24-02-2021

WeDNeSDaY, FeBRuaRY 24, 2021
5
The auto industry eyes on batteries
IvaN PeNN
As automakers like General Motors, Volkswagen and Ford
Motor make bold promises about transitioning to an
electrified, emission-free future, one thing is becoming
obvious: They will need a lot of batteries.
Demand for this indispensable component already
outstrips supply, prompting a global gold rush that has
investors, established companies and start-ups racing to
develop the technology and build the factories needed to
churn out millions of electric cars.
Long considered one of the least interesting car
components, batteries may now be one of the most exciting
parts of the auto industry. Car manufacturing hasn't
fundamentally changed in 50 years and is barely profitable,
but the battery industry is still ripe for innovation.
Technology is evolving at a pace that is reminiscent of the
early days of personal computers, mobile phones or even
automobiles, and an influx of capital has the potential to mint
the next Steve Jobs or Henry Ford.
Wood Mackenzie, an energy research and consulting firm,
estimates that electric vehicles will make up 18 percent of
new car sales by 2030. That would increase the demand for
batteries by about eight times as much as factories can
currently produce. And that is a conservative estimate. Some
analysts expect electric vehicle sales to grow much faster.
Carmakers are engaged in an intense race to acquire the
chemical recipe that will deliver the most energy at the lowest
price and in the smallest package. G.M.'s announcement last
month that it would go all electric by 2035 was widely
considered a landmark moment by policymakers and
environmentalists. But to many people in the battery
industry, the company was stating the obvious.
"This was the last in a wave of big announcements that very
clearly signaled that electric vehicles are here," said Venkat
Viswanathan, an associate professor at Carnegie Mellon
University who researches battery technology.
Battery manufacturing is dominated by companies like
Tesla, Panasonic, LG Chem, BYD China and SK Innovation -
nearly all of them based in China, Japan or South Korea. But
many new players are getting into the game, and investors,
sensing the vast profits at stake, are hurling money at startups
that they believe are close to breakthroughs.
"I think we're in the infancy stage," said Andy Palmer, the
former chief executive of Aston Martin and now the
nonexecutive vice chairman of InoBat Auto, a battery startup.
"There is more money than there are ideas."
QuantumScape, a Silicon Valley start-up whose investors
include Volkswagen and Bill Gates, is working on a
technology that could make batteries cheaper, more reliable
and quicker to recharge. But it has no substantial sales, and
it could fail to produce and sell batteries. Yet stock market
investors consider the company to be more valuable than the
French carmaker Renault.
China and the European Union are injecting government
funds into battery technology. China sees batteries as crucial
carmakers, government agencies and investors are pouring money into battery research.
to its ambition to dominate the electric vehicle industry. In
response, the Chinese government helped Contemporary
Amperex Technology, which is partly state-owned, become
one of the world's biggest battery suppliers seemingly
overnight.
The European Union is subsidizing battery production to
avoid becoming dependent on Asian suppliers and to
preserve auto industry jobs. Last month, the European
Commission, the bloc's administrative arm, announced a 2.9
billion-euro, or $3.5 billion, fund to support battery
manufacturing and research. That was on top of the more
than €60 billion that European governments and
automakers had already committed to electric vehicles and
batteries, according to the consulting firm Accenture. Some
of the government money will go to Tesla as a reward for the
company's decision to build a factory near Berlin.
The United States is also expected to promote the industry
in accordance with President Biden's focus on climate change
and his embrace of electric cars. In a campaign ad last year,
Mr. Biden, who owns a 1967 Chevrolet Corvette, said he was
looking forward to driving an electric version of the sports car
if G.M. decided to make one.
Photo: Gabriela Hasbun
Several battery factories are in the planning or construction
phase in the United States, including a factory G.M. is
building in Ohio with LG, but analysts said federal incentives
for electric car and battery production would be crucial to
creating a thriving industry in the United States. So will
technological advances by government-funded researchers
and domestic companies like QuantumScape and Tesla,
which last fall outlined its plans to lower the cost and
improve the performance of batteries.
"There's no secret that China strongly promotes
manufacturing and new development," said Margaret Mann, a
group manager in the Center for Integrated Mobility Sciences at
the National Renewable Energy Laboratory, a unit of the U.S.
Energy Department. "I am not pessimistic," she said of the
United States' ability to gain ground in battery production. "But
I don't think all of the problems have been solved yet."
Entrepreneurs working in this area said that these were
early days and that U.S. companies could still leapfrog the
Asian producers that dominate the industry."Today's
batteries are not competitive," said Jagdeep Singh, chief
executive of QuantumScape, which is based in San Jose,
Calif. "Batteries have enormous potential and are critical for
a renewable energy economy, but they have to get better."
For the most part, all of the money pouring into battery
technology is good news. It puts capitalism to work on
solving a global problem. But this reordering of the auto
industry will also claim some victims, like the companies that
build parts for internal combustion engine cars and trucks, or
automakers and investors that bet on the wrong technology.
"Battery innovations are not overnight," said Venkat
Srinivasan, director of the Argonne National Laboratory's
Collaborative Center for Energy Storage Science. "It can take
you many years. All sorts of things can happen."
Most experts are certain that demand for batteries will
empower China, which refines most of the metals used in
batteries and produces more than 70 percent of all battery
cells. And China's grip on battery production will slip only
marginally during the next decade despite ambitious plans to
expand production in Europe and the United States,
according to projections by Roland Berger, a German
management consulting firm.
Battery production has "deep geopolitical ramifications," said
Tom Einar Jensen, the chief executive of Freyr, which is building
a battery factory in northern Norway to take advantage of the
region's abundant wind and hydropower. "The European auto
industry doesn't want to rely too much on imports from Asia in
general and China in particular," he added.
Freyr plans to raise $850 million as part of a proposed
merger with Alussa Energy Acquisition Corporation, a shell
company that sold shares before it had any assets. The deal,
announced in January, would give Freyr a listing on the New
York Stock Exchange. The company plans to make batteries
using technology developed by 24M Technologies in
Cambridge, Mass.
The first priority for the industry is to make batteries
cheaper. Batteries for a midsize electric car cost about
$15,000, or roughly double the price they need to be for
electric cars to achieve mass acceptance, Mr. Srinivasan said.
Those savings can be achieved by making dozens of small
improvements - like producing batteries close to car factories
to avoid shipping costs - and by reducing waste, according to
Roland Berger. About 10 percent of the materials that go into
making a battery are wasted because of inefficient
production methods.
But, in a recent study, Roland Berger also warned that
growing demand could push up prices for raw materials like
lithium, cobalt and nickel and cancel out some of those
efficiency gains. The auto industry is competing for batteries
with electric utilities and other energy companies that need
them to store intermittent wind and solar power, further
driving up demand.
"We are getting rumbles there may be a supply crunch this
year," said Jason Burwen, interim chief executive for the
United States Energy Storage Association.An entire genre of
companies has sprung up to replace expensive minerals used
in batteries with materials that are cheaper and more
common.
How does Bill Gates plan to solve the
climate crisis?
BIll McKIBBeN
First things first - much respect to Bill Gates for his
membership in the select club of ultra-billionaires
not actively attempting to flee Earth and colonize
Mars. His affection for his home planet and the
people on it shines through clearly in this new
book, as does his proud and usually endearing
geekiness. The book's illustrations include photos
of him inspecting industrial facilities, like a
fertilizer distribution plant in Tanzania; definitely
the happiest picture is of him and his son grinning
identical grins outside an Icelandic geothermal
power station. "Rory and I used to visit power
plants for fun," he writes, "just to learn how they
worked."
And this new volume could not be more timely -
it emerges after a year that saw the costliest slew of
weather disasters in history, and that
despite a cooling La Niña current in
the Pacific managed to set the mark
for record global temperature. As
everyone can attest who watched the
blazes of Australia and California, or
the hurricanes with odd Greek names
crashing through the gulf, we are in
dire need of solutions to the greatest
crisis our species has yet faced.
It is a disappointment, then, to
report that this book turns out to be a
little underwhelming. Gates - who
must have easy access to the greatest
experts the world can provide - is
surprisingly behind the curve on the
geeky parts, and he's worse at
interpreting the deeper and more
critical aspects of the global warming
dilemma. Since he confesses that he
completely missed the climate
challenge until 2006, when he met
with some scientists almost two
decades after the problem emerged
(previously "I had assumed there
were cyclical variations or other
factors that would naturally prevent a
true climate disaster"), it's perhaps not surprising
that he's still catching up. And yet, his
miscalculations are important, because they are
widely shared.
Let's do the numbers first. Gates correctly
understands the basic challenge, which is to "get
to zero" as soon as we can. "Humans need to stop
adding greenhouse gases to the atmosphere," he
writes, which is as useful a sentence as the English
language admits. And he understands that the key
to doing this is to electrify as much human activity
as possible: from powering our computers to
turning the wheels of our cars and buses to
producing steel. But when it comes to generating
that electricity, he worries that solar panels aren't
becoming more efficient fast enough: Unlike
computer chips, for instance, there's no "Moore's
law" that doubles their usefulness every two years.
But that's not really the target here: In fact, as
the analyst Ramez Naam pointed out last spring,
the price of solar power has dropped astonishingly
in the last decade, far outpacing even the most
optimistic forecasts. The price drop is 50 to 100
years ahead of what the International Energy
Agency was forecasting in 2010, mostly because
we're getting better at building and installing solar
panels. Every time we double the number of
panels installed, the price drops another 30 to 40
percent, and there's plenty of runway left.
These staggering numbers are why Gates's
current-day snapshots of the "Green Premiums"
you need to pay for clean energy don't mean as
much as he thinks they do: Especially since
Bill Gates touring the Yara fertilizer distribution facility in
Dar es Salaam, Tanzania in 2018. Photo: Gates Notes
storage batteries are now dropping in price on a
similar curve, it's clear that the imperative is to
install as much solar (and wind power, which is on
the same price trajectory) as fast as humanly
possible, since if we don't make huge progress in
the next 10 years scientists have made clear we can
kiss the targets we set in Paris goodbye.
One wishes Gates had talked, for instance, with
Stanford's Mark Jacobson, whose team has
calculated how almost every country on earth
could go to 80 percent renewable energy by 2030.
If he had, he might have understood more clearly
that the things that really interest him - advanced
nuclear power, for instance, where he describes
his considerable investments - are more about
mopping up: He's absolutely right that we should
be investing in research across a wide list of
technologies because we may need them down the
line to help scrub the last increments of fossil fuel
from the system, but the key work will be done (or
not) over the next decade, and it will be done by
sun and wind.
As London's Carbon Tracker Initiative
explained last year, building new sun- and windpower
facilities is already, or soon will be, cheaper
even than operating existing coal-fired power.
Most people, Gates included, have not caught on
yet to just how fast this engineering miracle is
happening.
So why aren't we moving much faster than we
are? That's because of politics, and this is where
Gates really wears blinders. "I think more like an
engineer than a political scientist," he says proudly
- but that means he can write an entire book about
the "climate disaster" without
discussing the role that the fossil fuel
industry played, and continues to play,
in preventing action.
We now know from great
investigative reporting that the oil
companies knew everything about
climate change back in the 1980s, and
that they systematically built an edifice
of disinformation and denial to keep us
in the dark. That's why we've wasted
almost three decades of scientific
warning. "I don't have a solution to the
politics of climate change," Gates
writes, but in fact he does: He founded,
and his foundation is a shareholder in,
a company that has donated money to
exactly the politicians who are in the
pocket of big oil. A Bloomberg analysis
last fall found that Microsoft had given
only a third of its contributions to
"climate-friendly" politicians. Emily
Atkin, in a December issue of her
climate newsletter Heated, pointed out
that Microsoft had joined 42 other
corporations in a letter to Presidentelect
Biden calling on him to enact
"ambitious" climate policies - and then donated to
David Perdue for his Georgia Senate runoff (other
signatories to the letter also gave to Kelly Loeffler).
Had they won and the G.O.P. retained control of
the Senate, the chances for those ambitious
climate policies would have been nil.
Gates mentions in passing at one point that he
chose to divest his fortune from fossil fuel
companies, but only because "I don't want to
profit if their stock prices go up because we don't
develop zero-carbon alternatives." He scoffed at
the idea that activists (who otherwise go mostly
unmentioned in this book) thought that "divesting
alone" would "transform the world's energy
system." But of course those activists, myself
included, thought no such thing.
a Ford display at the 2019 International auto Show in Frankfurt.
Photo: Ronald Wittek
Ford to phase out gasoline-powered
vehicles in Europe
Neal e. BouDeTTe
Ford Motor became the latest
automaker to accelerate its transition to
electric cars, saying Wednesday that its
European division would soon begin to
phase out vehicles powered by fossil
fuels. By 2026, the company will offer
only electric and plug-in hybrid models,
and by 2030 all passenger cars will run
solely on batteries.
The plan is part of a bid to generate steady
profits in Europe, where Ford has struggled
for several years, as well as to meet
increasingly strict emissions standards in the
European Union."We are going all in on
electric vehicles," Stuart Rowley, president of
Ford of Europe, said during a news
conference.
Ford and other automakers are moving
more rapidly on electric vehicles in Europe
than in the United States. Last year, the
European Union began imposing penalties
on carmakers that do not adhere to limits on
carbon dioxide emissions, forcing them to
sell more electric cars.
Ford is a relatively minor player in Europe,
with 5 percent of the passenger car market,
but it said it planned to spend $1 billion to
overhaul its main European plant, in
Cologne, Germany, to produce electric
vehicles. The first new model is supposed to
go into production in 2023, Ford said, and
will use electric vehicle technology developed
by Volkswagen.
Ford has begun selling its battery powered
Mustang Mach-E in Europe and will begin
delivering models to European customers
during the next few weeks.All of the delivery
vans and commercial vehicles made by Ford
of Europe will be electric or plug-in hybrids
by 2024, and its entire range of vehicles
would be electric or plug-in hybrids two
years after that.
However, Ford will continue to sell
commercial vehicles with gasoline or diesel
engines in Europe for years to come. The
company said that, by 2030, two-thirds of
the commercial vehicles it sells in Europe
will be battery powered.
"There will still be demand for
conventionally power vehicles," Mr. Rowley
said.
Last month, General Motors said it aimed
to produce only electric vehicles by 2035, but
G.M. has all but pulled out of Europe. The
company sold its Opel division in 2017 to
France's Peugeot SA. Peugeot recently
merged with Fiat Chrysler and is now known
as Stellantis.
Jaguar Land Rover said Monday that all of
its Jaguar luxury cars, and 60 percent of
Land Rover luxury SUVs, will run solely on
batteries by 2030.The lab at QuantumScape,
a Silicon Valley start-up whose investors
include Volkswagen and Bill Gates, is
working on a technology that could make
batteries cheaper, more reliable and quicker
to recharge.Credit...Gabriela Hasbun for The
New York Times.