WEBVTT 1 00:00:00.400 --> 00:00:07.400 You're listening to Redefining Energy. Your co hosts from Berlin Girard Reid and from 2 00:00:07.480 --> 00:00:12.400 London Laurence Segalem. Today on Redefining Energy, we're going to talk about battery 3 00:00:12.439 --> 00:00:17.760 chemistries Lauren. Yeah, and there's a lot of alphabet soup sure is NMC, 4 00:00:18.160 --> 00:00:22.079 LFP, go on and on and on NAD Yeah, yeah, absolutely 5 00:00:22.160 --> 00:00:27.320 yea. But first of all, from our partner, Equina Capital is a 6 00:00:27.359 --> 00:00:33.000 sustainable investment company headquartered in Hamburg, Germany. Equia Capital Investment realizes such as 7 00:00:33.039 --> 00:00:38.039 clean energy, sustainable infrastructure, energy efficiency and growth private equity on behalf of 8 00:00:38.039 --> 00:00:42.000 its clients. Yes, job, this is not a single day where we 9 00:00:42.320 --> 00:00:49.320 see new accronemes and we get absolutely totally lost and there are ka factories announced 10 00:00:49.799 --> 00:00:53.759 all over the place. Now, we did a few months ago it is 11 00:00:53.799 --> 00:00:59.640 at ninety two who was extremely popular with Simon Moss, where we talked about 12 00:01:00.200 --> 00:01:06.400 everything that's upstream, the gear factories and now we're gonna open the doors of 13 00:01:06.519 --> 00:01:10.920 the gear factories and see what they are producing. Absolutely because at the end 14 00:01:10.920 --> 00:01:15.280 of the day, the real technology is in and around the chemistrtion for our 15 00:01:15.280 --> 00:01:21.159 listeners, The Global ev says this year would reach fourteen million, So that's 16 00:01:21.480 --> 00:01:26.680 up thirty five percent. Y're on, yea. But the energy stationized storage 17 00:01:26.760 --> 00:01:33.120 it's even more spectacular, screwing at fifty percent yea. It means that as 18 00:01:33.359 --> 00:01:38.640 stationarized storage started, they just put EV batteries into stationized storage, which created 19 00:01:38.920 --> 00:01:44.640 a lot of problem and now we're going to start discussing a possible divergence of 20 00:01:44.799 --> 00:01:48.799 those two markets. Absolutely. Well, well, it's time to bring our 21 00:01:48.840 --> 00:01:55.680 guests. Carmack Holoid is Managing director at Electrious Energy Hong Kong base Litia, 22 00:01:55.719 --> 00:02:02.159 my own technology and EV advisory business and carmack twenty year career as Litchar my 23 00:02:02.200 --> 00:02:07.240 own industry spect He is, in my opinion, one of the most knowledgeable 24 00:02:07.639 --> 00:02:12.879 guy on that topic and pushes his violence. Guy. Let's bring him on. 25 00:02:13.840 --> 00:02:16.919 Komack, welcome to the show. Thank you, Lauren. Lauren, 26 00:02:17.000 --> 00:02:22.759 could you pronounce Komack second name please for me rather than just as yes. 27 00:02:22.879 --> 00:02:27.599 I could try, But is that rich like you? So it's like it's 28 00:02:27.639 --> 00:02:32.599 two against one this morning, Karmack. You'll have to give it to him, 29 00:02:32.599 --> 00:02:39.039 go on, okay, which is absolutely not what job told me yesterday. 30 00:02:39.280 --> 00:02:42.319 No, because I gave you the English person of it, which is 31 00:02:42.319 --> 00:02:46.639 alterous because I wanted you to say that smaller but you didn't. You know, 32 00:02:49.280 --> 00:02:52.039 very good, Laura, very good. Okay, let's dive in. 33 00:02:52.199 --> 00:02:55.719 We brought you in because you know opinion, you're one of the best experts 34 00:02:55.759 --> 00:03:00.280 in batteries, but whisky history. You're based in Hong Kong. You go 35 00:03:00.680 --> 00:03:05.039 visit the factory, you see all those suppliers going on. It's an absolute 36 00:03:05.039 --> 00:03:08.919 booming market. So my first question is what's the state of play where at 37 00:03:08.960 --> 00:03:14.159 the middle of twar twenty three, you know what big trends do you see? 38 00:03:14.360 --> 00:03:16.159 Oh my god, it's changing month to month, Laurent. I don't 39 00:03:16.199 --> 00:03:21.199 think this time last year we'll be talking about sodium mine for example, big 40 00:03:21.240 --> 00:03:27.400 trend coming up out in China. We're talking about China extending the EV subsidies. 41 00:03:27.479 --> 00:03:30.560 At the end of last year they revoked the subsidies and we didn't see 42 00:03:30.560 --> 00:03:34.120 it coming. But in response to some of the policy moves in Europe and 43 00:03:34.280 --> 00:03:38.639 US, China had to keep the momentum going in their EV industry. Yeah, 44 00:03:38.719 --> 00:03:40.800 months and month are even week to week in the battery industries. EV 45 00:03:40.879 --> 00:03:47.960 industry SS major news, new factories, new technologies and new applications. I 46 00:03:49.000 --> 00:03:52.280 don't know where to start. Really, Can we start with evs? Because 47 00:03:52.319 --> 00:03:55.120 if I look at my AVA, my second EV Yeah, and what's happened 48 00:03:55.240 --> 00:04:00.840 is I've seen it doubling in the range of these vehicle US and probably a 49 00:04:00.879 --> 00:04:04.400 half and at the cost you're now what sort of four hundred kilometer range? 50 00:04:04.560 --> 00:04:08.759 I'd love to you de tell me when are we all going to be driving 51 00:04:08.800 --> 00:04:11.840 cars that have a range of a thousand kilometers? But if you move to 52 00:04:11.919 --> 00:04:16.439 China tomorrow and by a GAC apparently you can charge it in eight minutes eighty 53 00:04:16.439 --> 00:04:21.839 percent and drive a thousand kilometers. What's really big trend interesting laurent As, 54 00:04:23.000 --> 00:04:25.959 and it kind of comes up naturally is China was going to be seen as 55 00:04:26.000 --> 00:04:30.399 a battery export the rest of we are going to compete against China battery production. 56 00:04:30.439 --> 00:04:34.399 But now they're ev exporter and the amount of EVS day, export, 57 00:04:34.480 --> 00:04:41.040 months and month is growing doubling almost quarter over quarter. Finding new markets byds 58 00:04:41.120 --> 00:04:45.240 here now for sale in Europe. So they're quite aggressive going into international markets 59 00:04:45.360 --> 00:04:47.920 and they're being well accepted. The new level of competitive is on the automotive 60 00:04:48.000 --> 00:04:53.480 level. Now the established oms will have to not only team of battery makers, 61 00:04:53.480 --> 00:04:59.399 but Chinese EV makers. And do you think that BYD is virtually integrated, 62 00:04:59.519 --> 00:05:02.639 But you know you've got some other which are pure battery players like Kettle. 63 00:05:03.319 --> 00:05:06.240 Do you think their long term business model is also going to make cars 64 00:05:06.360 --> 00:05:13.600 or buy OEMs or continue to just DELIVERO batteries. Yeah, they've already tried, 65 00:05:13.639 --> 00:05:15.399 so they kind of late to the party. They're missed the boat c 66 00:05:15.600 --> 00:05:19.199 ATL. They have invested in a number of car companies, not just EV 67 00:05:19.279 --> 00:05:25.920 companies that established Chinese care companies that Changan CTL over twenty five percent of that 68 00:05:26.000 --> 00:05:30.480 company now and have developed with Changan a veto. I think the NAMEBV brand 69 00:05:30.600 --> 00:05:33.360 is so you've got the overall automotive brand. And then they split down subsidiaries. 70 00:05:33.399 --> 00:05:36.759 So they're trying to get into the market follow what BYD down, But 71 00:05:38.079 --> 00:05:42.600 BYD was more natural progression. They built ICs as well in the beginning, 72 00:05:42.839 --> 00:05:47.160 the transferred quickly pivoted to evs and to build their own batteries now BYD or 73 00:05:47.160 --> 00:05:51.600 and lithium mining as well. It is an avalanche of vertical integration going on. 74 00:05:51.759 --> 00:05:57.759 But they definitely by the's best positioned and by top EV seller in China. 75 00:05:57.959 --> 00:06:01.040 Second globally. Not sure cetail be able to catch them with their recent 76 00:06:01.079 --> 00:06:04.839 investments. Com Can I ask you a little bit about the Chinese automobile market 77 00:06:04.839 --> 00:06:09.680 there, because it has been for years the Volkswagen was the biggest player in 78 00:06:09.720 --> 00:06:13.279 the market, and you saw on the last quarter that's what's now happened is 79 00:06:13.319 --> 00:06:16.680 BYD has become the biggest player and Volkswagen is in trouble. But actually, 80 00:06:16.800 --> 00:06:19.879 what's for me, it is really interesting, is Volkswagen seems to be and 81 00:06:20.000 --> 00:06:26.240 the conventional automobile manufaction across the Western world seemed to be technologically behind. Now 82 00:06:26.360 --> 00:06:29.480 the Chinese EV guys, and I'm sort of going, how can this happen? 83 00:06:29.560 --> 00:06:32.519 How can you be Volkswagen looking at this. You're in that care market 84 00:06:32.519 --> 00:06:38.079 here, number one, your senior competitors. I think guys just been sleeping 85 00:06:38.439 --> 00:06:43.240 or am I reading too much into what's going on in the market, they've 86 00:06:43.240 --> 00:06:46.600 been sleeping. I think we all remember the data Volkswagen stepped into the EV 87 00:06:46.720 --> 00:06:49.279 business. I mean, that's too long ago, and now they're all in. 88 00:06:49.600 --> 00:06:53.920 I'm in this industry about fifteen years, only five years years ago. 89 00:06:54.000 --> 00:06:57.000 Investors are asking me our EV is really gonna be saying it's really gonna be 90 00:06:57.040 --> 00:07:00.360 a market for evs, and just so much has change. But then in 91 00:07:00.480 --> 00:07:05.079 China Volkswagen business is a little different to their global operations. They don't compete 92 00:07:05.120 --> 00:07:09.399 on the EV level. It's molly I see. You know, every taxi 93 00:07:09.439 --> 00:07:15.240 in China was or is Volkswagen Jetta of some description or Santana I think the 94 00:07:15.279 --> 00:07:18.639 brand there is, and they had an opportunity to basically convert the entire Chinese 95 00:07:18.680 --> 00:07:23.680 taxi fleet to evs. And that's what BYD did in Shenzen, all the 96 00:07:23.720 --> 00:07:29.519 taxis in Shenzen or by D evs, and just outside Shenzen they have massive 97 00:07:30.199 --> 00:07:33.560 charging I don't know if you describe in stations or ultra parks, just parking 98 00:07:33.600 --> 00:07:39.040 lots just with thousands of taxis charging. And they developed that infrastructure, you 99 00:07:39.079 --> 00:07:42.720 know, ten years ago. If we take a step back to kiking about 100 00:07:42.720 --> 00:07:46.079 the EV market, So last year to twenty two was ten million. This 101 00:07:46.160 --> 00:07:51.040 year the predictions are fourteen million, and of course if you look at the 102 00:07:51.120 --> 00:07:55.079 curve they make any sense, you know, we're going to go to twenty 103 00:07:55.639 --> 00:07:58.079 or something. Of course, depending on the market. I mean you get 104 00:07:58.120 --> 00:08:01.480 no way on one side, and probably make it cool on the others. 105 00:08:01.959 --> 00:08:07.279 But you see it as a trend that really can be stopped. Quarter of 106 00:08:07.319 --> 00:08:11.399 a quarter EV sales are down twenty twenty three. There's many factors that can 107 00:08:11.399 --> 00:08:13.639 slow it down, but it can't be stopped. The big stumbling block GAG 108 00:08:13.759 --> 00:08:18.879 Page one twenty twenty three in China was the policies, the subsidy extensions which 109 00:08:18.920 --> 00:08:22.279 are coming in again. China and the rest of the world needs to change 110 00:08:22.319 --> 00:08:26.160 from government support to market consumer driven. And I thought we were at the 111 00:08:26.160 --> 00:08:31.639 stage of consumer driven, but these heavy subsidies and incentives in the US have 112 00:08:31.799 --> 00:08:35.600 changed the whole market dynamics again, throwing a bit of a spanner in the 113 00:08:35.679 --> 00:08:39.559 works. Because Europe EV sails it down as well. Penetration is kind of 114 00:08:39.840 --> 00:08:43.399 state static because OEM's and many players in the battery supply chain don't know where 115 00:08:43.399 --> 00:08:48.080 to go better to do business in US get a lot of the tax incentives. 116 00:08:48.159 --> 00:08:50.879 Europe is still chart and a stick. So can we just talk a 117 00:08:50.919 --> 00:08:54.159 little bit about the future of batteries and how you see it, who's the 118 00:08:54.200 --> 00:08:58.639 winners, who the losers, what chemistries are are there, etc. Good 119 00:08:58.720 --> 00:09:01.120 question, and a lot of people want to know that answer. Sure, 120 00:09:01.919 --> 00:09:07.919 I'm of the opinion lithium mine is here for the next thirty forty fifty years 121 00:09:07.960 --> 00:09:11.679 at least. So lead acid is one hundred and twenty years old, even 122 00:09:11.679 --> 00:09:16.080 older, but in industrially used that lithium mine has gone from lab to where 123 00:09:16.080 --> 00:09:20.000 we are today in about forty years. After forty years, we're just really 124 00:09:20.000 --> 00:09:26.879 applying it industrially and finding perfect applications for energy storage EVS. And I just 125 00:09:26.879 --> 00:09:31.159 don't see any reason to develop a new battery technology, not that there's any 126 00:09:31.159 --> 00:09:35.960 out there that can possibly compete with litimine because the difficulties we have setting up 127 00:09:35.039 --> 00:09:39.879 litimine factories, supply chains, mining raw materials. It will be the same 128 00:09:39.919 --> 00:09:43.639 for any other chemistry, but will be forty years behind. I like to 129 00:09:43.679 --> 00:09:48.519 go a bit into the chemistry of batteries. So everybody three four years ago 130 00:09:48.679 --> 00:09:54.600 was just talking about nickel cobald very dense batteries, and of course it's sold 131 00:09:54.759 --> 00:10:03.360 LFPs and you mentioned earlier sodiumyan. So how do you see the technological trend 132 00:10:03.080 --> 00:10:11.200 not only comparing those three niculfpn and sodium, but also inside each vertical how 133 00:10:11.279 --> 00:10:15.679 much the technology of each is improving. Because probably we'll talk about solid state 134 00:10:15.840 --> 00:10:20.799 or not. But I'm interested in the comparison of the three parallel chemistry and 135 00:10:20.039 --> 00:10:24.519 what's happening inside each chemistry. I'm in the view that we need to pick 136 00:10:24.559 --> 00:10:28.759 a chemistry, are a few chemistries and go with it so we can establish 137 00:10:28.759 --> 00:10:35.279 the supply chain scale quickly. The constant reinventing of CATO chemistry is see nickel 138 00:10:35.320 --> 00:10:41.879 manganese cobalt are switching to little manganese oxide LMO or switching to cobalt free, 139 00:10:41.919 --> 00:10:45.559 which all have different reasons behind it. But if we have too many multiples 140 00:10:45.639 --> 00:10:50.240 of NMC chemistries, then the supply chains just become longer, they become more 141 00:10:50.240 --> 00:10:54.840 complex. What the EU is looking for standardization and that will help along the 142 00:10:54.879 --> 00:10:58.840 whole supply chain. Basically, if you can standardize the chemistry, the batteries, 143 00:10:58.039 --> 00:11:01.960 the battery pack, then we can come to circularity more and have a 144 00:11:03.000 --> 00:11:07.240 more circular economy where it's much easier to recycle these materials. When you have 145 00:11:07.360 --> 00:11:11.759 complex supply streams into recycling space, efficiencies drop, recovery rates drop, things 146 00:11:11.759 --> 00:11:16.080 fall through the cracks. So I'm of the view that we need to settle 147 00:11:16.120 --> 00:11:20.399 on a particular chemistry go with that. For the next decade while we build 148 00:11:20.440 --> 00:11:26.879 out the industry. And in terms of why are we constantly upgrading are improving 149 00:11:26.919 --> 00:11:30.200 the chemistries, is that we're trying to get higher energy density cars so we 150 00:11:30.200 --> 00:11:33.399 can have longer range. But you know, we're more or less at the 151 00:11:33.399 --> 00:11:39.000 ceiling across all those chemistries in TRADITIONALLYTIAMNE battery, which is the liquid based electrolyte, 152 00:11:39.039 --> 00:11:41.240 and you mentioned the solid state which is totally different, but we're more 153 00:11:41.279 --> 00:11:43.879 or less at the ceiling for traditionally etim mine batteries. We're going to make 154 00:11:43.960 --> 00:11:50.440 in incremental improvements, as you've seen from Tesla, which is basically driving the 155 00:11:50.519 --> 00:11:54.440 industry even in terms of battery performance and CTL. It's the engineering now that's 156 00:11:54.440 --> 00:11:58.080 making the improvements. What's the cell format? Tesla come up with the forty 157 00:11:58.120 --> 00:12:01.519 six eighty format, which is about three times bigger than the twenty one seven 158 00:12:01.559 --> 00:12:05.799 hundred which are using now, and that's changed the whole industry. Now every 159 00:12:05.799 --> 00:12:09.519 other battery maker is trying to make forty six eighty. Then we see CTL 160 00:12:09.799 --> 00:12:13.000 doing cell to pack instead of cell to module, so reducing the weight. 161 00:12:13.039 --> 00:12:16.799 And then we have tested doing cell to chassis, so making a battery part 162 00:12:16.840 --> 00:12:20.360 of the infrastructure and support structure of the car. So the biggest provenance and 163 00:12:20.919 --> 00:12:26.279 energy density and range in the last eighteen months are coming from innovations and the 164 00:12:26.320 --> 00:12:30.080 engineering side, not on the chemistry side. Comic, can I just ask 165 00:12:30.200 --> 00:12:33.279 one question, which is just sitting around sodium mine. What's your thoughts on 166 00:12:33.320 --> 00:12:35.679 that sodium mine? You know, I'm trying to avoid it for the last 167 00:12:35.759 --> 00:12:41.039 year or so, hoping it would go away because you guys are in this 168 00:12:41.080 --> 00:12:43.200 space as well. It's just impossible to cover everything that you're doing, everything 169 00:12:43.240 --> 00:12:46.759 from batteries to the energy markets, oil and gas. You know, it's 170 00:12:48.600 --> 00:12:50.879 it's impossible to cover, and I was hoping it would go away. Fortunately 171 00:12:50.919 --> 00:12:54.600 it hasn't. Sodium mine chemistry is as old as lithium mine. In fact, 172 00:12:54.720 --> 00:12:58.559 the original inventor is good Enough, who just passed away recently, was 173 00:12:58.600 --> 00:13:03.879 also working on sodium and at the same time as he was developing lithium mine, 174 00:13:03.960 --> 00:13:07.960 so there were both chemistries are running concurrently forty years ago. The reason 175 00:13:07.080 --> 00:13:13.639 the focus shifted forwards lithium mine was the high energy density compared to sodium mine, 176 00:13:13.799 --> 00:13:18.840 and this application was the original research was focused on developing our batteries through 177 00:13:18.840 --> 00:13:22.639 the Defense Department who wanted extreme high energy density. But sodium mine chemistry is 178 00:13:22.679 --> 00:13:28.080 well understood, it has been commercialized in a very small scale. Sodium mine, 179 00:13:28.200 --> 00:13:31.080 in my opinion, will find a niche market. There is I think 180 00:13:31.279 --> 00:13:35.559 over one hundred and fifty gig in one hours of planned capacity in China, 181 00:13:35.799 --> 00:13:39.679 so China's again we might fall behind again. China is rolling out sodiu mine. 182 00:13:41.279 --> 00:13:45.679 Outside China there there's nothing happening. So if sodium mine is successful, 183 00:13:45.919 --> 00:13:50.679 then will be dependent on China for sodiomine batteries. Sodium mine chemicals the uses 184 00:13:50.759 --> 00:13:56.799 hard carbon on the anode side. They're developing layered oxides similar to NMC on 185 00:13:56.840 --> 00:14:00.559 the cathode side. We're still going to be beholding to China if we do 186 00:14:00.679 --> 00:14:03.759 roll out the sodium mine. The sodium mind basically happened overnight. Who was 187 00:14:03.799 --> 00:14:09.279 mentioned last year. Now there is two sodium mine evs available in China to 188 00:14:09.320 --> 00:14:15.080 buy today. Chinese government is really behind integrating sodium mine int the grid storage 189 00:14:15.080 --> 00:14:18.559 applications and that was originally seen as main outlet for a sodium mind. But 190 00:14:20.080 --> 00:14:24.960 THETL quite confident they can increase the energy density of sodium mine batteries. Or 191 00:14:24.080 --> 00:14:28.399 mixed sodium mine one of the future developments and batteries is normally you just have 192 00:14:28.440 --> 00:14:33.840 an NMC battery pack or LFP battery pack. So you blend the character sticks 193 00:14:33.879 --> 00:14:37.399 of both, you get a high energy density, you get better winter performance. 194 00:14:37.399 --> 00:14:41.639 So they're blending the batteries together, and so details already doing a mixing 195 00:14:41.639 --> 00:14:45.919 sodium mind batteries with NMC batteries. They could find a role in niche markets 196 00:14:45.919 --> 00:14:50.360 for sure. So you talk about dunct and of course density is very important 197 00:14:50.559 --> 00:14:56.039 because that will open new markets. If I understand on one of the measure 198 00:14:56.080 --> 00:15:01.879 of density is what a w pukuilo? Is that correct? What our per 199 00:15:01.919 --> 00:15:05.600 kilograms? Okay, so can you explain a bit where we are now in 200 00:15:05.759 --> 00:15:13.759 term of sodium LFP NMC solid state if ever exists, because of course that 201 00:15:13.879 --> 00:15:18.960 might open market like aviation or trucks or other things. So give us a 202 00:15:18.000 --> 00:15:24.000 bit of numbers here. We're doing really well in terms of increasing energy density 203 00:15:24.200 --> 00:15:28.159 of batteries. So the overall goal of research and development of lithiumine batteries is 204 00:15:28.159 --> 00:15:33.000 to get to five hundred one hours per kilogram. That is the maximum we 205 00:15:33.120 --> 00:15:37.679 hope to get out of traditional lithiumiine battery chemistry. The theoretical energy density is 206 00:15:37.720 --> 00:15:41.279 about seven hundred and fifty eight hundred one hours per kilogram. That's the theoretical. 207 00:15:41.320 --> 00:15:46.679 Once you start adding batteries onto foils and you put the components together, 208 00:15:46.759 --> 00:15:50.480 you just lose a lot of energy density. So we're pretty close to three 209 00:15:50.559 --> 00:15:54.240 hundred one hours per kilogram right now with NMC lithiumine batteries on the cell level. 210 00:15:54.480 --> 00:15:58.559 When you get the pack level, it dropped about two twenty. That's 211 00:15:58.600 --> 00:16:02.600 basically we'll give you you mentioned earlier. You're at about four hundred to six 212 00:16:02.679 --> 00:16:07.240 hundred kilometers of range with about three hundred one hours per kilogram on the cell 213 00:16:07.360 --> 00:16:11.240 level. LFP is about half that, so it's about one fifty one seventy 214 00:16:11.759 --> 00:16:15.720 one hours per kilograms. Then you get half the range cutting edge of that. 215 00:16:15.799 --> 00:16:19.720 So there's a company in China called Goshen. They've developed a two hundred 216 00:16:19.759 --> 00:16:23.639 and ten one hour per kilogram close to NMC, which I mentioned was two 217 00:16:23.759 --> 00:16:29.639 seventy three hundred pack levels to twenty, and they did that by another iteration 218 00:16:29.720 --> 00:16:34.080 of LFP, which is LMFP, which is listing manganese iron phosphate being developed 219 00:16:34.279 --> 00:16:37.000 meant. On the LFP side, this is all new as well, just 220 00:16:37.080 --> 00:16:41.399 basically happened over the last eighteen months where there's a constant battle between the battery 221 00:16:41.440 --> 00:16:47.120 makers to get one up on the competition. So where we're at now in 222 00:16:47.279 --> 00:16:52.720 LFP is that the industry is shifting towards LMFP for EV applications. There's no 223 00:16:52.759 --> 00:16:56.320 particular reason to do it. For energy storage applications. China's invested a lot 224 00:16:56.399 --> 00:17:00.720 and Chinese companies in LFP production. There's going to be an unbelievable amount of 225 00:17:00.799 --> 00:17:04.799 LFP batteries and LP materials coming out of China in the next few years. 226 00:17:06.359 --> 00:17:11.200 There's like five million tons of LFP cathode production planned. We're compared to NMC. 227 00:17:11.519 --> 00:17:15.799 I think ANIMC is like only about a million over the next few years, 228 00:17:15.000 --> 00:17:19.240 so tons. So the market's going to be just just's gonna be. 229 00:17:19.319 --> 00:17:23.480 LFP just dumped into the market in the next few years. Not sure if 230 00:17:23.519 --> 00:17:27.680 that's going to change the outlook. So we're mentioning at NMC and LFP for 231 00:17:27.759 --> 00:17:33.319 evs. Outside China, NMC is still the main chemistry. All the Korean 232 00:17:33.359 --> 00:17:38.160 battery makers and Japanese battery makers use NMC type materials. The European OEMs, 233 00:17:38.200 --> 00:17:42.000 even though they say they're going to LFP or different versions of it, are 234 00:17:42.000 --> 00:17:48.799 still predominantly integrating NMC batteries into their cars. Same in the US. So 235 00:17:48.440 --> 00:17:52.720 if a lot of cheap LFP does plunge into the market in the next two 236 00:17:52.759 --> 00:17:56.559 or three years, they'll be interesting to see if that will change the technology 237 00:17:56.559 --> 00:18:00.400 of choice for the OEMs outside China. If you look at the way a 238 00:18:00.440 --> 00:18:06.160 conventional automobile producer competes, I mean, they really compete in terms of the 239 00:18:06.240 --> 00:18:10.599 quality of their internal combustion engine, and at one point I thought the battery 240 00:18:10.640 --> 00:18:12.160 was a commodity, but I'm beginning to think, well, maybe that's not 241 00:18:12.200 --> 00:18:15.279 the case, because actually what you will probably end up doing is, let's 242 00:18:15.279 --> 00:18:21.759 say the lower cost battery is going to the LFP batteries generally they give less 243 00:18:21.839 --> 00:18:26.279 performance, and then you've got an NMC battery which is a bit more expensive, 244 00:18:26.359 --> 00:18:29.440 gives a bit better performance, better range. But I would have assumed 245 00:18:29.920 --> 00:18:34.119 this is going to be even other chemistries which will be more expensive but give 246 00:18:34.200 --> 00:18:40.319 you much better performance in terms of acceleration, in terms of power, and 247 00:18:40.400 --> 00:18:44.119 in terms of range. And so that's how these comm manufacturers will compete in 248 00:18:44.160 --> 00:18:47.519 the futures. Am I seeing this right wrong? How do you see it? 249 00:18:48.119 --> 00:18:51.279 That's exactly how I see it too. So what's the difference going to 250 00:18:51.319 --> 00:18:55.359 be between a Ford battery pack with LFP and a Mercedes battery pack with the 251 00:18:55.400 --> 00:18:57.440 same LFP. So how do you change the premiums? You get the same 252 00:18:57.480 --> 00:19:00.640 engine essentially, and it's going to be same with NMC the you know, 253 00:19:00.839 --> 00:19:06.640 for they're going to source NMC from SK, maybe BMW FROMSK for example, 254 00:19:06.680 --> 00:19:10.279 they're not why do you paint the extra one hundred thousand for there's going to 255 00:19:10.319 --> 00:19:15.079 be differentiate the asition on the premium end in terms of going to more exotic 256 00:19:15.160 --> 00:19:19.160 chemistries. I think Lauren mentioned earlier maybe solid state on the high end premium, 257 00:19:19.480 --> 00:19:23.200 but it won't give you any benefit in terms of power or performance. 258 00:19:23.359 --> 00:19:29.279 It'll just give you a range and maybe one of the other than range. 259 00:19:29.319 --> 00:19:33.319 The other area that OEM's compete on is charging time, and that's engineering, 260 00:19:33.359 --> 00:19:37.480 not just chemistry. Even though chemistry plays a big parrot hook charge the character 261 00:19:37.559 --> 00:19:42.079 quickest is is more or less out. They're competing right now. We talk 262 00:19:42.119 --> 00:19:48.599 a lot about EVS, but of course the segment which is growing fast and 263 00:19:48.720 --> 00:19:55.000 probably even faster if it's sessionary storage. Until recently they would just put EV 264 00:19:55.119 --> 00:19:57.079 batteries in the sessionary storage. But now, of course it looks like the 265 00:19:57.160 --> 00:20:02.640 technologies are going to diverge. Or am I thinking wrong here? Yeah, 266 00:20:02.640 --> 00:20:04.680 it's already happened in China. But I always make the point there's not a 267 00:20:04.720 --> 00:20:11.680 single energy stores specific giga factory announced outside China. All focused on evs might 268 00:20:11.880 --> 00:20:17.079 change in the near future, but in China they're big battery makers and Tier 269 00:20:17.119 --> 00:20:22.440 two are building energy stores specific giga factories. There is a divergence already. 270 00:20:22.720 --> 00:20:25.880 You have LFP, but not all LFPs the same. There's EV great lef 271 00:20:26.039 --> 00:20:30.039 there's energy storage are a great LFP because you want more storage. Where evs 272 00:20:30.039 --> 00:20:34.200 they'd make a thinner electrode so you could charge a quicker move the electrons in 273 00:20:34.200 --> 00:20:37.519 and out quicker. But the thicker it is, the slower it takes. 274 00:20:37.559 --> 00:20:41.759 But for US energy storage, thicker electrodes you get more ions in their per 275 00:20:41.799 --> 00:20:45.799 kilogram more or less. Yeah, we're seeing the divergence. Chinese government against 276 00:20:45.839 --> 00:20:51.440 mandated LFP only for energy storage LFP in terms of lithium ione so no NMC 277 00:20:51.799 --> 00:20:56.400 and so the all the Chinese factories basically can only build LFP packs and that's 278 00:20:56.400 --> 00:21:00.519 what's going to be available to the global customers. I'm LFP it's going to 279 00:21:00.599 --> 00:21:06.240 take out if it's not already has taken over energy storage, even though NMC 280 00:21:07.000 --> 00:21:11.200 is in the US is kind of holding its own energy storage but not growing. 281 00:21:11.680 --> 00:21:14.200 But is it still the same suppliers? I mean, do we see 282 00:21:14.240 --> 00:21:18.559 the same names or did you four see some certain companies just do ESS For 283 00:21:18.680 --> 00:21:23.000 instance, there are certain Chinese companies that do just the ESS. Yeah, 284 00:21:23.079 --> 00:21:27.279 yeah, outside channel really can't think of one that just makes cells for for 285 00:21:27.440 --> 00:21:32.400 energy storage. You do have the solar companies now moving in as well, 286 00:21:32.519 --> 00:21:36.920 right into yeah, train a solar making batteries as well. Yeah, yeah, 287 00:21:36.960 --> 00:21:38.400 that's right. There's a bit a bit of change in America. Before 288 00:21:38.400 --> 00:21:42.480 the Chinese use to send the cells or export to cells, and then there'd 289 00:21:42.519 --> 00:21:47.440 be integrators in Europe and US who would put into the containers whatever way they 290 00:21:47.480 --> 00:21:51.680 choose to package the cells for the market. Now the Chinese are sending the 291 00:21:51.759 --> 00:21:56.119 whole energy storage units as is. Let's kind of changed the market in US 292 00:21:56.119 --> 00:21:59.759 and Europe. So before in US especially they have to work with integrators still 293 00:22:00.200 --> 00:22:04.759 cells where now they can just buy power packs from BYDCATL and install right in 294 00:22:04.759 --> 00:22:08.400 the ground. The energy storage market is still evolving. Who are going to 295 00:22:08.440 --> 00:22:11.279 be the main players in terms of deployment, how the system is going to 296 00:22:11.359 --> 00:22:15.880 use. The containers have already changed before. There has been a number of 297 00:22:15.920 --> 00:22:18.359 incidents in the US. Before there were walking containers where you do all the 298 00:22:18.400 --> 00:22:23.039 maintenance inside the container. Now there's no walking containers. It's all external access. 299 00:22:23.599 --> 00:22:26.640 That's changed over the last year or so. So it's still evolving. 300 00:22:27.559 --> 00:22:32.480 Comic I asked you just about pricing and how you see that going forward. 301 00:22:32.519 --> 00:22:34.279 Maybe talk about pricing you see in the market today at the cell, on 302 00:22:34.319 --> 00:22:38.000 the pack level, and what you see going forward. It's been a very 303 00:22:38.039 --> 00:22:44.400 tough year on pricing for EV packs, EV modules, battery packs, battery 304 00:22:44.400 --> 00:22:49.400 modules for energy storage still very expensive. Energy storage cells more expensive than EV 305 00:22:49.559 --> 00:22:53.440 cells, And when the price of lithium crashed during the year, the price 306 00:22:53.480 --> 00:22:57.480 of the cells didn't go down. They continue to either stay even or even 307 00:22:57.519 --> 00:23:03.759 slightly increase. That the really drive down to cost because of the availability of 308 00:23:03.839 --> 00:23:07.079 cells was still a little issue end of last year. In the beginning of 309 00:23:07.119 --> 00:23:10.480 this year quality cells that is yeah, but metal pricing, yes, her, 310 00:23:10.599 --> 00:23:12.880 lithium is on a roller coaster. Never see anything like it. The 311 00:23:12.920 --> 00:23:18.039 forecast for lithium price, if you listen to the Chinese, it goes lows 312 00:23:18.240 --> 00:23:22.519 twenty thousand USD a ton. If you listen to some other pundits or analysts, 313 00:23:22.519 --> 00:23:25.480 they see it going to be eighty thousand USD a ton, and that's 314 00:23:25.599 --> 00:23:27.920 over like the next six months. So be brave man to be make a 315 00:23:27.960 --> 00:23:32.960 prediction where lithium is going to go. But come explain that to me, 316 00:23:33.319 --> 00:23:36.960 because like if I look at the case of solar we also had like last 317 00:23:37.039 --> 00:23:40.400 year, it's very difficult at JR hands and solar cells. And then what 318 00:23:40.480 --> 00:23:45.559 happens is silicon prices go down and then suddenly the market is down twenty percent, 319 00:23:45.680 --> 00:23:48.880 right, So why are you not seeing that in the whole battery space. 320 00:23:48.400 --> 00:23:52.599 There's a bit more going on in the battery space. It's metals trading, 321 00:23:52.960 --> 00:24:00.279 there's companies stockpiling materials, so there's inventories of batteries that's still need to 322 00:24:00.319 --> 00:24:03.720 be disposed of, these inventories of lithium. So the lithium price was down 323 00:24:03.759 --> 00:24:08.119 because there was high inventories of lithium or concentrate. In China, we're always 324 00:24:08.119 --> 00:24:11.799 worried about, well could we ever catch up to demand. So China in 325 00:24:11.839 --> 00:24:17.440 twenty twenty two went nuts in building out nickel output from Indonesia, nickel processing 326 00:24:17.480 --> 00:24:21.599 from Indonesia. Then we had the lithium. They started developing the lipidolite, 327 00:24:21.799 --> 00:24:25.599 then electro life factories, the whole supply chain. Lfp I said there's going 328 00:24:25.680 --> 00:24:27.279 to be a lot of out of pepoint the market. They really ramped up 329 00:24:27.319 --> 00:24:33.640 capacity so much in twenty twenty two that it supply overtook demand. Cormack in 330 00:24:33.720 --> 00:24:37.160 order to conclude, how do you see the battery market in the next say, 331 00:24:37.240 --> 00:24:42.920 three to five years in terms of tech prices, consolidation growth. Where 332 00:24:42.920 --> 00:24:47.400 are we heading over the next five years? Is the landscape is going to 333 00:24:47.440 --> 00:24:51.640 be totally different. Today We're going to have US battery plants, We're going 334 00:24:51.680 --> 00:24:56.079 to have European battery plants, and there's a risk if all that does come 335 00:24:56.079 --> 00:24:59.319 on the line. There's a big worry in the market and ctl are very 336 00:24:59.359 --> 00:25:02.680 worried about it. It's going to be oversupply of batteries. Even today, 337 00:25:02.880 --> 00:25:07.319 there is an oversupply of batteries coming out of China. What also is having 338 00:25:07.480 --> 00:25:11.319 kind of mentioned it earlier, it likes a BYDS vertic integration building battery plants. 339 00:25:11.559 --> 00:25:14.680 There's a number of other Chinese EV makers who are also Hang on a 340 00:25:14.680 --> 00:25:18.480 second, it's almost easier to build the batteries than the EV and they're pouring 341 00:25:18.480 --> 00:25:21.359 money to building battery plants as well. Volks back and doing the same, 342 00:25:21.519 --> 00:25:23.920 Testler doing the same. The landscape might look a lot different. The biggest 343 00:25:23.920 --> 00:25:30.319 battery makers might be Om's five years time well commack. It's an excellent way 344 00:25:30.319 --> 00:25:33.920 to conclude, and as usual, when you took to specialists like you, 345 00:25:33.720 --> 00:25:40.000 the overall picture is much more complex than when you read those consultant reports. 346 00:25:40.000 --> 00:25:42.160 Thank you very much for coming onto the show. Thank you, guys, 347 00:25:42.240 --> 00:25:45.160 reappreciate the invitation. I was like, all right, it was really great. 348 00:25:45.400 --> 00:25:48.839 Thank you. It's great. That's a lot to cover, a lot 349 00:25:48.880 --> 00:25:52.960 to cover. Yeah, it's complex and exciting. Yeah, a job. 350 00:25:52.400 --> 00:25:57.279 I hope you we have this podcast because we bring so much great guests and 351 00:25:57.920 --> 00:26:02.720 learn so much. It's fantastic. Oh, I agree. I suppose. 352 00:26:02.759 --> 00:26:06.359 I think the thing that I took out of it is the innovation, the 353 00:26:06.480 --> 00:26:11.000 quality improvements, the performance improvements and the cost reductions are going to continue, 354 00:26:11.559 --> 00:26:15.759 right, It's just the beginning of the journey. But I also like the 355 00:26:15.799 --> 00:26:22.200 fact that he was also pushing towards a standardization of those chemistries and not having 356 00:26:22.240 --> 00:26:27.720 to reinvent, not to be too innovative in chemistry because that that industry impact 357 00:26:27.759 --> 00:26:33.279 and of course recycling impact. So at some point does chemistry we need to 358 00:26:33.319 --> 00:26:36.720 studilize. The other thing that he I was saying as well, and it 359 00:26:36.759 --> 00:26:40.920 goes back to starting my own belief to now, which is it's a little 360 00:26:40.920 --> 00:26:45.079 bit like the solar space. There was lots of different solar technologies out there 361 00:26:45.359 --> 00:26:48.559 fifteen twenty years ago, and actually today there's one that dominates and it dominated 362 00:26:48.599 --> 00:26:52.400 fifteen years ago, and that the silicon. He's sort of saying the same 363 00:26:52.440 --> 00:26:56.119 thing. In batteries. There will be alternatives, check the sodium or something 364 00:26:56.160 --> 00:27:00.079 like that that might go in to stationary storage. But really the future it 365 00:27:00.160 --> 00:27:03.480 here, and that's what I take. Also, I suppose what's interested for 366 00:27:03.519 --> 00:27:06.279 me and all of it. I just look at in terms of range of 367 00:27:06.279 --> 00:27:10.720 a car getting very close to a thousand kilometer range, right, you know, 368 00:27:10.839 --> 00:27:12.839 and if you're a thousand kiomonal range is at a game over for an 369 00:27:12.839 --> 00:27:17.519 internal combustion engine, right, it really is. That's what I took out 370 00:27:17.519 --> 00:27:22.759 of it. I'm really person goes the EU and the US are putting all 371 00:27:22.799 --> 00:27:27.960 their eggs in the nickel cobal chemistries. And now it seems that China is 372 00:27:29.279 --> 00:27:33.599 going really LFP all the way. And there was one piece that I listened 373 00:27:33.640 --> 00:27:37.920 to from the JOLLOI podcast epis at one sixty five with the Unitial of R 374 00:27:38.079 --> 00:27:44.519 with the chief commercial officer at nine one is the only EDFP expert outside China. 375 00:27:45.200 --> 00:27:47.880 Very interesting. So they are trying at No. One to do some 376 00:27:48.039 --> 00:27:52.319 NFPs, but all the wisest in the West, I think they're dropping the 377 00:27:52.359 --> 00:27:55.720 ball on on that technology. Well listen, I think we've dropped the ball 378 00:27:55.759 --> 00:27:57.160 full stop on batteries. You think of it like this, you think, 379 00:27:57.440 --> 00:28:02.480 just give me the name of one large scale producer from the Western world. 380 00:28:02.480 --> 00:28:04.720 There isn't. They might be coming, but they're not there yet. There's 381 00:28:04.720 --> 00:28:07.799 not one in the top ten. And actually, look, it's not going 382 00:28:07.839 --> 00:28:12.839 to be a pure play. It's really Vatican integration. It's going to be 383 00:28:14.240 --> 00:28:18.119 falsifigen. Who's gonna produce batteries, it's gonna be with the recent news about 384 00:28:18.279 --> 00:28:22.720 Chuck Wald and Rover, let me cut across you, because I have no 385 00:28:22.799 --> 00:28:26.000 doubt that they're going to produce the packs. That's clear for me. But 386 00:28:26.160 --> 00:28:27.880 the cells, I don't believe this. I don't. I don't believe we 387 00:28:27.920 --> 00:28:32.599 can compete in the cells unless you do something. You know, you have 388 00:28:32.640 --> 00:28:36.880 to get a really huge scale to compete with the CTLF you really do, 389 00:28:37.400 --> 00:28:41.319 or an LG or even a Panasonic. Do you see anybody doing that really 390 00:28:41.480 --> 00:28:44.400 on the cell side. Look, there's a lot of I'm not going to 391 00:28:44.440 --> 00:28:48.960 say second tier, but Chinese company chasing CTL whether it's the CALP, the 392 00:28:49.119 --> 00:28:56.839 Gotcha on the EV and those people might do jo adventure with Western m of 393 00:28:56.920 --> 00:29:00.960 course, and that's what they do. I mean, that's what don But 394 00:29:00.119 --> 00:29:04.680 still, even if the set is produced in Europe, what actual components will 395 00:29:04.759 --> 00:29:08.559 come through China? They come through the Chinese value chain let's call the Asian 396 00:29:08.599 --> 00:29:11.920 value chain, because it's not just China, it's the South Koreans and the 397 00:29:12.000 --> 00:29:15.160 Japanese are still in the game a little bit as well. So yeah, 398 00:29:15.279 --> 00:29:18.640 but what really is clear is I go back to the what we have to 399 00:29:18.720 --> 00:29:22.880 learn from the Asians in the West is you need to be more and before. 400 00:29:23.160 --> 00:29:26.319 So that means you need to be really big and you need to move 401 00:29:26.359 --> 00:29:30.279 before your competitors. And we haven't learned that in the West. Where after 402 00:29:32.039 --> 00:29:33.960 and smaller. That's what we do in the West, after and smaller. 403 00:29:34.079 --> 00:29:40.839 Right, It's just like, so can't compete. You can't compete because you're 404 00:29:40.839 --> 00:29:45.880 going to put politictionism. So it's going to be called a job and adjustment 405 00:29:45.119 --> 00:29:51.279 border. It's going to call the IRA So that's how you rebalance. And 406 00:29:51.359 --> 00:29:56.480 look, maybe we're further and after and smaller, but we need for security 407 00:29:56.599 --> 00:30:03.440 reasons and job reasons. We need those industry at home. And even if 408 00:30:03.440 --> 00:30:07.759 the Batwists are not as good, we catch up. Okay, fine Batwistle 409 00:30:07.839 --> 00:30:11.279 will always be two years behind the Chinese. But you know it's okay, 410 00:30:11.559 --> 00:30:15.759 Well, we can get into a philosophical debate about that realm, but another 411 00:30:15.799 --> 00:30:22.519 time, right, And by the way, we are both product of globalization. 412 00:30:22.799 --> 00:30:26.400 You are a Frenchman living in London. I am an irish Man living 413 00:30:26.440 --> 00:30:30.920 in Germany. That's the world I grew up on. That's where I like, 414 00:30:30.920 --> 00:30:34.640 do I really want to have protectionism everywhere? And restrictions. No, 415 00:30:34.960 --> 00:30:38.119 but listen, that's the way we seem to be moving. Yeah, ebbs 416 00:30:38.160 --> 00:30:42.559 and flows. I guess. Anyway, let's get lost and that that's another 417 00:30:42.640 --> 00:30:48.440 day's discussion. Okay, yeah, we thank come back from coming on the 418 00:30:48.480 --> 00:30:56.480 show with our legacy and dear friends. Absolutely brilliant. I talk to you 419 00:30:56.519 --> 00:30:59.759 in two weeks time, look forward to my friend. Thank you for listening 420 00:30:59.799 --> 00:31:04.680 to Redefining Energy. Don't forget to rate the show and subscribe on Apple Podcasts, 421 00:31:06.079 --> 00:31:07.720 Spotify, or the platform of your choice.