1 00:00:10,840 --> 00:00:14,720 Speaker 1: Hello, and welcome to another episode of the Odd Lots podcast. 2 00:00:14,760 --> 00:00:19,320 Speaker 1: I'm Chill, WI Isn't and I'm Tracy Alloway. Tracy. The 3 00:00:19,560 --> 00:00:24,800 Speaker 1: surging price of oil and other fossil fuels has has 4 00:00:24,840 --> 00:00:27,760 Speaker 1: certainly got a lot of people talking more about the 5 00:00:27,920 --> 00:00:33,640 Speaker 1: energy transition e vs. Electric cars, renewable energy on the grid, 6 00:00:33,760 --> 00:00:38,080 Speaker 1: solar panels, wind, etcetera. But it also seems clear that 7 00:00:38,440 --> 00:00:41,200 Speaker 1: all that is going to be very expensive as well. Yeah, 8 00:00:41,320 --> 00:00:44,239 Speaker 1: this is the ultimate irony. Just as oil prices are 9 00:00:44,280 --> 00:00:47,159 Speaker 1: spiking and everyone's going, oh, we need to, you know, 10 00:00:47,680 --> 00:00:51,440 Speaker 1: quicken the transition away from fossil fuels, it seems like 11 00:00:51,720 --> 00:00:54,800 Speaker 1: all of the commodities that you actually need for that 12 00:00:54,880 --> 00:00:59,880 Speaker 1: transition for decarbonization, those are spiking too. Yeah. Not only 13 00:01:00,040 --> 00:01:01,880 Speaker 1: are we seeing a surgeon price. And if you look 14 00:01:01,920 --> 00:01:06,319 Speaker 1: at all these crucial metals, whether it's nickel or cobalt, 15 00:01:06,480 --> 00:01:09,800 Speaker 1: or the price of lithium, all these crucial ingredients, not 16 00:01:09,880 --> 00:01:12,600 Speaker 1: only are the church mostly up into the right, there 17 00:01:12,640 --> 00:01:15,319 Speaker 1: aren't that many of them. It's not just that they're costly. 18 00:01:15,480 --> 00:01:18,120 Speaker 1: It seems like these markets again kind of like we 19 00:01:18,360 --> 00:01:21,040 Speaker 1: are extremely tight. There's not just a bunch of it 20 00:01:21,080 --> 00:01:23,920 Speaker 1: to be easily procured from what I can tell. Well, 21 00:01:24,040 --> 00:01:27,120 Speaker 1: so this is something that I'm really curious about. What 22 00:01:27,319 --> 00:01:32,000 Speaker 1: exactly is the supply of these essential metals for batteries 23 00:01:32,040 --> 00:01:36,040 Speaker 1: because I'm sure you remember the rare earths, Like I 24 00:01:36,080 --> 00:01:38,880 Speaker 1: don't want to call it a bubble, because clearly there 25 00:01:38,959 --> 00:01:42,760 Speaker 1: was something to it, but rare earth stocks where some 26 00:01:42,840 --> 00:01:47,240 Speaker 1: of those um two Yeah, everyone was like, by rare earths, 27 00:01:47,240 --> 00:01:49,680 Speaker 1: by rare earths, there's only so much of them, and 28 00:01:49,800 --> 00:01:53,240 Speaker 1: it just seemed a little speculative. And so I'm wondering 29 00:01:53,280 --> 00:01:55,840 Speaker 1: how much of that bowl case was true. Is there 30 00:01:55,880 --> 00:01:58,560 Speaker 1: actually a finite amount or is it the case that 31 00:01:58,680 --> 00:02:01,280 Speaker 1: it just takes long to get the mind's up and going, 32 00:02:01,400 --> 00:02:04,320 Speaker 1: it takes a while to increase production. I honestly don't know. 33 00:02:04,560 --> 00:02:07,040 Speaker 1: With words I recall a lot of the story too 34 00:02:07,120 --> 00:02:10,239 Speaker 1: is they're not that rare, but they are, they're very 35 00:02:10,280 --> 00:02:13,080 Speaker 1: pollutant the process of mining, and so which countries actually 36 00:02:13,080 --> 00:02:15,760 Speaker 1: want to do that? And China seemed to be the 37 00:02:15,800 --> 00:02:18,960 Speaker 1: most willing. So the other thing that happened recently in 38 00:02:19,080 --> 00:02:24,079 Speaker 1: battery news specifically is Joe Biden announcing that the Defense 39 00:02:24,160 --> 00:02:27,080 Speaker 1: Authorization Act sort of these tools the government has for 40 00:02:27,120 --> 00:02:31,000 Speaker 1: procurement would go to this space and American metal supply. 41 00:02:31,320 --> 00:02:34,480 Speaker 1: So this is clearly a lot of interest. Who gets 42 00:02:34,520 --> 00:02:36,480 Speaker 1: to build the batteries, how costly it's going to be, 43 00:02:36,520 --> 00:02:38,639 Speaker 1: who has access to the metals, what it's going to 44 00:02:38,720 --> 00:02:42,960 Speaker 1: take to ramp up production, increased urgency. Clearly in this 45 00:02:43,000 --> 00:02:45,840 Speaker 1: moment on these questions absolutely and all brought into focus 46 00:02:46,000 --> 00:02:50,000 Speaker 1: by Russia's invasion of Ukraine and the subsequent sanctions, and 47 00:02:50,040 --> 00:02:52,280 Speaker 1: the fact that Russia holds something like I think it 48 00:02:52,320 --> 00:02:56,040 Speaker 1: was eleven percent of the world's nickel supply. But even that, 49 00:02:56,120 --> 00:02:58,200 Speaker 1: you know, I don't know what type of nickel they 50 00:02:58,240 --> 00:03:00,399 Speaker 1: actually hold. I don't know if it matters what type 51 00:03:00,400 --> 00:03:02,080 Speaker 1: of nickel you have in the market. I have so 52 00:03:02,120 --> 00:03:05,040 Speaker 1: many questions, and yeah, I'm eager to learn. Great, Well, 53 00:03:05,240 --> 00:03:08,040 Speaker 1: let's dive right into this. We're gonna be speaking all 54 00:03:08,080 --> 00:03:10,960 Speaker 1: about batteries and the battery supply chains with James Fifth. 55 00:03:11,040 --> 00:03:14,079 Speaker 1: He has a principal at Volta Energy Technologies, a VC 56 00:03:14,320 --> 00:03:18,360 Speaker 1: firm focused on this area. Previously headed up energy storage 57 00:03:18,440 --> 00:03:22,520 Speaker 1: at Bloomberg and f up until very recently. So James, 58 00:03:22,560 --> 00:03:24,560 Speaker 1: thank you so much for coming out on odd lots. 59 00:03:25,680 --> 00:03:28,079 Speaker 1: Tory Tracy great to be on here and yeah, big 60 00:03:28,080 --> 00:03:30,200 Speaker 1: clime fans, so so thank you very honest to be 61 00:03:30,240 --> 00:03:32,520 Speaker 1: able to speak well we we we uh. We spoke 62 00:03:32,560 --> 00:03:35,240 Speaker 1: with their former colleague Net Bullard earlier in the year 63 00:03:35,280 --> 00:03:36,840 Speaker 1: and when we asked him who should we talk to 64 00:03:36,880 --> 00:03:39,920 Speaker 1: about batteries, he said, you were the man so very 65 00:03:39,920 --> 00:03:43,440 Speaker 1: excited about this. Why don't we start very big picture? 66 00:03:43,640 --> 00:03:45,920 Speaker 1: What is when we talk about the battery market, what 67 00:03:46,080 --> 00:03:48,880 Speaker 1: is the market today? How much is evis, how much 68 00:03:48,960 --> 00:03:51,160 Speaker 1: is grid storage? Like, what are we talking about when 69 00:03:51,160 --> 00:03:52,920 Speaker 1: we sort of take a big, sort of eagle eye 70 00:03:52,960 --> 00:03:55,200 Speaker 1: view at the battery market. Yes, so it's it's a 71 00:03:55,240 --> 00:03:57,360 Speaker 1: great starting space. And I think that's probably what I 72 00:03:57,440 --> 00:04:00,440 Speaker 1: started is if we go back a decade, really the 73 00:04:00,440 --> 00:04:04,600 Speaker 1: battery market was confined to consumer electronics, so your cell phone, 74 00:04:04,720 --> 00:04:08,560 Speaker 1: your laptop, your iPad, that's what Littiman batteries went into. 75 00:04:08,920 --> 00:04:12,400 Speaker 1: And at the time kind of passenger vs were almost nothing. 76 00:04:13,280 --> 00:04:14,880 Speaker 1: But by the time we got to the end of 77 00:04:15,000 --> 00:04:19,200 Speaker 1: the last decades kind of twenty, what we found is 78 00:04:19,279 --> 00:04:23,600 Speaker 1: that the kind of biggest demand sector for litty Mind 79 00:04:23,640 --> 00:04:26,040 Speaker 1: batteries had flipped and it was no longer that consumer 80 00:04:26,040 --> 00:04:31,839 Speaker 1: electronics sector. It was instead passenger electric vehicles, And just 81 00:04:31,920 --> 00:04:33,520 Speaker 1: to kind of, you know, try and put it in 82 00:04:33,560 --> 00:04:37,159 Speaker 1: a bit of context. Back in kind of twenty nineteen, 83 00:04:37,560 --> 00:04:39,440 Speaker 1: at the end of the year, there was almost two 84 00:04:39,520 --> 00:04:43,480 Speaker 1: hundred giga one hours of battery demand. Now there's lots 85 00:04:43,480 --> 00:04:45,600 Speaker 1: of jargon in the battery industry, so let me kind 86 00:04:45,600 --> 00:04:49,320 Speaker 1: of try and break that down a little bit more So, essentially, 87 00:04:49,360 --> 00:04:51,520 Speaker 1: if you look at a passenger EV if you look 88 00:04:51,560 --> 00:04:54,840 Speaker 1: at your Tesla model as for example, you might find 89 00:04:54,880 --> 00:04:57,039 Speaker 1: that you have a hundred kill or what our pack 90 00:04:57,839 --> 00:05:01,680 Speaker 1: Now there's a lillian kill what hours in a gig 91 00:05:01,680 --> 00:05:05,160 Speaker 1: of one hour, and so if you have a hundred 92 00:05:05,640 --> 00:05:08,719 Speaker 1: kill what hours kind of per vehicle, what you find 93 00:05:09,000 --> 00:05:12,919 Speaker 1: is that you're looking at around um what does that 94 00:05:13,040 --> 00:05:16,159 Speaker 1: end up being kind of ten thousand vs per gig 95 00:05:16,240 --> 00:05:18,960 Speaker 1: or what hour. So when we had two hundred giga 96 00:05:19,000 --> 00:05:23,480 Speaker 1: one hours UM on the market, that's you know, enough 97 00:05:23,640 --> 00:05:26,480 Speaker 1: for around two hundred thousand evs. But of course, as 98 00:05:26,520 --> 00:05:28,960 Speaker 1: I say, I wasn't just going into kind of Tesla's etcetera. 99 00:05:28,960 --> 00:05:31,480 Speaker 1: It was going into consumer electronics. But also, as you 100 00:05:31,560 --> 00:05:34,080 Speaker 1: pointed out, you know, staciary storage, but stacialy storage is 101 00:05:34,240 --> 00:05:36,920 Speaker 1: again kind of a much smaller chunk compared to the 102 00:05:37,440 --> 00:05:40,440 Speaker 1: the EV market, But just because it's smaller doesn't mean 103 00:05:40,480 --> 00:05:42,600 Speaker 1: it's not important when we're kind of looking at that 104 00:05:43,080 --> 00:05:46,920 Speaker 1: energy transition kind of sector. Can I ask a really 105 00:05:46,960 --> 00:05:51,039 Speaker 1: basic and embarrassing question, but you know, when we say 106 00:05:51,200 --> 00:05:55,760 Speaker 1: lithium ion batteries, how exactly are these medals used in 107 00:05:55,920 --> 00:05:59,159 Speaker 1: batteries And is it the case that you're always going 108 00:05:59,200 --> 00:06:01,360 Speaker 1: to need a certain amount of them or are their 109 00:06:01,360 --> 00:06:06,200 Speaker 1: efforts underway to make them more efficient and use fewer 110 00:06:06,360 --> 00:06:10,240 Speaker 1: or less metals in them. So again, another kind of 111 00:06:10,279 --> 00:06:14,599 Speaker 1: great question, um, and it's it's there's a fairly nuanced answer, 112 00:06:14,640 --> 00:06:16,719 Speaker 1: but I'll again try and kind of you know, break 113 00:06:16,760 --> 00:06:19,160 Speaker 1: it down to the basics. So if you look at 114 00:06:19,200 --> 00:06:21,480 Speaker 1: what's happened kind of over that period of time from 115 00:06:21,520 --> 00:06:26,200 Speaker 1: two thousand and ten to twenty, the kind of average 116 00:06:26,279 --> 00:06:31,400 Speaker 1: kilograms required per battery has decreased because there have been 117 00:06:31,440 --> 00:06:34,760 Speaker 1: improvements in in you know, primarily the kind of cathode 118 00:06:34,800 --> 00:06:37,960 Speaker 1: which is one of the active components. But again, you 119 00:06:38,000 --> 00:06:41,880 Speaker 1: know within the battery space there are different chemistry, so 120 00:06:42,279 --> 00:06:45,839 Speaker 1: different cathodes that use different metals. The kind of key 121 00:06:45,839 --> 00:06:48,480 Speaker 1: ones that have been used over the last decade is lithium, 122 00:06:48,480 --> 00:06:50,799 Speaker 1: and you find lithium in everything, So you have lithium 123 00:06:50,800 --> 00:06:54,920 Speaker 1: mixed with either nickel, manganese and cobalt, or you can 124 00:06:54,960 --> 00:06:59,160 Speaker 1: have um lithium mixed with with iron and phosphate. So 125 00:06:59,200 --> 00:07:02,440 Speaker 1: you have these kind of predominantly kind of leading and 126 00:07:02,520 --> 00:07:06,920 Speaker 1: competing chemistries, and each has its advantage and disadvantage. If 127 00:07:06,920 --> 00:07:09,440 Speaker 1: you have the lithium mind and phosphate, which is called LFP, 128 00:07:10,200 --> 00:07:13,120 Speaker 1: those batteries are a relatively low cost because you only 129 00:07:13,160 --> 00:07:15,720 Speaker 1: have kind of lithium in it. That is expensive, but 130 00:07:15,960 --> 00:07:19,280 Speaker 1: you have a lower kind of energy density, and what 131 00:07:19,320 --> 00:07:22,200 Speaker 1: that means is in a given kind of volume or 132 00:07:22,200 --> 00:07:24,040 Speaker 1: for a given weight, you can't get as many kind 133 00:07:24,080 --> 00:07:27,440 Speaker 1: of kill what hours, So that limits the range of 134 00:07:27,480 --> 00:07:31,320 Speaker 1: an electric vehicle essentially. Whereas the nickel, manganese and cobalt 135 00:07:31,360 --> 00:07:36,360 Speaker 1: batteries otherwise known as NMC, they have a higher energy density, 136 00:07:36,480 --> 00:07:38,680 Speaker 1: so you can go further in your e V, but 137 00:07:38,760 --> 00:07:41,480 Speaker 1: it comes with the downside of higher costs because you've 138 00:07:41,480 --> 00:07:43,320 Speaker 1: got nickel in there, you've got cobalt in there, and 139 00:07:43,320 --> 00:07:45,400 Speaker 1: you've got littium in there. So you're always kind of 140 00:07:45,440 --> 00:07:48,760 Speaker 1: playing this this game to try and balance the kind 141 00:07:48,760 --> 00:07:52,440 Speaker 1: of performance versus cost of any of these lifting mind batteries. 142 00:07:53,480 --> 00:07:56,920 Speaker 1: So when we think about the e V market, what 143 00:07:57,160 --> 00:08:01,720 Speaker 1: is the current state of the art technology and is 144 00:08:01,760 --> 00:08:06,440 Speaker 1: the roadmap for does it seem fairly clear words going 145 00:08:06,600 --> 00:08:08,680 Speaker 1: in terms of say, what kind of tech will go 146 00:08:08,720 --> 00:08:11,760 Speaker 1: into batteries ten years from now or is there still 147 00:08:11,920 --> 00:08:15,560 Speaker 1: is it still open in terms of there being debate 148 00:08:15,680 --> 00:08:18,720 Speaker 1: about what path the industry will ultimately take. Yeah, a 149 00:08:18,760 --> 00:08:21,440 Speaker 1: great question and one that I could probably talk about, 150 00:08:21,480 --> 00:08:23,480 Speaker 1: you know, four and out that I'll get. I'll try 151 00:08:23,520 --> 00:08:25,880 Speaker 1: and supervid just frame the debate for us a frame 152 00:08:25,920 --> 00:08:28,800 Speaker 1: of the discussion. So you know, I mentioned we have 153 00:08:28,880 --> 00:08:31,600 Speaker 1: this kind of n MC or this LFP chemistry, and 154 00:08:31,680 --> 00:08:34,840 Speaker 1: over the last decade, you know what's happened was the 155 00:08:34,920 --> 00:08:38,000 Speaker 1: use of LFP was really confined to China, and outside 156 00:08:38,000 --> 00:08:41,719 Speaker 1: of China, in Europe and in the US, companies were 157 00:08:41,760 --> 00:08:45,880 Speaker 1: focusing on nickel based chemistry, so like the NMC and 158 00:08:45,920 --> 00:08:47,880 Speaker 1: the states of the art had kind of more and 159 00:08:47,920 --> 00:08:50,760 Speaker 1: more nickel being added. So that increased the energy density, 160 00:08:50,920 --> 00:08:54,240 Speaker 1: which is why you know EV ranges have kept on increasing. 161 00:08:54,640 --> 00:08:58,040 Speaker 1: And it seemed like that you know, those nickel heavy chemistries, 162 00:08:58,520 --> 00:09:00,839 Speaker 1: we're going to be the kind of dominant technology over 163 00:09:00,880 --> 00:09:05,840 Speaker 1: the next decade. But actually what's happened is Chinese companies 164 00:09:05,840 --> 00:09:09,720 Speaker 1: in particular have come up with an innovative way to 165 00:09:09,720 --> 00:09:12,599 Speaker 1: to in reality kind of squeeze more juice out of 166 00:09:12,640 --> 00:09:17,120 Speaker 1: the batteries using LFP. So now these low cost kind 167 00:09:17,120 --> 00:09:20,440 Speaker 1: of lithium and phosphate batteries can give you ranges that 168 00:09:20,520 --> 00:09:23,480 Speaker 1: are not as high as a nickel based battery, but 169 00:09:23,800 --> 00:09:26,600 Speaker 1: you know, in most cases suitable. And that's why we 170 00:09:26,640 --> 00:09:29,560 Speaker 1: see companies like Tesla and VW saying that they'll use 171 00:09:29,600 --> 00:09:32,160 Speaker 1: these these LFP batteries and their kind of low cost 172 00:09:32,600 --> 00:09:35,400 Speaker 1: entry level evs. So that's the kind of big trend 173 00:09:35,440 --> 00:09:37,280 Speaker 1: that we see now is actually this this l FP 174 00:09:37,480 --> 00:09:40,320 Speaker 1: is coming back onto the market. While it's not kind 175 00:09:40,360 --> 00:09:42,720 Speaker 1: of technically as stated the art as some of these 176 00:09:42,800 --> 00:09:46,600 Speaker 1: high nickel chemistries, actually engineers have done a fantastic job 177 00:09:46,640 --> 00:09:51,160 Speaker 1: at making it, you know, enough for what most consumers 178 00:09:51,240 --> 00:09:54,400 Speaker 1: need and then just to kind of finish if we go, 179 00:09:54,679 --> 00:09:57,319 Speaker 1: you know, in ten years time, I think what everyone's 180 00:09:57,320 --> 00:10:00,840 Speaker 1: really hoping for and looking forward to, it's sort state batteries. 181 00:10:01,280 --> 00:10:03,319 Speaker 1: You know, you've probably heard people saying the Holy Grail, 182 00:10:03,400 --> 00:10:06,559 Speaker 1: and that's probably taking it a little bit far, but certainly, 183 00:10:06,800 --> 00:10:10,160 Speaker 1: you know, they promised to kind of make Evis faster 184 00:10:10,280 --> 00:10:12,679 Speaker 1: pass um, you know, the performance that you get today, 185 00:10:12,679 --> 00:10:14,760 Speaker 1: and make that kind of idea of a four D 186 00:10:14,920 --> 00:10:19,040 Speaker 1: five hundred mile range kind of realistic. So how much 187 00:10:19,120 --> 00:10:22,800 Speaker 1: does the recent volatility in metals prices, the surges that 188 00:10:22,880 --> 00:10:26,640 Speaker 1: Joe and I were describing in the intro supply constraints, 189 00:10:26,679 --> 00:10:30,400 Speaker 1: given Russia's invasion of Ukraine and the subsequent sanctions, how 190 00:10:30,480 --> 00:10:33,560 Speaker 1: much does all of that throw a spanner in the 191 00:10:33,600 --> 00:10:37,840 Speaker 1: works of the sort of long term trajectory of battery 192 00:10:37,920 --> 00:10:42,440 Speaker 1: development and technology that you just described. Yeah, it's it's 193 00:10:42,520 --> 00:10:45,640 Speaker 1: kind of clearly been a pretty difficult time in the 194 00:10:45,640 --> 00:10:47,840 Speaker 1: battery industry. I mean, coming off the back of the 195 00:10:47,920 --> 00:10:51,240 Speaker 1: kind of pandemic and the logistics problems that have come 196 00:10:51,280 --> 00:10:53,320 Speaker 1: from that. You know, we're then thrown into this terrible 197 00:10:53,320 --> 00:10:56,160 Speaker 1: war between Ukraine and Russia, which then creates kind of 198 00:10:56,200 --> 00:10:59,440 Speaker 1: more turmoil in the commodities market. And you know, as 199 00:10:59,480 --> 00:11:04,000 Speaker 1: you said, getting Tracy around kind of ten percent of 200 00:11:04,120 --> 00:11:07,120 Speaker 1: the world's nickel is kind of mind in Russia. But actually, 201 00:11:07,200 --> 00:11:09,400 Speaker 1: as as you kind of rightly pointed out, not all 202 00:11:09,440 --> 00:11:12,880 Speaker 1: of that can be used in kind of electric vehicles 203 00:11:12,920 --> 00:11:17,000 Speaker 1: and littemon batteries. Nickels divided into kind of two classes, 204 00:11:17,000 --> 00:11:19,000 Speaker 1: so you have class one and class to Class one 205 00:11:19,080 --> 00:11:22,880 Speaker 1: is typically the higher purity material, whereas Class two can 206 00:11:22,880 --> 00:11:26,000 Speaker 1: be contaminated with with iron in particular, So it's a 207 00:11:26,120 --> 00:11:29,760 Speaker 1: class one material that you need in litemon batteries, and 208 00:11:29,840 --> 00:11:33,439 Speaker 1: Russia actually produces around sev of the world's kind of 209 00:11:33,480 --> 00:11:37,680 Speaker 1: supply of this class one material. So the sanctions imposed 210 00:11:37,679 --> 00:11:42,960 Speaker 1: on Russia, you know, do create problems for the battery 211 00:11:43,000 --> 00:11:46,400 Speaker 1: industry going forward. And these are as, i say, kind 212 00:11:46,400 --> 00:11:49,200 Speaker 1: of exacerbating problems that have actually been there in the past. 213 00:11:49,280 --> 00:11:51,960 Speaker 1: I think it was two years ago so that Elon 214 00:11:52,040 --> 00:11:55,440 Speaker 1: Musk pleaded for for for nickel miners to invest in 215 00:11:55,440 --> 00:11:59,320 Speaker 1: more capacity and start producing more nickel, and that hasn't 216 00:11:59,400 --> 00:12:02,200 Speaker 1: really had And there's some more capacity that's been in 217 00:12:02,240 --> 00:12:05,440 Speaker 1: the works coming online in Indonesia for a couple of years, 218 00:12:05,480 --> 00:12:08,640 Speaker 1: but not to the extent that most kind of automated 219 00:12:08,720 --> 00:12:11,800 Speaker 1: is expect will be be needed. So there are kind 220 00:12:11,800 --> 00:12:14,880 Speaker 1: of supply chain constraints coming up there. And not to mention, 221 00:12:15,440 --> 00:12:18,720 Speaker 1: you know, on top of that, the volatility and pricing 222 00:12:19,520 --> 00:12:21,720 Speaker 1: doesn't help. And you know, I should I should point 223 00:12:21,720 --> 00:12:24,680 Speaker 1: out that actually a lot of automakers and sell manufacturers 224 00:12:24,960 --> 00:12:27,920 Speaker 1: what they've done is they've they've locked in long, longer 225 00:12:28,000 --> 00:12:31,800 Speaker 1: term supply. So we heard of again Tesla locking in 226 00:12:31,840 --> 00:12:34,920 Speaker 1: this kind of longer term deal with with Valet, the 227 00:12:35,040 --> 00:12:38,840 Speaker 1: Brazilian nickel minor. And when you have these longer term contracts, 228 00:12:39,040 --> 00:12:41,360 Speaker 1: you're not as exposed to the kind of volatility in 229 00:12:41,360 --> 00:12:44,960 Speaker 1: the spot price market. But when it comes to renegotiating 230 00:12:45,000 --> 00:12:48,800 Speaker 1: those contracts, you know, when whenever whenever, that is, if 231 00:12:48,840 --> 00:12:51,040 Speaker 1: prices are high, the price that you'll end up paying 232 00:12:51,080 --> 00:12:53,000 Speaker 1: for that kind of new contract is going to be higher. 233 00:12:53,040 --> 00:12:56,560 Speaker 1: So the uncertainty, you know, doesn't help the industry at all. 234 00:12:57,040 --> 00:12:58,880 Speaker 1: And at the end of the day, it's it's really 235 00:12:59,080 --> 00:13:01,480 Speaker 1: consumers that end up kind of feeding the bike because 236 00:13:01,480 --> 00:13:04,640 Speaker 1: most of those prices have passed through to automatacy then 237 00:13:04,679 --> 00:13:08,080 Speaker 1: process that through to the consumer. So you know, the 238 00:13:08,160 --> 00:13:11,240 Speaker 1: other problem for consumers as far as I can tell, 239 00:13:11,280 --> 00:13:12,480 Speaker 1: and I may be wrong, but as far as I 240 00:13:12,520 --> 00:13:15,199 Speaker 1: can tell, yes, there is the cost, but there's also 241 00:13:15,280 --> 00:13:18,400 Speaker 1: just like it seems like at least speaking from the 242 00:13:18,480 --> 00:13:23,120 Speaker 1: US perspective, that we're basically maxed out. Consumers are willing 243 00:13:23,160 --> 00:13:25,559 Speaker 1: to buy not just all of the evs that exist 244 00:13:25,600 --> 00:13:27,240 Speaker 1: on the market, but more. And so you have these 245 00:13:27,240 --> 00:13:31,280 Speaker 1: waiting lists from the legacy automakers that you know, in 246 00:13:31,320 --> 00:13:33,480 Speaker 1: some cases are over a year people waiting to say, 247 00:13:33,520 --> 00:13:35,960 Speaker 1: like buy a new electric truck or something like that. 248 00:13:36,440 --> 00:13:39,520 Speaker 1: So we have this it seems like the demand is massive. 249 00:13:39,559 --> 00:13:41,800 Speaker 1: And then you look at these charts of e V 250 00:13:42,520 --> 00:13:45,240 Speaker 1: market penetration expecting the future, and they're all like the 251 00:13:45,280 --> 00:13:48,319 Speaker 1: classic up into the right. And so I guess the 252 00:13:48,400 --> 00:13:52,280 Speaker 1: question is, like, how much of a constraint is battery 253 00:13:52,320 --> 00:13:57,360 Speaker 1: supply to essentially the trajectory of e vs the people 254 00:13:57,720 --> 00:14:00,680 Speaker 1: forecast if it were just from a demand perspective, because 255 00:14:00,720 --> 00:14:03,240 Speaker 1: it looks like demand is now the problem. Well, the 256 00:14:03,320 --> 00:14:07,760 Speaker 1: supply of new of nickel and other metals allow for 257 00:14:07,800 --> 00:14:12,440 Speaker 1: that sort of like hockey stick like growth in EV penetration. Yeah, again, 258 00:14:12,480 --> 00:14:15,440 Speaker 1: this is this is a million dollar question, um, And 259 00:14:15,480 --> 00:14:20,680 Speaker 1: I think, yeah, certainly battery supply is consideration, you know, 260 00:14:20,720 --> 00:14:23,960 Speaker 1: I think we'll certainly see that kind of hockey stick 261 00:14:24,000 --> 00:14:26,800 Speaker 1: like growth up into the right in electric vehicles. I 262 00:14:26,840 --> 00:14:30,479 Speaker 1: think the question is, you know, how steep is that transient? 263 00:14:30,840 --> 00:14:32,960 Speaker 1: As you say, there's a number of kind of potential 264 00:14:33,000 --> 00:14:37,160 Speaker 1: bottomnecks within the supply chain that could limit that growth. Um, 265 00:14:37,640 --> 00:14:39,320 Speaker 1: you know, if we go to the raw material side 266 00:14:39,320 --> 00:14:43,080 Speaker 1: of things, it's literally is there enough lithium or nickel 267 00:14:43,160 --> 00:14:45,160 Speaker 1: that can be dug out of the ground to meet 268 00:14:45,200 --> 00:14:49,920 Speaker 1: that demand? And based on current trajectories, you know, well 269 00:14:50,120 --> 00:14:52,560 Speaker 1: will will be okay for the next kind of two 270 00:14:52,640 --> 00:14:55,800 Speaker 1: or three years. There's going to be potential shortages you 271 00:14:55,840 --> 00:14:59,280 Speaker 1: know in lithium and nickel and cobalt. Then after that 272 00:14:59,320 --> 00:15:02,040 Speaker 1: it really depends on whether the new minds that are 273 00:15:02,080 --> 00:15:05,040 Speaker 1: slated to come online do manage to come online or 274 00:15:05,080 --> 00:15:07,040 Speaker 1: you know, if there are delays. One of the key 275 00:15:07,800 --> 00:15:10,280 Speaker 1: that we should be watching one of the problems as 276 00:15:10,280 --> 00:15:14,480 Speaker 1: I said, so so so within Indonesia, there's there's a 277 00:15:14,520 --> 00:15:17,320 Speaker 1: lot of new projects which are using a technology called 278 00:15:18,240 --> 00:15:21,400 Speaker 1: h PAL so high pressure acid leaching. Now this is 279 00:15:21,440 --> 00:15:25,720 Speaker 1: a promising technology, but there's only one operating mind in 280 00:15:25,760 --> 00:15:27,560 Speaker 1: the world that uses it today. So there's a lot 281 00:15:27,680 --> 00:15:31,440 Speaker 1: riding on a technology that is to some extent not 282 00:15:31,600 --> 00:15:34,640 Speaker 1: that widespread. And if those minds don't come on online, 283 00:15:34,680 --> 00:15:37,320 Speaker 1: then then we start to kind of run into issues. 284 00:15:37,960 --> 00:15:40,160 Speaker 1: Then on the lithium side of things, you know, there's 285 00:15:40,200 --> 00:15:43,160 Speaker 1: there's there's a huge number of kind of minds that 286 00:15:43,200 --> 00:15:45,880 Speaker 1: are looking to open. We have kind of new minds 287 00:15:45,920 --> 00:15:51,040 Speaker 1: opening in Australia, we have new refining refineries opening in Australia. 288 00:15:51,080 --> 00:15:53,720 Speaker 1: There's a Chinese company that's just helped open a new 289 00:15:53,760 --> 00:15:56,240 Speaker 1: lithium refinery. So we've we've got a lot of kind 290 00:15:56,240 --> 00:15:59,680 Speaker 1: of potential projects coming online. And then within the US 291 00:15:59,800 --> 00:16:02,080 Speaker 1: we look at something kind of new lithium projects that 292 00:16:02,080 --> 00:16:05,160 Speaker 1: are that are being stated there. There are companies like 293 00:16:05,160 --> 00:16:09,200 Speaker 1: Standy Lithium and others that are looking at geothermal projects. Similarly, 294 00:16:09,280 --> 00:16:12,040 Speaker 1: in Europe we have Fulcan Lithium which is also looking 295 00:16:12,080 --> 00:16:14,400 Speaker 1: at a geo thermal project. So there's a lot of 296 00:16:14,560 --> 00:16:17,200 Speaker 1: activity in the sector. It's just a question of can 297 00:16:17,200 --> 00:16:20,040 Speaker 1: you push those through to the end and actually execute 298 00:16:20,120 --> 00:16:24,040 Speaker 1: on them, and that's that's harder to do. So, just 299 00:16:24,080 --> 00:16:26,720 Speaker 1: on that note, can can you go back to what 300 00:16:26,880 --> 00:16:30,280 Speaker 1: Joe and I were kind of hinting at earlier? Are 301 00:16:30,360 --> 00:16:34,720 Speaker 1: there enough of these medals in the ground to satisfy demand? 302 00:16:35,400 --> 00:16:37,120 Speaker 1: And is it the case that it just takes a 303 00:16:37,120 --> 00:16:41,200 Speaker 1: while to build the minds, develop new technology to actually 304 00:16:41,400 --> 00:16:45,720 Speaker 1: extract them. So so there's slightly enough in the ground. 305 00:16:46,320 --> 00:16:47,960 Speaker 1: It is as you say, though, it just takes a 306 00:16:47,960 --> 00:16:50,040 Speaker 1: while to develop these projects. If you look at a 307 00:16:50,080 --> 00:16:52,880 Speaker 1: typical kind of mind development time, you could be looking 308 00:16:52,880 --> 00:16:56,560 Speaker 1: at kind of seven to ten years, and that becomes 309 00:16:56,560 --> 00:16:59,200 Speaker 1: an issue if that hockey stick growth takes off faster 310 00:16:59,240 --> 00:17:02,360 Speaker 1: than expected. If of setting more uvs this year, that's 311 00:17:02,360 --> 00:17:04,760 Speaker 1: hard because you can't just get a new mind operating 312 00:17:04,800 --> 00:17:07,399 Speaker 1: this year. Similarly, you can't get a new cell manufacturing 313 00:17:07,400 --> 00:17:10,199 Speaker 1: plant operating overnight. So that that that's where the issues 314 00:17:10,560 --> 00:17:13,879 Speaker 1: come as if demand is there faster than than supply 315 00:17:14,000 --> 00:17:15,879 Speaker 1: can keep up, you know, which is always going to be, 316 00:17:16,000 --> 00:17:18,520 Speaker 1: you know, an issue in any kind of growing market, 317 00:17:18,600 --> 00:17:22,119 Speaker 1: how does that supply demand balance work. But until the 318 00:17:22,200 --> 00:17:25,320 Speaker 1: last year or so, it seemed like supply was going 319 00:17:25,359 --> 00:17:27,280 Speaker 1: to be ahead of demand, and suddenly that's flipped and 320 00:17:27,600 --> 00:17:31,160 Speaker 1: we've seen this kind of great up taking in electric vehicles. 321 00:17:32,000 --> 00:17:35,080 Speaker 1: So we know that governments around the world are thinking 322 00:17:35,160 --> 00:17:37,680 Speaker 1: about this and concerned, and of course we saw we 323 00:17:37,800 --> 00:17:41,280 Speaker 1: got the news from the White House recently about wanting 324 00:17:41,320 --> 00:17:46,080 Speaker 1: to accelerate domestic sourcing of key medals. What steps are 325 00:17:46,080 --> 00:17:49,800 Speaker 1: being taken around the world to make it such that 326 00:17:49,960 --> 00:17:53,879 Speaker 1: some of these new projects maybe move faster or approved 327 00:17:53,920 --> 00:17:57,800 Speaker 1: faster or developed faster, and what are the what policies 328 00:17:57,960 --> 00:18:00,480 Speaker 1: should be. We'll be watching to see whether or whether 329 00:18:00,520 --> 00:18:03,600 Speaker 1: they prove effective. Again, this is a This is a 330 00:18:03,600 --> 00:18:07,040 Speaker 1: difficult one because I think there's lots of discussions around 331 00:18:07,040 --> 00:18:09,320 Speaker 1: the world of needing to open new minds, and you know, 332 00:18:09,400 --> 00:18:11,960 Speaker 1: the signing of the Defense or the invoking of the 333 00:18:12,000 --> 00:18:15,920 Speaker 1: Defense Production Act in the US is a great indicator 334 00:18:16,040 --> 00:18:19,000 Speaker 1: that the US government is backing the battery supply chain 335 00:18:19,040 --> 00:18:21,960 Speaker 1: and wants these minerals to be there. But in most 336 00:18:22,000 --> 00:18:25,919 Speaker 1: of the kind of western world, the problem isn't government 337 00:18:25,960 --> 00:18:29,520 Speaker 1: support so much, it's the permitting and the processing. You know, 338 00:18:29,560 --> 00:18:33,760 Speaker 1: there's still amount of opposition to digging minerals out of 339 00:18:33,800 --> 00:18:37,000 Speaker 1: the ground in Europe or the US. One of the 340 00:18:37,080 --> 00:18:40,639 Speaker 1: kind of recent European lithium projects that was slay to 341 00:18:40,640 --> 00:18:44,200 Speaker 1: start operation a year or two ago in Portugal ran 342 00:18:44,320 --> 00:18:48,159 Speaker 1: up against environmental kind of lobbyists and and has been 343 00:18:48,200 --> 00:18:51,440 Speaker 1: delayed a couple of times since then. So we've got 344 00:18:51,440 --> 00:18:55,199 Speaker 1: this kind of split environmental group where lifting batteries are 345 00:18:55,240 --> 00:18:57,639 Speaker 1: good for the environment because you get evs on the 346 00:18:57,720 --> 00:19:01,200 Speaker 1: road and polluting cars off the road. But there's still 347 00:19:01,200 --> 00:19:06,720 Speaker 1: this concern around local impacts on the environment and and 348 00:19:06,720 --> 00:19:09,520 Speaker 1: and kind of habitats. That's the real issue, and it's 349 00:19:09,560 --> 00:19:11,479 Speaker 1: it's hard for a lot of Western governments to kind 350 00:19:11,480 --> 00:19:15,440 Speaker 1: of balance that. So although we see money and and 351 00:19:15,440 --> 00:19:19,320 Speaker 1: and kind of government sentiments supporting these projects, it's slightly 352 00:19:19,359 --> 00:19:21,480 Speaker 1: harder under ground to actually kind of carry them forward. 353 00:19:22,119 --> 00:19:25,000 Speaker 1: There are some countries that are better than others. So Canada, 354 00:19:25,040 --> 00:19:27,960 Speaker 1: for example, is expected to announce around one point six 355 00:19:28,000 --> 00:19:32,240 Speaker 1: billion US dollars to support mining of kind of critical 356 00:19:32,280 --> 00:19:36,760 Speaker 1: battery materials in its upcoming budget. And in Canada the 357 00:19:36,840 --> 00:19:41,640 Speaker 1: kind of legislation is much more friendly to minors, so 358 00:19:41,880 --> 00:19:45,359 Speaker 1: there we can see projects coming online faster. You know. Similarly, 359 00:19:45,359 --> 00:19:47,960 Speaker 1: in countries like Indonesia, as they say, where you have 360 00:19:47,960 --> 00:19:51,000 Speaker 1: these nickel projects being developed, it can be easier to 361 00:19:51,440 --> 00:19:53,359 Speaker 1: get these minds up and running from a kind of 362 00:19:53,400 --> 00:19:57,320 Speaker 1: permitting perspective. So it's really, i think, i'd say, in 363 00:19:57,080 --> 00:20:00,600 Speaker 1: in in the US and in Europe, it's watching see 364 00:20:01,119 --> 00:20:04,080 Speaker 1: what else kind of what legislation follows things like the 365 00:20:04,240 --> 00:20:06,520 Speaker 1: Defense Production Act. You know, how how does the government 366 00:20:06,520 --> 00:20:11,080 Speaker 1: then move to support these minds in a more material way? 367 00:20:11,119 --> 00:20:13,199 Speaker 1: If you like I was about to ask, what does 368 00:20:13,240 --> 00:20:16,159 Speaker 1: it actually mean if a government says they're going to 369 00:20:16,240 --> 00:20:21,320 Speaker 1: spend X billion dollars to boost domestic mining capacity, Like, 370 00:20:21,400 --> 00:20:24,840 Speaker 1: how does that money actually flow? And is it the 371 00:20:24,840 --> 00:20:29,119 Speaker 1: case that maybe, I don't know, maybe designating land for 372 00:20:29,119 --> 00:20:32,040 Speaker 1: for this activity would be more useful in terms of 373 00:20:32,080 --> 00:20:35,720 Speaker 1: boosting production. How does it actually work? It's it varies 374 00:20:35,760 --> 00:20:38,880 Speaker 1: a lot by location, so we're still waiting to get 375 00:20:38,880 --> 00:20:41,399 Speaker 1: the kind of final details. Canada's one point six billion, 376 00:20:41,440 --> 00:20:44,440 Speaker 1: for example, But you know there that that that money 377 00:20:44,520 --> 00:20:48,200 Speaker 1: might go to help carry up feasibility studies. It could 378 00:20:48,440 --> 00:20:50,639 Speaker 1: be offered in the way of loans to kind of 379 00:20:50,760 --> 00:20:54,719 Speaker 1: buy equipment or to kind of start operating projects. In 380 00:20:54,800 --> 00:20:58,080 Speaker 1: the US, the Defense Production Act makes will make around 381 00:20:58,080 --> 00:21:03,320 Speaker 1: seven hundred and fifty million in funds available which companies 382 00:21:03,359 --> 00:21:05,960 Speaker 1: can use for these kind of feasibility studies, so assessing 383 00:21:06,720 --> 00:21:10,520 Speaker 1: where they could build new minds or for upgrading equipment 384 00:21:10,520 --> 00:21:13,640 Speaker 1: and infrastructure so they can get higher yields have become 385 00:21:13,680 --> 00:21:16,480 Speaker 1: more environmentally friendly in the process. So there's lots of 386 00:21:16,520 --> 00:21:19,720 Speaker 1: different ways that it can be spent. We don't kind 387 00:21:19,720 --> 00:21:23,159 Speaker 1: of soft and see land being directly kind of designated 388 00:21:23,240 --> 00:21:25,920 Speaker 1: four minds. But again that's that's an knocking that could 389 00:21:25,920 --> 00:21:44,000 Speaker 1: be on the table. I want to switch a little 390 00:21:44,000 --> 00:21:48,200 Speaker 1: bit to the state of grid storage. And you know, obviously, 391 00:21:48,280 --> 00:21:52,480 Speaker 1: as we've seen, particularly in Europe, the electricity prices have 392 00:21:52,560 --> 00:21:55,560 Speaker 1: gone absolutely nuts, and there's a lot of interest in 393 00:21:55,560 --> 00:21:59,920 Speaker 1: increasing renewables, particularly wind and solar, but of course it's 394 00:22:00,040 --> 00:22:02,199 Speaker 1: seems like for them to really work and to have 395 00:22:02,280 --> 00:22:05,280 Speaker 1: like a zero emissions grid, you would need a lot 396 00:22:05,320 --> 00:22:08,639 Speaker 1: of backup battery power to back up those powers. So 397 00:22:08,720 --> 00:22:12,800 Speaker 1: where how big is that market right now? Just grid 398 00:22:12,880 --> 00:22:17,040 Speaker 1: level batteries. Yes, the good market, as I mentioned, is 399 00:22:17,600 --> 00:22:21,520 Speaker 1: smaller in terms of demand for batteries than the passenger 400 00:22:21,560 --> 00:22:24,200 Speaker 1: electric vehicle market. But as you say, it's it's key 401 00:22:24,280 --> 00:22:27,159 Speaker 1: to this renewable energy push. You really need to have 402 00:22:27,240 --> 00:22:31,199 Speaker 1: those batteries on grids in order to kind of avoid 403 00:22:31,320 --> 00:22:34,800 Speaker 1: curtailment and and and really decarbonized grids. But if we 404 00:22:34,840 --> 00:22:36,800 Speaker 1: look at it on a let's say, kind of giggle 405 00:22:36,840 --> 00:22:38,800 Speaker 1: on our basis, So this this unit we use for 406 00:22:38,840 --> 00:22:44,520 Speaker 1: measuring battery demand, um it represents somewhere around kind of 407 00:22:44,560 --> 00:22:48,520 Speaker 1: five percent of the total demand for batteries today, So 408 00:22:48,600 --> 00:22:51,960 Speaker 1: it's you know, it's very small, but it is it's critical, 409 00:22:52,040 --> 00:22:55,000 Speaker 1: and its use is going to kind of continue growing. 410 00:22:55,480 --> 00:22:57,480 Speaker 1: So as we get into you know, as you say 411 00:22:57,480 --> 00:22:59,840 Speaker 1: in Europe, particularly as we get it further into this decade, 412 00:23:00,520 --> 00:23:04,919 Speaker 1: demand will will increase and we'll probably see somewhere around 413 00:23:05,280 --> 00:23:07,520 Speaker 1: kind of a hundred thirty giggle what hours of cumulative 414 00:23:07,640 --> 00:23:11,240 Speaker 1: batteries deployed on on the grid to help support renewable integration. 415 00:23:11,440 --> 00:23:15,240 Speaker 1: So can I I apologize for this, but I always 416 00:23:15,280 --> 00:23:19,360 Speaker 1: get lost at like d thirty kilt hours and how 417 00:23:19,400 --> 00:23:21,720 Speaker 1: to how to think about that? And how big is that? 418 00:23:21,960 --> 00:23:24,800 Speaker 1: Like how big? Well, how big is there? Yeah? That's 419 00:23:25,040 --> 00:23:27,480 Speaker 1: um that is one that I'll have trying to work 420 00:23:27,480 --> 00:23:29,320 Speaker 1: out the top of my head. I think the way 421 00:23:29,359 --> 00:23:31,200 Speaker 1: to think about this is that there's a project that's 422 00:23:31,200 --> 00:23:35,440 Speaker 1: being built in Florida that's about nine hundred megawae hours 423 00:23:35,480 --> 00:23:38,040 Speaker 1: and I can't remember the exact number that they gave, 424 00:23:38,160 --> 00:23:42,080 Speaker 1: but that's something like thirty football fields. So it's a 425 00:23:42,160 --> 00:23:44,280 Speaker 1: huge amount of space that's required. But the thing to 426 00:23:44,320 --> 00:23:48,000 Speaker 1: remember is that these are generally not that nine hundred 427 00:23:48,000 --> 00:23:50,199 Speaker 1: megawae hour in size. You know, they tend to be 428 00:23:50,280 --> 00:23:53,720 Speaker 1: smaller projects around anywhere from a hundred to two hundred 429 00:23:53,680 --> 00:23:58,359 Speaker 1: megawa hours, and they're they're distributed around the grid where needed. 430 00:23:58,400 --> 00:24:00,879 Speaker 1: So you're not going to kind of walk into, uh, 431 00:24:01,440 --> 00:24:03,520 Speaker 1: you know, come off the highway and find just a 432 00:24:03,560 --> 00:24:06,520 Speaker 1: field full of batteries. You know, they'll be more distributed 433 00:24:06,600 --> 00:24:09,240 Speaker 1: probably on the edge of let's say solo farms, and 434 00:24:09,359 --> 00:24:12,080 Speaker 1: the space compared to solo farm is kind of tiny. 435 00:24:13,119 --> 00:24:15,719 Speaker 1: So a lot of our discussions so far has been 436 00:24:15,760 --> 00:24:20,520 Speaker 1: about the idea of countries securing domestic supply of medals 437 00:24:20,520 --> 00:24:24,280 Speaker 1: that are vital to building batteries. What what do companies 438 00:24:24,320 --> 00:24:27,080 Speaker 1: do in this situation. I mean, you mentioned Elon Musk 439 00:24:27,200 --> 00:24:30,800 Speaker 1: saying that he wanted better domestic production of I think 440 00:24:30,840 --> 00:24:34,480 Speaker 1: it was nickel. But what can you know big car 441 00:24:34,520 --> 00:24:39,160 Speaker 1: companies or battery makers, actually, due to secure supply, there's 442 00:24:39,200 --> 00:24:42,000 Speaker 1: not a lot they can do themselves at the moment. Typically, 443 00:24:42,560 --> 00:24:48,679 Speaker 1: battery manufacturers and particularly automakers have automakers don't want to 444 00:24:48,680 --> 00:24:51,080 Speaker 1: be vertically integrated. If we look at what's happened over 445 00:24:51,119 --> 00:24:54,480 Speaker 1: the last kind of a couple of decades, companies like 446 00:24:54,560 --> 00:24:58,000 Speaker 1: VW have tried to reduce their kind of vertical integration 447 00:24:58,000 --> 00:25:02,479 Speaker 1: and secure supplies. It's only that's now changing if they 448 00:25:02,560 --> 00:25:04,560 Speaker 1: want to make sure that they can get hold of 449 00:25:04,560 --> 00:25:07,439 Speaker 1: these kind of critical battery materials. A lot of them 450 00:25:07,520 --> 00:25:10,640 Speaker 1: are signing these longer term off take agreements, but actually, 451 00:25:11,000 --> 00:25:12,679 Speaker 1: you know, increasingly more and more of them, they are 452 00:25:12,720 --> 00:25:18,240 Speaker 1: actually investing in small scale lithium producers. So I Testa 453 00:25:18,320 --> 00:25:21,000 Speaker 1: again as an example, invested in a company called Piedmont 454 00:25:21,080 --> 00:25:24,800 Speaker 1: Lithium in the US or it has a long time 455 00:25:24,800 --> 00:25:28,120 Speaker 1: off take with them. Similarly, a lot of Chinese battery 456 00:25:28,119 --> 00:25:32,399 Speaker 1: producers in particular are investing in or taking kind of 457 00:25:32,400 --> 00:25:35,480 Speaker 1: exerting states in small scale minds in order to make 458 00:25:35,520 --> 00:25:39,080 Speaker 1: sure that they have availability to that for that material 459 00:25:39,119 --> 00:25:41,680 Speaker 1: in the future, and so they have better kind of 460 00:25:41,760 --> 00:25:43,760 Speaker 1: visibility on what that pricing is going to look like. 461 00:25:43,840 --> 00:25:47,120 Speaker 1: It helps reduce their exposure to the kind of volatile 462 00:25:47,240 --> 00:25:50,360 Speaker 1: kind of spot price market. Essentially. So I want really 463 00:25:50,400 --> 00:25:54,520 Speaker 1: talk about the broader trajectory of batteries, and you mentioned 464 00:25:54,560 --> 00:25:57,600 Speaker 1: something interesting at the very beginning, which is that maybe 465 00:25:57,760 --> 00:26:01,680 Speaker 1: in ten years will have solid state batteries. Let's talk 466 00:26:01,680 --> 00:26:03,840 Speaker 1: about that A bit more, what is the breakthrough that 467 00:26:03,880 --> 00:26:06,000 Speaker 1: everyone is hoping for. Let's start there. What does that 468 00:26:06,119 --> 00:26:08,359 Speaker 1: mean if we were to switch from the lithium iron 469 00:26:08,400 --> 00:26:10,960 Speaker 1: approached to the solid state and why that would be 470 00:26:10,960 --> 00:26:13,840 Speaker 1: such a game changer. So, yeah, slid state batteries have 471 00:26:13,840 --> 00:26:17,280 Speaker 1: have have really been on the horizon for for for 472 00:26:17,560 --> 00:26:20,479 Speaker 1: well over a decade now, and the big difference is 473 00:26:20,520 --> 00:26:23,680 Speaker 1: that today when we look at a lithium ion battery, 474 00:26:24,040 --> 00:26:28,119 Speaker 1: there's three important components. So you have the two electrodes 475 00:26:28,200 --> 00:26:31,439 Speaker 1: called the cathode and the anode, and then they're typically 476 00:26:31,520 --> 00:26:36,680 Speaker 1: separated by a liquid electrolyte. So this liquid electrolyte helps 477 00:26:36,800 --> 00:26:41,479 Speaker 1: move lithium between the two electrodes, and that's the kind 478 00:26:41,480 --> 00:26:44,359 Speaker 1: of basic principle of how the battery works. In a 479 00:26:44,359 --> 00:26:47,640 Speaker 1: solid state battery, you get rid of that that liquid 480 00:26:47,880 --> 00:26:50,840 Speaker 1: and you replace it with a solid material that lithium 481 00:26:50,880 --> 00:26:53,560 Speaker 1: ions can can move through. So it's really kind of 482 00:26:54,040 --> 00:26:58,040 Speaker 1: quite ingenious. And by getting rid of that liquid, you're 483 00:26:58,040 --> 00:27:02,560 Speaker 1: removing fuel source. So one of the problems with lickingmone batteries, 484 00:27:02,600 --> 00:27:04,920 Speaker 1: and it's a very rare occurrence, but you do often 485 00:27:04,960 --> 00:27:08,440 Speaker 1: you do occasionally hear about evy battery fires and they're 486 00:27:08,480 --> 00:27:12,040 Speaker 1: often fueled by this liquid electrolyte. So if you get 487 00:27:12,119 --> 00:27:15,320 Speaker 1: rid of that, battery has become much safer and actually 488 00:27:15,560 --> 00:27:19,680 Speaker 1: it then allows you to manufacture much denser batteries as well, 489 00:27:20,240 --> 00:27:24,399 Speaker 1: so smaller volume, less weight in some instances, and again 490 00:27:24,440 --> 00:27:27,960 Speaker 1: that helps increase the range of your vehicle. That's also 491 00:27:28,000 --> 00:27:30,560 Speaker 1: another big debate. I think I mentioned this earlier, but 492 00:27:31,119 --> 00:27:34,760 Speaker 1: some people believe that range anxiety is one of the 493 00:27:34,800 --> 00:27:37,880 Speaker 1: things that holds back electric vehicles, and I think it's 494 00:27:37,880 --> 00:27:40,520 Speaker 1: certainly true if you think about the you know, the 495 00:27:40,600 --> 00:27:43,960 Speaker 1: one long journey that you do each year where in 496 00:27:44,000 --> 00:27:47,040 Speaker 1: the UK where I'm based, you might drive let's say 497 00:27:47,040 --> 00:27:50,760 Speaker 1: three miles in one go, and you can't really do 498 00:27:50,840 --> 00:27:52,960 Speaker 1: that in an evening today. It's going to be right 499 00:27:53,000 --> 00:27:55,000 Speaker 1: on the edge of the limit of what navy can do, 500 00:27:55,320 --> 00:27:57,439 Speaker 1: particularly if you have the air con on, if you've 501 00:27:57,480 --> 00:28:00,359 Speaker 1: got the stereo on. All of these things drained the actually, 502 00:28:00,840 --> 00:28:04,199 Speaker 1: so to range anxiety is considered by some to be, 503 00:28:04,280 --> 00:28:05,520 Speaker 1: as I say, one of the things that kind of 504 00:28:05,520 --> 00:28:08,120 Speaker 1: holds that back. When I think about when I get 505 00:28:08,160 --> 00:28:10,480 Speaker 1: an e V, you know, I got a hybrid of 506 00:28:10,520 --> 00:28:13,159 Speaker 1: plug in hybrid because I want to drive around London 507 00:28:13,240 --> 00:28:15,760 Speaker 1: on electric But for that longer journey, I don't want 508 00:28:15,800 --> 00:28:19,639 Speaker 1: to be started charging for you know, minutes. With solid 509 00:28:19,640 --> 00:28:22,320 Speaker 1: state batteries, you could get a four five hundred mile 510 00:28:22,440 --> 00:28:25,679 Speaker 1: range out of that battery on one charge, and you know, 511 00:28:25,720 --> 00:28:29,200 Speaker 1: then suddenly range is not an issue. Really you need 512 00:28:29,240 --> 00:28:32,280 Speaker 1: to stop during that time anyway, to to grab a coffee, 513 00:28:32,320 --> 00:28:35,320 Speaker 1: to run to the restroom, you know, whatever it is. 514 00:28:35,600 --> 00:28:38,720 Speaker 1: And so I think solid state batteries that kind of 515 00:28:39,240 --> 00:28:43,240 Speaker 1: promising technology that would just level the playing field between 516 00:28:43,680 --> 00:28:48,160 Speaker 1: internal combustion engine vehicles and electric vehicles. Here's another really 517 00:28:48,240 --> 00:28:51,320 Speaker 1: dumb question from someone who doesn't know anything about this space. 518 00:28:51,720 --> 00:28:54,680 Speaker 1: But you know, you're talking about increasing the capacity of 519 00:28:54,720 --> 00:28:57,480 Speaker 1: the battery in order to increase the range. Are there 520 00:28:57,480 --> 00:29:01,400 Speaker 1: any efforts underway to decrease the charging time so that, 521 00:29:01,480 --> 00:29:05,080 Speaker 1: you know, actually charging your electric vehicle would be the 522 00:29:05,080 --> 00:29:08,240 Speaker 1: equivalent of pulling into a gas station and just getting 523 00:29:08,280 --> 00:29:10,720 Speaker 1: more gas. That's again one of the kind of big 524 00:29:10,760 --> 00:29:14,920 Speaker 1: focuses of a lot of water makers is this charge time. Today, 525 00:29:15,320 --> 00:29:17,360 Speaker 1: charge times have come down, but a lot If you 526 00:29:17,400 --> 00:29:21,560 Speaker 1: get a Porsche Tike and you can do k charge 527 00:29:21,640 --> 00:29:24,600 Speaker 1: in about twenty minutes or so, so that's that's, you know, 528 00:29:24,680 --> 00:29:27,760 Speaker 1: not too bad. I think it's probably slightly longer than 529 00:29:27,800 --> 00:29:30,360 Speaker 1: most people would want to stop at a gas station 530 00:29:30,720 --> 00:29:34,200 Speaker 1: if they're on a long journey, but it's not unreasonable. 531 00:29:34,800 --> 00:29:37,400 Speaker 1: But mass market e vs, you know, the kind of 532 00:29:37,680 --> 00:29:41,800 Speaker 1: v W golfs, etcetera, are not at that charging speed yet. 533 00:29:42,280 --> 00:29:45,480 Speaker 1: But most automakers, for some of their models, they're looking 534 00:29:45,520 --> 00:29:48,120 Speaker 1: to reduce charging time down to let's take kind of 535 00:29:48,160 --> 00:29:51,680 Speaker 1: ten or fifteen minutes, and perhaps as a result of that, 536 00:29:51,800 --> 00:29:53,880 Speaker 1: you need a smaller battery, so you're stopping a little 537 00:29:53,880 --> 00:29:57,400 Speaker 1: bit more often. But actually on long journeys, most people 538 00:29:57,440 --> 00:30:00,000 Speaker 1: want to stop everything let's say kind of two three 539 00:30:00,040 --> 00:30:17,680 Speaker 1: hundred miles anyway, so it's perhaps not such. Are there 540 00:30:17,680 --> 00:30:21,320 Speaker 1: any like big bang other big bang breakthroughs that people 541 00:30:21,360 --> 00:30:24,480 Speaker 1: are working on? So it seems like, you know, over time, 542 00:30:24,840 --> 00:30:29,080 Speaker 1: engineers get more and more ingenious about as you mentioned 543 00:30:29,200 --> 00:30:33,440 Speaker 1: the Chinese battery, engineers have found a way to get 544 00:30:33,480 --> 00:30:36,480 Speaker 1: more range out of the cheaper approach, and that that's 545 00:30:36,480 --> 00:30:40,239 Speaker 1: a potential breakthrough. Are we looking at a sequence of 546 00:30:40,280 --> 00:30:43,920 Speaker 1: just ongoing like sort of like squeezing more water from 547 00:30:43,920 --> 00:30:46,120 Speaker 1: the stone or squeezing more juice from the lemon or whatever. 548 00:30:46,760 --> 00:30:50,680 Speaker 1: Or are there other sort of like big step change breakthroughs, 549 00:30:50,920 --> 00:30:54,200 Speaker 1: maybe like the solid state battery that we should be pursuing, 550 00:30:54,440 --> 00:30:58,160 Speaker 1: because I feel like in the discussion, particularly around UM 551 00:30:58,200 --> 00:31:01,320 Speaker 1: the grid and the use of renewal bars, people are 552 00:31:01,360 --> 00:31:02,920 Speaker 1: talking about we just need to pour a ton of 553 00:31:02,960 --> 00:31:05,720 Speaker 1: money in this into R and D, etcetera and get 554 00:31:05,720 --> 00:31:07,520 Speaker 1: the big breakthrough. Is that how it's going to be 555 00:31:07,560 --> 00:31:11,560 Speaker 1: or or just be just incremental progress over time. So 556 00:31:11,600 --> 00:31:15,760 Speaker 1: I'm a big believer in kind of innovation helping to 557 00:31:15,800 --> 00:31:19,040 Speaker 1: reduce costs and improve performance. The question of is it 558 00:31:19,080 --> 00:31:21,120 Speaker 1: going to be a big breakthrough is it going to 559 00:31:21,160 --> 00:31:24,240 Speaker 1: be kind of smaller incremental ones. I used to be 560 00:31:24,320 --> 00:31:26,800 Speaker 1: a believer in the kind of big step change, but 561 00:31:26,840 --> 00:31:29,000 Speaker 1: actually I think now you know what I've come to 562 00:31:29,080 --> 00:31:31,880 Speaker 1: realize after working in this field kind of twelve years 563 00:31:31,960 --> 00:31:34,360 Speaker 1: or so, it's actually it's lots of kind of small 564 00:31:34,520 --> 00:31:37,640 Speaker 1: incremental changes that add up to make the big difference, 565 00:31:37,640 --> 00:31:40,560 Speaker 1: whether that's in cost or or in performance. And just 566 00:31:40,600 --> 00:31:43,560 Speaker 1: as an example of that, from two thousand and ten 567 00:31:44,200 --> 00:31:49,440 Speaker 1: to battery pack prices fell by from over a thousand 568 00:31:49,440 --> 00:31:52,480 Speaker 1: dollars parkular with our back in two and ten down 569 00:31:52,520 --> 00:31:56,239 Speaker 1: to around a hundred and thirty dollars parkular what so 570 00:31:56,320 --> 00:31:59,840 Speaker 1: kind of a huge change there, and there's not one 571 00:32:00,360 --> 00:32:02,960 Speaker 1: thing that you can kind of pinpoint on that helped that, 572 00:32:03,320 --> 00:32:05,640 Speaker 1: but there was lots of kind of small incremental changes, 573 00:32:05,920 --> 00:32:09,280 Speaker 1: things like changing the mix of metals in the cathode, 574 00:32:09,360 --> 00:32:12,640 Speaker 1: so reducing the amount of cobalt, increasing the amount of nickel, 575 00:32:13,040 --> 00:32:16,240 Speaker 1: as well as kind of improvements to the manufacturing process. 576 00:32:16,880 --> 00:32:19,520 Speaker 1: Economies are scale and manufacturing as well and within the 577 00:32:19,520 --> 00:32:22,600 Speaker 1: supply chain have been key to that. And so if 578 00:32:22,600 --> 00:32:26,160 Speaker 1: we look at what's going to happen over the next decade, 579 00:32:26,640 --> 00:32:30,600 Speaker 1: there's lots of kind of similar improvements and technologies on 580 00:32:30,720 --> 00:32:33,560 Speaker 1: the horizon. Solid State is just one of those, and 581 00:32:33,600 --> 00:32:37,480 Speaker 1: actually solid State will kind of will will benefit from 582 00:32:37,480 --> 00:32:39,960 Speaker 1: a lot of these other incremental changes. So the area 583 00:32:40,000 --> 00:32:43,320 Speaker 1: that I'm really interested in the moment is the manufacturing 584 00:32:43,360 --> 00:32:46,600 Speaker 1: process itself. It's it's something that although people have got 585 00:32:46,680 --> 00:32:49,760 Speaker 1: better at doing it over the last thirty years, it 586 00:32:49,840 --> 00:32:53,520 Speaker 1: hasn't really changed. And suddenly we're seeing a wave of 587 00:32:53,880 --> 00:32:57,200 Speaker 1: new companies coming to the market who are really focusing 588 00:32:57,800 --> 00:33:01,800 Speaker 1: on how they can kind challenge the status quo and 589 00:33:01,840 --> 00:33:05,520 Speaker 1: reduce costs, and so there's a couple of technologies that 590 00:33:05,640 --> 00:33:09,600 Speaker 1: are going to throw out here. One's called prelithation. So 591 00:33:09,640 --> 00:33:13,320 Speaker 1: this is is in theory, a relatively simple thing to do. 592 00:33:13,360 --> 00:33:15,680 Speaker 1: You add a little bit of extra lithium into the 593 00:33:15,720 --> 00:33:21,200 Speaker 1: battery during the manufacturing process, and for various reasons, that 594 00:33:21,560 --> 00:33:24,960 Speaker 1: bumps the energy density by about And what that kind 595 00:33:24,960 --> 00:33:29,080 Speaker 1: of increase in energy density means is that you need 596 00:33:31,000 --> 00:33:36,160 Speaker 1: less nickel, cobalt, manganese in the battery. And when you're 597 00:33:36,160 --> 00:33:40,280 Speaker 1: looking at the kind of manufacturing capacity you're producing kind 598 00:33:40,280 --> 00:33:42,880 Speaker 1: of more giggle what hours for every plant that you have, 599 00:33:43,160 --> 00:33:45,840 Speaker 1: and therefore your your kind of cost per giggle what 600 00:33:45,880 --> 00:33:48,560 Speaker 1: our produced comes down as well. So there's there's a 601 00:33:48,640 --> 00:33:52,240 Speaker 1: lot of innovations like that that are close to being 602 00:33:52,280 --> 00:33:55,480 Speaker 1: commercial commercialized, you know that they're in the pilot stage, 603 00:33:55,720 --> 00:33:57,400 Speaker 1: and I'm really looking to all of those to kind 604 00:33:57,400 --> 00:34:00,880 Speaker 1: of see how the industry develops. But as I say, 605 00:34:00,920 --> 00:34:04,200 Speaker 1: even technologies like that will will end up benefiting solid 606 00:34:04,240 --> 00:34:06,160 Speaker 1: state as well in the future. So it's it's really 607 00:34:06,800 --> 00:34:09,160 Speaker 1: no one silver bullet, but but lots of innovations at 608 00:34:09,160 --> 00:34:12,399 Speaker 1: the same time that will help push the industry forward. So, 609 00:34:12,560 --> 00:34:16,279 Speaker 1: speaking of the future. Here's a big picture question. But 610 00:34:16,520 --> 00:34:20,719 Speaker 1: the recent turmoil that we've seen in commodities, is that 611 00:34:21,120 --> 00:34:27,400 Speaker 1: a net positive for decarbonization and battery adoption or a 612 00:34:27,440 --> 00:34:30,200 Speaker 1: net negative because I could kind of see arguing it 613 00:34:30,840 --> 00:34:32,600 Speaker 1: both ways. So on the one hand, you have higher 614 00:34:32,600 --> 00:34:36,200 Speaker 1: oil prices and maybe people look for alternatives to traditional 615 00:34:36,280 --> 00:34:38,799 Speaker 1: fossil fuels. But on the other hand, you clearly have 616 00:34:38,920 --> 00:34:41,840 Speaker 1: higher metals prices as well, and that might make batteries 617 00:34:41,880 --> 00:34:45,600 Speaker 1: even more expensive for consumers, as you described earlier in 618 00:34:45,640 --> 00:34:48,920 Speaker 1: the conversation. So what's your your gut take on whether 619 00:34:49,000 --> 00:34:52,000 Speaker 1: this is all good or bad for batteries. There's one 620 00:34:52,040 --> 00:34:53,880 Speaker 1: I've been thinking about a lot over the last couple 621 00:34:53,880 --> 00:34:56,120 Speaker 1: of weeks. I think if I go with my gut, 622 00:34:56,160 --> 00:34:58,040 Speaker 1: I think it's a good thing. You know, as you say, 623 00:34:58,120 --> 00:35:02,480 Speaker 1: high oil prices do incentivized people from from driving their 624 00:35:02,560 --> 00:35:06,040 Speaker 1: combustion vehicles. It makes them think about, you know, what 625 00:35:06,080 --> 00:35:08,800 Speaker 1: should I do when I'm getting my next vehicles? Should 626 00:35:08,800 --> 00:35:10,719 Speaker 1: I go for gas again? What happens if I end 627 00:35:10,800 --> 00:35:13,120 Speaker 1: up in this kind of same situation? And so I 628 00:35:13,120 --> 00:35:17,360 Speaker 1: think that will push people towards evs. And although the 629 00:35:17,400 --> 00:35:20,880 Speaker 1: metals prices are higher now, and that's not great for 630 00:35:20,920 --> 00:35:24,560 Speaker 1: the battery market. We actually went through a similar situation 631 00:35:25,080 --> 00:35:28,879 Speaker 1: back in two thousand and eighteen where cobalt prices hit 632 00:35:29,000 --> 00:35:32,680 Speaker 1: almost a hundred thousand dollars per metric time, and and 633 00:35:32,760 --> 00:35:35,759 Speaker 1: lithium prices were at an all time high back then. 634 00:35:35,840 --> 00:35:38,080 Speaker 1: That that they're now higher than they were then, but 635 00:35:38,640 --> 00:35:43,400 Speaker 1: that actually resulted in innovation within the battery space. Suddenly 636 00:35:43,440 --> 00:35:45,719 Speaker 1: manufacturers looked to reduce the amount of cobalt that were 637 00:35:45,760 --> 00:35:49,920 Speaker 1: in their batteries, and that resulted in in kind of 638 00:35:50,000 --> 00:35:53,600 Speaker 1: much better performance and people were expecting. And so I 639 00:35:53,600 --> 00:35:58,560 Speaker 1: think it's it's this uncertainty today will kind of result 640 00:35:58,600 --> 00:36:01,240 Speaker 1: in innovation within the batteries base. And I think actually 641 00:36:01,239 --> 00:36:05,120 Speaker 1: in the supply chain, higher commodity prices, you know, that 642 00:36:05,160 --> 00:36:11,640 Speaker 1: typically incentivizes new production. So we'll see more companies interested 643 00:36:11,640 --> 00:36:14,800 Speaker 1: in in in digging nickel, lithium, cobalt out of the ground. 644 00:36:15,160 --> 00:36:16,719 Speaker 1: And so in the long run, I think this is 645 00:36:16,880 --> 00:36:21,400 Speaker 1: a positive for electrification. There's this old Thomas Edison quote, 646 00:36:21,400 --> 00:36:23,480 Speaker 1: and I'm not sure if it's apocryphal or not, but 647 00:36:23,520 --> 00:36:26,360 Speaker 1: I've seen it a bunch in battery talk, where I 648 00:36:26,360 --> 00:36:28,640 Speaker 1: guess Edison was like a battery skeptic way back in 649 00:36:28,680 --> 00:36:30,920 Speaker 1: the late eighteen hundreds, and you referred to the storage 650 00:36:30,960 --> 00:36:35,160 Speaker 1: batteries quote a mechanism for swindling the public by stock companies, 651 00:36:35,200 --> 00:36:38,080 Speaker 1: and you basically thought all these battery companies were frauds. 652 00:36:38,080 --> 00:36:40,200 Speaker 1: They like weren't going to shake out and people just 653 00:36:40,239 --> 00:36:42,200 Speaker 1: lose a lot of money. Is there a lot of 654 00:36:42,600 --> 00:36:49,400 Speaker 1: flim flammery in the battery world? Flim flammery. That's a 655 00:36:49,440 --> 00:36:53,520 Speaker 1: great word. I think that's my my new favorite synonym 656 00:36:53,600 --> 00:36:56,480 Speaker 1: for securities. Yeah, Like, is the is it a space 657 00:36:56,560 --> 00:36:59,000 Speaker 1: that there's like a bunch of people promising all kinds 658 00:36:59,040 --> 00:37:01,840 Speaker 1: of like yeah, we're have this big breakthrough blah blah blah, 659 00:37:02,040 --> 00:37:04,120 Speaker 1: and it's always five years out or it's always ten 660 00:37:04,160 --> 00:37:06,719 Speaker 1: years away. And meanwhile, a bunch of people there is 661 00:37:06,760 --> 00:37:08,960 Speaker 1: a lot of money chasing something like Holy Grail or 662 00:37:08,960 --> 00:37:11,800 Speaker 1: a company they're just going to change everything. It's certainly 663 00:37:11,840 --> 00:37:14,279 Speaker 1: true to say that there has been that within the 664 00:37:14,320 --> 00:37:17,879 Speaker 1: battery industry, and there were a number of companies in 665 00:37:18,000 --> 00:37:22,160 Speaker 1: the kind of twenty tens that over promised and underperformed. 666 00:37:22,160 --> 00:37:24,400 Speaker 1: I think that the probably the biggest one that people 667 00:37:24,440 --> 00:37:30,200 Speaker 1: will remember is the UK consumer appliance company. Dyson brought 668 00:37:30,239 --> 00:37:33,040 Speaker 1: a solid state company called sack T three in I 669 00:37:33,080 --> 00:37:36,879 Speaker 1: think it was seventeen or so, and within to two 670 00:37:36,960 --> 00:37:39,880 Speaker 1: or three years they had wound down that part of 671 00:37:39,880 --> 00:37:43,719 Speaker 1: the battery research team because sack T three couldn't deliver 672 00:37:43,760 --> 00:37:46,920 Speaker 1: on the promises that it had made. So there are 673 00:37:46,960 --> 00:37:50,399 Speaker 1: examples of that, but I think there's a lot more. 674 00:37:50,880 --> 00:37:52,880 Speaker 1: I would say that's a kind of transparency in the 675 00:37:52,880 --> 00:37:55,640 Speaker 1: battery market than perhaps when Edison was around. So I 676 00:37:55,640 --> 00:38:00,719 Speaker 1: think companies so I think, you know, companies tend to 677 00:38:00,800 --> 00:38:03,160 Speaker 1: understand these days that you know they won't get away 678 00:38:03,160 --> 00:38:07,360 Speaker 1: with misleading investors. But I think it's certainly true to 679 00:38:07,400 --> 00:38:10,359 Speaker 1: say that, you know, on the investing side, there's there's 680 00:38:10,360 --> 00:38:13,399 Speaker 1: a huge amount of interest in the market. We see 681 00:38:13,680 --> 00:38:18,040 Speaker 1: the valuation of companies kind of increasing at a phenomenal 682 00:38:18,160 --> 00:38:21,960 Speaker 1: rate in the VC space these days. So there's there's 683 00:38:21,960 --> 00:38:25,919 Speaker 1: a lot of incentives for companies to really make sure 684 00:38:26,000 --> 00:38:28,200 Speaker 1: that they can produce as much as they can, but 685 00:38:28,320 --> 00:38:32,080 Speaker 1: that creates kind of disincentives or the wrong incentive at times. 686 00:38:32,120 --> 00:38:36,400 Speaker 1: So there could be the possibility for somebody who's perhaps 687 00:38:36,400 --> 00:38:40,080 Speaker 1: not repetable getting into the market and misleading investors. But 688 00:38:40,120 --> 00:38:43,480 Speaker 1: if investors are smart about this, they will make sure 689 00:38:43,560 --> 00:38:46,400 Speaker 1: they understand the technology and they'll make sure they're not 690 00:38:46,520 --> 00:38:49,480 Speaker 1: taken for a ride. And you know, if they are 691 00:38:49,520 --> 00:38:52,680 Speaker 1: taken for a ride, perhaps that's you know, as much 692 00:38:52,719 --> 00:38:55,920 Speaker 1: of a comment on their diligence process as it is 693 00:38:55,920 --> 00:38:58,640 Speaker 1: on on whoever takes them for a ride. Does that 694 00:38:58,680 --> 00:39:02,320 Speaker 1: hold true for China as well? I mean, I remember 695 00:39:02,960 --> 00:39:06,400 Speaker 1: billions of dollars or I guess trillions of u N 696 00:39:06,680 --> 00:39:09,760 Speaker 1: being poured into the e V and the battery space 697 00:39:10,239 --> 00:39:12,440 Speaker 1: in recent years. And this is something that China has 698 00:39:12,440 --> 00:39:17,600 Speaker 1: been very vocal about boosting as a strategic interest, strategic 699 00:39:17,640 --> 00:39:20,440 Speaker 1: industry for the country itself. And it seems like whenever 700 00:39:20,760 --> 00:39:25,200 Speaker 1: China designates something to be strategically important, often there's a 701 00:39:25,200 --> 00:39:29,359 Speaker 1: tendency for overproduction or a build up of over capacity 702 00:39:29,400 --> 00:39:34,120 Speaker 1: and maybe inefficient allocation of capital. These are all euphemisms 703 00:39:34,160 --> 00:39:37,319 Speaker 1: that I'm using what's going on in China. Yes, so, 704 00:39:37,360 --> 00:39:40,560 Speaker 1: as you say, China has heavily invested in the EV 705 00:39:40,680 --> 00:39:44,759 Speaker 1: and battery space, and we have seen that kind of 706 00:39:44,800 --> 00:39:48,319 Speaker 1: over investment in capacity over the last decade. If you 707 00:39:48,360 --> 00:39:50,880 Speaker 1: look at the number of kind of tier three and 708 00:39:50,920 --> 00:39:53,560 Speaker 1: tier two supplies in China, you know, there's a lot 709 00:39:53,560 --> 00:39:57,160 Speaker 1: of excess capacity there particularly that's kind of tiers three space, 710 00:39:57,640 --> 00:40:02,040 Speaker 1: where companies invested quite heavily in any fifteen and they 711 00:40:02,080 --> 00:40:07,480 Speaker 1: really failed to secure any contracts with any large automakers, 712 00:40:07,520 --> 00:40:10,240 Speaker 1: and so as a result, there's a lot of stranded capacity, 713 00:40:10,239 --> 00:40:13,960 Speaker 1: and those companies tend to look to lower value markets 714 00:40:13,960 --> 00:40:17,239 Speaker 1: to try and utilize that capacity. But if you look 715 00:40:17,280 --> 00:40:19,880 Speaker 1: at the kind of tier one and tier two sector, 716 00:40:20,360 --> 00:40:24,280 Speaker 1: you have companies like c at, L, B y D, EVE, Energy, 717 00:40:24,400 --> 00:40:28,440 Speaker 1: Ghost and high Tech, and you know, they have capacity. 718 00:40:28,520 --> 00:40:32,399 Speaker 1: They're building more and more capacity every year, and most 719 00:40:32,440 --> 00:40:36,480 Speaker 1: of that capacity is being taken by automakers. So in 720 00:40:36,880 --> 00:40:38,799 Speaker 1: that sense and the kind of tier one and tier 721 00:40:38,840 --> 00:40:42,759 Speaker 1: two markets actually that that capacity that is being utilized, 722 00:40:42,760 --> 00:40:46,080 Speaker 1: and those companies, you know, have a very kind of 723 00:40:46,080 --> 00:40:49,520 Speaker 1: solid grip on the supply chain and and on battery technology. 724 00:40:49,640 --> 00:40:52,760 Speaker 1: Can we talk dollar amounts for a second. I often 725 00:40:53,000 --> 00:40:54,920 Speaker 1: when I hear things like kill a lot of hours, 726 00:40:55,040 --> 00:40:56,839 Speaker 1: and it's hard for me to wrap my head around 727 00:40:56,840 --> 00:40:58,879 Speaker 1: how big that is. But I have a better sense 728 00:40:58,920 --> 00:41:01,040 Speaker 1: of when we're talking about dollar It's like, what is 729 00:41:01,080 --> 00:41:05,600 Speaker 1: the dollar size? Of the battery market these days. I 730 00:41:05,640 --> 00:41:07,600 Speaker 1: don't know, however you want to measure it, whether sales 731 00:41:07,680 --> 00:41:10,200 Speaker 1: or market cap of companies, etcetera, And like, where do 732 00:41:10,280 --> 00:41:12,160 Speaker 1: you see that in ten years or what are the 733 00:41:12,200 --> 00:41:15,600 Speaker 1: expectations of how big this industry is going to get 734 00:41:15,880 --> 00:41:18,920 Speaker 1: over the next decade or so? Yes, So, so if 735 00:41:18,920 --> 00:41:22,560 Speaker 1: we put it into dollar amounts, if we looked let's say, yeah, 736 00:41:22,600 --> 00:41:25,120 Speaker 1: let's let's say and your sales, Yeah, they'll be around 737 00:41:25,400 --> 00:41:30,359 Speaker 1: fifty four billion battery sales in two If we go 738 00:41:30,480 --> 00:41:33,800 Speaker 1: to you're looking at around a hundred and sixty billion. 739 00:41:34,200 --> 00:41:36,560 Speaker 1: So these are markets that are that are big today 740 00:41:36,560 --> 00:41:40,200 Speaker 1: but are growing, you know, very quickly, and market caps, 741 00:41:40,360 --> 00:41:42,600 Speaker 1: you know, are kind of growing at a similar rate. 742 00:41:42,640 --> 00:41:45,160 Speaker 1: I think the one that probably most people like to 743 00:41:45,200 --> 00:41:49,000 Speaker 1: point to is Quantum Escape, which is a listed company 744 00:41:49,080 --> 00:41:52,319 Speaker 1: working on solid tape batteries and it's it's market cap 745 00:41:52,520 --> 00:41:55,480 Speaker 1: when it kind of went public virus back went up 746 00:41:55,560 --> 00:41:58,120 Speaker 1: to in the tens of billions. And this is for 747 00:41:58,200 --> 00:42:00,320 Speaker 1: company that is pre revenue and kind of how hasn't 748 00:42:00,440 --> 00:42:02,759 Speaker 1: produced anything yet. So there's a lot of money going 749 00:42:02,760 --> 00:42:05,440 Speaker 1: around the market. Valuations are high, but it's going to 750 00:42:05,480 --> 00:42:07,040 Speaker 1: be a big market and you know there's a lot 751 00:42:07,080 --> 00:42:10,560 Speaker 1: of fighting to win market share. Well one last point, 752 00:42:10,680 --> 00:42:13,440 Speaker 1: you know, you mentioned Quantum Escape, but in my mistaken 753 00:42:13,920 --> 00:42:16,920 Speaker 1: that they're really I feel like I've looked at this before, 754 00:42:17,239 --> 00:42:19,440 Speaker 1: but am I mistaken? There don't seem to be that 755 00:42:19,680 --> 00:42:24,080 Speaker 1: many like pure play public battery companies out there. Like 756 00:42:24,080 --> 00:42:26,640 Speaker 1: when I've looked before, is I go who's public? Who's listed? 757 00:42:26,680 --> 00:42:29,560 Speaker 1: What battery starcks? Should I be watching? My mistaken there 758 00:42:29,560 --> 00:42:32,399 Speaker 1: aren't that many, you know, so you're quite right. There 759 00:42:32,400 --> 00:42:37,640 Speaker 1: are in China more listed companies, Contemporary and Forex Technology 760 00:42:37,719 --> 00:42:42,560 Speaker 1: or CTL being the largest, But outside of China, a 761 00:42:42,600 --> 00:42:46,480 Speaker 1: lot of the largest factory manufacturers that are there today 762 00:42:46,960 --> 00:42:50,880 Speaker 1: are not pure place. So LG Cam, for example, had 763 00:42:50,880 --> 00:42:54,040 Speaker 1: a battery manufacturing unit that was part of this bigger 764 00:42:54,120 --> 00:42:57,839 Speaker 1: kind of chemicals company. They actually I POD earlier this year, 765 00:42:58,239 --> 00:43:05,120 Speaker 1: so they I fiods LG Energy Solution. And we then 766 00:43:05,160 --> 00:43:08,839 Speaker 1: also have from Koreer sk Innovation the oil and gas 767 00:43:08,840 --> 00:43:11,600 Speaker 1: company or one of the parts of the oil and 768 00:43:11,600 --> 00:43:14,399 Speaker 1: gas company, and it has a battery unit that it's 769 00:43:14,440 --> 00:43:16,799 Speaker 1: about to spin out called s k o N. So 770 00:43:16,840 --> 00:43:21,080 Speaker 1: we are seeing more pure play companies, you know, starting 771 00:43:21,120 --> 00:43:24,600 Speaker 1: to list but it's it's not kind of as bigger 772 00:43:24,640 --> 00:43:26,600 Speaker 1: public markets as it could be. But I think that 773 00:43:26,600 --> 00:43:28,480 Speaker 1: would like to change over the next couple of years, 774 00:43:28,520 --> 00:43:30,560 Speaker 1: as we have the Korean companies I p O ing 775 00:43:31,040 --> 00:43:34,399 Speaker 1: more Chinese market, Chinese companies entering the market, and we'll 776 00:43:34,400 --> 00:43:36,880 Speaker 1: probably see a few more I p O s in 777 00:43:37,000 --> 00:43:39,080 Speaker 1: Europe and the US as well. I know British Fault 778 00:43:39,400 --> 00:43:41,600 Speaker 1: looking to I p O at some point potentially, and 779 00:43:41,600 --> 00:43:44,600 Speaker 1: I'm sure North Fault will in the future I p O. 780 00:43:44,680 --> 00:43:46,839 Speaker 1: And you know, that's kind of great, kind of huge 781 00:43:46,840 --> 00:43:49,640 Speaker 1: demand I imagine when they do well. James, this was 782 00:43:49,680 --> 00:43:52,600 Speaker 1: an absolutely fantastic overview. I think is Tracy and I 783 00:43:52,680 --> 00:43:55,960 Speaker 1: we're talking about this is not an area that we 784 00:43:56,000 --> 00:43:57,880 Speaker 1: know much about. The only thing we really know is 785 00:43:57,920 --> 00:44:00,680 Speaker 1: that it's like really important and then we have to 786 00:44:00,760 --> 00:44:03,280 Speaker 1: learn more. But this was like sort of a great 787 00:44:03,800 --> 00:44:06,200 Speaker 1: intro to the topic. So I really appreciate you coming 788 00:44:06,200 --> 00:44:08,600 Speaker 1: out outline, and I thank you for having made pleasure. 789 00:44:08,760 --> 00:44:27,080 Speaker 1: Thanks so much, James. That was really helpful. Tracy. I 790 00:44:27,120 --> 00:44:29,440 Speaker 1: found that to be extremely helpful. I mean, I joked 791 00:44:29,440 --> 00:44:31,399 Speaker 1: at the end, but it really wasn't a joke. All 792 00:44:31,440 --> 00:44:34,520 Speaker 1: I really know about batteries is that they're a big deal. 793 00:44:34,560 --> 00:44:37,160 Speaker 1: I'm going to get become a bigger deal. No, I 794 00:44:37,239 --> 00:44:40,200 Speaker 1: totally agree, And this was a really good first step, 795 00:44:40,239 --> 00:44:42,319 Speaker 1: and I thought James was very clear and a lot 796 00:44:42,320 --> 00:44:45,120 Speaker 1: of the ideas that he laid out. One thing that 797 00:44:45,160 --> 00:44:47,440 Speaker 1: I was thinking about throughout this episode, and I think 798 00:44:47,480 --> 00:44:50,160 Speaker 1: this is maybe this will be the motto for odd 799 00:44:50,200 --> 00:44:52,520 Speaker 1: Lots for this year. But any problem that can be 800 00:44:52,560 --> 00:44:56,120 Speaker 1: solved with money probably isn't really a problem, right. I 801 00:44:56,120 --> 00:45:00,200 Speaker 1: think I've said that before, And with something like mineing 802 00:45:00,480 --> 00:45:03,719 Speaker 1: these medals that are vital for the decarbonization process, for 803 00:45:03,800 --> 00:45:08,480 Speaker 1: building these big batteries and getting everyone moving into electric vehicles, 804 00:45:08,600 --> 00:45:12,480 Speaker 1: it seems like the issue there is really a time 805 00:45:13,040 --> 00:45:16,279 Speaker 1: and be our country is going to be willing to 806 00:45:16,400 --> 00:45:20,000 Speaker 1: actually dig up their land in order to do this. 807 00:45:20,120 --> 00:45:21,880 Speaker 1: And I think there's still a big question mark. And 808 00:45:22,040 --> 00:45:24,560 Speaker 1: James kind of hinted at this. Canada in the US 809 00:45:24,640 --> 00:45:27,960 Speaker 1: can throw billions of dollars at this issue, but how 810 00:45:28,040 --> 00:45:30,400 Speaker 1: much is that actually going to speed up the production 811 00:45:30,440 --> 00:45:32,919 Speaker 1: process and is it going to happen at all given 812 00:45:33,040 --> 00:45:36,520 Speaker 1: environmental concerns. I love that as our new motto. I 813 00:45:36,560 --> 00:45:38,840 Speaker 1: mean that is essentially what we talked about with the 814 00:45:38,840 --> 00:45:41,200 Speaker 1: Salton posts are right like that we've had. We are 815 00:45:41,239 --> 00:45:45,360 Speaker 1: like we are past the age of monetary driven problems 816 00:45:45,480 --> 00:45:48,560 Speaker 1: and now into the age of like sort of physics 817 00:45:48,600 --> 00:45:54,920 Speaker 1: problems and engineering problems and domestic politics problems and geopolitics problems, 818 00:45:55,000 --> 00:45:57,520 Speaker 1: all of these things like, yes, there is a monetary cost, 819 00:45:57,920 --> 00:46:01,080 Speaker 1: but also like will this through work or not? Well, 820 00:46:01,160 --> 00:46:05,360 Speaker 1: this new method of cheaper extraction of medals that that 821 00:46:05,480 --> 00:46:08,360 Speaker 1: James was talking about, I forget the acronym he used, 822 00:46:08,360 --> 00:46:10,560 Speaker 1: but you know this new thing that they're using in Indonesia, 823 00:46:10,880 --> 00:46:12,760 Speaker 1: will it pan out and proved to be a cheaper 824 00:46:12,800 --> 00:46:16,200 Speaker 1: way of separating nickel and cobalt. All of these questions 825 00:46:16,200 --> 00:46:19,160 Speaker 1: are like, they're very interesting and no amount of money 826 00:46:19,160 --> 00:46:22,719 Speaker 1: can guarantee their success. Absolutely, that's a perfect summary. Great, 827 00:46:22,760 --> 00:46:26,399 Speaker 1: well that should we just yeah, all right, let's leave 828 00:46:26,440 --> 00:46:29,239 Speaker 1: it there. This has been another episode of the All 829 00:46:29,280 --> 00:46:32,000 Speaker 1: Thoughts podcast. I'm Tracy Alloway. You can follow me on 830 00:46:32,040 --> 00:46:34,960 Speaker 1: Twitter at Tracy Alloway and I'm Joe wisn't All. You 831 00:46:34,960 --> 00:46:37,960 Speaker 1: can follow me on Twitter at the Stalwarts. Follow our 832 00:46:37,960 --> 00:46:41,640 Speaker 1: guest James Frith, Follow our producers Carmen Rodriguez at Carmen 833 00:46:41,800 --> 00:46:45,640 Speaker 1: Arman and Colin Tipton at Colin Tipton. Follow the Bloomberg 834 00:46:45,680 --> 00:46:49,239 Speaker 1: head of podcast Francesco Levi at Francesco Today, and check 835 00:46:49,280 --> 00:46:52,480 Speaker 1: out all of our podcasts at Bloomberg under the handle 836 00:46:52,800 --> 00:47:02,120 Speaker 1: at podcasts. Thanks for listening. Hey, there are AD Thoughts listeners. 837 00:47:02,320 --> 00:47:05,040 Speaker 1: We are very excited to let you know that Ad 838 00:47:05,040 --> 00:47:09,240 Speaker 1: Thoughts is nominated for a Webby Award. You know, Tracy, 839 00:47:09,560 --> 00:47:12,839 Speaker 1: I'm not normally like a big awards person or get 840 00:47:12,880 --> 00:47:15,600 Speaker 1: excited about that, But now that I saw that we 841 00:47:15,600 --> 00:47:19,800 Speaker 1: were nominated for the Webby for Best Business Podcast, suddenly 842 00:47:19,840 --> 00:47:21,920 Speaker 1: I'm feeling very competitive and I want to win. You 843 00:47:22,000 --> 00:47:25,040 Speaker 1: really want it? Yeah? Okay, Well, on that note, listeners, 844 00:47:25,200 --> 00:47:27,920 Speaker 1: if you enjoy add Thoughts, if you like what we do, 845 00:47:28,040 --> 00:47:30,360 Speaker 1: we would really appreciate it if you take two minutes 846 00:47:30,440 --> 00:47:33,520 Speaker 1: of your time and head over to vote dot Webby 847 00:47:33,640 --> 00:47:36,960 Speaker 1: Awards dot com. You can find odd lots in the 848 00:47:37,000 --> 00:47:40,839 Speaker 1: Business Podcast category. We really appreciate it if you voted. 849 00:47:40,960 --> 00:47:43,480 Speaker 1: If not, understand, but it would be cool for us. 850 00:47:43,520 --> 00:48:06,960 Speaker 1: So you're fans. Thanks so much. Year to