- [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)
