- [Narrator] This is a nickel-and-cobalt battery,
popular in electric vehicles in the US and Europe
and this is a lithium iron phosphate battery,
also known as an LFP battery, which is popular in China.
It has a shorter range, but it's cheaper to make,
less prone to fires, and lasts longer.
Both of these batteries were made by CATL,
a Chinese company
that's the world's largest EV battery maker.
Of the 10 biggest EV battery companies, six are Chinese.
China is the dominant force in EV battery production
while the US is deeply reliant on foreign batteries.
- The US and China are in David and Goliath situation
when it comes to battery production.
- [Narrator] We are comparing how the US and China stack up
in the four main stages of battery production.
From final assembly, all the way back
to sourcing the raw materials.
China assembles more than 2/3
of the world's electric vehicle battery cells.
US automakers lag far behind.
Several companies have outlined plans
to build plants in the US.
But shifting battery production is difficult.
Panasonic, a Tesla partner learned this
when it started building a battery plant
at Tesla's gigafactory in Nevada.
Panasonic found it couldn't just import equipment from Asia.
Different safety regulations
and different operating conditions made it a challenge.
It also had to train workers to make batteries,
a finicky process where small mistakes
can have major consequences.
After years of its joint battery business
operating in the red,
Tesla and Panasonic's cell production has become profitable
and it's now a model for other automakers to follow.
Other companies have found getting EV battery factories
up and running takes longer than they expect.
- Toward the end of the supply chain
is where the US definitely seems like it can make
the most inroads and then try to work its way back
to traditional mining and processing from there.
- [Narrator] It's the earlier parts
of the supply chain that are more difficult.
Before you can make finished battery cells,
you need to build all the components that make it work:
the anodes, cathodes, separators, and electrolytes.
China is the global leader in producing these components.
The US is far behind.
- You're talking about working with very specific chemicals
and materials and turning them into vital products.
So there's a lot of safety testing,
and everything has to be very carefully done.
So that's another reason, China having years of leadership
in this space is so critical because they have the know-how,
they're able to adjust to new technologies,
and they've been doing this for a really long time.
Both of those together make it a really herculean task
for the US to catch up.
- [Narrator] The US government has invested billions
in companies that are trying to do this domestically.
But companies can need years to develop the technology
and ramp up manufacturing.
Automakers accustomed to slower development cycles
are trying to revise battery development strategies
in response to changing mineral prices and technology.
For example, companies have two main choices
when it comes to cathodes,
the battery cells' most expensive component:
nickel and cobalt used widely in the US and Europe
or LFP, common in China.
US companies have historically preferred nickel
and cobalt batteries for their long range,
but volatile mineral prices have led some automakers
to turn to LFP batteries.
While these batteries can't travel as far between charges,
they typically last longer
and have better thermal stability.
Meaning, they're more resistant to heat.
Some US automakers are particularly interested
in them for entry-level vehicles.
- Iron phosphate is in vogue now,
but companies are really investing
in next generation batteries as well.
Companies are always innovating
and trying to change battery chemistries.
That's why getting a glimpse of the supply chain now
and how it might change is really challenging.
- [Narrator] Before you can make components
like cathodes and anodes, you need to process
and separate the raw materials that make them up.
The US currently does little of this
while China is the world leader.
And companies often have trouble
building chemical processing facilities in the US.
- The bureaucracy here between local, state,
and federal regulations and then rules,
all of that is a messy process that will take time
to work through and a lot of resources.
Then you have local opposition, oftentimes,
to these facilities if there are concerns
about consuming huge amounts of water
or energy or even damaging the local environment.
And the last big one is just labor and supply chain issues
like we've seen throughout the Coronavirus pandemic.
- [Narrator] And then there's the matter of getting
the raw materials.
Most of the minerals in electric vehicle batteries
aren't mined in the US or China.
They're imported from countries like Australia,
Indonesia, and Congo.
China has strong relationships with these countries
where it can get raw materials.
The US is building new mines domestically
and also building international partnerships,
but both approaches have challenges.
It can take up to a decade or more to get new mines
up and running in the US and raw materials are only useful
once they can be processed.
- US companies are also trying to go
to other countries and say,
"Look, we'll develop a mine here", in a country like Ghana
or in Africa, "and then we'll ship that material
to the US to be processed."
The challenge is it's a lot more difficult
to do even the processing facilities in the US.
In the US, it's really difficult to get new mines built
and permitted because there's a lot
of environmental opposition
and people just generally don't like mines
in their backyard.
- [Narrator] Some companies though,
are focused on an alternative source of materials.
Instead of mining new materials,
they're salvaging minerals from scraps and dead batteries.
- In the United States right now, we have some lithium,
but really no nickel, no cobalt and on grand scheme relative
to all the lithium that we're gonna need,
we don't have that much.
- [Narrator] Ascend Elements is a US startup focused
on producing engineered EV battery materials.
It currently operates a recycling facility in Georgia
and is building a larger one in Kentucky
that may cost up to $1.5 billion.
The company says it can produce enough cathode precursor
and active materials to equip 250,000 EVs per year.
Recycling startups are among
the more promising American battery materials suppliers.
But they're far from matching the output
of factories in China, the world's largest battery recycler.
And they're years from contributing a meaningful amount
of material to the market.
- The recycled materials look exactly
like a cathode material made from virgin material,
which is mined material.
Send it to a third party lab or whatever,
you couldn't distinguish between the two.
- [Narrator] Ascend Elements takes used batteries,
discharges them, and shreds them
to recover the critical components like lithium,
nickel, and cobalt,
while separating out materials like copper,
aluminum, and plastic.
They call the remaining powdery material black mass.
Through this process, Ascend says it recycles up to 98%
of the critical battery materials,
and does it with a significantly smaller carbon footprint
than mining and traditional cathode manufacturing methods.
It's currently focused
on making nickel-manganese-cobalt cathode precursors
and active materials.
Recycling may not enable the US
to outpace Chinese production, but it could still
be an important part of its domestic supply chain.
- The question isn't really
whether the US can catch up to China.
It probably can't ever catch up really at this point,
given how far ahead China is,
but it will take many years for this to play out.
A realistic goal is to just clean up the US supply chain
so there is some domestic production
of all these critical components.
Right now, they're just basically at the mercy
of China and these other countries.
This is much more about security of basic supply
so that battery shortages don't become a pinch point
in the energy transition.
(bright music)