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
Yuan Gao - Pulead
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In this episode, we sit down with Dr. Yuan Gao, a materials scientist and executive whose career spans the foundational days of Li-ion research to the executive suites of global cathode manufacturing. Yuan shares his accidental entry into the battery field during late-night shifts with Jeff Dahn, leading to foundational post-doctoral work on manganese spinel cathodes in the mid-1990s.
We explore his subsequent tenure at FMC Corporation, where he contributed to solving critical impedance and safety issues in LCO and LNO cathodes. He also shares the origin story of stabilized lithium metal powder (SLMP) for anode pre-lithiation. Providing a candid look at the corporate realities of battery R&D, Yuan explains how FMC's pursuit of high-margin chemicals led to the eventual abandonment of its pioneering cathode program and the sale of its patent portfolio to Umicore.
Finally, Dr. Gao reflects on his time as CEO of Pulead Technology in China. He unpacks the specific structural advantages of the Chinese manufacturing ecosystem.
Yuan Gao - Pulead
SPEAKER_00When I was the FMC, I try to work with some universities. They'll tell you, oh, our overhat, 60%. You pay us $100,000. Only $40,000 goes to that professor. How much the professor can do is $40,000? Maybe one postdoc or something. And every university has the industry liaison office. Always think their technology yet to be discovered will be next to the Gatorade. I always tell you the Gatorade story of University of Florida. Anything that you develop belongs to the university. When I went back to China, work at Pulit, I had a lot of universal collaboration. They were basically, you don't need to pay me anything, and you own all the IP.
SPEAKER_02And I'm Kevin Eberman. Welcome to Battery Potential. Kevin?
SPEAKER_04Vincent!
SPEAKER_02Who do we have today?
SPEAKER_04Well, we'd like to welcome Jan Gao and a huge thanks for joining us today in the podcast, Jan. Your career offers an incredible look into the evolution of lithium ion batteries and battery materials and taking you from the lab bench all the way to the CEO's desk, which is pretty cool. You started out in the mid-90s as a postdoc in Jeff Don's lab, collaborating closely with the early lithium-ion pioneer Molly Energy, who we've talked about on this podcast before, and Jeff was a guest before. And uh you made major breakthroughs in spinel cathodes, and we'll get into that. From there, you spent over 14 years at FMC, uh, and you you didn't stay in the lab, you seamlessly transitioned into global business leadership and eventually served as president and CEO of PoolEd, one of China's top cathode manufacturers. And today you sit on the board of several battery material companies in North America. It's really an honor to have someone who's impacted the global battery supply chain in every possible angle. Again, welcome you on. We're really looking forward to this conversation.
SPEAKER_00Well, thank you so much. It's my honor, and thank you for having me here. Uh, again, as you said, it's uh it's been uh uh a long journey and uh really uh my honor to sit here with you
Accidental Path to Batteries
SPEAKER_00guys.
SPEAKER_04Well, I want to uh you know that we often do this, it's kind of starting at the beginning. A lot of what we care about is kind of motivations and what took you from here to there. But at the very beginning, at some point, like back in high school or university days, how did you get interested in studying batteries in the first place? How did you decide this direction I want to go?
SPEAKER_00And it's oh by accident, I have to confess. It's uh I wasn't interested in batteries. I was always interested in uh back in my high school days, I was always interested in math and the physics. I uh always wanted to study the uh how the universe or how things work. So that's why I chose physics as my uh discipline for study. So I did my undergrad in China and I went to University of British Columbia in Vancouver, Canada. I do my uh uh graduate work. My uh my PhD thesis was not on battery at all, it was on semiconductor materials, material size, of course, it's related. And uh we did a lot of photoemission studies at Brookhaven National Lab with Singletron. So the reason I'm giving you a little bit of background that because it's needed to explain how I got into Lithium battery space. Right. So my uh thesis advisor, he always told me, he said, uh Yuan, look, you can always learn experimental skills from me or in the lab or after you graduate, you go to work. But it's very once you graduate, it's very hard to learn real hard physics theory. So I encourage you to take those courses. So uh unlike other students in the labs, of course, I spend a lot of time fixing pumps, uh detecting vacuum leaks, all these things, of course. But I I took as many theory courses as possible, like quantum field theory, because I'm always interested in uh the whole physics thing, how things work. So eventually those things come in handy when I started uh my work in the battery
Night Shifts With Jeff Dahn
SPEAKER_00field. So uh fast forward to April 1990. That's my first time to meet with Jeff Dunn. So my uh little background, uh both my thesis advisor, Tom TJ, and Jeff Down studied physics under the same supervisor called Rudy Hering. So in the 90s, Jeff was leaving Maori Energy, uh, about to uh start as a professor in Summer Fraser University. So he came to his uh old body, uh Tom, who was my C's advisor. So we were in uh Brookhaven National Lab on Long Island, and so we're doing a lot of photoemission study on semiconductor wafers. So he wanted to study, he wanted to learn photoemission. So Tom basically said, hey, you learn the rope strong you want. He's uh my student. Uh so we're doing a lot of uh night shifts. So that's how uh I met with uh Jeff.
SPEAKER_04Night shifts with Jeff doing photoluminescence or thing?
SPEAKER_00Right, uh photoemission. So for some reason, Jeff wanted to acquire this uh technique, but it was uh bread and butter for us. In the semi-in connector labs, we're doing it like 24 hours around the clock. So as a student, Tom did the uh day shift, I did uh student did most of the night shift. So Jeff would be sitting with me uh overnight. Uh as you wait for the data to come in. You sit there wait for a long time.
SPEAKER_04Yeah.
SPEAKER_002 a.m., 3 a.m. very quiet. So you know Jeff is not a quiet person. He cannot stay there quietly. So he would say, Yuan, let me teach you, let me show you how battery works. I was like, uh, who cares? Why should I care about battery? I care about my PhD thesis, I care about uh the data quality of the spectrum I'm collecting, but he he he would insist, let me show you. This is very neat, Yuan. This is very neat.
SPEAKER_01Yeah.
SPEAKER_00Uh this is uh new. Yeah. Because I don't think at that time uh in 1990, uh Lucian concept or they came out, it was solely a lithium battery. So let me show you how a lithium battery works. Um so eventually I'll say, okay, there's nothing else to do. Uh we'll listen to your story. So over time, so we did this kind of thing. So every six months we will work together. Oh, we even published a paper together. Oh, first of all, we always have to make our vacuum chambers super clean because we have a wafer. So he had to bring in dirty black powders. I didn't I didn't care. Either graphite or pure lithium nickel oxide. He was very interested in pure. At that time, there's no high nickel NMC. And again, we submitted a paper uh to physics review letters. They said, hey, this is neat physics using, we didn't say this is battery material, uh, it's going to be very useful, energy density, capacity, that sort of thing. So I got to know him very
Joining Dahn Lab as Postdoc
SPEAKER_00well. So uh fast forward to 93. I was about to finish my PhD, but I didn't want to leave Vancouver because at that time, for my discipline, the only employment opportunity was like a bell up in New Jersey.
SPEAKER_03Right.
SPEAKER_00Um, I didn't want to leave Vancouver because uh my wife still required a couple more years to finish her PhD. Jeff and I were already friends. After uh three years of working together, published many papers, a physical paper, nothing about uh battery. So one day I expressed my frustration. Uh he said, hey, forget about going to New Jersey. Come work for me as a post op. He said, uh, come work for me because uh I just told you there's a such thing called Lucian Battery. By 93, already the concept of Lucian battery. The Lucian battery is new, it has huge potential, it's open field. You basically can pick whatever topic you want. You can do whatever, it's just so interesting. I thought, yeah, maybe I will do a two-year postdoc, wait until my wife gets her PhD, and then I will move back to the semicolon space. So I so I agreed. So I went to work for him. So I visited his lab.
SPEAKER_02So Jeff had only been a prof, uh he became a prof in 1990, I think, at uh Simon Fraser. So he had only been a prof for a few years. So were you his first postdoc?
SPEAKER_00No, no, I joined him uh right after New Year 1994. Another one before me called uh actually I worked with him even Jen Rummers. Jen Rumers. So Jen Rummers, when I started my postdoc, Jen Rummers already working at Mali Energy. He already uh he already done his uh postdoc. So and again, Jen and I became very close too. We we worked together quite a bit during my postdoc ship. After even after I uh started my uh industrial job in FMC, I went back and visited uh his uh home and we hiked in uh uh in the mountains
Spinel Cathodes
SPEAKER_00together. Um so so anyway, I started uh as a postdoc, and then at that time, early '94, uh the big challenge was to making spin-out, manganese spin-out work. So that was interested by Molli Energy. Molly Energy really, really want to commercialize spin-out battery because at that time the general thinking, going back that's 32 years ago, more almost 33, um, people thought was uh LCO, lithium carbon, gonna be taking over. It's nothing to be uh worked on. Yeah, let's work on some new material. So basically in the castle space, we spend a lot of time on uh uh magnet spinel and pure lithium nickel oxide. Talking people are saying, oh, lithium-1, nickel one, lithium. Yeah, yeah, yeah. We're moving towards high nickel uh 10 years ago, uh as if it's something new. As remember, the industry started from the other end, pure. Nothing is higher nickel than pure lithium nickel oxide. So that time, a lot of effort on pure lithium nickel oxide, uh, which is very interesting material. I read a lot of uh papers from a very, very good professor, uh a French professor, uh Delmas.
SPEAKER_02Claude Delmas, yeah.
SPEAKER_00Yeah, yeah. Uh he published, I learned a lot from his publication because he studied the magnetics. You you study the cure temperature, we're we're looking, well, again, physicists, right? You look at the low temperature behavior. People don't study that kind of a fundamental uh thing anymore. So when I started, remember I came from a semiconductor uh physics background, so I started uh on understanding the fundamental physics standpoint. I create a lot of uh series, uh calculations compared to my experimental, trying to see why it fades from a fundamental physics standpoint. Uh at that time, I think in 1994, 1995, uh Kleo Amin, he was still at the Japan storage battery. He published a paper on nickel doped spin out showing higher voltage. So instantly I was studying why the voltage is higher once you throw some nickel. So again, I explained it with the photoemission, studying the valence band, some calculation, everything. I can tell you, my postdoc work at JeffLav still sort of my transition from academia to application industry. But in retrospect, I think it's good because it kind of trained me to look at the any material problem from a fundamental perspective. Because sometimes you need, in order to solve the problem, you need to understand the fundamentals. But then, because part of our funding came from Mali Energy, so we had a bi-weekly meeting with Mali Energy, meeting with like Jen Remers, I mentioned, uh former postdoc of Jeff, and also their RD director, uh. I don't even know him. I visited Maur Energy uh from time to time. Give me first taste of industry. You know, Jeff has a lot of industry background. So that was my first taste of industry. Really a good transition for me.
SPEAKER_02Yeah right. And also, you know, you approach it from the solid state uh perspective, so you could really sort of understand the crystal structures, the lattices. And you know, battery is interesting because all the details of the structures at the atomic level really make a difference in the battery performance, right? Yep. So it's it's kind of a unique field to be to be in uh when that's your interest.
SPEAKER_00Oh, right. To me, the crystal field, oh group series, no big deal, right? Because I came from sort of a hard physics.
SPEAKER_04Yeah, you know that was a good thing. All these things.
SPEAKER_00Yeah, XRD to me was uh very easy uh rudimentary tool, right?
FMC Recruitment
SPEAKER_00So so but I learned, of course, how to cast electrodes, how to assemble cells, all these things. But anyway, in 95, so I went to attend my first electrochemical society meeting in Chicago. Already after one year, more than a year, opposed I already published uh something together with Jeff, of course, explaining some fundamentals of spin-out. So I was already invited to give a talk. I give a talk on spin-out, managing spin out. The room was packed. ECS meeting always attended by thousands of people, and eco, you know, university we're uh Jeff, even though it's uh uh by comparison very well-funded professor, but compared to industry, we're very poor. So we're uh three people. We we share one room, one hotel room. Jeff myself, another student of his, and the hotel was like, I don't even remember the name hotel, probably not very good hotel. Like a 20-minute walk from the conference venue.
SPEAKER_04Yeah, yeah.
SPEAKER_00So now I give a talk on spin-out with a room full of people, and right after my talk, a group of people chased me down from FMC, uh, a guy, a a business manager from FMC.
SPEAKER_04Okay.
SPEAKER_00It was like uh Dr. Gao. I came, I flew in this morning from Charlotte, North Carolina, to listen to your talk. I'm very busy. I need to fly back to Charlotte for another meeting. Now let me introduce you to Watt Abner, my future boss. I see uh uh uh uh uh leader in RD. He will take good care of you. You guys can have a conversation, we really invite you to visit us and maybe you can come work for us. I was like, I just that morning, I just came out of a hotel room, shared it with two other people, right?
SPEAKER_04Yes.
SPEAKER_00I walked 20 minutes. Um, and uh here is a guy who says, Hey, I'm I just flew in and I'm so busy, I'm flying out right away. It's like, oh, you guys have a lot of money to waste. Right. Uh of course, uh my future boss Warner treated me well with lunch and inviting me to.
SPEAKER_04But you had not talked to FMC before at all? They just grabbed you right there. Okay.
SPEAKER_00No, no.
SPEAKER_04Okay.
SPEAKER_00Uh of course I visit them and uh I was like, oh wow. Industry. Of course I work with the model energy, but model energy is a small company.
SPEAKER_04Yeah.
SPEAKER_00Um when you when you go in the 90s, you visit a big corporation. You visit your lab, they have more instrument they could use.
SPEAKER_04Yes.
SPEAKER_00Uh it's just compared to a university lab, you're like, oh gee.
SPEAKER_04Look what I can do. Yeah.
SPEAKER_00Yeah, what you can do. Of course. And in 96, my wife got her PhD ready to move. Uh, Jeff was ready to move. He was moving to Dalhousie in 96. Uh huh. So we parted our ways in uh in 1996. Uh of course, uh, a lot of his students who haven't finished will have to move with him from Vancouver to uh Halifax. I just happened to have already concluded my two years of postdoc training, dragged my feet until basically Jeff started to pack his lap for the move. And I won FMC in May uh 1996, uh started my industrial experience. Um now returning to a semiconductor anymore.
SPEAKER_02Right, that's right. Left semiconductors behind. Before we move on from the postdoc, I'm just curious. So while you were in Jeff's group, um you actually overlapped with a number of interesting people. You've already mentioned Yul Rick van Sak and Jan Reimers, but there's also Brian Wei, who ended up sort of being the technical leader of Molly and uh Tao Zhang. Tao Zhang, yes.
SPEAKER_00Oh yeah, I interact with uh we uh when I was uh spending my two years uh postdoc ship there, they're both Jeff Student.
SPEAKER_02Right. Um and the reason I sort of brought these people up is I just I'm curious whether your paths cross again later on in industry, right? Because Tao Zhang goes on to to uh start C Nano.
SPEAKER_00When he was a uh Bell Corps and it was FMC, we actually worked on something together but never published anything. Uh due to the uh laziness of us. I think I I usually should have published something. Because uh but anyway, yeah, let me because it's no longer confidential, it's almost 30 years past. So I was uh I will I already moved my lab from uh North Carolina to Princeton, New Jersey, the corporate headquarters of RD of FMC. So he was in Red Bank, New Jersey, very close. So next door from my lab is a corporate safety group of FMC, whose job is to study process safety. You know, in a chemical plant, a lot of processes would be unsafe. If it's exothermic, you accumulate heat, you can have a thermal runaway. So they have is an instrument called microwatt calorimeter. It's a big refrigerator. This is a far more microwatt, it's uh uh six-order of a magnitude more sensitive than your DSC, uh, three-order magnitude more sensitive than your ARC, that sort of thing. But it's very expensive. But for process safety for a big chemical company, it's very important. So there is a group, dedicated group, who's doing that. So I tore, I'm because my neighbor, I tore them and say, Eee gee, this is very useful. I think we can detect some very, very small side reaction in the battery. I didn't have a kind of thing. So I talked to Tao, he was uh studying uh dissolution of SEI on uh graphite. I said, hey, why don't you bring some of your battery over? I didn't have the full cell capability, I only had the quant cell. He had a full cell. Uh I think he had an 18650 at the right bank. So I asked how to bring some of his uh full cell over. Let's study uh at different temperatures that this solution I see, because this solution I see, I'm sure it's echo ceramic. Usually you cannot detect it, but uh our FMC's microwatt should be able to detect it. Detect it. So I convinced, I think it's very interesting data, but for some reason we never loaded up. At that time, uh his uh pressures on helping the Bell Corps licensees to make the lamination work. Just move on. Uh because I reported to my boss, my boss, like, oh yeah, sure.
SPEAKER_04Who cares? But you know, you know, you're you're you know that Vincent has and uh Larry Krauss have worked uh doing nanocalorimetry extensively. It's like so funny because this is exactly what Vincent has done so much of in recent years in cyclic.
SPEAKER_00Yeah, it was uh it was uh around the I think the turn of a century because I think Tao left Bell Cour soon after year 2000.
SPEAKER_02This was a great little side side. I didn't go with it with Taozhang. Uh but let's let's rewind to you joining FMC.
SPEAKER_04So you exactly what did they want you to do?
Safer LNO
SPEAKER_00Yeah, I started my uh my job at FMC and uh uh my first files is that uh what I'm not I met in Chicago. So he gave me all the freedom. He gave me a lot of support, people. And another thing, I was like, wow. Because I was very used to doing everything myself at uh at uh at the university. Yeah, all of a sudden you have all this support. Yeah, they said, hey, you you're you're a PhD guy. You shouldn't waste. I I still don't think it's wasting my time. But they're their culture is like, hey, don't waste your time. You just tell other technician or some other, oh, one of my uh the person that reported me, she's still with uh it's no longer FMC today, they're part of a real tinto. Uh Marina Yakovleva, you probably remember. Yeah, we know Marina. So she was my uh the first one of the first group members in my in my group. Yeah. So so we uh we are the FMC supply locent carbonate to uh Sony, the first Losign battery, commercial lotion battery uh producer. In the late 90s, they brought me to visit Japan, visit Sony all the time. They were telling Sony, hey, not only will sell your leusing carbonate, battery grade, uh, which is the I think at that time only FFC could produce the purity. Um but we also we have uh we uh set up our battery, we want to go downstream. We have our battery group, we have our smart battery people. Uh so share with us what problem uh you want us to solve. So uh this gentleman called uh Yushio Nishi. Yeah um so basically say, hey, I we really want to use uh lithi nickel oxide because we don't think uh LCO is the future, but it's uh not safe, it's just too energetic. I want you to make it safer. Can you do that? So I came back, I did a lot of uh um DSC on luth. So I started the doping. I tried to reduce the uh exotherm by doping. Of course, everyone started with aluminum. This is uh NCA, right?
SPEAKER_03Right.
SPEAKER_00But I say, hey, NCA doesn't, once you dope it, the capacity goes down and uh the the impedance goes way up. I see aluminum doping gives you this uh impedance problem. So I say, hey, look, you have to replace nickel, you gotta have a valence three things. There's not many valence three things you can put in. So one day a LIBOR lit up in my head and said, hey, can I do a combination? As long as every valence is three, it's okay. So for instance, I grab a valence four, I grab a valence two, or then I open up a selection. I can have put in many, many different things. So I tried many, many different things. As long as they have given you an average valence of three, then I don't have to limit myself to uh to aluminum. So I discovered uh combination of titanium and magnesium. So magnesium, valence two, titanium, valence four, super stable stuff. I combine them together, I dope uh L I N IO2, it gets the exotherm weeder.
SPEAKER_03Wow.
SPEAKER_00And it doesn't hurt the impedance so much. So I went back, and so Nietzsche sounds so so happy. That's how I made my uh I made my name at FMC a few months after I joined them. So I was uh promoted um less than a year. And then my boss, War Amner, took another job uh at uh SKC, so he left. So vacancy. So I uh less than a year I was in his uh his job uh leading many more people. So we're trying to develop market for LCO.
SPEAKER_04Were you trying to scale up uh though that cathode then?
SPEAKER_00Or were you uh yes, yes, we tried. We tried.
LCO and Asia Market Boom
SPEAKER_00But uh we we also were selling LCO. Uh we had a toting operation in the US. We also had a Caso Drum Venture in Japan with Honju Chemical.
SPEAKER_03I see.
SPEAKER_00Uh so uh commercial sales LCO became my responsibility as well, even though I initially we only wanted to work on something new. Yeah, but for a company, the existing product so yes, Big Cash. Uh I did a lot of visits in China at that time. Uh LCO uh only important in Japan. You know, around uh early 2000, uh one fundamental patent expired. Then all of a sudden you have a Chinese company and uh Korean company all popped up because initially uh the original uh AEA patent in the UK was only licensed to the Japanese. So that's why how Lucian started, but that patent expired early year 2000.
SPEAKER_03Right.
SPEAKER_00Then you have LG, you have uh Samsung, you have uh Lee Shin, you have uh BYD. ATL started in 1999. Oh, I I visited them uh soon after they started, so that gave me a lot of commercial exposure, making a lot of uh friends all over the place. Uh people probably forgot there were quite a few Lusiman battery makers in Taiwan as well, but eventually they all uh folded uh or moved to China.
SPEAKER_02So so that's interesting. You know, I really um knew FMC lithium as a lithium carbonate seller. I didn't realize that they were an LCO maker. So FMC later on becomes Live and then Arcadium, then now it's Rio Tinto, um, still selling lithium carbonate, and I assume lithium hydroxide. But when you joined, was the main product being sold by FMC lithium carbonate or was it LCO?
SPEAKER_00Um main product was listening carbonate. When I joined FMC, I think they had almost a monopoly in the battery, but my battery space is tiny. Small. So that gave the FMC a channel to interact with uh company like a Sony, Panasonic. So I made a frequent trip to Japan to visit Sony, Sanyo in uh Kobe, and Panasonic in uh Osaka, and a smaller player, Toshiba in Tokyo, Hitachi, uh all the every I think uh at one point if I uh I remember there are six uh Japanese players. So we developed uh LCO production in a drone venture in Japan. We're developing new castle as well. I thought uh LCO was the castle of yesterday, but it was but it's still a lot of problems. Again, thank I I don't think it's confidential anymore. The only commercial battery maker in the US, sorry, in North America was Molly Energy. Obviously, I went back to Vancouver and visited Molly Energy from FMC as
Doping LCO
SPEAKER_00well. So I always uh credit Jan Reimert to make me realize a problem I didn't realize. He he put out a piece of paper. So look, you want. People always show you nice capacity versus psycho number, psycho life. Yeah, no one shows you energy versus psycholife.
SPEAKER_04That's okay.
SPEAKER_00You know, people don't use capacity, people use energy. Do you know why? I said, I don't know. Jen says, because if they show you that, the energy versus psycho life looks like this very ugly.
SPEAKER_04All the impedance.
SPEAKER_00Yeah, he's you know why? I said, I don't know. You know, he said there's a big problem with SCO, impedance growth. The the discharge voltage becomes lower and lower and lower. So even your capacity look pretty. Your energy versus cycle. So can you can you can you guys uh solve that problem? So I took that, I remember I took that uh challenge like a 98 or 99. So I studied the phase algorithm. First I said, oh, maybe, because I realized there is a cubic phase of LCO in like uh I forgot the temperature, not so high, it's like uh 400-600 degrees. Uh my hypothesis, oh, must be uh during cooling, you form this cubic phase, that probably gives you the impedance. So we uh hey you to to make good LCO, you need to crunch cool it. We did it. Definitely the performance improved, but not to our satisfaction. Um remember at that time in 97 already made very good called a safe nicolate, that's the code name in within FMC business circle. We we presented to Sony called Safe Nicolate, Titanium Um Magnesian Dope. So one day I I I was uh reading a paper from a professor in uh Scotland at St. Andrews University. So basically, he was studying uh LCO. He showed like LCO, the P type semiconductor. It was a pure science paper. Better people wouldn't pay attention. So I paid attention because I'm semiconductor guy. They say, yeah, oh. So I put in magnesium, I will create more holes. So I put magnesium, it created more holes. Uh yeah, the conductivity went up like a two-order magnitude.
SPEAKER_05Uh-huh.
SPEAKER_00Um then uh I tried to dope with uh uh titanium. Titanium doesn't move into LCO. It forms on the surface. It never goes in, it doesn't want to move. So that's basically in a way I failed doping LCO, but I created LI2TIO3 coating on the surface LCO. And the magnesium created a lot of hosts. It increased the conductivity like a two-order magnitude. So so I tested that material. Bingo, it was like performance so good. I could uh I had the data uh 27 years ago. It shows the impedance, the uh the we measured in the cycle you measured midpoint voltage. The midpoint voltage stayed flat for a thousand cycles. So went back, of course, showed Jan Remers of course that data to our customer in uh Samsung, everyone in in Asia. Yeah uh that eventually that invention became the basis of uh Humicor's LCO based business. Oh it's a lot of things. They license, they they first licensed our technology, and then they basically bought the whole pattern. Because I I blame people in Asia. They they got our sample, they got the good performance. No one should uh show me in my in my face that hey this is wonderful. They're like an expressionless.
SPEAKER_04They're hiding their excitement.
SPEAKER_00They all try to duplicate my material.
SPEAKER_04Yes.
SPEAKER_00In order instead of uh saying this is good, they try to circumvent or or or duplicate your material. Because years years later, uh actually I was already at the Pew Lead. Years years later, I met a battery scientist of a Chinese company. Uh I don't want to share the name, a big Chinese, well-known, big Chinese battery company. He's like, Dr. Gal, you know what? When you show me that result, I was like, that's great, that's great. But my boss said, don't tell them anything.
SPEAKER_03Yeah, right.
SPEAKER_00Don't tell them anything. It was like, eh, I want to tell you how wonderful that material
Licensing Cathodes
SPEAKER_00was. So so we didn't receive any positive feedback. So in 2003, uh FMC management was like, hey, there's no uh when we started the manufacturing LCO, uh, we have a drone venture in Japan, that's okay, we have a customer there. We we never invested our cat pack in the US. We use tolling uh because we're hoping one day we would have a battery company here. Uh we're we had a high hope for Duracell and every ID, but they all folded. None of them, they all discontinued their lucid mind. Right. So we have with no customer in in the state. So the business in Asia, we don't want to continue this business. So they pulled the plug. So FMC exited Castle business in early 204. So they said that from now on, you I know you uh you have a wonderful technology. Why don't you just uh uh yeah, license, license model. I said I push back and said, no, if you're if you're a sell product, uh you might be able to license your technology for a few years because you're out of action. You don't get the first hand feedback from customers. You cannot improve. After a few years, your technology will become obsolete.
Prelithiation
SPEAKER_00But they said, yeah, why don't you focus on annoy? Because uh because, and again, I invented another thing around the year 2000. Remember, I was uh so frustrated that I couldn't make kind of a big leaf uh on castle side compared to my friends at Jeff Lab on the anode side. So I was sitting there thinking, daydreaming, you name it. All of a sudden I said, hey, the reason is that uh the castle choice is too limited. The castle choice it has to be conductive, you have enough capacity. The one restraint is it has to provide lithium. So there's not many, there's not many, you have a spin-out, you have a layered, uh, you have uh olivine, the three family. That's it. Because you have to provide lithium. What if we don't have you don't have to limit your choice to lithium providing materials? Wouldn't that be good? So I uh I I talked to uh my boss at that time. I said, hey, if there's a lithium powder I can use, I can prelutate the anode, then I don't have to limit my choice of cathode anymore. But I don't think this kind of a material exists. He looked at me, he said, it does exist. You know, we make butolutium. FMC makes butulutium, organoluthium for synthesis as a catalyst. It's a very dangerous process, by the way. It burns in contact with air. He says as an intermediate, we actually make something called lithium dispersion, which is a lithium powder suspended in mineral, mineral oil.
SPEAKER_05Yeah.
SPEAKER_00At that time I was only in charge of battery RD, so I never I never paid attention to our lithium extraction in Argentina. I never paid attention to our organobusiness. So this is another point I want to share uh with our audience or younger generation. Um you don't want to limit yourself to your own field. You want to look, keep your eyes open. You never know. Uh sometimes the problem you cannot solve with your within your own box uh maybe.
SPEAKER_04Already solved in some other field.
SPEAKER_00Exactly, already solved. So he was like, yeah, we have a lutin dispersion. That's allecin powder suspended in uh uh mineral oil. That's what we use to make uh bital, which is a big product we sell. I asked him, can he make a you can wash out away mineral oil? And uh I can use that for my battery research. And so, no, no, no. That's uh that's dangerous. You cannot, too dangerous. You cannot, that's high surface air, lithium metals, too dangerous. You cannot do that. So we we discussed some more in his office. Oh, his name is John Barba. He's very smart, uh, inventive. Uh very uh yeah, he's a well-known.
SPEAKER_04He's a key guy for lithium extraction.
SPEAKER_00Oh, yeah, he's uh very active. I just met him uh in uh Las Vegas in uh two months ago. Uh he's he's uh very active in the lithium extraction field. At that time he was our technology director, my boss. So we we brainstormed a little bit. So we said, hey, maybe we could stabilize it. Let's just grab this so-called lithium dispersion. Let's just stabilize it with something. Um then we can dry it. Then I can use it because it can become a standalone material. I can prelute. So I did a lot of study, great result, because at that time people consider today uh uh silicon uh carbon composite as if it's a new material. But 26 years ago, there was a company in Japan called Shinizu. Shinizu is very uh famous for uh for uh silicone type of material. Uh they are also famous for rare magnet technology. This will come into my career later on when I was in Moluccore. But anyway, at that time they were already making silicon carbon composite because they're a silicone company. They could make that kind of thing very easily. But the problem is, you know, silicon carbon composite has a huge universal composite, like a 40-50 percent.
SPEAKER_01Yeah.
SPEAKER_00Because you consume lithium in the first charge. So um, of course, my objective to is to lithate, proliferate the anode so that I can use manganese uh uh yeah, manganese dioxide, that's kind of a cheap uh material as a castle. And then also it's very safe. So, but I share my result with our friends in Japan. They're like, hey, gee, this is great for our silicon composite. That's like a year
Margins Drive Strategy Shift
SPEAKER_002000. But anyway, so come uh the late 203 FMC management, look at this whole portfolio, battery material portfolio. You get something very interesting on the annual side as a core to the lithium. You have castle technology, kind of interesting, but it's not core to our business. Oh, by the way, your margin. Uh I happen to be at that year. Do you know lithium carbonate has a high year or low years?
SPEAKER_01I see.
SPEAKER_00Sometimes the price is very low, sometimes very high.
SPEAKER_01Yeah, but it's a high.
SPEAKER_00When it's a high, you have a margin of 70%. Uh so in that year, when they did, they do this annual review. Of course, when they did that review, they got a huge margin on locium carbonate. They look at the castle, they said you call it uh high-tech materials. Look at your margin, 20%. You know, selling LCO with 20% margin was very high. But to them, to FMC management, it's like you while you're in this business.
SPEAKER_04We can have so much more margin somewhere else, right?
SPEAKER_00Exactly, exactly. It's like if something is not like a 30-40 percent margin, you you you you don't kill it. Don't don't show it to me. 20%, you have no future. So we exited the castle. So my group uh put everything on anode or supporting because at that time we're competing.
SPEAKER_04I just want to kind of like tie off some of these things. So so look there you are right there. You're exiting cathode, and so at that point, when you're exiting, you're you're you're producing by joint venture uh a lithium cobalt dioxide. You've you've gone around and you've tried to get people interested in in your nickelate and you didn't get much back, but you've probably got patents there, and then you decide to sell license or sell the patents to humicular or yeah, we license we licensed uh technology to a uh a Chinese startup, uh Castle startup, BNM in 203, collecting royalty.
SPEAKER_00So the management is very happy. You uh you could like you can make money by doing nothing just to sit there and collect money. And also they started to give the uh added responsibility on the commercial side because they observe uh me uh interacting with customer very well, so I was supporting our colleagues in Asia to visit customer in Japan, Korea, China, because we're competing in the low-syncarbonate space with other people by them.
SPEAKER_02I just want to sort of uh come back to to Kevin's point. You know, it's really fascinating that there was a company, FMC Lithium, that was ready to make LCO, had unique technology that was best in class in North America, and ended up closing the program because there was nobody to buy it.
SPEAKER_04Right and and your customers were trying to not show you how valuable your future stuff was when and and make so they could make it themselves.
SPEAKER_02Right. And Yuan, you pointed out you were hoping Duracell would be a customer. And um yeah, if listeners are interested, you know, the whole Duracell story we have in episode five from Karthik Ramaswamy, that whole story of how Duracell went into lithiumion. Um, yeah, so that was really interesting to me. I didn't realize FMC was ready to, you know, be an LCO supplier and then ended up abandoning that thread. Right.
Umicore Scale Up
SPEAKER_04But you mentioned Yumicorp too. How did they fit into it?
SPEAKER_00Oh, yeah, they had a foresight of seeing this future. They put in the cap pack, they built their big. Uh at that time, it's considered big. I think they put in a 5,000 home per year castle plant in South Korea. I think around the year 2000 or something.
SPEAKER_04And I think it's like next door to Samsung SDI. Right, next next door. Right, next door.
SPEAKER_00I uh visit them. Uh 26 years ago, 5,000 home per year is huge, considered huge, of course. Today it's nothing. Uh they realize this technology is pretty big. So one day they came to FMC, I don't remember the year, but uh after FMC already exited the castle business.
Selling the Patent Portfolio
SPEAKER_03Okay.
SPEAKER_00I already have my responsibility on both technology and sales marketing. Uh they can uh his name uh Kurt Vanderput Vanderput. Yeah. They came to me at a conference and said, I want to talk to you guys because you do you guys don't realize the infringement in China on your patent. Your technology is so good, but you guys are not enforcing it because you guys don't care. You access the castle, it's not your core business. Why don't you sell your patent to us? Because we can be better, much better enforcer. It's more valuable to us. So so we came together. Uh, of course, it's the music to the ear to the FMC management. Yeah, sure. Someone willing to pay to buy our patent. Let's just uh wash our hands. Uh, because collecting royalty wasn't uh easy. Yeah. Um it's very hard to check the volume sort of like they didn't, even though we collected some money, but they always suspected uh uh our licensees were cheating on us. They say, hey, someone someone wants to take it out uh take over. That's great. So that's where we sold, we sold uh the whole pattern LCO or Caso portfolio to Unicorp. Um then I kind of uh um I left FMC in 2010 uh joined Molicorp uh because Dr. John Berber was CTO of Molycorp. He basically approached me and said, Look, I mean FMC doesn't care about your battery technology. They don't care.
Licensing Trap
SPEAKER_02But uh yeah, so actually before we get into Molycorp, I just wanna you made a point that I think is really important because I think um a lot of people have fallen in that trap, which is a company invents something uh very valuable, they think, oh, it's gonna be easier to make money by licensing it. And we'll just invent something again later on and we'll keep licensing are great ideas. And then what happens is, as you point out, they start licensing and then there isn't a magic idea that comes up. There's no feedback. And then they're right, and then there's no connection with a customer. Exactly. And they're and they're disconnected from the market.
SPEAKER_00Exactly. I think most just look at my my inventions. It's all triggered by a customer. This customer presented me with a problem, with a challenge.
SPEAKER_03Yeah.
SPEAKER_00And I uh I try to solve the problem from a customer. Working with then I I will later on I will share with you my experience with Pew Lead why the uh Chinese castle company keep inventing, because they work very closely with their customer. So again, once you're no longer a player, you're out of touch with your customer. I don't think you have you uh Gen 2, Gen 3 to the license anymore. So at some point your your your your residual technology just just expired.
SLMP
SPEAKER_04And before before before we leave stabilized lithium, did that, did you make sales of stabilized lithium?
SPEAKER_00Uh very little, very little, because there's uh poor Marina took uh they are still working on it. I think they make a huge improvement by because of one of the challenges of uh we call the SLMP, stabilized lithium powder, is very hard to apply. It's very hard to introduce it to production line. I think pollution now is widely used in the lithium on battery production, in China at least. But uh I I'm not so sure they have a big business. Let me put it that way, because they have uh they have a competitor who can make lithium powder, and also a customer figure out other ways not using lithium metal powder to put lithium in, uh, real tint or lithium ink, I think still a one of the good ways if you can reduce the cost. Again, the cost is always uh a barrier when you try to develop business in Asia.
Molycorp
SPEAKER_04Okay, so now Burba pulls you away towards rare earth magnets.
SPEAKER_00It was a very exciting time in 2010. Uh, if you remember, uh rare earth was like uh dead end, no one paid attention, not interesting. America had a very good mine called Mountain Pass. It's been operating in California, so they have to shelf it in the 90s. I forgot exactly which year, because China has driven the rare price to the bottom. So it's cheaper to buy. That's again in the 90s. That was the 90s, early 2000s. That's kind of a prevailing wind. If you can buy, you don't make. So we offshore, it's not just rare earths, we offshore pretty much all manufacturing. If you can buy easily, much cheaper, why you make it? So in 2010, people realized America needs its own rare earths. So Mountain Pass mines restarted in 2010. So Maui Corp raised a lot of money to reopen Mountain Pass. Uh John Barber was the CTO, so he brought me over. I learned a lot of new things. Rare Earth is far more complex than Lusim. There's so many elements as sharing one box on the periodic table. So I learned a lot of interesting things. Uh China started to impose restrictions on exports, so price went up 20 times in 2010. Exciting times. So, but then uh China removed the restriction later in 2011, the price crashed, so we faced a lot of uh problems. Right. Um so high, low, high low. It's like a roller coaster. Yeah, hard to end the business. Yeah, I learned a lot of things in Mongan Pass in terms of technology. Uh, got involved in uh corporate development, uh merger acquisition, everything because it's like a very small group. At Moluccore, I learned a lot of geology. It came in handy later on in my career. Uh, mining regulation, all those things. But anyway, uh, we're not doing well, I have to say.
Pulead Recruitement
SPEAKER_00Then late 2013, right before Thanksgiving, I received a call from a friend from Pulit. Remember, I visited all the castle company, all the battery company in China, our Korea in Japan. I received a call. I said, hey, we're trying to find you. You disappeared from our space. Finally, through friends and friends and friends, I we trace you down. You're hiding in Colorado. Remember, I left the space in 2010. So by 2013, you disappeared for three years. We finally traced you down. So we invite you to visit China because you know EV is about to take off. It's be very important, your knowledge, your everything. I said, Oh come on. Uh people have been telling me uh EV is around the corner for almost years, but never materialized.
SPEAKER_05I I don't mean that.
SPEAKER_00Oh no, no, no. He said that um they gave me all the solid data why they believe the EV is around the corner to take off. And he said, hey, no string attached. We invite you to visit us. And sure enough, like uh a couple weeks later, I received a call from another castle, Chinese castle company. Hey, we trace you down, we track you down, please come visit us. Uh it's like uh I didn't know why. Of course, but then I I said I'm busy in my schedule tight. The earliest I can visit is after New Year's Day 2014, so I went to visit them. Then I realized why? Because they got sued by Humakor. See they wanted me to help them to solve the patent problem, and also, of course, um to help them on other things because really, really, I visit them. You can see their expansion plant. It's like a unimaginable in the US. It's not like a building. So much more plants more quickly. Yeah. Yeah, they're like building big plants. Uh it's like a dwarf humicorpse plant. I mean, I already considered, I was like an MV Humicorpse. Hey, they build a big plant in South Korea. And the ones that see the Chinese plant, hey humicorps plants, small ones. So anyway, I uh I after some uh due diligence I decided to join them. I reported to work in May 2014.
SPEAKER_04Let me interject here because I I probably should have asked this at the very beginning. But you know, is your earliest background out of out of China or Taiwan or um Oh I I grew up in Beijing, China.
SPEAKER_00I never worked in China.
SPEAKER_04Okay, I was always assumed. But that might have been one of the reasons they they look at your patents for sure and so on, but they also realize okay, he's he's I don't have I don't have a language problem, I don't have a culture problem. And you know everybody in the field, you know the entire world's field.
SPEAKER_00Oh, I had an older connection. I uh for instance, uh you know ATL, which is princessors now famous C ATL. I visited them when they only have a handful of employees. I knew them all as uh I visited uh BYD back in uh 98, I think. When I came back, I reported to uh the management. I uh visit uh uh yeah, we visited uh a company called PYD. It's like who's PYD? Why are you wasting your time visiting PYD? You should spend all your time at Sony. Why you made a detour to Shenzhen to with the who who what's the name of the company again? Yeah, that sort of thing. The first time we visited Li Shen, they only have a blueprint on the wall. The factory was not even built yet, right? They were still operating out of their research institute number 18. That's the first time we visited them. So I knew those founders of those uh uh uh big companies. Yeah, so they always joke with me, said, hey Dr. Gao, if you joined us at that time, you'd be uh very rich. So uh I didn't, of course, I didn't I didn't uh uh but I was uh financially okay in 2014. I was like saying, hey, if uh if I went back, nothing worked out, I could retire. I'm not a big spender. Uh I made a lot of money at Model Core and FMC stock off and everything. Yeah so I was already a senior uh at MotoCore. The other thing I learned, I never had uh board experience uh FMC, even at as a uh global marketing director. Uh Model Core, I finally reached the level of a VP.
SPEAKER_04You got all the right things for PULAD. Sure.
SPEAKER_00So I got all this. Uh so by the time I went back to field, I already reached very high level in the US corporate life. And uh I if I had to retire in 2014, I would be okay.
China Manufacturing
SPEAKER_00But one thing always intrigued me at FMC. Every time I give a quote to a Chinese company, they always say, Hey, I get another quote from uh your Chinese competitor. It's like uh way, way low. That's like how we did the old analysis. There's no way they could be that. So I was like, uh, yeah, I want to figure out how they can make the cost so low. So cheap, yeah. Yeah, so this is my opportunity to work there.
unknownYeah.
SPEAKER_00So then I would learn first hand because a lot of people tell me, but I want to get my first hand knowledge. Why they can make things so cheap.
SPEAKER_04Yeah, yeah. What did you find out? What's the secret?
SPEAKER_00Oh, yeah. Uh many, many things combined, all of above. I guess uh people, some people say, oh, they got heavy government subsidies. Uh they they got uh uh but one thing, one thing at least is no longer true today, in the early days, 20 years ago, probably true, uh cheap labor no longer. Uh today uh Chinese labor is no longer cheap. Number one, number two, uh castle manufacturing is pretty automated. You labor doesn't account for very little. So even you pay people zero, you don't save a lot of money. Uh but uh so many, many things. I think one one driver is that uh once I became a uh the CEO of a PLEAT, uh the first half a year, I made a point. Every morning I was sitting there morning meeting at manufacturing. I would make my tour, so I want to learn first hand. Yeah, I get my hand dirty. It's just like I I got my hand even at the FMC when I do my research, I got an assistant, I try to do my own experiment. So at the PewDiePie, I I make I didn't need to, but I uh first six months I toured every single piece, part of manufacturing. Um in China, there is this huge drive in making everything efficient. This is really a big driver. Government subsidy, yes. That's why when I came back, I was invited to on some panel discussion. I always put this out. I said when you build something new, it's a huge learning curve cost.
SPEAKER_04Right. Things don't work at first and you have a lot of low yield and all that.
SPEAKER_00Your yield is low. Battery, battery yield would be low. Your material yield is very low. LCO okay, because you can sell LCO for cobalt value. LVP, there's no value. So if your yield is low, it's lost. Yeah, it's a
Subsidies and University Ecosystem
SPEAKER_00loss. So initially, now of course the Chinese government already, I think it phased out their subsidy, but back when 2014 was drawn them, all sorts of uh support you can apply. On RD, if you spend more than 3% of your revenue on RD, you qualify as so-called high-tech company. You get all sort of a uh your tax corporate tax rate is way lower than normal corporate tax.
SPEAKER_01Uh huh.
SPEAKER_00You get some rebate on your RD spending. Also, when I was an FMC, I tried to work with some universities, uh, two things. One, they'll tell you, oh, our overhat 60%. You pay us $100,000 a year, only $40,000 goes to that professor. How much the professor can do is $40,000? Maybe one postdoc or something. $60,000 goes to university. And every university has the industry liaison office or technology transfer office.
SPEAKER_04Right, right, right, right.
SPEAKER_00I always tell you the Gatorade story on University of Florida. And so I want okay, a racing IP, anything you develop with the professor so and so belongs to the university. All sorts of things. Right, right, right. Uh when I went back to China work at Pulitz I had a lot of universal collaboration.
SPEAKER_04Totally different.
SPEAKER_00Totally different. They were basically, you don't need to pay me anything, and you own all the IP. Why? Because I write a grant proposal to the government funding agency. If I put your name on it, I'll say we have an industry sponsor. The government, I increase my chance of getting that money. I don't need your money. I get a lot of money from the government. I just need to play, hey, my research topic is useful to the industry because I have an industry sponsor, a call Pulli. Right. They sign off on that. I get my money. So you can get a university doesn't want to claim the IP, the IP belongs to you. That kind of a in the subsidy? Yes, of course. So I think the ecosystem in China, it's just a lot more pro-industry.
SPEAKER_02Did Pully do a lot of research themselves, or were they mainly focused on manufacturing?
SPEAKER_00Oh, we we we came out, basically our RD came out of Peking University. Oh, if you look at the company name, uh today uh Peking University doesn't have any share, but that they won when the company was formed, it's a lot of share from the university. They kind of sold divasted their shares. So PewDiePie is uh PU stands for Peking University Lead, uh Peking University Lead. That's how they put the name together. Uh so we uh at one point before we built our RD center, where our RD Center was was on campus. So after we built our RD building, they will move our people out. We still uh we still utilize their instrument, SEM, everything, you name it. Uh now now, of course, PewDiePie is very rich today. They have a TM. How many castle companies would have a TM? They have a TM, they have XPS, they have all the expenses, but they want you utilize universities, yeah, instrument. For free. Yeah, for free. Um and uh you you you you come up with a subject, you you go talk to a professor. Uh yeah, I did that. I uh I talked to MIT professor, I talked to Rutgers University, I talked to I I I collaborated with Clemson University near our RD Center, which is uh an hour drive away. Oh this university, oh, we need 60% overhead. Oh university uh university needs to own all the IP right. Oh, this thing is so hard. And it's day and night difference when you work with Chinese universities.
SPEAKER_04Interesting. Do you think it's still that way in China today? Or has it changed?
SPEAKER_00I don't know. But when I was there, it was like that. It's uh it's so pro-industry. So pro-industry. The other thing is the loan guarantees. You want to do an expansion, uh, you need uh capital. Oh, it's just if I remember correctly, one of the loans uh we took out to build our uh I also built two, not just castle. I during my tenure, I built two separate plants too. The loan we took, the delta between the commercial, the commercial rate and the one percent we pay is all paid for, subsidized by the industrial park, the local government. The local government, hey, we pay for that delta. So we we we we call the bank, hey, give those guys a loan because this is important for our industrial park. Uh the bank will say, hey, I need to charge 6%. The industrial park says, hey, I will pay the delta, you charge them one percent.
SPEAKER_01Yeah.
SPEAKER_00Yes, this support is enormous. Um you pay for the learning curve cost. But once you have the volume, it's a chicken and egg. You got to practice. You practice, you reach today. If you look at PewDiePie yield, it's probably 99%. Your cost is very low. But day one, when you turn it on, your yield is very low, your cost is way high. Somebody got to pay for the uh learning curve costs. Same thing. CETL. No one can compete with them because their yield is very high. But 10 years ago, when their yield was very low, who paid for their learning curve costs?
SPEAKER_04The government local local government, probably.
Work Culture and Compliance Rules
SPEAKER_00Yeah, yeah. And also, um, those of the RD support, and Chinese people work hard. Um you have to admit that.
SPEAKER_04Yeah, I wanted to ask about that. You know, you've you you worked in a few places in industry uh in the US and and then uh and then there you are in China. People generally say, Oh, yeah, the Chinese people work really hard and so on. But you got you got to see it and you say you like to get your hands dirty, so you saw it at the factory and and the lab and then the business administration. What did you really see?
SPEAKER_00How how would you describe that work ethic and the you see this big CETL building in England? Do. You go there at 10 p.m. You see that the light is still on.
SPEAKER_04Ah, I see.
SPEAKER_00It's uh well the other thing, the ecosystem is very different. It's like uh uh in a Chinese company, most of the employees are from out of town. Yeah, they don't relocate their family to that place, their family stays behind. So from the top guy to, for instance, Pulli's uh uh flagship uh factories in Qinghai, Western China. The reason they put it there is so that they get government support for Lithium. Because Qinghai is a big lithium production. If you don't invest in that place, you don't get priority to get lithium. So if you look at the topic exactly from the chairman to CEOs to uh VPs or RD people, no one, very few people came from that region. They're probably from Shanghai, from Beijing. They all work there, but their family is still in bigger, more well developed places. So you live in in China, in the C A T L too. Most of the employees live in company dorms.
SPEAKER_04Right.
SPEAKER_00So you're like, hi, I'm here. I uh I don't get to go see my family after work. So might as well just stay in my lab, in my office. Just keep working, right? Yeah, until it's time to go to bed.
SPEAKER_02Right. So earlier you mentioned your wife when she was completing her PhD. So when you worked at Pew Lead, did she move to China as well?
SPEAKER_00No, no, uh, I was by myself. Uh but Pew Lead, uh, I have to thank them. They give me a very good package. In order to lure me over, they allow me to uh go back home six times a year. Allow my wife, my son to visit China four times, company paid. So they could visit China four times, I could come back six times. Um but I never, I was so busy. I uh I never came back. I think on average, I probably only came back uh four times per year. Uh my wife, as a professor, never could visit me four times a year, probably a couple times, a couple of times a year. Uh but we we also managed to meet somewhere else. Sometimes we meet in Europe. Uh another thing about PewDieP stands out in among old Chinese, because when I drawn there, the first thing I said, I want to make sure. If you don't, if you don't, you guys don't agree with me, I don't come. I want PewD to be totally compliant. I don't want, I don't like the guy, it's like infringe other pattern. So if we do something, we actually we get license. So PewDiePie was the only company at that time we have a license from Humicor. Basically licensing back, my invention. We got license from this uh Swiss company of FLP plus C uh licensing. We got the FIP license, we got NMC license. Well, we we waited a little bit on the battle between 3M and uh BSF. Once that's settled, uh uh we license from BSF. So we're the only company who has license from O3. Uh we could uh business outside of China.
SPEAKER_02So just you know, for the LFP plus C license package, you know. So there's uh the episode with Michel Gauthier that that mentions that for us, um, which was episode three and Kareem Zagib's episode, episode eight, that sort of talk about how that license that patent portfolio was built. Um so that's really interesting that you mentioned, like, oh, they're calling me because there's there's infringement cases. I was about to ask what happened. Um so that was really interesting that you put that as a as a condition for joining their team that everything had to be properly licensed.
SPEAKER_00I I have to I want to make sure you're compliant. I don't know if an organization have to have uh some liabilities, but I one thing I can promise you, because you guys don't know who to talk to to get a license or get a good deal. So I I did get some very good deal from from Humicor from BSF. I talked and uh Mike Fuchenko Frchenko is a good friend of mine. We work out a deal that's good for BSF, good for us. I work uh Kurt was a good friend of mine. I said, hey, we can join force to enforce patent in China. So for that, you give me a better deal. Uh smart. So again, uh FOP is the same thing. So you want to set an example. You want to set an example that uh if you are compliant, you get something, right?
SPEAKER_05Yeah, right.
SPEAKER_02Yeah, yeah, good idea. So did it make it harder for Pure League to compete with other Chinese material makers because you were paying license fees?
SPEAKER_00Yes. Unfortunately, it opened our door outside for the longest time. We were the only one who could sell FIP outside of China.
SPEAKER_05I see.
SPEAKER_00We sold in Korea, we sold in Europe, not big, but we're the only one. But in China, we try to collect, we we will try to charge a little bit higher price for that royalty. Oh, we go to get the pushback. Oh, yeah, why don't you guys figure out a way not to uh your competitor never charge us that? Uh so we uh I have to tell you, CETL is very good because they are they they have in overseas, they always pay us the royalty. They're saying they want to be uh ATL, CETL always compliant. Some other companies uh oh no no, you you cannot charge us that uh uh additional competitor, they don't charge that. So it's uh it's a little bit hard. Uh for some company, not all the companies. Um I think BYD was pretty good uh later on. They realize they had a big exposure. If they don't do things properly, they might have a liability too. So they are like, yeah, yeah, yeah, no problem. You you pass it through to us. So so I think my conclusion is if someone becomes big name overseas, they tend to play by the rules.
SPEAKER_01I see.
SPEAKER_00If they're not big names, uh which many. I mean in China, you get so many companies. Uh some companies they're they're they're happy with uh selling aftermarket product. You know, even today, there's some Chinese companies they sell battery only into this uh battery bank for charging your phones. There's no name. It's like, hey, I I don't care.
SPEAKER_05Right.
SPEAKER_02Right.
Pulead Growth
SPEAKER_02So so when you in 2014, when you joined Pew Lead, were they already making LFP, NMC, and LCO? What was the biggest, what was the sort of spelling? Where did it start and how did it grow?
SPEAKER_00Oh, LCO was their big when I joined them, LCO was the biggest product. Already they were uh I cannot claim credit, they were already in the Apple supply chain, but I strengthened that relationship. I made it improved, but they already are very successful there. Uh but Alpha P was growing. They just started a big plant, but uh still sort of learning their ways. So by the time I left, uh by the time I retired, uh they were already big notch up. So I think today their biggest castle product is FLP. They still sell LCO, but it's in terms of volume and value. I think order magnitude is smaller than FP now. But uh back in 2014 it was their biggest product. Uh PewDiePie has never been big in uh NMC because uh I think in a way it's the right thing to do because they never felt comfortable with a high nickel. So their NMC product is always kind of a mid-nickel type of product. Right. So it wasn't fashionable during the period of 2017, 2018, 2019. Now I think people realize mid-nickel is really you want you want a more stable material. So in terms of castle, their big their biggest product is the FOP. They have a low temperature, also their portfolio. Uh they have a high density FOP, which is everyone wants to have. They also have a high power FOP, and a low temperature FOP, which is difficult, not many people can make.
SPEAKER_04We don't really want to get too close to the present because then we start to run into uh stuff you probably can't talk about, but nonetheless, uh you you know that did, as you say, you stepped down and you left somewhere around 2019 and and continue to be very active in the space. You haven't really retired, you're you're out there on boards and you're um you're consulting and and on quite a quite a lot still. And so you know, I can see you're involved in in you know lithium supply and you're still involved in um LFP on
Future of LFP and Sodium Ion
SPEAKER_04it. Since you just mentioned the LFP, I'm I'm curious, you know, without going into your your details of what you're really doing, you know, what can you say very generally about the future here? So where do you think the future is gonna go here for iron phosphate? Is it gonna take over more and more? Are we gonna see like I have I have three EVs. I have a Leaf, I have a Ionic, and I have a leaf. I have a Tesla. Oh yeah, that's right. And none of them have the LFP yet. I think some of the other ones do nowadays. But what do you think the future is for LFP, you know, both globally and uh North America?
SPEAKER_00Yeah, I think um, and again, I'm uh uh people always ask me to pick a winner. I think every castle has this suitable use. I don't write off uh back in during my career. Sometimes people write off FOP. It says the future belongs to high nickel. Um next year it will say, oh, future belongs to FLP. Nickel, uh people no one will use it, it's not stable. I think every castle has its uh proper use, uh suitable application depends on application. So I'm very high on FOP and in the meantime, I'm also very high on NMC. Depends on your application. I'm I think for certain applications you can also use a sodium ion. It's just it just depends on what application. It's not like uh one castle will take over the whole battery space. I mean a lot acid still in existence today. It's uh um but I I do think I think LP will have a bigger share than NMC because in terms of the performance and value, it has the right mix for a bigger market. Uh NMC may be for certain applications. Really, applications really require higher energy density. And for certain applications, you might want you don't even want to use FLP, you want to use sodium ion.
SPEAKER_04So are you saying like uh LFP among lithium ions LFP can't be beat in terms of uh dollars per energy? Uh is that what you're saying? Whereas if you sodium ions maybe going to be even better for dollars per energy, but maybe not maybe not per volume or weight, but per energy.
SPEAKER_00So sodium is coming in, it's a low temperature performance. Okay, low temperature performance. Um I think a dollar uh in the future might have some dollar per energy value, but not there yet.
SPEAKER_04Uh-huh. Um but iron phosphate is.
SPEAKER_00Yes. Yes. If you look at the dollar per energy, uh the winner is FIP.
SPEAKER_04Okay.
SPEAKER_00Today, even compared to sodium iron. But sodium iron has a potential of uh providing good dollar per energy. And also sodium, the life is not there yet, but I think it has a potential to be there. And the other thing I want to mention is a project I'm involved in. I'm not ready to share too much detail, but I think it's a lot of work can be done on the annual side. Uh ask yourself why people move to solid state. Because we want to suppress the dendroid, we want to use the lesson metal as an annual. But I think we we finally figure out a way to control the dendroid in a liquor system. I think that will be a big impact. So again, uh again, I I'm enjoying my status right now because in the past, when I was an employee, a corporate employee, you can only come in through one touch point. Now, with my board work or consulting work, I'm touching the industry on cashod, on lithium extraction, lithium supply, on precursor, on anode, on all sorts of things. It gives me a more holistic picture. I could never, uh I didn't have when I was a full-time employee. But I want to make sure I don't have a conflict interest. So each entry point is a one company, but I could touch the whole supply chain through many, many doors or windows. That's really uh that's something I really enjoyed. I'm still as busy as a I think I may uh my wife was uh complaining the other day. I think I'm uh busier uh than a full-time employee. I'm involved in so many different things. That's really exciting.
SPEAKER_04Yeah, yeah. That's only fun.
SPEAKER_02So you have a like a really kind of unique vantage point because you were with a company in you know the early 2000s, late 90s that did manufacturing for the battery space in North America. Then you have the experience of actually scaling catholic material production in China, and then now you have exposure to board level and consulting of North American companies.
Lessons for North America
SPEAKER_02Looking back of the the experience from the 90s and early 2000s, what lessons do you think we should learn from that era? What what are the lessons that companies today should learn from that era?
SPEAKER_00I think we uh we give up too easily, but it's uh I don't know how to change that business culture. If you were for a big public company, you look at your numbers quarter by quarter. I always uh wonder how we stayed in the castle space. We're we're we invented so many things so far in advance, but we didn't rip the uh most of the benefit because we're like uh the business decision was made. It's like, hey, yeah, your margin's not high enough, why don't you do something, go do something else? Um we're not unique. FMC is not unique. So many US corporations made similar decisions. So we're looking back, yeah. If you were the company executive, top guy, even CEO, uh, you probably made the same decision or you'll be gone. You'll be fired by the board anyway. Um so so I think it's a business culture. The other thing I always have been uh calling for help is that if we uh everyone talked about building up a North American supply chain. I every time I I had my chance to voice my plea, I always said, please, there is a challenge of a learning curve cost. If we're serious, if we're serious about building our own supply chain back home in North America, somebody got to pay for the learning curve costs. Customers are not gonna consumer, you can't ask them. Consumer won't pay. You cannot say, hey, my materials are twice as expensive because I I my I don't have the experience. My yield is 50%, not 99%. So because I need to charge consumer twice as much. No. So in order to compete, please somebody give us the support, uh sustained support. Not like we have we pass a law, give you support for two or three years, and it's gone. Um I think it's uh worse than having uh uh I think giving you a sugar high for two years, then we struggle is probably worse than having no support.
SPEAKER_04Yeah, interesting.
SPEAKER_00And we not we gotta have a 10-year program. Uh China, China's EV industry is where it is today because they s they had a 10 or 20 year program.
SPEAKER_04You know, your your China is examples makes me think of something. Uh and a lot of people don't realize it if they haven't been involved in it, but it's not all coming from the national government. A lot of it is coming from the local. Yep. From the province government, from the money is coming from them.
SPEAKER_00And uh also not even provincial, the industrial park. Even the industrial park. The central government support in terms of some of the incentives, yeah. Then you have a provincial support, even the industrial park will give you uh well, like say you build a factory, you need a piece of uh real estate. Uh, you probably don't need to pay for that piece of real estate for many years. Deferred payment.
SPEAKER_04What uh what it leads to is like, well, of course, at the federal government in the US, it'll go flip-flop back and forth every you know four to eight years. But not states. In the states uh uh in the US, most states stay one way or the other politically for more like six years at least, if not longer. If somehow states could have uh you know help with the funding, then that could you could get more sustained funding. And there is some of that. There is that available, but but maybe we don't use it enough. Maybe we maybe we should all be aiming to expand on that.
SPEAKER_00Yeah, I think so. First we have to admit, if we don't admit it, we never improve. We had to admit in terms of UV's supply chain, we're behind.
SPEAKER_03Right.
SPEAKER_00So to catch up with somebody require more energy.
SPEAKER_01Yeah.
SPEAKER_00Right? So this additional energy has to come from somewhere. It's not easy. If we think it's easy, then we'll never catch up. So we need to realize we need to have additional push. This additional push needs to come from somewhere. Maybe together we can we can uh uh provide this push and then we can catch up.
SPEAKER_04Yeah, yeah, that's good.
SPEAKER_02Yeah, I think that's uh probably a good place to to conclude. Thank you so much, Juan.
SPEAKER_00Oh, no problem. My pressure.
SPEAKER_04Yeah, so great to have your wisdom on the show. And great to see you and great to talk to you.
SPEAKER_00Yes, always great to see you too.
SPEAKER_02Battery potential is produced by Cyclical Music by Big Flavor.
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