Mother Nature by putting that water back into suspension, which naturally dissociates under very low energy conditions. And we can separate lithium by particle size. That project is in the final permitting phase and will produce on the order of 60,000 tonnes of lithium carbonate equivalent per year compared to what Australia produces, which is approximately more than 400,000 tonnes of lithium carbonate equivalent. So, you know, 10 to 15% of what the entire country of Australia shows, it's a big problem. The site will handle both lithium extraction and refining, eliminating the need for a complex supply chain. If you take what's happening in Australia and China, putting everything in one place, that's exactly what we're aiming for and what the plan is really designed to do and what we'll have at the end of the day is high quality lithium chemicals that can go directly to a battery or cathode manufacturer that can be incorporated directly into the supply chain.

Our goal is to go into production sometime in 2024. CNBC took a look inside the US lithium R&D lab at the Reno Nevada backpass project in particular, although it's a big asset today, according to our research on man, it would be by 2025. We could It takes a little more than half of what is needed in the US just for batteries. But no one wants a mine in their backyard. And just like other proposed mines in the United States. The project has been plagued by lawsuits and opposition from some Native American tribes and local environmentalists. The initial lawsuits were dismissed, but some did not give up and even camped on the property in protest.

I found out that the Bureau of Land Management wanted to destroy a beautiful mountain pass for the world's largest open pit lithium mine. And together with my best friend Max Wilbert, I set up camp in the exact place where the open pit mine would be. My original goal was to raise awareness about how these lithium mines would destroy some of the last remaining beautiful places in the United States, we hope you understand that this backup pass in many areas is like a graveyard for us. We did not have cemeteries in the past, but the place where our people rest in their eternal life should not be disturbed.

Think about if someone went and dug up your ancestors and decided to move them and bury them somewhere else. That was the main reason we got involved in litigation was the lack of consultation. As you know, there were 27 tribes in the state of Nevada. And there were only three tribes, I think they actually had consultations, if you want to call it that, receiving letters, I guess from the BLM about this project. And then we discovered that it was inappropriate. Lithium America said it has been working with local tribes to participate in the cultural assessment of the land and has received overwhelming support from locals.

We have members of lithium in America looking at a team in the communities, explaining what it all means. So people really understand that we've been trying to be as respectful and careful as possible. But also, as I said before, wanting to know what interests them, what things are needed for the community, so that we can be good neighbors, the initial life of the mine is more than 40 years in the processing plants. So these may be multi-generational jobs and an area that doesn't have these opportunities today and really never has. Therefore, it takes a multi-pronged effort to try to address any of the questions from all sides;

Every resource development project will face resistance from the people who live near it. The impacts on the territorial footprint of an extraction project always fall disproportionately on the local population. And that's how it has always been for thousands of years. And always will be. Well, that's the same kind of thing, it's the old problem that's not in my backyard. And there are times when that is totally appropriate. And I think in the moments where you know, you have to evaluate the greater good. And I think the biggest good or approved effect is to produce lithium, this is a big mine, make no mistake about it, there will be unrest on the ground in this mine.

From every aspect I have seen, compared to a gold mine of the same size, this impact will be much smaller. Like fossil fuels, lithium mining is an extractive industry that inevitably has impacts on the environment, from carbon emissions to local wildlife populations. If there is a threat to a species, due to a lithium mine, it will pale in comparison to the type of species extinction we will see in the coming years. If we don't get climate change under control, CO2 emissions from lithium chemical manufacturing may be missing us in a number of different ways if we don't pay close attention to how we build these new mines because we are going to have to build a lot of new mines to meet demand for lithium chemicals from the battery industry.

An Oakland, California-based startup, Lilac Solutions, aims to make lithium extraction less water-intensive and more sustainable. Then there are companies like Red Wood Materials and Lifecycle that recycle spent batteries and recover lithium and other metals for reuse. It is possible to decarbonize the energy that powers an electric vehicle, it is even possible to decarbonize the extraction and processing of battery materials, which are used to make batteries, and even store that energy in the electric vehicle battery. It will never be possible to decarbonize the fossil fuels used to power internal combustion engines. It's important as we grow this industry to be in the US or in countries that share similar values ​​because the danger of rapid growth like this is that things are done incorrectly, whether it's environmental standards, labor standards, respect for local communities. , we have laws and processes here in the US and in like-minded countries to prevent things like this from happening.

I think that will be an important aspect as this industry grows. Magdalena Petrova: If you've been following the electric vehicle market, you've probably heard a lot about cobalt, cobalt, cobalt, cobalt. Recent Cobots have received so much attention because it is one of the metals used to produce lithium. Ion batteries that power everything from laptops and cell phones to electric vehicles. The amount of different metals found in the Evie battery can vary depending on the type of battery. In car models, a typical lithium-ion battery can contain about 14 kilograms of cobalt. Cobalt has been a popular choice for batteries because the metal increases battery life and energy density, which in the case of electric vehicles means autonomy by keeping the battery structure stable while charging and discharging. continually.

But cobalt, typically extracted as a byproduct of nickel and copper mining, is one of the most expensive materials in a battery. While battery prices have fallen by 9% between 2010 and 2020, they still represent around 30% of the total cost of an electric vehicle. For an unknown vehicle: typical with a 780 kilowatt hour battery today, we estimate that the cobalt content alone costs about $800 in that battery, so it's not insignificant for mass electrification to occur. There are many opinions about the need to eliminate cobalt or reduce it to a minimum. Magdalena Petrova: Cobalt mining is also linked to human rights abuses and child labor.

These are some of the reasons why battery makers like Samsung and Panasonic, and automakers like Tesla and VW, along with several startups, are working to eliminate cobalt completely. Elon Musk has been talking about removing cobalt from Tesla batteries since 2018. And some of the companies that make vehicles in China are already using cobalt-free technology. But while different cobalt-free technologies are being tested, each has presented its own challenges. Unknown: Cobalt helps prevent battery fires. So if you remove it, you'll have to replace it with something else that maintains safety and longevity. Magdalena Petrova: Evie sales worldwide are expected to skyrocket from 3 million in 2020 to 66 million in 2040.

And with demand for electric vehicles increasing, demand for battery raw materials such as cobalt outbid. Unknown: If we compare the demand and supply of cobalt, from a geological point of view there is enough raw material in the earth's crust. Same thing with lithium, same old with nickel, where manganese is just for the production and processing of that material, like all other materials, it's nowhere near the level needed to sustain the level of demand. Magdalena Petrova: One way to alleviate demand for new cobalt mines is to recycle the cobalt found in old batteries. Companies like Redwood Materials in Nevada and Canada have sprung up to do this, but some types of recycling have disadvantages.

Unknown: Cobalt is currently recycled, but the process in which it is recycled is very harmful to the environment. You take all the old batteries and melt them down at temperatures above 1000 C, and the cobalt can be extracted. The reason this is done is because of how expensive cobalt is. Magdalena Petrova: Over the past four years, the average cost of cobalt was higher than the cost of all other battery metals combined. The price of cobalt has also historically been very volatile. Some of this volatility may be due to the fact that cobalt is typically produced as a byproduct of nickel and copper mining and is therefore tied to demand and price fluctuations for those metals.

Cobalt mining and refining is also geographically limited. Unknown: Most of the world's battery cobalt reserves are located in the Democratic Republic of the Congo and cobalt mining is associated with human rights abuses.human rights and child labor, so Magdalena Petrova: continue. Chinese investors control about 70% of Congo's mining sector. China also has more than 80% control of the cobalt refining industry, where the raw material is converted into commercial-grade cobalt metals suitable for use in electric vehicles. In light of the trade war between the United States and China, cobalt supply is in a precarious position for American manufacturers. Unknown: Louisa China has truly mastered and fully embraced the lithium-ion battery revolution.

Magdalena Petrova: To understand the importance of cobalt and batteries, we have to talk about battery chemistry. A typical lithium-ion battery has three main components. The negative end is known as the anode and the positive end is known as the cathode. The two electrodes are separated by electrolyte, a substance that conducts an electric current. The movement of positively charged lithium ions from the anode, through the electrolyte, and to the cathode creates free electrons, which travel through an external circuit and carry the electrical current that powers the device. When a battery is charged, this chemical reaction is reversed.

The different types of lithium-ion batteries are distinguished by the metals that make up the cathode. This is where cobalt is found. Today, the market is dominated by NMC batteries whose cathodes contain nickel, manganese and cobalt. Depending on the proportions of each metal in the cathode, which are represented by the numbers following the names of the cathodes, you will get different properties in the battery. For example, increasing nickel in the cathode increases energy density and therefore anger, but it also makes batteries more unstable. This is because adding more nickel generally means decreasing the amount of cobalt, which prevents cathode corrosion that can lead to battery fires, while battery and automobile manufacturers try to optimize battery chemistry at performance parameters. cost, life cycle safety and range, some cobalt-free batteries already do this. exist.

But there are unknown trade-offs: There is already a viable cobalt-free battery, and it's lithium iron phosphate, or LFP. But the main disadvantage of the LFP is the low energy density. And so the driving range can see lithium ion phosphate right now on the buses, so things don't need to go that far and have a regular routine. Well, as consumers, we want cars that can compete head-to-head with internal combustion engines. And those cutters that do not contain cobalt at this time cannot offer it. Magdalena Petrova: The production of lithium iron phosphate or LFP batteries is dominated by Chinese companies such as BYD and the contemporary Amperex Technology Limited or CTL.

One reason is a long-standing licensing agreement that allowed Chinese manufacturers to make LFP batteries without paying a costly fee to the patent owners, as long as they sold the batteries within China. The last of these patents, owned by a Swiss-based consortium, expired in September 2021 in Europe and will expire in 2022. In the United States, this has opened the floodgates for major Western automakers to use battery chemicals at iron base. Unknown: US and European OEMs are adopting LFP in parallel to their high nickel batteries because it has great advantages over pine, nickel and cobalt based batteries. In particular, it is much cheaper, its component materials are much more available and abundant than nickel and cobalt, and it has greater longevity.

Lithium Magdalena Petrova: Iron phosphate batteries are also generally considered very safe as iron is a very stable element. Both Ford and Volkswagen have said they will offer vehicles with LFP batteries. Tesla already uses LFP batteries in Model Three Model Y vehicles and manufacturers in China, and the company says it will now expand the use of LFP batteries to all of its entry-level Model Three and Model Y vehicles. Previously these cars used aluminum oxide, nickel, cobalt or NCA batteries, which Tesla will continue to use in its long-range versions. Unknown: Long range vehicles use a nickel based cathode and we use nickel because Nicholas has a higher energy density for our long range vehicles, but for our standard range vehicles and for stationary storage, I think all of that will carry over to iron cathodes, we are moving towards an iron-based chemistry that is finally at the point where it is competitive in range when combined with an efficient powertrain.

I believe that the vast majority of batteries in the future will be iron-based. Magdalena Petrova: Even Apple was reportedly in talks with Chinese LFP manufacturers to make batteries for its Ed car project, although those talks appear to have been put on hold. In an effort to reduce our dependence on foreign countries. The U.S. Department of Energy released a national plan in June to help guide investment to develop domestic lithium battery manufacturing and support increased research and development. Among its objectives. The Plan calls for removing cobalt from lithium batteries by 2032. Startups Sparks and US-based Tech Power say they can help, although the companies have yet to test their technologies in electric vehicles.

Sparks was founded in 2019 by Sanjeev Malhotra, a former U.S. Department of Energy executive. The Tennessee-based company has 15 employees and was born from a partnership with the Department of Energy's Oak Ridge National Laboratory. Spark says it has raised more than $10 million in grants from DOD, the California Energy Commission and several early customers to bring its cobalt-free lithium-ion battery to market. Unknown: That was one of the key triggers for starting the spark: addressing the supply chain issues for predominantly cobalt lithium-ion batteries and making ourselves independent of any supply chain that relies on China. Magdalena Petrova: Sparks is still in the testing phase.

The company says it will initially focus on supplying batteries for large transportation vehicles such as buses and trucks, off-road vehicles such as agricultural and industrial equipment, and energy storage solutions. Spark says it is also in talks with two automakers and will begin testing their batteries in its vehicles next year. Sparks, this technology focuses on replacing cobalt and its cathode, which also contains nickel and aluminum, with iron. The company says it considered other metals, but chose iron because it is cheap, widely available in the U.S. and chemically stable, making it safe to use. Mahapatra says it generates sparks in its battery's cathode material that the company calls NFA.

For nickel iron, aluminum improves the chemistry of iron-based and cobalt-containing cathodes. Unknown: The energy density of the cell using our cobalt-free cathode is twice that of the LFP. And in terms of cost, we are almost 30% lower than that of LFP. However, at the same time, this cobalt-free cathode meets and exceeds the performance that would be seen in a traditional cobalt cathode in terms of energy density, which is the energy that can be packed into a certain weight or volume. with the life expectancy of traditional lithium-ion battery. And in terms of cost, it is almost 35-40% lower than the cost of a typical lithium-ion battery.

Magdalena Petrova: To create this NFA cathode material, Sparks licensed six patents from Oak Ridge National Laboratory, Unknown: The main focus of these six patents is the design of the material being used by removing cobalt and replacing it with Arren. Second, the process to make the cobalt-free cathode much more stable. And the third is the manufacturing process. Then there is a patented one that essentially reduces manufacturing time because manufacturing time translates into cost. Magdalena Petrova: Spark says its cobalt-free batteries can be produced using the same equipment used to make conventional cobalt-containing batteries. Unknown: We are currently looking at about 2 million square feet where we will install manufacturing for these three parts of the value chain: the cathode material, the electrode and the cells.

And essentially, we have identified a couple of scalar partners and, through some strategic partnership, we are looking to have manufacturing of these three components starting next year. Magdalena Petrova: Like sparks, Houston-based Tech's Power was founded in 2019. The startup emerged from research led by the Yarmulke Mun Theorem at the University of Texas at Austin. In 2020, the research team published a paper in which they tested a cathode made of manganese, aluminum, and 89% nickel and found that their cobalt-free material performed very well compared to cobalt-containing cathodes. Unknown: There is no visible drawback with the performance of our cobalt-free material compared to the performance of the cobalt-containing material, the life cycle and how quickly it can be loaded and unloaded, and safety.

Magdalena Petrova: This cathode composition was the starting point for the material that Tex Power is trying to commercialize. Unknown: o commercialize our nickel-manganese-aluminum based chemistry, which does not contain cobalt, has a higher energy density than current lithium-ion battery cathodes, and operates stably and safely. Magdalena Petrova: worldwide. The most widely used cathode material today is NMC. From six to two this cathode is made up of 60% nickel and 20%. Both manganese and cobalt technologies say they can increase the energy density of their cathode material by replacing cobalt with larger amounts of nickel. But the rise of nickel at the cathode has traditionally brought its own challenges.

Unknown: Nickel is very reactive with the electrolyte. Therefore, cobalt is typically added to minimize degradation of the cathode structure and then other elements such as manganese are also added to improve thermal stability. So all of these others are LMS that are usually added to make up for nickel deficiencies. Magdalena Petrova: Texas Power says it is solving this instability problem by adding aluminum and manganese, as well as a series of proprietary substances known as dopa. The result, according to the company, is a cathode material that is 20% cheaper than conventional six-to-two cathode NMC. But producing this material is complicated, it is unknown: the decrease of cobalt in the material makes production difficult and it will also be difficult to obtain consistent properties from batch to batch.

So the process that Tech's power is developing is to minimize that kind of concern, so that when tons and tons of material are produced, the properties are consistent from batch to batch. Magdalena Petrova: While cobalt is generally easy to synthesize into a cathode material. Getting the right reaction using nickel requires close monitoring and control of factors such as temperature and oxygen flow and pressure. It took years for the UT Austin team to fine-tune the production process for its nickel-manganese aluminum cathode material. Tex power will use the same process to produce its cathode material at scale. Unknown: Our production technique is immediately scalable.

It is the same production technique that they use industrially. Therefore, next year we will build a production line for hundreds of kilos of material per year. Magdalena Petrova: The taxpayer manufactures only the cathode material and plans to partner with other companies to produce battery cells. Unknown: We have a contract with the Department of Defense along with 24 of them where they are producing a high energy cell with lithium metal anode and our higher energy cathode material. And we are reaching energy densities greater than 500 watt hours per kilogram, about double that of today's commercial lithium-ion batteries. Magdalena Petrova: Still, Erickson says it may be some time before Tex Powers cathode materials are used in electric vehicles, although he is in talks with several automakers.

Unknown: Automakers have, you know, one or several years of safety testing and things like that, that they will go through before they put it in a commercial vehicle, but you know already at the end of 2023, we could have some prototypes and electric vehicles. Magdalena Petrova: Although the performance of cobalt-free batteries continues to improve, experts believe that the future Evie battery market will consist of a number of different battery chemistries for different applications. Unknown: we estimate that it will represent around 20% of the global vehicle marketbattery electric vehicles by 2030. Adopted by these new cobalt-free chemicals, we expect the type of entry-level low-cost vehicles, for example, the Tesla Model Three standard range model, to be LFP or lithium iron phosphate, followed then by these cobalt-free materials that will represent the majority of the primary volume vehicles.

And then at the top end of the range will be high-nickel batteries, which will represent high-end, high-performance vehicles. Magdalena Petrova: Other advances in batteries could help improve cobalt-free chemistry. Automotive companies Hyundai and Kia announced that they are working with us on vector energy to replace liquid electrolyte batteries with solid-state electrolyte batteries. This would provide batteries and even greater range and additional safety benefits. Unknown: With these cobalt-free batteries. They operate at a higher voltage and that is one of the reasons they are more susceptible to battery fires. With solid state batteries. It's like solid state hard drives.

It is a solid electrolyte, is capable of withstanding higher voltages and can potentially offer greater autonomy, which is the most important thing for the consumer, but also greater safety and faster charging times. We just received another grant from the California Energy Commission for next-generation batteries, which are basically solid-state batteries that use our cobalt-free cathode, which has the potential to double the energy density that we have today. Basically, it is almost four times greater than that of the LFP. Magdalena Petrova: Meanwhile, others are focusing on improving Unknown batteries: some companies, like for example BYD, or something like that, offset the advantages of LFP with certain things like what we call cell to pack technology, where we eliminate By dividing the battery pack in modules, we just have that the whole battery pack consists of several cells together and that gives it a better range advantage.

Magdalena Petrova: But regardless of the advances we make, experts emphasize that the technology must be widely accessible. Unknown: When you think about the chemistry of cobalt-free cathodes. What we hope to have are batteries that are more accessible to everyone, which will make it easier for developing countries to adopt many of the technologies that we are trying to develop without fear of cost and without fear of performance. The Industrial Revolution left many people behind, because we cannot afford for this renewable energy revolution to leave anyone behind.