Exclusive interview: Author Steve LeVine on why EV batteries are the new oil, and the U.S. needs to start drilling (2024)

  • How lithium-ion batteries are like oil


    The Business of Business: Can you explain a little bit about your experience covering this topic? And what's interesting about it to you?

    Steve LeVine: I come at it a little bit different from other people who are in this in this space. Most people are coming from a climate background right and see EVs and batteries as a solution. And so that's, that's the framework. I come from oil and geopolitics.

    When I was a foreign correspondent, my last posting was in the former Soviet Union on the Caspian Sea, There was a big oil boom when I was there. And this was a competition between the United States and Russia for who was going to control this new oil. And so my interest in energy is, has always been, ‘how does it impact who is powerful, who isn’t, who's rich and, and who isn’t,’ and how they push their weight around how they assert that power.

    In 2010, after the financial crash, you may have noticed that that a bunch of countries got interested as people were, you know, sifting through the rubble. ‘Okay, what are we going to rebuild out of this?’ One of the things that came on people's radar screens was electric cars. And Elon Musk was a big part of making that a thing. There were some breakthroughs at that time. And it it looked like maybe we could have another electric car age, like there was a century ago. And so suddenly the thing that made me interested was looking at how many countries suffering from the financial crash saw electric cars, and then their enablers, the lithium-ion battery as one of the big pieces of getting them out of this out of this deep hole in this deep recession. That's geopolitics.


    "The thing that made me interested was looking at how many countries suffering from the financial crash saw electric cars, and then their enablers, the lithium-ion battery as one of the big pieces of getting them out of this out of this deep hole in this deep recession." — LeVine


    My interests became batteries, and EVs and geopolitics, who are the ones who are the winners, who were the losers? I ended up doing a book, The Powerhouse, and what I did was I found a single battery team that was attempting to invent what I called the super battery.

    And they're at Argonne National Laboratory in in Chicago, and I and I asked them and they let me embed. You may have read The Soul of a New Machine, which Tracy Kidder wrote in 1980 at the at the cusp of the beginning of the of the personal computer age. He embedded himself in one of these companies that was attempting to bring about this new age and he and he wrote this classic book,. So this book, The Powerhouse, I meant it as The Soul of a New Machine for batteries, so I spent two years embedded with this team, these battery guys, and it's like watching paint dry. It's it's a very, very slow process.

    I wish like, like now, there was so much excitement around batteries, around EVs when that book came out. It was more like ‘batteries? What? Why are you writing about..why am I interested in batteries.’ My interest has revived, well most of it has been imposed upon me by my bosses who have noticed that there's big interest and said, ‘incidentally, we're starting a new blog, on batteries, electric cars, you are writing it is starting next week.’ That's how it happened. And so that That's, that's what got me back in. I do get into the the very nitty gritty, the chemistry of the actual battery, the metals, the the, you know, the chemicals, the interaction, everything that goes on at that level, all the way up to geopolitics, and that's what sets my stuff apart from, from what you'll see elsewhere.

  • China is winning the battery battle


    That is fascinating. It's like you're following the the power literally and figuratively as it sort of shifts from, from one kind of, well, you know, power of one type of thing from fossil fuels to these batteries. That's really cool. So can you talk a little bit about the Biden infrastructure proposal? You seem to think that batteries were definitely a glaring omission from this package? Why is that? And why is that a problem?

    So if you are thinking geopolitics, which I am, then who is going to own the future, in the technologies of the future, and, and we're thinking, you know, suddenly mRNA is a technology of the future. But so you know, [so is] quantum computing and so are EVs, and batteries, these have moved from an aspiration when I wrote my book to a real thing. And we're on the cusp of a boom, that boom is going to begin in the middle of the decade in five years.

    And the marker for that…is that at that time, the cost of electric cars is is going to drop, and [gasoline-powered cars are] going to have sticker price parity, with EVs and electric cars. And that that's the point at which the this industry will take off. And so if you if you view economics as a dimension of geopolitics, which it is, then you want to own this, you want to, you know, you want to be the big guy. You want to win the game and and who's winning the game today, it's China.


    "You want to win the game and who's winning the game today, it's China." — LeVine


    China recognized this back in 2010. It got in big, a lot of government support, it was willing to take that risk over the last two years. And really over the last year, Europe has gotten the message and it the EU has poured support into into the creation of a battery, a homegrown battery industry to support the the European automakers mainly the Germans, VW and BMW were going very big into into EVs, changing everything for for their own reasons, survival reasons.

    And in Germany and in Scandinavia, [there is] this incredible battery industry. It’s similar if you're familiar with Taiwan and semiconductors, Northern Europe, is becoming Taiwan for batteries. And where are we? So we have Elon Musk. And then from there, we fall off the cliff. You know, there are a couple of mom and pop battery shops. And I'm not trying to be cute…These tiny battery operations..just meet the current demand, where China and Europe had said, ‘we foresee demand and we're building now for that.’

    This is where the Biden plan comes in. So Biden has you know, $1.9 trillion [for the infrastructure proposal], of it $174 billion is for EVs. I don't think that Biden is blind or oblivious he knows batteries are going to be a big component of what what he ends up proposing, and I do think that what he proposes in some form is going to pass Congress. But I think that he needs to put plant his flag and say explicitly, ‘this is about we are creating we're going to be Taiwan Not you. And and here's what we're gonna do…we’re going to, to put money behind research and we're going to make it very, very easy to set up shop. And we're going to create a runway. Yes, demand isn't now, it's in 2025. So therefore, we're going to give a long runway, a financial runway so people can survive the Valley of Death.’

    This is what should happen. I pointed that out. So the problem is that, that he needs to be explicit about what he's doing. Batteries are like, that's the car, the battery is 40% of the value of an EVs. So if you are making EVs, but you're not making the batteries, you're losing all of the value. Right? And who are we, as a country, we we have given away over the last two or three decades our manufacturing capability, innovation, basic innovation, and invention, not just tinkering. But the new thing…And if if you care about the about the American future, and I'm talking real politic, I'm talking geopolitics, if you care about about the US future, then you care that we own our battery foundation.

    So it's kind of like the oil of the future.

    Yeah. We are the inventor, Americans are the inventors of the major chemistries that are used, John Goodenough, the inventor of the nerve center of every battery on the on the every lithium ion battery on the planet, is a professor, 97 years old, at the University of Texas. And, and he also in his lab, the other major, most of the other major chemistries were in invented the the chemistry that's inside the GM bolt was invented at Argonne lab where I was embedded. So we invented it, but then the Koreans, the Chinese, and the Japanese, they're the ones who are making the batteries and now the Europeans.

  • Where the battery making goes, so too go the jobs


    The numbers that you cited, make that really clear. I think you said something like out of 200 factories either being built or already built, like 148, or something like that, are in China. And 11 in the United States. That’s a pretty vast disparity. What besides the geopolitical power issues are the other problems that could result from all of the batteries being made in China or elsewhere and not in the US?

    So there's another thing that's this is very much linked to, and that's the problem with capitalism. And the problem with with our political system, which is linked to the problem of capitalism. There is a is a business in Los Angeles called ChargerHelp. There are people who repair EV charging facilities. But there aren't people who have the skills, right? Who can fix these…So they started their own school for technicians…This is in South Central LA, in a very poor area of LA. So the the people who are who are in like, spitting distance of the company, are, are people who haven't graduated. Lots haven't graduated high school, these jobs, they are aiming these jobs at their friends, family, you know, relatives, and they are training these people, men and women of any age really.

    I wrote a story about this…It's like it's a very short course and you learn how to assess what's going on with this charger, using these devices and sending the result to headquarters. And then they arrange to get it to get it fixed. How much should we be be paying these these people? They just came up with this figure of $39 an hour. If you do the math, that's $80,000 a year if you're 40 hours a week. Union wages in, in the 1970s, early 1980s, before unions crashed, but the average union wage in the United States was about $42 an hour. And so this is $39. You could live a middle-class life. So this is creating a new middle class for people who get that skill, and this is is something [you get by] establishing a battery industry in the United States…It’s not a race to the bottom where you pay everyone $15. No, you pay them $39 an hour, $40 an hour. You say that’s the wage….you’re reseeding the middle class, and all of these people who have fallen out of the middle class suddenly are, you know, back…that’s a big thing.

    There are roughly 10 million Americans who one way or another work in the automobile industry, or associated, you know. The concentric circles. A lot of those people are going to lose their jobs…so what are those people going to work in? Well, you can train them in these batteries. And so, I think it’s smart. It’s something, if you’re strategic about it. Biden said he wants the people whose jobs are created to earn union wages, and by that he means, you know, higher wages. He wants to rejuvenate the middle class.

  • Price-parity as an inflection point for the EV industry


    Being able to foresee that this potentially contributes to lots of good jobs. I mean, that seems like a big, big point here. What are some other challenges involving the batteries that we do need to address if we want to really grow electric cars, the whole industry?

    This inflection point that's coming mid-decade, basically, it's the cost of the battery. The metric is the kilowatt hour, so that dollars per kilowatt hour. When I started in 2010, working with batteries, that price was about $1,200. So a battery will be like 75 kilowatt hours. And so if it's $1,200 times 75, you get like $100,000 battery. Well, that's an expensive car. Then try to you know, staple the metal around it, right, and stick a milk crate that you can sit on.

    The price has gone down to about the average $171. In mid decade, the forecast is that it's going to be an average of $100. So That same battery is $7,500. Some of the batteries are 100 kilowatt hours. So that would be $10,000. But that’s reasonable, and then suddenly, that’s the point at which people who do that kind of automobile economics, they say, that’s the inflection point where you get that sticker price parity.

    But the think that happens, what do you do to drive down costs further because you need incentives for people to buy the car, but also for car makers to make the car. Car makers have become used to these big margins that they get from the SUVs and the trucks. And so, Elon Musk in September had his Battery Day, and he trotted out innovations that he’s working on. You know, he always misstates when his things are going to happen, but anyway, he said sometime in the next few years, so figure maybe in the second half of the decade or something, the number would be brought down to $56 a kilowatt hour. Like, that is revolutionary. Then suddenly, wow, you know, these cars are affordable, and folks can earn money from them, like the car makers.

    VW, you know, it’s copying Musk. So Musk had Battery Day and VW had Power Day. And the same thing, you know, but this time with their CEO, who is not Elon Musk in terms of charisma, but he’s not bad, he’s probably the next best. Anyway, he said the same thing. He named a bunch of innovations that very much resembled the ones that Musk was talking about. He’s talking about $61 a kilowatt hour. But how do you get there? New formulations?

    So lithium is coming up, pure lithium. Why do we use lithium, the the lightest metal on the periodic table, and, and it's plentiful. And so it's, it's, you know, it's it's a good good thing to start with, but in contact with moisture, you get volatility. The dream from the beginning has been to use pure lithium metal.

    [Currently, for safety-related reasons] they embed just a few grains of lithium in graphite. And then, and then, through electro chemical process, it shuttles from one side from one electrode to the other electrode and back and forth. And that, that lithium moves, but it's not, it's not enough, you know…Well, it's, it's much more controllable.

    This thing that I just described to you, this march down the cost curve, that when they first started talking about it was regarded as absurd. It was like, okay, we're gonna land a person on Jupiter. Like that. That's how it was seen. But they've almost done it, and they will do it. And also the use of lithium metal, this was regarded as that same sort of a thing.

    But there are companies, three or four companies that are doing it, you know, they're doing it at a they're using pure lithium metal in a in a lab scale battery, right. They and they are, but they've had success enough that they're scaling them up. And the car companies GM and VW both have invested heavily in the company…It looks like in the second half of the decade, we're going to have electric vehicles with pure lithium metal as the anode, the anode one at one of the electrodes. So that so basically there's a group of new chemistries that were that were very until very recently regarded as out of this world too hard…some magic happened. I don't know what, but something happened. And suddenly, they're real, they're happening.

    Just to kind of recap a bit and make sure I understand and people understand: So the the solid, the pure lithium batteries, you get more power out of that, right? But it's also like you have to control it, right?

    Yeah, it's a lot more energy. Yes. And, and so when you when you have that much more energy, then you have a choice, you can, you can decide, I'm going to keep the cost of the battery the same, but I'm going to put more of it in the battery and make the car go further. Like, you know, some people think they want 500 miles, they don't need 500 miles, you know, but 350 would be great 375 I think that that's the sweet spot. Or you can go the other way, use less of that pure lithium, but because it's so energetic, you can drop the price down to, you know, well into the $20s. Suddenly you're paying, you know, in the $20s, not the high $20s, either the mid and low $20s. Because you've got this very powerful anode.

    Interesting. So is price parity, the biggest thing that's kind of stopping lots and lots of EVs from being on the road right now? Or are there other issues? Like the safety issues? We talked about earlier? charging times? What are some of the other things that are hang ups?

    Yeah, it's two things. One is the cost. You’ve got the first movers. Right? Who who want to make a statement?

    They want to brag about having their Tesla.

    Yes. Yeah. They want people looking at them. But how do you get it into the mass market? And so that has to be priced…People don't care. They don't want to do the math. ‘Well, if you keep the car for 10 years, then total cost of ownership… But no, I want to pay the same price. Now.’ That's how people really are. And, and then, the other thing is, we are accustomed to convenience, we are accustomed to being able to not even thinking about our car. ‘Oh, no, I have an appointment…down in Midtown. Now I gotta go.’ And then you get in the car, and there's no gas in the car, right. But you know, that like one block later, there's a gas station. And in three minutes, you can fill up or get enough gas, and then be on your way. But that's not the case with electric vehicles.

    So you know, you get the first movers, who say, ‘Oh, you just don't understand. And what's actually going to happen is that people are going to charge in their own garage.’ And they're and, you know, these are first movers, you know, these are the people before there was Apple, who were buying all of the parts at electronic stores and making their own computer at home. Most people want to buy, like the whole computer in one piece. Right?

    And so that that's what, that's how people will be with cars, right, and with electric cars. They want to know before they buy the car, that they're going to be able to charge up in a in a jiffy. You can tell them you're going to charge at home and maybe they will maybe that is how eventually human behavior will will change, but you're not going to get the mass market this decade saying that. So you have so there have to be charging stations, and we have to be fast charging stations, so no one is going to buy if they think they have to wait eight hours. And so it has to be like maximum 30 minutes and probably 15 minutes to get to get not not a full charge. Like like make, you know 50 miles, 100 miles of charge. That that lack of like the equivalent of a half tank, right? If you were using gasoline, and then and then you would be on your on your way. So if you, Christie, walked into the showroom, and the car was the same price, and you from home you had seen that there's a charging station, or a couple fast charging stations, 24 hours, you will consider buying that. If the car is cool. You also want the car to be cool. They’re making too many ugly cars. It’s not one of those things, you build it and people buy it. No, you like you have to make it cool. And so the so these are the main things, price parity, fast charging. And the the car has to be cool.

  • Stand-out battery startups


    Are there are there startups that you're watching? I think you mentioned maybe one, but what what are some startups in this space that you think can kind of help close the gap? Or help drive more innovation in the US in this space?

    I am super impressed by by the startups that that I run into, and by the excitement in the battery community, and by the kind of people like, so when, again, when I when I was doing that book, in that five year period…I needed the two years in the lab, because battery people at that time, like they don't know how to talk. They've never spoken to someone and so, like getting whole thoughts, whole explanations is very hard.

    But now, like they’re chatterboxes, on Twitter, they're going on and on and on, you know, arguing about this and that. So, QuantumScape gets a lot of attention. They call themselves solid state. They’re not actually solid. Solid state should have no liquid. They have…a little bit of liquid in the cathode. And but that's sort of it's like what what this new age has shown us is that you can have liquid in the battery with pure lithium metal.

    Solid Energy now now known as FCS, they're doing the same thing. Both of those are I think pretty interesting startups….Sila Nano is making a silicon anode. Silicon is a holy grail because it can, it can hold far more [lithium] atoms than graphite. So therefore you have more energy or you're you're you're dealing with more energy….and there's one called Nano One. That's another another one of these and it's it's using a manganese.

    The thing about manganese is that it's much cheaper than any of the other metals, than cobalt, or nickel or aluminum….It’s very useful as a stabilizer in the, in the in the battery. But if you use too much, you lose it, it dissolves into the electrolyte, and that creates instability, meaning the battery dies. But again, you know, out of nowhere, you've got a couple of companies, one of them is this Nano One. And they're making a manganese work.

    Hmm, cool, interesting. Are there any kinds of incentives, you think could help stimulate this stuff more that we're not doing?

    I do think at this stage first, I think that they should be moving toward not needing public policy. If you've got sticker parity, and you've got the build out of a charging fast charging network, you shouldn't need public policy. Right? And you've got cool cars, but at this stage getting from here to there, and you're looking for the geopolitical dividends of this, then you incentivize now. But how do we get from here to there? I do think that the the government should have the rebates…It was $7,500 [for consumers buying electric vehicles]. Some people have mentioned $10,000, but I think, look, this is what's going to happen. It’s going to be the 1980s all over again, with the flood of Japanese cars, because Detroit didn't have the vision to make a quality small car. But it's going to be Chinese. The Chinese are all over this. And we've got to be all over this.

Exclusive interview: Author Steve LeVine on why EV batteries are the new oil, and the U.S. needs to start drilling (2024)


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