Why The EV Industry Has A Massive Supply Problem
Unknown: The sheer magnitude of the waste and scrap problem and the magnitude of batteries that need to get recycled is think shocking to most people with these cobalt free batteries, they operate at higher voltage, and it's one reason why they are more susceptible to battery fires. Lithium actually is not a major component of the cost of batteries, but it's like the blood in your body, the chemistry behind how lithium ion batteries work, it remains the common denominator in all the battery technologies even that we're looking at now. Jeniece Pettitt: You are looking at bags and bags of depleted lithium ion batteries, batteries from electric cars, phone scooters, 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 that way because the the metals and the critical materials inside of them are very highly recyclable. We recover 95 98% of many of those critical materials like nickel and cobalt and copper, essentially, all of those metals are able to go back straight into reuse again and again. Jeniece Pettitt: This is JB Straubel. He is a co founder and longtime Chief Technology Officer of Tesla. He was the mastermind behind many of Tesla's core technologies, particularly around the battery tech. He left Tesla in 2019. So he could focus on recycling
all of these batteries. He gave CNBC, an inside look at his startup Redwood materials, where he's already recycling tons of batteries and sending some of the recovered materials to Panasonic so the battery maker can put them right back into Tesla's cars. Unknown: We can't just take all these really great minerals, and just dump them. That would be criminal. I mean, we have to reuse them Jeniece Pettitt: struggle started thinking about this massive and growing problem long before he left Tesla. Unknown: We started this, you know, because I saw this this looming problem from the end of life vehicles that we were creating, and starting to have a deeper appreciation, you know, back then for the scale of what was coming than the fact that, you know, I didn't see anyone else getting ready for the scale of that problem.
The sheer magnitude of the waste and scrap problem and the magnitude of batteries that that need to get recycled is, I think, shocking to most people, there's, I think a really exciting opportunity to link the recycling and solving the end of life problem with the supply chain solution, bringing more materials back into the feedstock, so it doesn't bottleneck battery production. Jeniece Pettitt: Batteries are indeed everywhere these days, and the demand for lithium ion batteries has risen sharply in the past five years and is expected to grow from $44.2 billion in 2020 To 94 point 4 billion by 2025, mostly due to electric cars. EVs are expected to hit 10%
of global passenger vehicle sales by 2025, rising to 58% of sales by 2040. Unknown: Do we have enough materials to build all the Evie batteries that are going to be required? Frankly, No, not right. The second we don't have enough materials in the supply chain to build everything today. So growth has to happen in the supply chain for all these vehicles. A lot more of that investment has to find its way to the top of the food chain to figure out you know where these materials will come from investing in new mines refining and recycling. We look at the materials that are in cells. These
are metals that are very durable. And we took a lot of effort to get them out of the ground. It's not like we have excess supply lying around that we can just pull to make cells from our excess supply is in the cells that are basically come to end of life and are ready for recycling. So we would be really foolish if we didn't take advantage of the capacity of older cells to create the next generation. Jeniece Pettitt: Panasonic says it produces 2 billion battery cells a year out of Tesla's giga factory in Nevada, Unknown: and specifically model three model Y for the Tesla team. So it's only those two models in America that we support in this factory, then we need somewhere between 20 to 25 of these all over the world but particularly here in the United States, we certainly need at least four or five six of these factories to support the wider automotive industry.
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 mined from raw materials often traveled more than 20,000 nautical miles from mine to automaker a supply chain that is far from sustainable. Unknown: Recycling has a very big role to play in the system. inability of electric vehicles themselves. One of the biggest sources of co2 from an electric vehicle is from the mining and manufacturing side of battery packs. Mining for
lithium is not a very co2 friendly activity. So there will be a time where recycling of batteries for the metals that it needs is going to be a strong factor in helping EVs achieve carbon neutrality. Jeniece Pettitt: The materials and Evie battery cells, for example, could have been mined in South America, Africa, Indonesia and Australia. Then they are often sent to China for
refining and then in Tesla's case sent to the US for cell production at Panasonic in Nevada at the Gigafactory. And a significant shortage of battery materials is looming in the near term for materials like lithium, nickel, cobalt and copper. Unknown: Right now demand is outstripping supply. Five years down the road, correct? That's correct.
How worried are you about it? I am pretty worried that this could become a bottleneck to electrifying everything that people are hoping to do. You know, I think it's going to be a bit painful when when all of these factories try and ramp at the same time and recycling and being able to efficiently reuse those materials can relieve some of the burden on the need for new mines are finding new resources. Jeniece Pettitt: The clunky supply chain also adds cost to the batteries, which are the most expensive part of an electric car, Unknown: the cost of the electric vehicle is dropping, but it's still dominated by the cost of the battery. And within the battery. The biggest
cost are the materials, it's a fairly direct link to say that the way to reduce further the cost of EVs so that more and more people can afford them is to figure out how we attack that material cost inside the lithium ion battery. And as the demand for electric cars continues to grow, it's going to put more stress on those commodity markets, you know, 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 ramp capacity. Kevin Kasetsart, another former Tesla employee is helping oversee that effort. The first challenge that company faces is gathering all of the batteries. Unknown: I like to think of the company in kind of three major groups. One is really collecting and
receiving right, which is what you see here. And there's very safe ways that we do that. The other is more refining. So breaking the material down taking it from its product that you see into its base metals, right, which are fully recoverable, and then building those back into battery grade products that we can sell back into the industry. But we currently receive about
60 tonnes a day. So it's about three semi trucks a day. And that's continuing to increase as we as we grow the business will go through this within a couple of months. Jeniece Pettitt: Redwood recycles a wide range of lithium ion batteries, not just those that go into EVs, it gathers the materials through a series of partnerships with companies like Panasonic, e waste recycling giant E, Ri, and envision ASC, which manufactures batteries for the Nissan Leaf. It also teamed up with Amazon, Unknown: Amazon is an interesting partner because they have batteries in so many different areas of their business, you know, all the way from data centers with AWS to the consumer products with things like Kindle, we're discussing with them a number of different projects, but the reach and access into the consumer world could offer some really interesting opportunities. It's been interesting how some of
our partners you know, get get quickly kind of overwhelmed by the problem that these old products can create. When these things pile up, they get to be really difficult to deal with. You can't just throw them in the landfill, you can't just shred them, it'll catch fire. Some partners have reached out to us in a little bit of you know, panic saying, geez, you know, we need to solve this problem, you know, can you help, Jeniece Pettitt: but beyond its partners struggle, so the largest lithium mine could be in the junk drawers of America, Unknown: there's only you know, so many geologic sources of a lot of these key materials. And, you know, for decades, we've been, you know, digging it up and putting it in products and using it.
And so many of these consumer products, they're just getting locked away, you know, stored in people's drawers literally at home or in their garage or in a shoe box. And over time, you know, that collection of old consumer products stored up in people's proverbial drawer at home, you know, has become, I think the world's largest, you know, resource of these materials. What do you think most people think? Do they think I don't want to throw it in a landfill but I don't know what to do with it. I do think there's a lot of confusion. You're just
concerned about data. There's concern about just throwing it in the garbage but there's a lot of barriers to productively recycling it. And the hurdle is so high right now that it encourages people to just do nothing to hang on to it, but it is wasting an incredibly valuable opportunity and a resource that we can tap into.
Jeniece Pettitt: Consumers can help by dropping off their old electronics at places like Best Buy staples, Salvation Army or at their local Solid Waste Authority. recyclers will pick them up and destroy the data before refurbishing them or extracting materials. Once Redwood receives the batteries, they are broken down and processed in massive machines. This is one of the Unknown: machines that we use to separating the different metals away from the batteries lets us very efficiently separate nickel and cobalt away from things like liquid. Jeniece Pettitt: The final product goes into these bins of raw materials which will ship to manufacturers, redwoods techniques recover more than 95% of a batteries nickel, cobalt, aluminum, graphite, and more than 80% of a batteries lithium, Unknown: this is one of our finished nickel products. So this is a mixed nickel sulfate product. And you can see, packaged and ready to go
basically back into a battery cathode manufacturer, this would be the type of product that you would ship back to Panasonic, or to some other battery manufacturer, they can now use this exactly Jeniece Pettitt: the lithium ion battery recycling market is projected to grow to $18.1 billion in 2030, up from 1.5 billion in 2019. Recycling batteries isn't just good for the planet, it's also surprisingly good business, Unknown: we make margin in in a few different places there. And it's really by you know, solving the transport and disposal problems with the batteries initially. And then we also take in a lot of consumer batteries, you know, things that used to be, you know, in an individual's, you know, care whether it was a scooter, or a bicycle or a phone, these things are a bit difficult to handle, and they do have chemical risks and fire risks. So we solve that problem and you charge customers solve that problem. Well, or, or we are able to basically do that at a low, you know, low return fee. So you
know, in some cases, we're actually paying customers back for the batteries, depending on how much material we're able to recover and resell from it. And that's my other question. Are you making money reselling materials yet? Or is it still in the startup phase where you're not turning a profit? Well, we're still we're still growing very quickly. So we're consuming capital as we build the operation and the equipment. The most
important thing, though, is that the unit operations are profitable. So we're able to, you know, take these input materials, refine them, purify them, and sell them at a profitable unit margin. And you know, that that's the fundamentally key thing is it's getting better quite quickly as we improve the technology and scale that gives me the encouragement that this you know, is economic today relative to mining, even at this early stage.
There's been just an amazing blossoming of recycling companies globally, China leads here again, US is catching up as as Europe but recycling is a very sort of unsexy industry that could be very profitable in the future, because of course, we need to take those batteries, recharged, and recondition them and use them again. And that's the good news. And there are many companies at work right now to fill that demand. Jeniece Pettitt: Another big player in North America is lifecycle which has battery recycling plants operating in Ontario, Canada, and Rochester, New York, and has plans for rapid expansion. Unknown: So this is our facility in Rochester, New York. It's part of the Kodak Eastman business park. So one of the things we like to say about this facility is not only do we recycle batteries, but we also recycle the building Jeniece Pettitt: lifecycle says that recycling is more efficient than mining, Unknown: long term recycling is more efficient, that uses less energy, it uses less water and uses less reagents than traditional mining processes. So our cost base will always be
lower. Benefit for last cycle is that we don't set the price, the mining industry sets the price. In fact, it's the marginal operator in that industry, which sets the price. And what we do is
we benefit from those higher prices. Now long term, we can see a potential where recycling starts to impact and bring down the cost of these materials. But at the moment, we're a relatively small part of the overall ecosystem, we're really unlocking the value in the batteries, and we're selling those materials at market dictated prices, which is dictated by mining and refining today, primarily, we're not relying on getting paid by anybody for a weights fee. And frankly, customers don't like that. They want to know that we're going to be unlocking the value of a mining company of equivalent motion to produce similar materials, they would struggle to produce the same levels of margin that we can deliver as a recycling company. So not
only is there a good ESG sentiment and story behind what lifecycles doing, but from a business perspective, it's highly profitable. This absolutely couldn't be more profitable than mining, you know, mining has the fluctuation and total dependency on the raw material cost, which makes it really different kind of industry. You know, we're more focused on the manufacturing and the conversion cost but you know, our business moves up and down with the commodity price or is in mind This totally linked to that a recycling of batteries will be a absolutely crucial component to this whole 21st century supply chain, you've got a couple of problems and challenges to attack here. One is to get rid
of the volume of end of life batteries that are going to be coming from EVs. And that's really going to take off 2025 onwards. The second thing is, what metals can you get out of those batteries? And what can you turn them into and what industries can use them and again, and that's a secondary problem. And so you've
got a lot of pioneers right now, looking at recycling, it's going to be a big industry. Jeniece Pettitt: Stroble says the plan is to continue to improve recycling technology and to create an entirely closed loop system. So recycling can actually surpass geological mining, Unknown: we are, you know, actively, you know, setting up facilities and looking for locations in Europe, you know, perhaps Norway, perhaps Germany, and also some smaller facilities, you know, on the other, you know, corners of the US, perhaps Texas, perhaps somewhere in the Midwest in five to seven years from now, we need to be able to break down materials in the Evie space at the pace that they're being manufactured today. So if there's, you know, let's just say for rough math, there's 1000 cars a day being produced. And there's more than that, we need to be able to recover and recycle at that same rate when those products hit their end of life. And that's just in the Eevee space, almost
everything has a battery in it nowadays. And so a lot of that technology is lithium ion cells, and it all has value that needs to be recovered and sent back into the supply chain. Jeniece Pettitt: And good recycling actually replaced mining one day, Unknown: with recycling of batteries, you'll never get enough lithium out of those batteries, and in the right quality to use back in batteries. That's like a fundamental issue for the industry that will be changing, especially with the demand profiling ever increasing as well.
But the fact of the matter is, at today's date, it is cheaper to mined for lithium rather than recycle it from existing battery packs. So that is projected to go on for the next at least 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: Batteries from EVs will not go in landfills. There are technologies available
like ours, like life cycles that are efficient, profitable, don't need subsidies, and can do this as a sustainable growing, failing business. Well, I think you know, about the, you know, maybe distant future, when we're operating as a really sustainable society and economy. You know, we need to be productively UNbuilding you know, everything that we've built, you know, this is kind of the tip of the proverbial iceberg. We're currently recycling, you know,
several gigawatt hours of energy storage per year. That seems like a big amount, but it's only maybe one or 2% of what's actually being built today. So, if you look ahead, you know, we need to be operating at 100 times the scale we are now in just a few short years, you know, this has to get solved, there really is no alternative. You know, we can't just sort of dump these batteries into the ocean or into a landfill, you know, it just it just doesn't work. So, you know, I really enjoy working on slightly underdog problems that are not getting enough attention where, you know, with a small team, you know, we can affect a big industry in the future and we can invent some things that are going to have a dramatic impact on a huge portion of the industry. The US government has a lithium supply problem, just about every major automaker has announced a transition to electric vehicles. Tesla delivered
nearly 1 million cars in 2021, and a handful of new Evie companies are finally rolling new models off the line. In order to power all of these EVs we will need lithium ion batteries, lots of them. Electric Vehicle growth will be responsible for more than 90% of demand for lithium by 2030. But lithium is also in our phones,
computers, ceramics, lubricants, pharmaceuticals, and are essential for solar and wind energy storage. Lithium actually is not a major component of the cost of batteries, but it's like the blood in your body. It's the chemistry behind how lithium ion batteries work. It remains the
common denominator in all the battery technologies even that we're looking at now for next generation batteries. The price of lithium is soaring, and establishing domestic supply of lithium has become the modern day version of oil security. But today, the United States is far behind with only 1% of global lithium being mined and processed in the US. We do have a lot and the challenge is can we produce what we need at at an economical and competitive price. That's going to be hard. I think from that standpoint. 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 the rushes on. Several domestic lithium projects are in the works. We have what some have described as the Saudi Arabia of lithium here. In the state of California, but they often face steep startup costs and opposition from environmentalists and locals. This is supposedly the largest lithium mine in the world. And we have to do this right. Getting to the the battery and electric cars does not seem to be green to me when you're destroying a beautiful mountain. This mine wants to run for 40
years and destroy this area. CNBC explores how the US fell behind in lithium production, and if it will ever be able to 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 fourths of the lithium ion battery mega factories in the world. But until the 90s, the US was the leader in lithium production, the lithium industry started in the US and and and had a had a good run for 50 years.
So what happened, lithium is not a scarce element, the United States holds almost 8 million metric tons of lithium, ranking it among the top five countries in the world. Bessemer City, North Carolina that was the original production location in the US, you had some of the early companies which were foot mineral company and lithium Corporation of America. And those those two companies had had built their business on producing lithium from spodumene. spodumene is a hard mineral that contains lithium. But mining spodumene is not always the most cost effective way to extract lithium.
The challenge that we have in the US is that we don't have the high high quality lithium resource. And so the concentration of lithium is going to be lower than than the traditional sources. And then it's more than likely you're going to have more contaminants. So those contaminants have to be be removed. The other main way of extracting lithium uses a salty brine that is pumped out of the ground. Compared to rock extraction, evaporation brine extraction is fairly cheap. Since a lot of the
work of separating out the lithium is done by mother nature. The challenge that the US production had was that production costs from the brine resource in Chile, it was just much lower than the cost of producing it from spodumene. In the US, lithium ion batteries, they were invented here. A lot of the technology that is being applied is licensed to companies overseas because the infrastructure here we don't have anymore we lost. Around the same time a massive lithium refining industry was growing in China, China was really the first place where the where the Evie revolution started taking off in a way that it hasn't in the US. But it is now
happening in Europe. So the fact that a lot of lithium conversion capacity is in China is just an artifact of the fact that they had to start making batteries five to 10 years sooner than the rest of us did. On a per capita basis. I suspect we're going to be one of the biggest users of lithium in the world and frankly, sending lithium to lithium carbonate we make in the US and sending it to China for further processing makes absolutely no sense. We need to have that
independent production. China's able to do things in a very impressive manner, but they aren't always our friends. And if we were selling were cut off from lithium batteries that would change our ability to respond to climate change in a substantial way. The Biden administration agrees and believes securing domestic sources of lithium is vital to national security. Last June, the Administration
released a blueprint for jumpstarting domestic lithium production and refining as well as battery manufacturing and set a national Evie sales goal of 50% by 2030. But there is only one operating lithium mined in the US at the moment in silver peak Nevada 85% of 2030s lithium industry doesn't exist yet. So the next decade is going to see tremendous growth in the lithium industry and battery materials supply chains in general. US lithium exploration efforts are underway in Nevada, North Carolina, California and Arkansas to name a few. Piedmont lithium is working on
reopening an old hardrock lithium mine in the US about 25 miles from Charlotte, North Carolina Piedmont signed a deal in September 2020. To supply Tesla with lithium salts from its deposits. They're sending Piedmont stock soaring at the time. The initial agreement says that Piedmont will supply about a third of its planned 160,000 metric tons per year. spodumene
Concentrate from its deposits in North Carolina, but the plan continues to get delayed due to permitting and concerns from its neighbors in its heyday from 1955 through the 1980s. That mind supplied most of the lithium in the US before overseas supplies became cheaper operation show down in the 1990s two companies in Arkansas galvanic energy and standard lithium are working on extracting lithium from underground brine reservoirs. A similar Brian project is underway in California, Salton Sea. Lithium in California is in an unusual form. It's
in this superheated geothermal brine, which is below the surface of the Salton Sea. And today, there's about a dozen geothermal power plants that generate electricity by cycling that superheated brine bringing it up to the surface and generating steam to create electricity and then pumping it down back in the ground. And so this process basically takes the lithium out of that brine covers it, and then the brine is pumped back in the ground that's different than how lithium is produced. Elsewhere in the world. Today, you have places like Chile and Argentina, where they have massive evaporation ponds, which have a pretty big footprint. So this is really the greenest way
to produce lithium that exists. 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 fouled by toxic runoff from area farms for decades, and it is rapidly shrinking. It's receding shoreline is exposing nearby communities to toxic fumes and killing wildlife. The state of California is trying to transform the area, calling it lithium Valley, and it hopes to generate the revenue needed to restore the lake.
The Salton Sea resource for lithium is really radically different than the other formations that 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, very mineral rich brine, which today is being cycled through these geothermal power plants. So it's a closed loop process, and very, very low impact.
Imperial Valley, California and Brisbane. Australia based controlled thermal resources is one of the companies getting close to being able to produce lithium in the area. First stage, a 50 megawatt power plant will be online in 2023, following with a 20,000 ton per year lithium hydroxide facility to be delivered shortly thereafter. Last summer, GM announced a multi million dollar investment in controlled thermal Resources Development at the Salton Sea and has secured first rights to purchase the domestically produced lithium for TVs. 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 battery grade product, it doesn't need to go offshore, we don't have to put it on a train and put it on a ship, send it over send it back. So I think General Motors are
a testament of you know, their experience in the supply chain kings have been doing it forever. This products produced by 100% green energy. It's interesting, 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 US. Canada based lithium
Americas is behind the project and its stock is up 740%. Since the beginning of 2020, it's a different kind of lithium resource Mother Nature deposited this very thick layer of sediment at the bottom of this ancient lake, which was once there and drained, we can reverse Mother Nature by putting that water back into a slurry, it naturally disassociates under very low energy. And we can separate the lithium out by particle size. That project
is in the final permitting phase, it will produce on the order of 60,000 tons of lithium carbonate equivalent per year compared to what Australia produces, which is about somewhere over 400,000 tons of lithium carbonate equivalent. So it's you know, 10 15% as much as the entire country of Australia proves so it's a big deal. The site will handle both the mining and the refinement of the lithium, removing the need for a complex supply chain. You take what happens in Australia and China put our all on one site is exactly what we're aiming and what the plan is actually designed to do so and what we'll have at the end of the day is high quality lithium chemicals that can go directly on to either a battery or a cathode manufacturer that can be put right into the supply chain. Our goal is to get into production sometime in 2024. CNBC got an inside look at lithium America's r&d lab in Reno Nevada backpass project in particular, while it's a large asset today based on us looking into man, it would be by 2025. We could do a little bit
more than half of the US is need just for batteries. But no one wants a mine in their backyard. And like other proposed mines in the US. The project has been plagued with lawsuits and opposition from some local Native American tribes and environmentalists. The initial lawsuits have been dismissed but some are not giving up and even camped out on the property in protest.
I found out that the Bureau of Land Management wanted to destroy a beautiful mountain pass stacker pass for the world's largest open pit lithium mine. And along with my best friend Max Wilbert, I set up camp in the exact location of where the open pit mine would be. My original goal was to raise awareness about how these lithium mines would be destroying some of the last beautiful places left in the United States, we're hoping that they understand that this backer pass in many areas is like a cemetery to us. We didn't have cemeteries back in the day, but where our people are resting in their eternal life should just not be disturbed. Think about if
somebody went and excavated your ancestors and decided to move them and we buried them someplace else. That was our main reason for involved in the in the litigation was the lack of consultation. As you know, there were 27 tribes in the state of Nevada. And there's, there were only three tribes, I believe that were really had consultation, if you want to call it that by receiving letters, I guess from the BLM on this project. And so we just found it was
inadequate. Lithium America said it has been working with the local tribes to participate in the cultural assessment of the land, and that there has been overwhelming support from the locals. We've got members of the lithium, Americas looking at about a team out in the communities, explaining what all this means. So people really understand that we've been we're trying to be as respectful and careful as possible. But also, as I said before, wanting to learn what they're interested in what things are needed for the community, so we can be good neighbors, the initial life of the mine is more than 40 years in the processing plants. So these can be multi generational jobs, and an area that doesn't have these opportunities today and really never has. So
it takes a multi pronged effort to try to address any of questions from all sides, every resource development project will face resistance from the people who live near it. The land footprint impacts of an extraction project are always disproportionately inflicted on local people. And that is how it always has been for 1000s of years. And that's how it always will
be. Well, that's the same kind of thing is is the old not in my backyard issue. And there are times when that's entirely appropriate. And times when it's you know, the greater good I think has to be assessed. And I think the greater good effect or pass is producing lithium, this is a big mine don't make any mistake about it, there is land disturbance going to be in this mine.
All aspects of it I've seen compared to a goldmine of the same size, this impact is going to be much lower. Like fossil fuels mining for lithium is an extractive industry that inevitably has impacts on the environment, from carbon emissions to local wildlife populations. If there's a threat to a species, because of a lithium mine, it will pale in comparison to what kind of species extinction we're going to see, in the years ahead. If we don't control climate change, it's possible for the co2 emissions of lithium chemical manufacturing to kind of get away from us in a number of different respects 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 satisfy demand for lithium chemicals from the battery industry. One Oakland California based startup lilac solutions aims to make the extraction of lithium less water intensive and more sustainable. Then
there are companies like red wood materials and lifecycle that are recycling depleted batteries and recovering lithium and other metals for reuse. It is possible to decarbonize power that runs an electric vehicle, it is even possible to decarbonize the extraction and processing of battery materials, which are used to make the batteries and still store that energy in the electric vehicle battery. It is never possible to decarbonize the fossil fuels that are used to run internal combustion engines.
It's important as we grow this industry to be in the US or be in the countries that are had share similar values because the danger with rapid growth like this is that things are done improperly, 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 avoid things like that from happening. I think that's going to 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 cobalt, the recent Cobots been getting so much attention is because it's one of the metals used to make lithium ion batteries which power everything from laptops and cell phones to electric vehicles. The amount of different metals found in Evie battery can vary depending on the battery type. In car model, but a typical lithium ion
battery pack may contain around 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 EVs means range by keeping the battery structure stable as the battery is continuously charged and discharged. But cobalt which is usually extracted as a byproduct of nickel and copper mining is one of the most expensive materials in a battery. While battery prices have fallen at 9%,
between 2010 and 2020, they still make up about 30% of the total cost of an electric vehicle. For a Unknown: typical vehicle with a 780 kilowatt hour battery today, we estimate the cobalt content alone costs around $800 in that battery, so that's not an insignificant for mass electrification to happen. There are lots of sentiments cobalt needs to be eliminated or reduced to the bare minimum. Magdalena Petrova: Cobalt extraction is also linked to human rights abuses and child labor. These are some of the reasons why battery manufacturers like Samsung and Panasonic, and car makers like Tesla and VW, along with a number of startups are working to eliminate cobalt completely. Elon Musk has been talking about removing cobalt from Tesla's batteries since 2018. And some of
the companies China made vehicles are already using cobalt free technology. But although there are a number of different cobalt free technologies being tested, each has presented its own challenges. Unknown: Cobalt helps to prevent battery fires. So if you eliminate it, you 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 increased demand for EVs demand for raw battery materials like Cobalt is expected to outstrip supply.
Unknown: Comparing demand and supply for cobalt there is geologically speaking enough raw material in their Earth's crust. Same with lithium, same old nickel thing where manganese is just for the production and the processing of that material, just like all the other materials is nowhere near the level of that needs to be to sustain the level of demand. Magdalena Petrova: One way to ease demand for new cobalt mining is by recycling the cobalt found in old batteries. Companies like Redwood materials in Nevada and Canada base lifecycle have emerged to do this, but some types of recycling have downfalls Unknown: currently Cobalt is recycled, but the process in which it is recycled is very environmentally unfriendly. It take all the old batteries and you smelt them at temperatures higher than 1000 C, and you can extract the cobalt back out of it. The reason
that that is done is because of how expensive Cobalt is. Magdalena Petrova: For the past four years, the average cost of cobalt was more than the cost of all the other battery metals put together. The price of cobalt has also historically been very volatile. Part of this volatility may be due to
the fact that Cobalt is usually produced as a byproduct of nickel and copper mining, and therefore tied to the demand and price fluctuations of those metals. The mining and refining of cobalt is also geographically limited. Unknown: The majority of the world's battery grade cobalt reserves are located in the Democratic Republic of Congo with the mining of cobalt is associated with human rights abuses and child labor and so Magdalena Petrova: on. Chinese investors control about 70% of Congos mining sector. China also
has over 80% control of the cobalt refining industry, where the raw material is turned into commercial grade cobalt metals suitable for use in EVs. In light of the US China trade war, cobalt supply is in a precarious position for US manufacturers, Unknown: Louisa China has really dominated is fully quite 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 the cathode. The two electrodes are separated by the 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 electric current use the power device. When a battery is charged, this chemical reaction is reversed. 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 cathode names, you will get different properties in the battery. For instance, increasing the nickel in the cathode boosts energy density and therefore rage, but also makes batteries more unstable. That's because adding more nickel
usually means decreasing the amount of cobalt, which prevents cathode corrosion that can lead to battery fires, battery and car manufacturers trying To optimize battery chemistry on the parameters of cost, lifecycle safety and range, some cobalt free batteries do already exist. But there are trade offs Unknown: there is already a viable cobalt free battery, and that is Lithium Iron Phosphate or LFP. But the main downside of LFP is low energy density. And therefore driving range
can see lithium ion phosphate right now in buses, so things that don't need to go that far, and they have a regular routine. Well As consumers, we want cars that can compete on a one to one footing with internal combustion engine. And those cutters that don't contain cobalt right now are not able to deliver that.
Magdalena Petrova: The production of lithium iron phosphate or LFP batteries is dominated by Chinese companies like BYD, and contemporary amperex technology limited or CTL. One reason is an old licensing agreement that allowed Chinese manufacturers to make LFP batteries without having to pay an expensive fee to the patent owners as long as they sold the batteries within China. The last of these patents which are owned by a Swiss based consortium, expired in September of 2021 in Europe and are set to expire in 2022. In the US, this has opened the floodgates for major Western automakers to use iron based battery chemistries. Unknown: American and European OEMs are adopting LFP in parallel to their high nickel batteries because it has great advantages over a pine nickel and cobalt based batteries. Notably, it's a lot cheaper, the component materials are a lot more readily available and abundant then nickel and cobalt has a longer longevity.
Lithium Magdalena Petrova: iron phosphate batteries are also generally considered very safe since iron is a very stable element. Ford and Volkswagen have both said that they would offer vehicles with LFP batteries. Tesla already uses LFP batteries in the model three in model Y vehicles and manufacturers in China and the company says it will now expand use of LFP batteries to all of its entry level model three and model Y vehicles. Previously these cars use nickel cobalt aluminum oxide or NCA batteries, which Tesla will continue to use in its long range versions. Unknown: A long range vehicles use a nickel based cathode and we use nickel because Nicholas higher energy density for our long range vehicles, but for our standard range vehicles, and for stationary storage, I think all of that will move to iron cathodes, we're moving to an iron based chemistry which is sort of finally at the point where it's competitive on range when combined with an efficient powertrain. I think that will be 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 planned Ed car project, though those talks seem to have been put on hold. In an effort to reduce us dependence on foreign countries. The US Department of Energy released a national blueprint in June to help guide investment to develop domestic lithium battery manufacturing and support further r&d.
Among its goals. The Blueprint calls for eliminating cobalt from lithium batteries by 2032 US based startups, sparks and tech power say that they can help though the companies have yet to prove out their technologies in electric vehicles. Sparks was founded in 2019 by Sanjeev Malhotra, a former executive at the US Department of Energy. The Tennessee based company has 15 employees and was born out of a partnership with the Department of Energy's Oak Ridge National Laboratory. Spark says it's raised over $10 million in grants from the DOD, the California Energy Commission and several early customers to bring its cobalt free lithium ion battery to the market. Unknown: That was one of the key motivation factors for starting sparks was to address the supply chain issues for lithium ion batteries, predominantly for cobalt, and make us independent of any supply chain that is dependent on China.
Magdalena Petrova: Sparks is still in its testing phase. The company says it's initially focusing on supplying batteries for large transportation vehicles like buses and trucks, off road vehicles like farming and factory equipment and energy storage solutions. Spark says it's also in talks with two auto manufacturers and will begin testing its batteries in their vehicles next year. Sparks this technology focuses on replacing the cobalt and its cathode which also contains nickel and aluminum with iron. The company says it's considered other metals but chose iron because it's cheap, widely available in the US and chemically stable making it safe to use Mahapatra says sparks his battery cathode material which the company calls NFA. For nickel iron, aluminium improves upon
iron based cathode chemistries and those containing cobalt, Unknown: the energy density of the cell using our cobalt free cathode is twice that of the LFP. And in terms of the cost, we're almost about 30% lower than that of LFP. Yet at the same time, this cobalt free cathode meets and exceeds the performance that you would see from a traditional cobalt carrying cathode in terms of energy density, which is the energy that If you can pack in a certain weight or a certain volume, it meets the life expectancy of traditional lithium ion battery. And in terms of cost, it's almost about 35 to 40% lower than the cost of your typical lithium ion battery.
Magdalena Petrova: To create this NFA cathode material sparks has licensed six patents from Oak Ridge National Laboratory, Unknown: the primary focus of these six patents is a on the design of the material that's used while eliminating cobalt and replacing it with Arren. Secondly, the process to make cobalt free cathode a lot more stable. And the third is the manufacturing process. So
there is one patented that essentially reduces the time to manufacture because the time to manufacture translates into cost. Magdalena Petrova: Spark says it's cobalt free batteries can be produced using the same equipment used to make conventional cobalt containing batteries. Unknown: We are currently looking for about close to 2 million square foot where we will be setting up the 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 for these three components starting next year.
Magdalena Petrova: Like sparks, Houston based Tech's power was founded in 2019. The startup was spun out of research headed up by 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 when compared to cobalt containing cathodes, Unknown: you do not see any downside with the performance of our material without any cobalt compared to the performance of the material containing cobalt, the cycle life as well as the how fast you can charge and discharge and safety.
Magdalena Petrova: This cathode composition was the jump off point for the material that Tex power is trying to commercialize Unknown: or commercializing our nickel manganese aluminum based chemistry that's cobalt free higher energy density than current lithium ion battery cathodes, and operate stably and safely. Magdalena Petrova: globally. The most widely used cathode material today is NMC. six to two this cathode is composed of 60% nickel and 20%. Each
of manganese and cobalt tech power says it's able to increase the energy density of its cathode material by replacing cobalt with larger quantities of nickel. But increasing nickel in the cathode has traditionally come with its own challenges, Unknown: the nickel is highly reactive with the electrolyte. So, Cobalt is typically added to minimize the degradation of the cathode structure and then other elements like manganese are added also to improve the thermal stability. So all these other are LMS that are that are typically added to make up for the deficiencies of nickel. Magdalena Petrova: Texas power says that it's navigating this instability problem by adding aluminum and manganese as well as a number of proprietary substances known as dopa.
It's the result the company says is a cathode material that is 20% cheaper than the conventional NMC six to two cathodes. But producing this material is tricky, Unknown: decreasing the cobalt in the material makes the production harder, it will also be difficult to get consistent properties from batch to batch. So the process Tech's power is developing is to minimize that kind of concern, so that when you produce tons and tons of material, you'll consistent properties from one class to another batch. Magdalena Petrova: Whereas Cobalt is generally easy to synthesize into a cathode material. Getting
the right reaction using nickel requires close monitoring and control over factors like temperature and oxygen flow and pressure. It took years for the team at UT Austin to fine tune the production process of their 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's the same production technique that
they use industrially. And so next year we're building a production line for hundreds of kilos of material per year. Magdalena Petrova: Taxpayer makes just the cathode material and plans to partner with other companies to produce battery cells.
Unknown: We have a contract with the Department of Defense in conjunction with 24 of them where they're producing a high energy cell with lithium metal anode and our highest energy cathode material. And we're reaching energy densities in excess of 500 Watt hours per kilogram that's around double current commercial lithium ion batteries. Magdalena Petrova: Still, Erickson says that it may be a while before Tex powers cathode materials are used in EVs, although it is in talks with a number of automakers. Unknown: The automakers have, you know, a year or several years of safety testing and things like that, that they'll go through before they'll put it into a commercial The vehicle, but you know as early as the end of 2023, we could have some prototypes and electric vehicles. Magdalena Petrova: Although cobalt free battery performance continues to improve experts believe that the future Evie battery market will consist of a number of different battery chemistries for different applications Unknown: that we calculate around 20% of the global battery electric vehicle market by 2030. Being taken up by these new cobalt free chemistries, we expect that the sort of entry level low cost vehicles, for example, the standard range model Tesla Model three will be LFP or lithium iron phosphate and then followed by these cobalt free materials which will account for most of the mainstream volume vehicles. And then at the top end of the range will
be high nickel batteries, which will account for high performance high range vehicles. Magdalena Petrova: Other battery breakthroughs could help enhance cobalt free chemistries, car companies, Hyundai and Kia announced they're working with us based vectorial energy to replace liquid electrolyte batteries with solid state electrolyte batteries. This would give batteries and even longer range and added safety benefits. Unknown: With these cobalt free batteries. They operate at higher voltage and that is one reason why they are more susceptible to battery fires. With solid state batteries. It's just like your solid state hard drives. It's a solid
electrolyte, it's able to withstand higher voltages, it can potentially deliver higher driving range, which is what's the most important thing for a consumer, but also higher safety, faster charging times. We just have received another grant from the California Energy Commission for next generation batteries which is basically solid state batteries using our cobalt free cathode, which has the potential of doubling the energy density that we have today. So basically making it almost four times that of LFP. Magdalena Petrova: Meanwhile, others are focused on improving the batteries form Unknown: certain companies like for example, BYD, or something the offset the range of advantages of LFP with certain things like what we call cell to pack technology, where we do away with splitting the battery pack into modules, we just have the entire battery pack is a number of cells together and that gives you a better range advantage.
Magdalena Petrova: But whatever advancements we make experts stress the technology needs to be widely accessible. Unknown: When you think of cobalt free cathode chemistries. What you're what we are hoping to have is batteries that are more accessible to all that makes it easier for developing countries to adopt a lot of the technologies that we are trying to develop without fear for costs without fear for performance. The Industrial Revolution
left many people behind, for we cannot afford for this renewable energy revolution to leave anyone behind.
2022-03-12 12:49
