Battery Potential
Battery Potential is a retrospective on the early days of the commercialization of Li-ion batteries. Pioneers of the of Li-ion battery industry from the 80s, 90s, and 2000s are interviewed by two battery scientists: Vincent Chevrier and Kevin Eberman.
Battery Potential is produced by Cyclikal LLC, a battery consulting and testing company. See cyclikal.com for more information.
Battery Potential
Oliver Gross - Valence
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Battery materials veteran Oliver Gross joins Vincent Chevrier and Kevin Eberman to trace his journey from ceramic research at the University of Toronto through the formative years of lithium-ion battery development. Oliver shares his experiences at Ultralife and a decade at Valence Technology — where he witnessed firsthand the internal discovery of LFP as a cathode material and the early commercialization of LFP cells using Bellcore's plastic Li-ion technology, including Valence's pioneering production in Northern Ireland and subsequent move to production in China.
Room recording - Feb 9, 2026
SPEAKER_01There was one instance. We were working on a uh it was a wound pouch that was manganese and silicium metal. We were looking at this manganese dioxide one. While I was working on one which had failed, I was doing some failure analysis, and I was preparing it by releasing one of the edges, and it just popped into flames in my hand. Now, the good news was it wasn't directly on my hand, it was going the opposite side. So I just patiently, of course, you know, took it over to the LithX and put that in there. And it was funny because one of my co-workers watched was watching me do that and says, So calm when you did that. It's just, it was that thing was on fire. It says, Well, what was I supposed to do? I had to get rid of it. And I guess, you know, like I was sitting there, was I scared? I didn't know better. I don't know. But either way, and that was like that that became like one of the legendary comments about you know that nothing will
Meet Oliver Gross
SPEAKER_01scare me.
Early Curiosity to Materials
SPEAKER_05Yeah, you know what I wonder about is uh I always curious like because I have um kids in 18s and 20s, that whole first step. You know, how did you how did you decide to work in the battery space? Like you take yourself back to your college days or your master's days, like how did you even go that direction? Oh geez.
SPEAKER_01It came to me. You know, that was the weirdest thing. Uh material science I thought was pretty cool because uh and it goes really it goes really back earlier than even university. It was when I was trying to ask my chemistry high school teacher, what makes a solid a solid? And you know, back then you were doing everything in liquid solutions to learn chemical reactions, and then I said, well, that's really good, but you know, why is a solid a solid? And it wasn't until you know you sort of fell into it in like chemistry class. I was starting to do chemical physics, actually, is where I started. Uh, because you know, I study in Canada and getting to engineering schools is sometimes a little bit tricky, even though quite frankly, I find engineering easier than many of the science areas. But the thing was is that we started to play around with uh high critical temperature superconductors, which was all the rays back in about 1987, 88. And uh so we learned how to make them and and and play with that and thought this is like really cool. Plus, you need to understand what makes a solid a solid. So I could find you know, it's it's as if, wow, now it all came together. And that was probably my first foray into what I would consider real material science. So, you know, you learned a little bit of structural materials, uh functional materials, electrical electronic materials, and so on and so forth, and you know, you dabbled a little bit in all that sort of thing. And when I went for graduate studies, because I wanted to just learn more, I wanted to you know explore uh more in that area, I said I definitely want to be in this material science field. But what I didn't want to do was I didn't want to be, say, in the like uh the school is very strong and the chemical metallurgy and areas of that nature. I didn't want to do that sort of thing. I wanted to work actually more with the materials themselves and look at uh things that were a little bit more complex. Ceramics was a really great area at the time, so I I went into ceramics because there was the nexus between the electronic aspects of it, the thermal aspects, the structural, and all of that. And I ran into Shankar Das Gupta, who at the time was the electrofuel manufacturing company, but he was an adjunct professor along with uh Steve Thorpe, who's an associate professor at the University of Toronto. We thought, wouldn't it be cool to put something together that covered like a whole bunch of these multifunctional areas? Now, a little bit about electrofuel before it became Electro Via. They were an like an all-hands engineering firm that would do various kinds of wild projects. They would manufacture equipment that would be used to produce, say, ceramics or other kinds of processes and so on. And they had a couple of projects. One was uh basically a type of a molten salt battery, which for me I was sitting here scratching my head saying, well, what the heck is that? Because you know, we're even at that time, you know, when when you know when you were learning batteries, there was nothing there about you know trying to keep these things up and melt an electrolyte to get to work. So they said, well, you want to learn a little bit about that, and by the way, you should learn about you know how you actually um extract and purify metals like aluminum and so on, same processes, you know, get get into that. And so I learned that. But on the side of that, there was another project, which was solid electrolytes. Right. So we were talking about solid oxide electrolytes, and these are more for oxygen uh well, basically oxygen separation, or to use them in low temperature fuel cells. And so uh these were like uh business bronchium oxide materials and so on and so forth. And I thought, well, that's a lot of fun. So I decided to play in that area, and actually that became the central part of my master's work. But it exposed me to a lot of the manufacturing processes that we were using on both sides with the batteries and with you know these kinds of devices. So there that came into the process and manufacturing side of things, along with the with the materials. So the battery was kind of more like um it was it was a theme or uh a forum for all these cool things. It's a playground. It's a material science playground there.
Startup Lessons and Electrovaya
SPEAKER_01Exactly. You know, you had all of this, you know, all these fun opportunities to work with. So that's what caught me. And it wasn't so much that it was a battery because I was working more in electrolysers and fuel cells and stuff, but it was all those sorts of fun things. The next job that I got, it it it was funny because the the then uh the next job was actually at a young startup company, which was outside of Toronto in the Mississauga area. And that one allowed me to take all of those and play yet more on more toys. And and the way I described this was this was it was an interesting company. It was it was called MTech, became Ashurst Chemicals later. But it was a startup company that was uh funded out of Colorado, but it was based in Mississauga, and it was a joint American Ukrainian-Canadian outfit because the Iron Curtain had fallen. And so the idea was to study all these wild technologies, material science-based technologies coming out of Ukraine. And so we were looking at these bizarre alloys that included like scandium aluminum alloys, we were looking at uh various kinds of percussive uh applied ceramic coatings, we were looking at uh various kinds of supercapacitors. And for those people who know about supercapacitors, they'll know that Ukraine actually has a strong history in that science and technology. Oh, plus batteries. And that was the funny part because the the vice president of it was Ken Rudafella, who uh you know one of the original of the Molly crew. Oh, right. And you know, and he hired me and he said the reason I uh the reason I wanted you on board was you'd done tapecasting, you'd done all these processing things that are really, really important in batteries. You know, we didn't even talk about like you know the materials that I had synthesized and whatever. He says, Oh, yeah, I know you could do that too, but you understand all the other steps that that are there too. Because we had done that, you know, in the lab. And it's like it all came together at once. And okay, that now if that doesn't draw you in yourself, you know, it's like, okay, this is where you want to be, then I don't know what does. So that's kind of how the whole story came together.
SPEAKER_05Well, it sounds really like a natural progression from and always driven by your by your by your own interest there. Like, oh, I'm interested in that. And one thing led to another.
SPEAKER_01Yeah, it's a little bit lucky, I guess, but then at the same time, the fact was that you you know you identified, I like that, let's work with that. Yeah, okay.
SPEAKER_03You you acquire all these skills that that allow you to really be effective in batteries. Um and then from there, where
Climbing the Battery Hierarchy
SPEAKER_03do you go?
SPEAKER_01You start you start playing with the skills. You st uh you know the one thing that that uh I caught on with Vincent was it wasn't so much say with electrical electric via, but at Asher, the one thing I started to do was then, okay, well, how do you make these contraptions? How do you make them work? You know, what what are the elements that make a working contraption? A working battery in this case. And you start to understand a little bit about the design of electrodes. You understood, like, okay, the materials, the materials need to be hosted by this electrode. Okay, well, what enables a good electrode? So you were starting to work your way up in the hierarchy of the system. And it's because you're curious.
unknownRight.
SPEAKER_01Because you know, you were you were working with one material that says, Oh, but to make it work, I gotta do these sorts of things, but if I can enable this, then it enables that, you start to understand the the synergies. Right. And that's what drove you, or what drove me for sure, you know, like of starting to learn how to design battery cells at that time because we were mainly working on battery cells. At at um MTech, we had both non-rechargeable and rechargeable. We were toying around with some lithium-ion technology at the time, and and I mean toying, we were basically trying to figure out how to make the graphites work because we were ta we were tailoring them against these very strange um say telluride types of uh cathode materials and and so on, to you know, these these bizarre cell coginite types of uh cathode materials and see if we could get those to work. And uh whether it worked like as a primary or secondary, we'll figure that out as we go. It was weird. When was this?
SPEAKER_05Was this like what what year are we talking about? I'm just trying to get situation.
SPEAKER_01This would be 1995. Got it. Okay. No, 94. 94. 95 is I we moved on. Yeah.
SPEAKER_03So 91, 93, you're at Electroviya. Electro via you know, later on ends up making L. It wasn't Electro Via yet. That was later on, yeah. Right. Later on this morphed into Electroviol, which uh ends up making LFP cells eventually. Um but while you're there, they die uh they dive into lithium ion later on. Uh later on, right.
SPEAKER_01Yeah. Right. Exactly. But the funny part was is that uh while I was there, and I'm sure maybe a couple of students after me as well when we were working there, we laid some of the groundwork for the techniques that uh give an appreciation of how to make lithium-ion batteries.
SPEAKER_03Yeah, I your comment about sort of the hierarchy of technologies and the lithium on battery really resonate with me because like for me and my in my doctorate, I was doing like atomic simulations, right? I was like at the atom at the atom level and then got to go to like designing materials at first, you know, the composition level, then the particle level, and then the electrode level, and just this whole hierarchy of have to work properly all the way to the pack. Yeah. Right. I thought that the cell, and I thought the other thing.
SPEAKER_01But it's kind of funny how like a guy who studied material science and started in there suddenly was doing you know this, you know, this overlay of mechanical engineering and process chemical engineering, and all of those other all those other professions that you know that overlap within the battery space. You know, you got a little bit of the ability to play in all those spaces. And it goes up, as you said, as you go higher up in the arc in the hierarchy, you get a lot more intellectrical.
SPEAKER_05Is MTech different from Ultralife? I mean, I know you went to Ultralife, but uh totally different.
SPEAKER_01Okay. Yeah.
Ultralife and Primary Batteries
SPEAKER_01MTech was a startup company that didn't really survive, but uh Ultralife, uh that was interesting because we happen to you know had some contacts at Ultra Life and um Michael Gobatant was was the first guy I talked with there, uh, which led me to Joe Borella, who they were in Ultra Life in upstate New York at the time, this Newark, New York, in the Finger Lakes area. And you know, we were having a conversation, and uh, you know, Ken Rudicella, who'd been my boss at MTEC, said, you know, that's just a lot more mechanical engineering, you know, so you're not gonna you're gonna be a little bit further away from the material science kind of side of things. He was right. Uh so it meant you had to like dive in and learn a lot more about hardcore mechanical engineering fabrication and so on. Uh at first, most of the stuff I was working with was the primary batteries. So this would be manganese dioxide, lithium, metal. Yeah. Um that was, however, Ultralife was one of the very early Bellcore licensees. So maybe you can help us eventually got me in there, yeah.
SPEAKER_03Yeah, maybe you can help us understand a little bit better, sort of what is Ultralife at that moment, like what is its market, what is it making, how big is it?
SPEAKER_01They were a specialty battery maker combined with their nine-volt product. So the story behind Ultralife was that when Eastman Kodak left the battery business, they had built up this particular uh production line, which was an Ultra Life production line, uh, in Newark, New York, making these nine volt lithium metal batteries. That was their central thing. And so what happened was the people that acquired this from Kodak, uh, they were out of the New Jersey areas. Okay, so a lot of them had had experience with several of the uh the battery companies that were predominantly working and playing around the Fort Monmouth areas and so on, you know, supporting various military specialty projects and what have you. So when they came in, one of the first things that they did was they started to diversify some of the products and technologies to get into broader markets than just simply the nine-volt market, which was geared at at the time was still predominantly you know, smoke detectors and other kinds of devices like that, some radio devices and and so on. But they knew that they could take the technologies that were inside and expand it into other things, which was that's how that's how it ended up getting diversified. And that was how Altspice became instead of just being the nine-volt manufacture, but also got into a lot of specialty and military solutions. They had also tied together with an acquisition of uh a Hawker battery company in um in the UK to get uh their lithium ion technologies merged into. Sorry, lithium metal. There was a lithium metal technology. Two technologies were they're all primary. Yeah, they're like the three volts, manganese, lithium metal. Right. But they were done different, uh, they were done differently. The cathode materials are completely different, and the uh production methods were different. And so the Hawker technology was higher performing in some aspects, uh particularly in power. And so in if you didn't want the high energy density, you want to give a small amount of that up, and you wanted to get additional power, it it made a very complimentary tech.
SPEAKER_05Was that like uh thinner electrodes to get higher power? Did you have to work on uh you know you talked about mechanical design and mechanical engineering, did you have to work on it? Oh, kissing.
SPEAKER_01It was chemical manganese dioxide instead of electrochemical manganese dioxide, and they would make a more porous electrode assembly, which uh itself operated substantially better, but had a little bit more electrolyte into it as well, you know, about uh twenty percent more. And that that seemed to also help quite a bit with its performance. So the primaries were basically at the time the major market movers. And this was remember, you gotta look thing. Now we're talking 1995 here. Right. There weren't a lot of rechargeable battery technologies that were on the market that were of reasonable cost. So most products that were still out there that were gonna be battery powered, right, right. And the high performance primary market was quite substantial. People were paying a premium for that high performance. Not just the military, but oil and gas industries, and they were the ones that were predominantly buying at that time. Right. And and so what was interesting was, you know, that that they were actually able to have a lucrative business in this market space with these specialized batteries. Uh that and and again, they would they would of course make small battery systems, you know, low voltage and whatnot, assemblies of those cells as well. Which got them into the system side.
SPEAKER_05Well, what what were uh some of the challenges you were focused on in that you know, ad ultra
Extreme Specs and Safety Scares
SPEAKER_05life there?
SPEAKER_01We had we were working on uh a fair number of interesting, extreme high performance types of technologies. First of all, it was predominantly putting these things into what we would call pouch cells. These are these thin format pouch cells, a very low height form factor. But then we were finding ways to make very, very dense, because of course you begin to stack electrodes or in some cases wind them, we were doing in both cases. And those were intended to then be very energy dense solutions that were competing with at the time it would have been things such as lithium sulfur dioxide or lithium cyanylchloride primary batteries. The fun engineering part were some of the shock and pressure conditions. So designing, let's say, a cell that could operate at below 18,000 feet underwater. Uh designing a battery cell that could withstand a 50,000 V impulse and having them function. I think you guys could figure out what those applications would be. There were a few other ones too, which I'm not which I won't talk about, but some of them they involve other things like high vacuum and so on. They're all extreme, right? And these are the fun things. Yeah, go ahead. Yeah, no, these were these were the fun things. These were really exciting little projects that were coming along.
SPEAKER_05Did you um were there any incidents? Oh yeah. What was that like, and what did you learn from it?
SPEAKER_01It uh there was one instance. We were working on a uh it was a wound pouch that was manganese lithium metal. And we had finished benchmarking some of the sulfur dioxide alternatives for this one battery. I don't know if you know what uh what that it goes by uh uh the the code BA5390 and BA5590. They're the standard, like there's they're like the bread and butter type of battery that's used by the Army and mil Marines and so on. The cell that goes into it, we were looking at this manganese dioxide one. While I was working on one which had failed, I was doing some failure analysis, and I was preparing it by releasing one of the edges, and it just popped into flames in my hand. Now, the good news was it wasn't directly on my hand, it was going the opposite side. So I just patiently, of course, you know, took it over to the Lith and put that in there. And it was funny because one of my co-workers watch it was watching me do that and says, So calm when you did that. I it's just it was that thing was on fire. It says, Well, what was I supposed to do? I had to get rid of it. And I guess you know, like I was sitting there, was I scared? I didn't know better. I don't know, but either way, and that was like that that became like one of the legendary comments about you know that nothing will will scare me, but it did. That's great. And and particularly because that was that particular cell was um at the time, it was it was still a pretty fairly big cell. It was about a 20 amp hour cell. Uh less a fair amount of lithium metal. Now, you know, this in this day and age, we work with hundreds of amp hours now, which is unbelievable we actually have gotten that far. But uh that was on primaries, you know. So that that uh you are working with lithium metal. You uh now fortunately we were working with reasonably modest electrolytes, electrolytes that were not incredibly volatile. But um I mean there are some electrolytes when you work in this area, the s particularly the salts can be quite dangerous, you know. Uh when you're doing with l uh liquid systems, you might be working with things as much as like with looking for chloride salt. And uh that's definitely not something that you want to do on a regular basis at all. Most of these were like with impact of fluoro arsenate, but we were starting to work with, you know, like that was one of my jobs at the time is to start looking at triplate salts and other kinds of uh things that were probably a little bit Less toxic. Of course, they led to other problems of corrosion, which we had to tackle. But uh that you know, and this is the whole point. This is the this is oh you it's going back to talking about the cell as a system and now understanding all the interactions of the materials and your you may have to look at it from a bulk to get to a much more analytical mode. Yeah.
SPEAKER_03So that's interesting. That's what we're doing a lot of but no, go ahead. The Lithium metal batteries, you know, to a large extent you can still go to the store and buy them for your small detector or or whatever um energy. That market industry uh survived in North America
Lithium Ion Arrives
SPEAKER_03and the next step in your career of lithium becomes influenced by lithium ions. Right. So lithium ion arrives on the scene has an energy density which is beyond any rechargeable battery, you know, it's both nickel metal hydride out of the water and nickel uh you know nicad. And so lithium ion completely changes the scene. What was your experience
Inside Bellcore Batteries
SPEAKER_03of that?
SPEAKER_01It it was a bit of an eye-opener when you started to work with lithium ion. We just started at ultralife and then you know when I had my next step in valence. The thing about lithium ion was everybody was still trying to see what does it make it to work. We knew that you needed a graphite anode, and then we had different kinds of cathodes that people were toying with. And and in simple terms, 1996, most people were looking at one of two types. It was either lithium cobalt oxide or lithium manganese oxide. And electrolyte, everybody was more or less working with the same salts, uh, same general formulations, but nobody had yet understood the role of additives, and we didn't know precisely what kind of separator was the right thing. We were like borrowing separators from the primary battery industry. In the case of Bellcore, it was to turn everything on its head and you know build it all up, you know, with as a as a unique semi-solid battery industry. Yeah, why don't you just ironically? Why don't you describe what Bellcore technology is? Yeah. So we all know, like lithium ions today, that you have this, you know, you have these two metal foils that have the electrode materials coated on them. You have a separate or microporous separator, you've got a liquid electrolyte. Bellcore uh actually approached it more from what I would describe as the heritage of the lead acid industry. And it was a polymer matrix uh PVDF co-HFP. So it was uh a variation of PVDF, you know, a co-polymer. And you would make the anode, the cathode, and the separator using this polymer as the base matrix. But what you would do is you would plasticize the polymer and extract out the plasticizer, thereby creating some degree of porosity that you then would re-infigure the electrolyte into. So there'd be a few steps in the way. And the but the beauty of working with these poly these plasticized polymeric systems is that you can make films and laminate them together. And so it's all a series of lamination. Okay, that's that was the main thing about Bellcore. Once the electrolyte is in there, it's it's effectively impregnated into the matrix. There's no real free electrolyte. And it's depending on again, depending on how you design it, you could have you can have it so that all the electrolytes retained, or you know, you heat it up under certain conditions, you can have it swept, so to speak, and when the electrolyte come out. But but that was that was like the variations that we're seeing in the in the use of Bellcore. So it's incredibly attractive with the notion of, oh, all I have to do is make a bunch of films, laminate them up, and away we go. And so the notion of being able to do like a lot of the sheet handling, material handling, was very, very attractive from a manufacturing perspective. The uh the issues that we learned with Bellcore was what we still fight with today with a lot of these systems is well, how much polymer do you really need? Because you know, that takes up the space of active material. Uh, and additionally, the interfaces are all still there. You need to work on the interfaces, you need to uh ensure that you have good homogeneous mechanical integrity across the interfaces, you know, in all dimensions. And that's what made Bellcore somewhat of a challenge and why it was so difficult for many people to scale.
SPEAKER_05Right. And and and that that didn't get commercialized, right? Or it did or where how far did Bellcore go with the LCK?
Valence Products and Limits
SPEAKER_01So with Valence, it went into production. And Valence had several products that uh included Bellcore. One was, I mean, there's there are actually a whole lit litany of them, but the probably the the Hallmark ones would be a satellite uh phone battery that Qualcomm did for their uh Global Star satellite systems. But uh their first product, which was actually a foray and sold in Best Buy in commercial value in commercial amounts, was the NCHRG system. And it was a uh it was just this uh flat battery that would be able to you would able to place underneath your uh laptop, so as an accessory.
SPEAKER_05I remember the N charge was the shape of a laptop, like it was a rectangle, the same shape as the laptop.
SPEAKER_01It was exactly and after that they uh there was uh I mean there was some switches in chemistry, but after that first generation N chart, that's when the Belcore technology ran out. There were two joint ventures that uh Valence had, one which was in South Korea, uh which was with the Hanil Cement Company called Hanil Valence. And that one really wasn't that successful, but the other one was with uh uh ATK. At first it was Alliance Tech Systems, so uh Alliant Valence, which was a uh that was more for government and military applications, and there were some uses there for that. But your but in terms of really large scale, it didn't quite get there beyond a whole series of like say small volume consumer electronics products, and so um now Velcor itself did see itself in some other So we skipped ahead just a little bit.
SPEAKER_03You were at Ultralife working on Lithium Primary, and then at Ultralife, did you also work on Lithium Ion?
SPEAKER_01I was introduced to it there and the amount of work that I did on it. It was it though they were doing Velcor as as Lithium Ion. So that was my first yeah, that was my first experience at the time was with uh Bellcore and simultaneously at Ultralife was observing uh the I would say the the basic makeup of it. It wasn't until I moved to Valence that I dove deep into it. Uh back in those days it was uh there was a lot of uh protection of the IP from one company to another. Right.
SPEAKER_03And so you mentioned Bellcore being used at Ultra Life, Bellcore being used at Valence. So Belcor is a technology portfolio that's licensed, right?
SPEAKER_01So Bellcore was originally developed by the labs actually that were in France. Uh what people don't understand about the Bell was it was a huge organization, and when it was broken up, uh AT ⁇ T Bell, right? You know, that we had a lot of spin-offs, and one of which was the Bellcore labs. And they had they were the ones who developed it. It was actually Professor Tarasgan who uh who actually was the lead developer of that tech. Right.
SPEAKER_05And so and with telecordia, right?
SPEAKER_01What what became telecordia?
SPEAKER_03Yeah.
unknownRight.
SPEAKER_03So Bellcore is sort of seen as the one of the introductory platforms for lithium-ion. You get to play with it at Ultralife.
Why Move to Valence
SPEAKER_03And then what makes you go from Ultralife to Valence?
SPEAKER_01Valence was a much more interesting situation because uh let's just say that at Ultralife, it was a it was a bit of a challenge of a place at the time. And it's not like that anymore, like uh today, but in those days there were pretty significant challenges with uh I'll say the leadership. And Valence just had some great opportunities at the time. It it seemed like a fun place to be. And besides, I always wanted to see the Southwest. Perfect. So it was changes in the opportunity to go and have a look at it. Yeah, exactly. So so Valence, and the interesting thing about Valence at the time, they had gone through like a lot of inceptions. When I landed there, they had left San Jose, because this is where they originally were from. And they had originally, by the way, for a lot of people they don't realize with Valence, they had actually started with a another kind of solid-state technology around polyethylene oxide and lithium metal. And uh the cathode material, they tried to do two different technologies on cathode. One happened to be a vanadium oxide base. And that was a technology that they were going to go to market with, and then they had to depart at the last time because they you know they realized there was a lot of issues with safety of cycling lithium metal, and they weren't able to solve that. Now, the reason I bring that up is because the CEO of the One of the Time was Lev Dawson, and he departed replaced by Cal Reed during the transition when they moved from San Jose to Henderson. Now, why did they do that? Part of that was uh this is when Delphi, you know, uh Delphi E to be precise at the time, thought you know it would be very, very nice to get into some of these advanced batteries and not just be in lead. And so they were willing to do a research effort. And so the point was they were going to partner with Valence and they were gonna have a joint research center. And that was the Henderson Nevada Center. So on site, you you actually had two companies, you had Valence and you had Delphi E. And uh we were in many ways intermingled at the time, developing uh Bell Core technology for multiple solutions. Theirs, of course, were had different objectives than ours, because Valence was looking predominantly consumer electronics at the time that was the main thing. You know, we'd have cell phones, laptops, and so on. Whereas they were looking at uh anything Delphi told them to, usually involved a car, but not always. So uh those are the kinds of things they were looking at. So larger format typically. Right. Okay.
SPEAKER_05And uh how um what
Bellcore Meets Pouch Cells
SPEAKER_05didn't doesn't the Bellcore technology eventually become kind of enable the first like lithium-ion powder cells? I mean, the I know that's cool.
SPEAKER_02It did.
SPEAKER_05Yeah, exactly. Can you how does it draw that line that connects that can Oh real it's actually a beautiful thing?
SPEAKER_01Yeah, because the Bellcore technology, when when it was first being done, this was the classic, and everyone's seen the YouTube videos. And before YouTube, way before YouTube, we actually had to record this stuff with cameras and then share that as they put it onto your laptop, okay? So and this was the first time people were seeing somebody taking this pouch bell, because bell core worked really nice in pouch, and and and used a flexible foil pouch with tabs as we all got familiar with. And you would do the classic story of taking your light bulb, you know, connecting the terminals, and then going and hammering a nail through, taking scissors, cutting this, you know, the cell. And those are the first forays into you know the demonstration of superior abuse over any other technology. Yeah. And it was one of the selling points of Pelcar was that. And the argument was you're enabling it because you can just put in this flexible foil food pouch and this amazing ability to design, fabricate any cell that you want in any size, and look at its stability and safety. Right. You know, which by the way, back at Ultra Life that we use those, and uh they would work well too.
SPEAKER_02Yeah.
SPEAKER_01If they were small enough.
Birth of LFP at Valence
SPEAKER_05Right. How did you go from um how did you get into the iron phosphate, the LFT in valence? What was the story there? Why was there a shift?
SPEAKER_01Well, that's actually interesting because valence was working on a lot of different kinds of materials. Uh on the anode, pretty much it was always as graphite, but on the cathode, we had tried everything. Uh lithium manganese oxide was the predominant one that we were working on. We eventually shifted to more to cobalt oxide. The first products, the consumer products are lithium manganese oxide, but we had for some of the smaller cell phone types, lithium cobalt oxide. We had worked with um uh the early versions of NCA. There was no NMC at the time, you know, but the very early versions of uh NCA we were working on, and those are predominantly for military applications. However, in the background, starting in about 1997, we had a materials group. It was led by Jerry Barker and uh Yazid Saidi, who uh they um they came up with a bunch of ideas of multiparn of cathode materials, and most of it was based upon taking NASTACON and doing a variation of that. Uh, and we're looking at different kinds different kinds of materials. And and so instead of being a silicon that said, okay, let's do phosphate, because they were reading a paper on you know phosphate chemistry, and we could try vanadium in there, and and that became one of the materials, and then the other one was saying, well, what other materials could work? And uh they were looking at iron, says, Well, let's try iron. Oh, look, there's this one paper here that talks about uh you know iron phosphate, you know, which happened to be coming out of the University of Texas.
SPEAKER_03Yeah, so this is the good enough paper.
SPEAKER_01The good enough paper, right? And so on one night, it was you know, they said, Well, how do we make this material? And overnight we tried carbothermal reduction. Material seemed to work on the next day. So very quickly we said, Okay, we've got ourselves the material. Now, that wasn't the final formulation of the first generation of the product, but you know, later on there were some additives that that were put in basically to scavenge the balance of the iron that's inside uh from the reaction. Because you didn't completely convert. What's a carbothermal reduction? So a carbothermal reduction is basically you take uh first of all, you start with a fair amount of carbon. Not surprisingly. You take iron oxide, and in this case, you were taking um lithium dihydrogen phosphate. So it was a reduced version of uh a lithium phosphate. Yes. And you would react that in a furnace under essentially neutral environment at first, and you would you would get the precursor of essentially what is a lithium iron phosphate, which then you would then put into an oxygen-rich environment, alpine it, you know, to the finished lithium um iron phosphate. However, you actually have carbon now embedded in the structure. And so the carbon was unreacted nanophase carbon, but it appeared to be stable. Nice. And so essentially you had it completely interspersed with the crystallites of the iron phosphate. That helped the electrical connectivity. And that became that became the core material. Yeah, that got your electrical connectivity. And so that that's the the the valence LFP, the first generation valence LFP, was done that way. And the interesting thing was if you go to the patent office, very missed the patent by uh it was less than a week. I think it was the three days. Oh my god, which was actually starter.
SPEAKER_05Wait, so you're saying that there was a you guys you had this approach and you're like, let's protect it, let's file it, and you were three days behind who was three days behind who's the good enough patent. Oh wow.
SPEAKER_03Right. Because the vanadium phosphate patent from Jerry and Barker predate the good enough patent, right?
SPEAKER_01They do. They do. That was actually the first one. It was a converted nasicon structure using the vanadium phosphate. And uh it it turned out that the iron phosphate was just a whole lot easier to work with. You know, the vanadium phosphate was was was a real bear. Yeah. So I mean there were some derivatives that that we that eventually we got to work surprisingly well. Like uh we had a uh fluorooxy phosphate derivative of it, which uh was a high voltage with a flat plateau, nice L type of structure. Worked pretty well. But uh in the meantime, yeah, the LFP came along really, really well. So that material was merged with the Bellcore technology into the updated N Charge. That was the first commercial product to use LFP anywhere in the world. That's what I remember. Wasn't that N Charge
Scaling LFP in Northern Ireland
SPEAKER_01product 2001.
SPEAKER_03And and at this point, where are these cells being made?
SPEAKER_01Uh Northern Ireland. That was the main facility. I'd lived over there for a couple of years ago.
SPEAKER_03Initially in Northern Ireland. In Northern Ireland, yeah.
SPEAKER_01Uh that was one of my jobs. I remember like for I spent two years over there mainly working on dropping in the new cell designs and chemistries in Northern Ireland and working manufacturing. Like the uh government funding that that that was the motivation for the original facility was was government funding. That uh that there was that it was well funded at the time. Now, later on, of course, the funding came from elsewhere, but the but the seed funding had originally come from uh the United Kingdom. Okay.
SPEAKER_03Do you know if if that's the the sort of commercial production achieved with the Bellcore platform?
SPEAKER_01I would doubt it because later on at Valence, uh we ran into somebody else who was like producing more. And this that's a story in and of
ATLs Origin Story
SPEAKER_01itself. So the Bellcore technology was a pretty nifty technology that you could fabricate some decent cells, the right chemistry. And it had enough degrees of freedom to its design uh that you could either engineer better cells or put some other kinds of manufacturing methods in. Well, in 2000, negotiations were done for Valence to acquire the Telcordia licenses in their entirety. So therefore, basically Valence was the holder of the Telcordia Logian patents. So therefore, those who are the license holders were actually working through Valence. Well, one of the activities that we did at Valence during that time, 2001 to 2002, was to seek out anybody who might be making cells that would infringe on the patents themselves. And we found a few. And we would treat them all a little differently. Well, there was one company that we ran into, which happened to be ATL.
SPEAKER_05And they and now, just to for context for listeners that that's kind of spun into C ATL, the world's biggest battery company, so it's kind of uh important.
SPEAKER_01Let's let's let's talk a bit about ATL because that's a real interesting thing. So ATL is actually um originally a funded project through TDK with investment out of Hong Kong having access through the free trade zone into China.
SPEAKER_02Ah, okay.
SPEAKER_01And so, right, so that's Robin, you know, that he put that together. Robin's saying. And they were a very young company. They had been formed in 97, but they only started making their first cells about 1999 and on a line. Uh, I didn't I think that wasn't even necessarily even in Hong Kong at the time. But when we ran into them in 2001, they were making Bellcore cells. Right. Producing Bellcore cells. They had a whole range of different sizes. So they didn't know who the who the people were that were ordering the cells in them and testing, but you know, we evaluated them, and quite frankly, it was a good product. It was comparable to anything that we were doing. It was built very nicely. Well, instead of taking the tact that um what we would do with with them, like maybe some others, where we were basically saying, you're gonna have to pay us licenses, you're infracting on this, or you're just right, or you're gonna be barred from various markets, which there were some companies that would see that way. The decision there was, you know, you're making a pretty good product. How would you like to go into business together? Right. And what what we would do is instead of uh you having to pay us licenses and royalties, we got some product that needs to be made. Why don't you just pay for all the tooling and the overhead and get that product in place? And you know, we'll of course get it at a discounted charge and so on. And ATL has stayed in business. Right. Well, that's good.
SPEAKER_05You made it good for each other. They they had a probably a cheaper route to manufacturing. And you had a product.
SPEAKER_01And you had a product. Well, it was a cheaper route to manufacture.
Supply Chain Shift to China
SPEAKER_01Now, also remember, globally, think about this. This is because this is an interesting topic here, too. Up until then, we had been manufacturing Northern Ireland because we had had funding through Northern Ireland and the United Kingdom, you know, in a plant there. We were not producing in the United States. Right. We had obviously worked with some in South Korea. That was the era of the late 90s with globalism. So this was just a natural extension of that. That's happening in many industries, for example. Right. And and the the framework to operate, particularly in China at the time, seemed extremely attractive. So this is a great way to step in. And so Valence transformed themselves from using the Northern Irish facility to very heavily relying initially upon ATL. The next step with Valence was to build actually facilities in China. That was the next part that they were going to do. And they ended up doing that. But that was the first leap uh, you know, leapfrog into that was with ATL, was with a competent supplier. And uh ATL was learning, but they were building a pretty decent product. Later on, uh, there was an experiment with LFP to put it into cylindrical cells, and that was that was actually where the decision was to work with ATL on that one.
SPEAKER_02Oh, okay.
SPEAKER_01Because instead of buying the equipment, you know, Valence decided just to use what was available, and one of the best partners to work with at the time was ATL. However, the cathode was not going to be made by ATL. It was going to be delivered to them. Wow. The materials that were being fabricated. Initially, the the LFP was manufactured in the US. And then it got transferred over to Taiwan and then to China. Wow. However, the electrodes were made in Korea. Which company? And then they were passed down to ATL. SK. SK. I got it. No way. What? And and it was interesting because SK was not making bat uh battery cells until they wanted to play around and learn how to make electrodes.
SPEAKER_05So they did a coating to make these electrodes from uh powder, iron phosphate powder that came from the US, you're saying?
SPEAKER_03Wow. So this this marks the the point where you have a departure from the Bellcore platform.
SPEAKER_01Correct. That's that's the time when it was decided that the cylindrical cells in very high volume, the cost was just so attractive. And the other thing was working with smaller cells allowed a little bit more flexibility in a lot of commodity range products as opposed to consumer electronics products. So we would like to handle like say the thin consumer electronics products with Bellcore, but we would have these larger larger scale uh types of products. And that's where the start of systems engineering adveilence started, which is one of the things that I kicked off there was um the ability to start building battery systems instead of just say uh you know a few cells, but getting into you know, which might be say limited to a hundred watt hours or less, but now we're talking about you know hundreds of watt hours or kilowatt hours, and the cylindrical cell is being able to do that.
SPEAKER_05It probably you probably had to get into battery management at that point, some battery management systems. Very much so, yeah.
SPEAKER_03So when valence was you know producing powder in one area, electrodes, the the powder was produced in the United States?
SPEAKER_01Initially, until the facility in China was up and running. Okay, but initially the powder is produced in China.
SPEAKER_03Initially producing the powder in the United States, getting the electrode made in Korea, the cell made in China. Valence was optimizing for cost?
SPEAKER_01It was initially to make a supply chain that worked and then optimized for cost. The long-term goal was to get this all manufactured in China, or at least in maybe Korea and China together. Okay, so initially, but the whole thing wasn't about cost. It was about cost, yeah.
SPEAKER_03Okay, but initially it was just capability. It was just this is where I can get this done, this is where I can get this done. Yeah. And then eventually it was cost cost optimization.
SPEAKER_05Yeah. And when when it started there, you first mentioned like that ATL could trade out of Hong Kong, but were they operating out of Shenzhen, China or something like that at that time?
SPEAKER_01They they had set their facilities up in Shenzhen, they had moved into Shenzhen.
SPEAKER_05Yeah. Yeah, right across the border from Hong Kong, so that makes sense.
SPEAKER_01Yeah. We were we were down to about uh, and by the way, back in those days, we were all talking watt hours, not kilowatt hours, so the costs were like 70 cents a watt hour. By the way, do your math, that's $700 a kilowatt hour. And that was considered to be really low cost. Right. And then we have that again. And that was at the time shocking. Right. That you could have those are the kinds of numbers that we're getting into.
SPEAKER_03Yeah, right. Wow. So what did um valence yeah, let's see. What did Valence teach ATL?
SPEAKER_05That's a good question.
SPEAKER_01Initially initially they taught them how to fabricate uh cells with LFP. In other words, how to optimize the designs using LFP, how to form them, how to test and evaluate, you know, for performance. Right. Later, the cathode process got transferred to ATL. And work with ATL to trans. It was it was to make the cathode. Okay, just the electrode process we talked about over at SK, you know, where they were coding. We taught ATL how to actually coat and make.
SPEAKER_05I I what where did they buy their uh equipment at that point? Or that was was that what kind of were they using Japanese coders then? Because that also all events were.
SPEAKER_01These were mainly the Japan.
SPEAKER_05Yeah.
SPEAKER_01It all migrates. It was mainly Japanese at the time. Yeah, yeah, yeah. And and because I think at that point in time, the first Chinese manufacturing equipment still was quite dodgy. Yep. So they were still importing a large amount of the manufacturing equipment. Right. And and another pizza. We'd seen that with some of the other people that we had worked with in China too. It was the same pattern.
SPEAKER_05The other pizza board, I think that uh anyone listening should should kind of catch here. ATL was some kind of a um a joint venture coming from the Japanese company, TDK, mentioning the Japanese equipment. We know there's a connection there to TDK. Do you know that story of how what that is? How how how did how did TDK form ATL?
SPEAKER_01I don't really know that. I don't know the exact stories uh behind TDK and how how they forayed in. It was predominantly that they needed to find a place that they could manufacture uh that wasn't necessarily just exclusively in Japan. They wanted to be able to expo export themselves into other markets, markets that weren't already being served by the other Japanese suppliers. And so strategically that was one of their plays.
SPEAKER_05I got it. I remember early days talking to ATL, probably the same years are talking about, and how much they would constantly differentiate themselves from the other Chinese battery companies as you know, we are we we have like the the Japanese mentality about quality and the Japanese mentality about IP and all that sort of stuff. Um Yeah.
SPEAKER_01They were different, I can tell you that, because we were going through China with a lot of developers at that time. You know, there was another company that was working with LFP at the time that happened to be in the same space. And the joke was as we'd be leaving one office working with a supplier or developer of equipment, they would then walk in behind us. So it was uh it was a bit of a joke with some of the some of them. Now, fortunately enough, I don't think the travel arrangements are that tight that we ever, you know, we're regularly meeting them. And I think you guys all know which company we're talking about here, but uh, but that was actually kind of a fun, fun time there that uh both were competing for the same kind of technology to make the same kind of achievement. Right.
SPEAKER_03You mentioned
Northern Ireland Shutdown
SPEAKER_03that Valence initially invested in in a in Northern Ireland manufacturing site. What you're describing is all of the cell production moving to China. Why didn't the Northern Ireland site work out? Did it just shut down? What happened to it?
SPEAKER_01It it was a combination of factors, but what I would describe mainly with uh Northern Ireland was the way to have solved it would have been with a capital expense that focused on much more levels of automation than were was there at the time. And you were really moving to the next generation of of production platforms. The thing also was the business models were very popular at that time that you needed to manufacture Asia. That was all the latest rage. That if you want to compete with the world and be ahead of everybody, it was a trend, you needed to move to Asia. And so that was probably the biggest factor why the why there was the move away from doing uh high volume production in Northern Ireland to moving to Asia and China in particular. The other thing Valence was experimenting with on the system side, the battery packs, was to manufacture them in all sorts of different locations, whether it was Mexico and Taiwan and all different kinds of business models were being toyed with depending upon which which product it was at the time that we're looking at. And that was uh a stormy time because the fact was is that you would have some good success in every single country depending upon what you were attempting to do. Eventually the goal was by the leadership was to move everything to China simply because it was seemed to be the lowest cost of all of the uh all the locations, lower than Mexico, lower than Taiwan, and that was the main thing that was driving it. Can you uh it ultimately led to the reason why I left as well as what do you mean by that?
SPEAKER_03Oh really?
SPEAKER_01Yeah, yeah.
SPEAKER_03Can you explain that a little bit?
SPEAKER_01Yeah.
Leadership Changes and Exit
SPEAKER_01Um so the CEO change, uh there were there were three uh like we were talking about some of the CEOs. Yeah, left Austin, who was the one who was predominantly in charge until about 2001 when Stefan Godovae came in. He he was ex Dell. And it and he was the architect to move the headquarters from Henderson, Nevada to Austin, Texas. And he left in about 2000, end of 2004, beginning 2005, and Jim Acker came in. Uh people will know him from um Energizer and uh Proctor and Gamble areas and so on too, which he had a lot of practice in in those particular markets. One of his first tasks uh to myself was to take all the RD activities and the engineering activities that were underway in Henderson, uh Nevada and in Austin and transfer that to China. He can find how to do the development.
SPEAKER_05Oh, I see. Oh, I see. Have them take over development.
SPEAKER_01And along with that, yeah, and along with that, by the way, could you lay off everybody that's over here? Wow. So it was I got it.
SPEAKER_05Not only are we gonna manufacture there, but we're just gonna move the entire operation there.
SPEAKER_01Yeah, that was that was his vision was to move all the engineering RD to China as well.
SPEAKER_05Wow.
SPEAKER_01Um and there was another issue that that uh that I left with because we were developing power cells at the time. And uh that was one of the projects I was leading was the power cells, which were for power tool. Right. And we had a we had a pretty competitive product. We were about ready to go and line up with our supply base that we're Billy and trying to go, and he shut it down. The main argument he gave was actually because I didn't have a PhD, therefore I didn't know what I was doing. Oh boy. Yeah, that's no fun. That that obviously didn't fare very well with myself or my colleagues who thought the product was great. Wow. So that kind of gave the indication that's and that was one of the reasons why I I uh ended up leaving Valence. The main reason was actually because of the family, but uh we wanted to be closer to our family. But yeah.
Carl Berg Funding Influence
SPEAKER_05What wasn't um wasn't Valence you know heavily supported by Carl Carl Berg as an angel investor? And did he have provide direction? Or was it really from your that CEO you were mentioning there?
SPEAKER_01Carl was surprisingly hands-off. Okay. He uh he would only interject on certain things when he felt it was completely unreasonable. It was surprising how fair he was with allowing the CEOs to run that facility or run the entire company.
SPEAKER_05What fraction do you think of the support of the funding came from, you know, this billionaire?
SPEAKER_01Oh, from Bergenberg Enterprises? Oh, it it it definitely exceeded 50% at at many points. Definitely did. Yeah, he was he was uh the real investor. But he was hands-off that led uh a large portion, but he was hands-off. It was it was surprising how how how gracious he was with that uh you know, with the operations at Valence. Wow, okay. I mean, since then, of course, Valence has has gone, you know, it's has it's had its uh history since then, carried on. Right. But uh yeah, at the time, at the time, Carl was really the big financial engine.
R&D Offshoring Trend
SPEAKER_05Interesting, but you know I just want to press just one make sure we dwell on you talked about how the one of the reasons to to go manufacture in ATL in China was okay, that's a trend almost like that's but then you have the move of well, let's move everything there, let's move development RD uh over to there. Was that also a trend? Or or was that not was that relatively unique to to Valence, do you think?
SPEAKER_01To me it sounded pretty unique. I d I didn't run into a lot of other cases of people that were planning to move all of their RD at that time. By the way, later on I did. Later on uh in the battery industry, we ran into like a lot of companies, probably the late 2000s, the end of the 2000s, we were starting to see other companies that were doing that. You know, now obviously I was in a different role at that time, but what I discovered then was it was quite common to have not only say a Chinese pilot line or whatnot, but also to be moving a fair amount of the development activities. Not all, mind you, but a fair amount. And so uh yeah, it the trend did broaden out beyond manufacturing. We were kind of unique at the time.
SPEAKER_05Mm-hmm. Interesting.
SPEAKER_03Who was Valence competing against when they did this in terms of lithium-ion cells? To have such a such a strong focus on cost. Who were they competing with? Why was that a competitive
Vertical Integration Shift
SPEAKER_03advantage?
SPEAKER_01The reality was at at the time, Valence was looking at going to be totally vertically integrated. So they were going to differentiate themselves with the rest of the market by actually providing energy storage product that nobody else was doing. So they were going from being, say, something like where they had to just regularly compete with the likes of ATL or Sony Saniu and so on, which was originally what they were planning on doing, to providing a total solution more like you would see from an egg side or or something of that nature. And that it was a transformation to becoming a total solutions provider. So the c the competition was moving up.
SPEAKER_05Is that like is that like can I think of that as going from being a cellmaker to a pack maker or a pack system?
SPEAKER_01Total
Segway Pack Program
SPEAKER_01solution. The Segway program is a good example of that, was providing a total battery pack. So it was now in competition with companies like well, FAFT was doing some systems work, but not doing it so well. But you'd be moving into you know other kinds of you know pack makers. And I mean these days we look at it, we call these guys the tier the tier ones in the auto industry and other industries. But uh that was really the vector that Valence was on at the time.
SPEAKER_05Yeah, I got
Taiwan Partners and Tolling
SPEAKER_05it. Yeah, I remember a period of time, I don't know how it is now, but where these kind of consumer electronics medium-sized packs became sort of dominated by two big companies in Taiwan. Yeah. Did that uh were they already there when you were maybe one is FTS, I think.
SPEAKER_01Um they were they were actually at times customers of the cells, and they were also partners on some of the product programs. So they would be toll producers for us on some some of these. So Taiwan was very uh very heavy in that area, as well as you know, several of those companies ends up moving into China as well. Okay, good. And they would be on some cases customers, but in other cases they would actually be um toll manufacturers for us. Got it.
SPEAKER_05Yeah. And then you as you said, you left go ahead. Go ahead,
US Cell Makers Landscape
SPEAKER_05Vincent.
SPEAKER_03Well, I just was wondering, so who else in the United States was making lithium-ion cells at that point?
SPEAKER_01There weren't a whole lot. Um uh at the time, uh you had SACT in Cockysville, which was you know doing some sort of work. Eagle Picture was doing a little bit of work. So notice government types. The only other company that was uh no, they weren't even making it. I mean, there was A123 had started up, but like us, they were manufacturing uh over in China. You know, we were not manufacturing cells in the US, we were manufacturing some packs, a few, but the vast majority of that was even overseas. Right. So at the time there really wasn't much in the way. Um uh Mali was uh was really the uh you know the last company, you know, until they completely moved to Taiwan. Yep. And and uh you you said now there were a lot of other startups, right? We all know them, but uh you know none of them sustain it. Right.
SPEAKER_05That's still still we were seeing that today where uh you're having companies try to form independent from the existing Asian companies and and uh not making it.
SPEAKER_01The only company you might want to talk about in this chain of my discussion is well, let's bring back Delphi. Because when Delphi departed Henderson, they moved back to Indianapolis. And you can draw a direct line to Enterdell out of that. So in many ways, they are the last vestige of that entire enterprise. Yeah, that's right.
Building North American Capability
SPEAKER_05Well, I guess uh I'm kind of curious. I mean, maybe I'm jumping the gun here, but I'm sort of curious like uh what do you think about that? What's your diagnosis? You know, you're involved now in um something called USABC, uh which is uh administers money from the U.S. Department of Energy for research and liquid batteries in a firsthand perspective. But what's your what's your view now on that versus other modes on the or or or is it important to and how do we uh build that kind of capability for manufacturing batteries that you know in the United States and Canada, or do you think we don't need to? Or what's your what is your view on all that?
SPEAKER_01I think I think bringing up you know things like the US ABC, that really is uh not so much in the manufacturing directly itself, but as all the enablers to the manufacturing, be it you know encouraging development of the supply chain, encouraging working battery cells of advanced technology types, right? So it's not just dabbling, say, a material, but actually creating a uh workable demonstration of a full electrochemical cell that has all the attributes that could be scaled up into a product. That activity, I think, uh something we do reasonably well. The manufacturing of battery cells is something that's incredibly challenging and not something that here, particularly in the US, we can do with great ease because we don't have a longstanding tradition of manufacturing of these kinds of products. Uh it's it's an area that the United States had begun to leave in the 1970s, definitely in fourth of the 1980s. So it's been a long
Learning Curve and IRA Support
SPEAKER_01time since we've been doing this sort of work. And it's not to say we can't do it. We would need to be doing a similar level of effort as in let's say what what China decided to when they decided they would want it to get into manufacturing and put that kind of effort into uh learning how to manufacture. One of the things that uh we were involved with a few years ago when uh the Department of Energy and the federal government was looking at exactly that kind of problem, uh, they were sort of saying, well, how can we help as the government? And and one of the things I mentioned to them is, well, think of it this way. You want to manufacture this particular cell in the United States, and now you want to compare it to, say, the product that's coming out of Asia. Let's talk about it not in quality, because we all say it's the same quality, but let's talk about what the manufacturing situation would be in the cost. And the main point would be is who's going to pay for that U.S. plant's scrappage rates and loss rates as they learn, as they go up the learning curve when producing that volume of product. Right. They're gonna have like low yield for a few years, for example. That's very expensive. For a long time. Now, the smartest way is of course you know find some way to be a partner with you know someone, be it in Korea or China, and learn and learn and learn and adapt and learn and so on, and and have enough opportunities so that you can learn, which means you have to produce a lot of product. But who's gonna pay for that? And that's the big question. And that was the one I put in front of them. It's not an easy answer, right? Everyone's gonna create their own different what the equations. That's partially what the IRA was intending to do was to assist in in these sorts of uh scenarios.
SPEAKER_05Yeah.
SPEAKER_01Yeah, to help pay for it, to help go over that hump. Um and and the fact was, can can our costs ever come down to those levels? No, of course not, but we can give it a good shot, and we can definitely improve dramatically over where we are. The uh the main thing I think that we're learning now, and anybody who's in a modern day environment, and I just sort of think back when I was like working on production lines in all the life in the early days of valence, the degree of automation that you see in modern-day factories that produce batteries and volume is beyond anything that anyone could have comprehended back then. Because the question would have been, well, why do you need all that? And I mean, we know now, but back then that would have just not been appreciated by anybody. You know, it's like first of all, the the scale is one thing, right? But then the other thing is what the benefits of that automation brings. Yeah, spell it out. Spell out why why you
Automation Drives Quality
SPEAKER_01need it. So automation, what it provides for you in these environments is the ability to manage the material flow and manage all the attributes associated with those materials, those subcomponents, components, and final systems. In a very data-rich environment, which we're so good at managing data now. If we advance the elimination of stops and material handling points, that becomes very critical with these kinds of processes. And the automation itself allows you to be data rich with high quality data. And that's that's really why uh you see automation becoming so ubiquitous at every stage to the degree that it is.
SPEAKER_05Is it is it okay? It sounds a little bit like well, this may be an oversimplification. It sounds a little bit like you're saying, although you thought you wanted to automate because it would be cheaper, really you want to automate because it's higher quality.
SPEAKER_01It is. Sure, it's expensive that way. But at the end of the day, it produces um a better quality product. And and that's you know, that's the way it goes. Which it's funny because going back to the lines at Alt for Life, and I was being mentored by a gentleman out of Duracell, how he would tell me day in, day out, with the right people he could produce on a line, you know, handcrafting cells with better uniformity than any machine could ever do. That was his belief back then. And what's your how what would you tell him now if you could go back in time? Yeah, I'm sure back then uh the machines were dumb enough to allow him to do that. At least my experience with those machines, that's probably was the case. And it's not the case anymore.
SPEAKER_05It might have been true at his time because the machines weren't that good, but now the machines are that okay. I see. Yeah. Well,
Partnering to Scale Fast
SPEAKER_05uh, so you s one of the things you said then is a is a s is a solution, is you you you don't try to reinvent it. You you you bring you bring the um let's just say Chinese battery company or cell company to North America. You work with them and you learn and you learn and you learn and you learn, and then you uh and then maybe from there you could try to go on your own. Um I I like that idea. Isn't that what what Tesla did with Panasonic? And uh to a great deal, that's exactly what they did.
SPEAKER_01Yeah, and by the way, this discussion here of what we're having doesn't mean you don't innovate, right? It doesn't mean you don't find a breakthrough technology which say produces a battery with half the number of the whatever you want to pick, okay? Those are all attributes. The reason we're emphasizing this is that unless you're producing a factory which is maybe a hundred megawatt hour per year and you've got, you know, like someone's willing to pay the extra price, when you sink those kinds of costs into a 10 to 40 gigawatt hour plant, the last thing you want to do is have to retool two years into the plant. Right. And so this is why you have to start with the very best in mind.
SPEAKER_05Yep, that makes sense.
SPEAKER_03So
Valence Government Funding
SPEAKER_03we've you mentioned in the scale up of uh you know, or the the on three, who's gonna pay for the cost of coming up to speed. In the case of Valence uh in the uh you know, early 2000s and the late 90s, what type of government support did it receive?
SPEAKER_01Valence did not receive much government support at that time. There was there was funding that would support specific projects that were associated with uh some of the ATK balance programs that paid for a production line, for example, which did help. And because that production line could then be used for other products that were maybe not uh you know for the defense side, but were used for consumer. So it did help in that aspect. With regards to the balance of the efforts, there was very little in terms of government sponsorship or funding in the way that we look at it today. At the same time, I don't think Valence was looking at something that was going to be more than say uh 100 megawatt hours per year. Nobody was really thinking in the scales of what we were looking at. You know? Like you would go into an electronics battery cellmaker, and you were bowled over if they were at a hundred megawatt hour per year. That was a huge plant. And now we're at gigawatt, yeah. And I think that was the mindset back then.
SPEAKER_03And the question of somebody shouldering the learning curve in terms of cost.
China Incentives and Scale
SPEAKER_03Um can you comment on would that have been different for ATL in China?
SPEAKER_01Funds to support their facilities, which we're not used to having over here. Government funds. So there even even at that time, yeah. Yeah, and when we say government funds, it could be localized government. But the fact was that there was a lot of incentivization to make the progress. There was a strong program in place across China at the time to modernize. There were target there were technologies that were targeted to be part of that. And advanced electronics batteries and lithi which meant predominantly lithium ion, but not exclusively, was right at the top. And so ATL would at at the time have a distinct advantage over anybody else that's starting up. That makes sense. Unless it maybe it happened to be a very large electronics company that you know already had the resources in in play.
SPEAKER_03You know, its situation would have been pretty different from the situation of the factory in Northern Ireland, for example. Correct.
SPEAKER_01As far as the the steps after the the plant was up and running, too, there would be incentives. But the amount of funding that that was accessed in Northern Ireland was small in comparison to what would be needed later on to build a plant of that size. And I think that was the whole point there, is that as people were starting to understand the scale at which these plants needed to be, it became uh more daunting to uh motivate uh be state funders to provide that kind of funding.
SPEAKER_03Right. And that scale is necessary to hit a cost target.
SPEAKER_01Predominantly. Yeah. Yeah, you would see that with most of the plants that were being prod uh being set up in China in the early 2000s, they were of sufficient size so that they could manage the kinds of cost that would be expected, but really was they were expecting the demand. Now, early in that time, if you went to China, you would see all kinds of factories. It wasn't just simply those that were say importing manufacturing equipment out of Japan. There were those. But there were there were others that were busy using very, very low cost labor with you know very manual processes. And of course the products suffered from that. You can see
Factory Floor Anecdotes
SPEAKER_01that.
SPEAKER_05Yeah, I remember uh touring uh factories in China at that time, even ATL, but uh various ones and some some in some places I would be proudly shown the uh gentleman who did the uh who turned the crank to wind the cell. Yep. And the people that's dearest.
SPEAKER_01And usually it was it was ladies l loads of tables, you know, those ladies winding. Right. It was yeah, uh, that was really something. That was not uncommon.
SPEAKER_03Yeah, do you have any um anecdotes that sort of stick out of your travels to to China, Oliver?
SPEAKER_01Just how fast things changed. I think that was that was the mighty part about it. Just how quickly things were just getting done. Were they getting done right back then? Of course, things were a little bit wilder than they are now. Um but it was it was actually a real interesting time to see how quickly things were, you know, they were they were getting caught up with the other Asian countries rather quickly in the early 2000s. Right. And I think that momentum we've seen right up until well, at least recent, you know, to today, that's uh this this momentum has been carrying forward. It's been something I think anyone has ever had the opportunity to see in their life and you know appreciate because I I don't know if or when we'll ever see something like this again.
China Transformation Over Time
SPEAKER_05Yeah, I agree. I mean uh I don't what was I'm curious what your first trip was to China because I think mine was probably 2001, you know, for work and like the uh in the big city, that was still a situation where the the traffic on the street went everywhere from literally you could see uh like a uh a pack animal and and you could see a sports car uh on on the street together to you know much later you go to I remember even even in Shenzhen by by 20 uh 16, it's like predominantly EVs, you know, just completely different. Indeed.
SPEAKER_01So indeed. No, absolutely. My first trip was about wasn't that far off, but it was 2004. And and what I recall was uh exactly that, that the roads were being shared by all sorts of different kinds of vehicles, pedestrians and so on and so forth. And no one seemed to really adhere to rules on the road. It it wasn't really a car culture yet. And that yeah, that carried on for some years, even until like uh I'm gonna say about 2012, 2013, where you'd be sure, but somehow you run into a traffic jam. And again, it was just simply because people weren't adhering to the rules at intersections or whatnot. It wasn't it wasn't that. It could no car accident, no stuff like that, but just snarl. And it's like, well, this could be simply resolved in our eyes. Now you go through the uh the towns and you don't even worry about it because everything, you know, there's like so much embedded automation that uh people just sort of seamlessly float into it. And so just the traffic in the and the nature of the traffic, and as you said, it's now huge numbers of individual cars, EVs and whatnot. So um, yeah, it's it's it's dramatic.
EVs Reshape Batteries
SPEAKER_01And that's the other thing about EVs. Uh when I c well, you know, when I came into the when I came into this business, nobody was really talking about electric vehicles. It was a it it it was it was uh how should I say it was a bit of a novelty or a uh you know like a a sideshow. Yeah. The first time was like when I got into Valence and the Delphi crew brought in a bunch of the EV1s. You know, now now for those people who don't know what that is, that was that was General Motors' foray into their first all-electric vehicle under California's first mandate. Yep. And so this was a sucker, but they had lead acid batteries in them. And so, you know, we're all sitting here scratching our heads, why lead acid when we got this great technology here? Well, uh now anyone's working in the auto industry now knows the answer, but of course, at the time it was a bit of a head stretcher, right? Uh but now you look at just how the the whole Evolution has gone and um you know what it did for the battery industry, you know, how it really drove a very large portion of the battery industry. And I would argue that many of us are in the battery industry today, maybe those of us who aren't, let's say, having the experience like that I'm I'm talking about today, you it's hard for you to think of it in another way, right? To think back to uh it was maybe cell phones, the consumer electronics. These sorts of things were driving it. Right. Uh you know, a complete other need.
Early EV Battery Experiments
SPEAKER_01Right.
SPEAKER_05Yeah. When when did you uh like sort of figure out or pencil out uh hey, this you know, you said you saw these EV ones with lead acid. Did that motivate you to you know lay down a spreadsheet and figure out like, well, why can't we do this with lifty mind? What would that look like? When did you first think to yourself, yeah, this works, not only economically, but energy-wise and power-wise, we should do this. Uh this should happen if for EVs with the Yeah, you know, it's kind of funny.
SPEAKER_01Yeah, we were doing a little bit of the that already in the late 90s. We were already playing around just like I I I just did that with you know, like a few spreadsheets and say, okay, how big a battery is this? What does it do? You know, what are the kinds of powers that we need? And get you know, get a basic feel for what that is. But what really happened was after Valence had moved to Henderson, one thing uh you know, we talked a little bit about some of the um investments and so on that were going to Valence. Well, one of them happened to also be uh an electric vehicle company that happened to reside in Mexico that was owned by you know the same same predominantly shareholders uh for Valence. Yeah, and so it turned out that uh that that forced us to learn a little bit more about well, what would these batteries really look like? And the U-Charge that uh that we had at Valence was one of the first products to look at, you know, to see as one possible solution. Nowadays we think that that's pretty primitive, but what year was that?
SPEAKER_05At the time it was a thought. 2003. 2003 and and did you say U Charge?
SPEAKER_01Yeah, the U Charge, that's that was the lead acid analogs that uh Venus had developed using the cylindrical cell.
SPEAKER_05Uh okay, got it. So it's like a pack for like backup or something like that. Backup power.
SPEAKER_01At at first it was, yeah, but then we actually uh built dedicated EV blocks that could that could build up electric vehicles.
unknownCool.
SPEAKER_01So it was during that time, the early two early 2000s, that we started to get it seriously into this, and and you know, I was trying to figure out well, what does it take to run these cars? And when you start facing the real numbers, that's when ooh, okay. It's uh a little more than what I thought. But it was still but it was still yeah, that's the main thing, right?
SPEAKER_05Yeah, it was expensive, but uh yeah, I mean of the of the things you needed energy for going a distance, power for acceleration, and price so that people could buy it. I'm guessing that price was the biggest problem.
Prius Plug In Project
SPEAKER_02Yeah.
SPEAKER_01Well, we had a fun project at Valence actually, uh in about 2004. Now, that time that's there was the uh I guess they call it the third generation Prius out there, you know, the the famous first, you know, uh Prius that everybody here knows. And uh there were a lot of work that was uh efforts that were being done out of California to make these plug-in hybrid derivatives. And that started in 2004 with the first Prius. And we got some of the we got a project with that was to take out the nickel metal hydride battery, put a lithium iron phosphate battery in about we we had different sizes, about three and a half to four and a half kilowatt hours, which was like huge blended driving for 20 miles. We thought this was awesome, you know. So that was that was like the first foray. Then that was when CATV seemed to make a lot of sense.
SPEAKER_05When you went out of valence to COBASIS, then that was that was focused on EVs, wasn't it?
SPEAKER_01Actually, it was about hybrids. It was all HEV at the time, but I was brought in knowing that COBASIS at some point in time would have to go to lithium ions. So that was one of the attractions, although I ended up working a lot in nickel metal hydride for uh practical reasons. But uh some of the first projects we worked on were at least RD projects, many with Journal Motors on plug-in hybrids. And so we were experimenting with that. Now that was not the Volt, the Volt was their ERES, but but they were doing some plug-in hybrid work as well. So yeah, we did ease into it there. Right. Amazing.
SPEAKER_05Well, are the things that you want you know that you you think we missed that you like we want to make sure that we include in in uh our discussion, Oliver? Like is there a is there an angle that we or a story we missed or anything like that that we we should make sure we get in there?
Rechargeables Change Everything
SPEAKER_05Just think about for a sec.
SPEAKER_01It's hard for a lot of people to imagine before lithium ion, what options did you have for your devices? Now I know cost plays a huge role. Don't get me wrong, a massive role. But back then, most appliances, if it was they were intended to be portable without a cord, you basically had some sort of a holster or whatever that you just subbed in you know, replaceable batteries. And that seemed to be pretty cool. There was a real big drive at that time to work on the technologies there. Think about it today. You buy devices and you just automatically assume they're rechargeable. You get a little cable, and then we go. You don't even think about the battery. It's somewhere inside there. It's it's not even something you'll ever really have to interact with anymore. Think about that revolution, about the portability. It's it's it's kind of astounding, you know, for anyone who's actually watched that. You know, the good thing about time is it moves slow enough that you don't realize the transitions occurred until you reflect back on it. And for me, I think that's the biggest point of where we used to say rechargeable for only certain items that warranted the cost that's associated with it because the benefit of its use and so on made sense. Otherwise, you know, you'd be going for non-rechargeable. That's probably been the biggest uh pulse for change in technology that you could have ever thought of. And that's because of this revolution, particularly with lithium-ion batteries.
SPEAKER_05Yeah, that's right.
SPEAKER_03Yeah, I had a moment like that, maybe it was like a couple of years ago, where I sort of paused and I thought, I'm actually wearing seven lithium-ion batteries. There you go. Right now, as I'm walking down the street. You know, all the various little gadgets and devices. And um, yeah, as you said, yeah, it's amazing. It's kind of like become seamlessly part of our of our daily lives. And that was completely impossible before the pouch we talked about.
SPEAKER_01That was one of the massive enablers. The fact that because a lot of people they don't realize is most of the prior technologies had pressure inside of them for one reason or another.
SPEAKER_05Yeah, exactly. Many of our lithium-on technologies don't have pressure. Yeah, from the yeah, from the bell cells. Yeah, into these pouch cells. Yeah, I mean these or we're both we're both wearing headphones that are basically using bell car cells almost. Well, at least they they still have uh they're still laminated to the separator, at least in in these pouch cells.
SPEAKER_01Yeah, exactly. It's it's it's a variation on the theme without a doubt.
SPEAKER_05Yeah, it's still PVD H PvD HFT adhesive on the separator. Exactly. Makes it work, it keeps it all together.
Wrap Up and Reflections
SPEAKER_05Well, I really appreciate you taking the time with us, Oliver. It was really fun, good discussion. We learned a lot. And you know I it's such an interesting journey to start with. Like, well, it was intriguing to me and and uh and then I wanted to know more about this, and then I had the skills to do that. And uh I think that's also a a good method, even for you know people who are in the university now or just starting out, like, you know, just keep following what's what's what's exciting, and there's always more to go. There's always more to to learn and improve on. Uh, and if you just keep following that thread of what's uh turning you on, you'll get there, you'll you'll it'll continue to be fun all the way along. So far it's still fun. That's right.
SPEAKER_01Yeah. I was on uh one of the Volta Foundation's um sessions, like the last one they had last week, and you know how they do the breakout room? Yeah. And uh I ran into in my breakout room, it was the author of a book I read, which is called The Electric Vehicle and the Burden of History. So we just sat there talking about his book. And you know, the one thing that one of the themes of the book is the what is old is new again. It's yes, everything you look at today has been tried in some form before. Here's a little bit about it, and and you know, uh and so on, and give it give a little context of that time. I I thought, yeah, there you go, you know. So someone's got a great idea. I don't want to discount it. Maybe now's the time. Yeah, exactly. All right, there's my motivator for like uh when I do my mentoring sessions at work or something, I'll tell them.
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