[Music] this is a humble battery in a world moving beyond fossil fuels these energy cells will power most things if you use a mobile phone if you have a laptop the battery is everywhere in our life and when it comes to battery manufacturing one country is the Undisputed leader battery production in China has been really growing very fast because it has a strong demand but now major economies are worried about China's Pole Position the United States has come to realize the degree of dependence on a single country Korea and Japan they are trying to create a market for themselves in the electric sector who will win the battle for battle batteries we're kind of at a fork in the road about whether we're going to see two worlds of batteries and it's going to be unfortunate my name is Julio Martinez I am a salesperson here at CarX for example this vehicle here the 2021 model 3 Tesla um it's priced up just under 32 ,000 you compare that to a lot of the gas power vehicles here this is actually a great great it's a bargain almost electric vehicles are energizing the American car market according to the International Energy agency sales of EES grew 55% in 2022 and despite the economic slowdown this year the EV Market is is still expected to expand 35% in 2023 it certainly doesn't make an economical sense to try to get the best bang for your buck through a standard gas powered vehicle the electric vehicles are going to be better overall driving the popularity of EVS are a slew of subsidies rolled out by the US government the latest is the inflation red reduction act or IRA signed into law last year the inflation reductions act seeks to really link the decarbonization agenda of the Biden Administration to the the desire to revitalize the US economy and in order to meet the Net Zero by 2050 and also um Paris uh targets um under you know the 203 um commitment climate change is driving a global energy [Music] transition and key to all that is this the battery if you use a mobile phone if you have a laptop you know that's how the battery uh like Le my battery start be used in the market uh in at 1990s and today you know the batteries been in the electric vehicle and also in the new field like large scale stational energy storage so basically the battery everywhere in our in our [Music] life whether is a store for energy generated by Renewables like wind and solar or as the driving force of electric vehicles batteries are at the heart of our post fossil fuel future but now now there could be a battle Brewing over batteries because currently one country dominates the global battery supply chain China China produces most of the battery cells for EVS claiming about 75% of market share six of the 10 largest battery manufacturers are in China and it also extracts six % of the rare Earths used to make batteries battery production uh in China has been really growing uh very fast because uh it has a strong demand and uh so the EV automobile Market in China is is enormous and you have a a huge growth potential so how did China come to have such a commanding lead in battery production it's time died to the explosion of a parallel industry electric vehicles I think the Chinese government identified earlier than most that uh this was a strategic industry and it put the incentives in place China didn't really have that mature petrol engine and Market in the same way to compete with the idea of electric vehicles and that really opened things up for much more rapid expansion they are making some of the best cost effective most technologically advanced electric vehicles around Beijing identified electric vehicles as a key pillar of growth back in 2015 generous subsidies tax breaks and other incentives gave birth to a slew of successful homegrown Eevee Brands among the first to make the move two EVS were Chinese ride hailing companies slowly EES gain wider acceptance and popularity among the Chinese public the first generation or second generation of the UV car maybe technology was not not uh uh great or battery was not that uh perfect but but new VV car is very efficient very reliable there could be as many as 300 Eevee manufacturers in China and one company stands as king of the Hill byd or build your dreams is the largest ev manufacturer in the world the Warren Buffett backed company started by making phone batteries in 1995 in 2003 it applied its Cutting Edge battery knowledge into cars [Music] in 2022 byd beat Tesla to become the world's leading electric car [Music] seller [Applause] byd is not only winning Car Sales it's become the world's second largest electric vehicle battery producer according to SN research just two Chinese companies byd and contemporary Amper technology or catl control 52% of the global battery market and China's dominance also stretches to the supply of critical minerals according to the iea China processes more than half of the world's lithium along with many other key materials used for making batteries it will be extremely difficult uh for the US and Europe and and others to really uh stop being relyant on Chinese minerals so in my view the global EV battery supply chains without China would not be really a reality but Chinese dominance has made other major economies nervous and in this context we return to the inflation reduction Act act under the IRA American EV buyers can claim up to $7,500 in tax credits but these come with conditions by 2025 qualifying Eves cannot contain minerals sourced from a foreign country of concern and by 2029 the EV batteries must be assembled or manufactured in the United States these restrictions are seen as chipping away at China's strangle hold the massive and highly influential inflation reduction act which is this huge amount of money and and Regulation and incentive to to essentially spur on a the Green Revolution in uh in the American economy it's not a place where Chinese companies are welcome and and so they would have to probably uh sell into the US market without the without many of the incentives that uh that could come with that the United States has come to you know uh realize the degree of dependence on the single country and in the context of uh you know recent um you know some of the economic cion cases that the United States has seen those have all sort of added up and really are getting really bipartisan focus in Washington DC on uh the degree of the US dependence on [Music] China us China rivalry has heated up in the recent years spilling into trade last year President Biden's chips act prohibited the sales of high-end chips and related technology to China China retaliated by placing export curbs on some Rare Earth minerals batteries could become the next area of superpower competition there's no doubt that the definition of what is a strategic sector for the United States is broadening and the levers that the US is putting in place to limit Chinese access to those strategic sectors is growing a battle for Batteries could reverberate around the world starting with the countries that extract a mineral known as white [Music] gold underneath the red Earth of Australia's vast Outback lies something known as white gold lithium a key material in battery making and Australia happens to have the world's fourth largest lithium Reserve in 2021 its mins provided half the world's supply of the metal Australia has abundant critical minerals that go into making key Clean Energy Technologies like electric vehicles and their batteries so there's a big focus on developing Australia's critical minerals industry uh this is seen as a a key point of economic growth and diversification and there's obviously a huge demand for critical minerals in a lot of other countries deep in rural Western Australia lies the Pilan Gora project one of the world's largest Hard Rock lithium deposits it's owned by pilbara minerals from this hard rock spodine a type of lithium ore is extracted the bulk of spodine is then shipped off to China to be further processed into lithium hydroxide for use in lithium based batteries nearly 90% of China's raw lithium Imports are from Australia China has a big usage and China also cultivated a big processing capacity to meet the demand of this big Market but the tide is turning the last few years have seen a deterioration of China Australia relations in 2020 China imposed trade restrictions on Australian agricultural products sanctions that are still in place this has prompted Australia to re-examine its Reliance on the Chinese market well it's a security of Supply vulnerability that will be familiar to people who who remember the the supply chain disruptions we saw postco or or post the uh you know Russian invasion of Ukraine it doesn't make sense um from that security supply perspective to have so much activity concentrated in one country with the competition over batteries heating up Australia has found a willing buyer to fill the Chinese void the USA the United States is starting to invest heavily diplomatically invest heavily in uh resourcer countries around the world and some of them are uh other uh sort of industrialized uh Nations such as Canada and Australia Australia's Got the stuff it's got the lithium you know it's got the rare Earths um and it is looking to create the the production and refining around that um because it can now see the huge potential of of of being one of those frsh suppliers to the the non ch China Global battery and EV Market what is happening in Australia gives us a good idea of the global picture the roots of the battery war begin at the base of the supply chain the Scramble for raw materials and the major battery producers are scooping up what they can in 2022 the Biden Administration proposed an overseas mining fund to support foreign projects China meanwhile has invested in prospecting for lithium ore across Central Asia and Africa in the meantime Beijing cannot afford to alienate canra yet during the economic um coercion situation that happened between China and Australia the one thing they never touched was Australian iron oil because Australia is Far and Away the biggest producer and exporter of IR or to China and there's no readymade Solutions the lithium side as well as I mentioned Australia has an even stronger position I think there's been some normalization of the Australia China relationship since the albanesi government came to power which is last year so there is definitely some sense of interdependence there and it go yeah on both sides of the relationship with competition driving demand opportunity beckons for resourcer countries enter Indonesia the archipelago is the world's largest source of nickel accounting for nearly half of Global Production nickel is an essential mineral that goes into the battery technologies which are going to uh Drive the electric vehicle Revolution over the next 30 Years versus the 30 year just past we can see a route to a world where nickel demand could quadruple but Indonesia isn't content with just exporting raw materials it wants to move up the value chain so in 2014 the country banned the export of nickel or this was relaxed in 2017 but a full ban returned in January of 20120 in that time Indonesia shed up its own refining and processing capabilities the nickel band has been around for close to a decade and what that has done is through various measures essentially try to ensure that more of those that processing happens in Indonesia uh with of course The Wanted side effect of developing industry there so it's created jobs there it has put factories there it has brought FDI uh into the country some of the factories were built with foreign capital and knowhow the morowali industrial park in Central sui is one of the biggest nickel-based industrial areas in the country it's backed by both the Chinese and Indonesian governments China is definitely the first mover for in this industry given Indonesia uh needs for developing its um Downstream industry and also Indonesia needs to develop more um technological capabilities and China is the actor or the partner that stand and ready to support Indonesia in this area and this strategy has paid off Indonesia's exports of processed nickel reached an estimated $3 Billion US in 2022 a staggering jump from just 1 billion in 2015 thanks to but there is another side to the skyrocketing demand for battery components in the rush to exploit raw materials environment and human costs get [Music] neglected off the Southeast coast of sulawesi Lies wani the island roughly the size of Singapore is dotted with sleepy fishing and farming Villages but recently nickel mines have disrupted won's [Music] tranquility isma is a farmer on the island he plants cashew nuts and Nutmeg and fishes for additional income he's agreed to speak to us on the condition of anonymity [Music] the mines are operated by Mining Company PT gumma kassi Pana which owns about 1,800 hectares of land concessions on the island these are licenses awarded by the government for [Music] [Music] [Music] [Music] mining for [Music] away from isma's Farm the once pristine Coastline has also been ruined by mining activity been ch then there is also the issue of land rights in parts of rural Indonesia like wani land ownership is often murky L dispute is always big problem in the mining area because uh even though the government give the concession or permit for the mining companies to operate but uh in many cases this area or the the concession area actually have uh certain Community since mining began Villages have held demonstrations riots and in some cases armed confrontations to assert their land [Music] rights fact the story of wani reflects what's happening elsewhere around the globe in the rush to feed the exponentially growing demand for minerals sustainability is not always a priority we can see from that side that Indonesia May gain a short-term gain and eventually Indonesia will lose because of the the cost that the country has to pay in terms of the environmental cause and also the social cause at the upper end of the value chain the battery battle is also heating up who will make the breakthroughs in Battery tech over the past 13 years Chung chin has been researching new battery Tech he started his career working on the world's first mass Market electric vehicle after my PhD graduation I joined NC work specifically for the Nissan Leaf the I think that's the first electric vehicle that is in real mass production today he Helms the international business unit at Goan high-tech an energy solutions company founded in 2006 in China it has 25,000 employees and eight research centers globally Goan is one of the earliest companies in China to develop lithium ion batteries for electric vehicles including Goan China has six of the world's top 10 EV battery makers producing about 75% of all electric vehicle battery sells Chinese government has very actively support to development for the electric vehicle in electric vehicle industry and because of that there is a lot of the companies not only the battery companies but also some like a material companies that all rising up apart from raw materials like lithium the battle for Batteries is also taking place in the technological space with Pol policies and subsidies driving growth in this sector China is far ahead of the competition according to global data as of mid 2023 China has 14,000 patents related to EV Power Trains in a distance second is the United States with [Music] 4,000 the Chinese are making some of the best cost effect most technologically advanced electric vehicles around this is not simply a cheap poor quality usurper product that's knocking the petrol engine um off its perch in in Europe in the EU this is this is Cutting Edge stuff and now the race is on to build a better and cheaper battery so there are uh you know several factors that determine how good a battery is so one of them is how fast it recharges right if it's a rechargeable batteries how long it lasts how many times you can actually recharge the battery and the battery is still functional because eventually uh if you charge and recharge too many times the battery dies from time to time you hear about an electric car that explodes because of something so safety environment uh and uh uh uh uh recyclability became very important issue now and so to get that you have to change technology so you can see from now on there will be a lot of Innovations of L batteries but for the current L batteries and you can see the 10 years ago for the L batteries like LP is only 90 water per kilo currently for the lp we go 200 water per kilo even with the same cap Street we if we nor optimizing for the cell design for the cam trees for electrolyte for the manufacturer processes we can increase a lot several times of the performance currently for EVS two technologies are the most widely used lithium ion and phosphate or lfp and lithium nickel Cobalt and manganese NCM the race is on to develop the next generation of Battery Tech so this is another part um of the battery production uh we are here in an environment that is extremely dry so it's drier than the Sahara Desert it's only 1% humidity here and this is what's currently occupying Professor Antonio castron Netto and his team at the National University of Singapore's center for advanced 2D materials so this is a new type of ceramic membrane containing niobium right so this is used inside of the battery uh to essentially help ions to move through the battery we already proved that a graphine oium battery can uh uh survive without any change for more than 10,000 Cycles so what does that mean that means that we can charge disch charge this battery 10,000 times and the battery is still working 10,000 cyclon means 30 years so these batteries can last 10 times longer than current lithium ones however niobium an element needed for niobium graphine batteries are about as rare as lithium but but there is another battery prototype that uses something far more abundant sodium the traditional ion used for Batteries is lithium sodium is the next ion in the periodic table anyone can capture sea water and extract salt and from Salt you extract sodium and from sodum can make batteries countries or companies that make battery breakthroughs will have a distinct advantage ant AG patent protections will allow them to carve out a space in the market protecting them from competition it's first move Advantage time in the marketplace degree of genuine competition within a gilded cage if you like Japan and South Korea are also exponents in the battle over batteries these two countries used to be the technological powerhouses in Asia now they're playing catchup to China South Korea wants to invest 15 billion US in the sector by 2030 while Japan is considering tax incentives for battery research Japan and Korea were already the the second and third biggest producers obviously some way behind China but they were already you know essentially a big part of the market and so have the capability there so you know expanding capability is easier than starting it up from scratch and so with these incentives that does create a good environment for them to increase their production what China did is that they push their industrial sector very strongly towards electrification and Japan and Korea and other countries not just them have been slow in doing that right but of course you know the these are uh uh countries which have very high level of technological development they are trying to create a market for themselves in the electric sector and then there were those using a different tact to reign in Chinese dominance the EU is investigating if Chinese subsidies which drove EV development are unfair this could lead to curbs on Chinese EV Imports China has hit back at the EU accusing using it of protectionism we are entering a a a phase where uh a lot more countries are adopting protectionist types of policies right and with things like the inflation reduction act and with sort of CopyCat acts by the EU or by other countries with other production incentives that might come from Japan or Korea as they develop uh their own capability you you'll try you probably see a more spread out uh Market but in terms of dominance you know you're looking towards the end of this decade China will probably still be pretty dominant in in batteries the battle over batteries is brewing but as the major economies duke it out what opportunities could be found for the little guys countless motorcycles moving along the streets is a common sight in Jakarta Indonesia is the world's fourth largest market for these two wheelers with 125 million on its roads however only about 35,000 are electric but the government plans to change that it has introduced tax subsidies and and incentives to boost electric vehicle adoption in the country startup ion Mobility is hoping to cash in it has built its first electric motorbike called the ion Mobius targeting consumers in Indonesia our initial Market is in Indonesia and we've taken the past three years since mid of 2020 by end of the year we would be ready to start mass production I expect the first batch of deliveries to happen in q1 next year as the major Powers battle over batteries this has created opportunities for smaller players like ion I think any big moves by big ships and big players often leave behind a lot of room for smaller players like ourselves to innovate and I see opportunities everywhere with this new world order previously as a small company no China player no China supplier would would care about us unless we had big orders but in a new world order where they see the opportunities versus the threats I feel that we get taken more seriously by our suppliers and opportunities for co-creation increase there are also opportunities to be found Upstream of the supply chain as battery producers VI for scarce resources like lithium an alternative industry has sprouted up battery [Music] recycling this is our lium recycling process line from lium batteries that we collected the furus and non furus metal are separated that we can able to obtain the Black Mass this black mass is basically a crushed battery at secure Waste Management a Singapore based company old batteries are first drain rained completely of stored energy dismantled and then shredded currently our process capacity is 3,600 tons mostly EV batteries the EV batteries C process is primar from North America and Europe R more FR from our Asia and Singapore secure waste sends the battery leftovers to Partners like any battery material who extract the white gold contained within this black mass so the first part of our process is to put Black Mass into our proprietary solution and its job is to react with the lithium this part of the process is where lithium gets extracted lithium actually moves across our membrane and react with water to form lithium hydroxide so after lithiums gets extracted we actually collect them in this tank here the last part of our process is to concentrate the lithium hydroxide we dry it and actually form the product right here according to mckeny the battery recycling industry could be worth $95 billion by 2040 at the moment competition over batteries is creating more opportunities than obstacles the idea isn't so much to replace or displace China which I think is impossible but the idea is to have more participants in the pool of suppliers whether it's the Upstream um you know minerals extraction or the processing of these minerals and then all the way Downstream into EVS I don't think that we are in a war sort of situation it's not as say strategic as semiconductors for example there's uh so much of the pie uh because we're going to need so many batteries to to power the EV demand um that you know I think that several parties can win I think China welcomes competition a Fair competition and China you know encourage you know we follow the WTO rules I don't see a problem of you know having a healthy competition I mean the biggest beneficiary is the consumers I don't see any wrong with [Music] that so the the battle for Batteries hasn't become a fullscale trade War just yet but with mounting geopolitical tensions this could change and some countries want to hedge their bets by building alternative Supply chains for Batteries the Koreans and the Japanese have come to a very strong conclusion that the components that go into batteries and electric vehicles are strategic IC which is why on the one hand they are very keen to create a separate supply chain uh to the Chinese one coming out of Indonesia because both the Koreans and the Japanese have been on the receiving end of Chinese sanctions in the past around strategic minerals they don't want to be beholden to the Indonesians they certainly don't want to beh be beholden to the Chinese the Koreans and Japanese as strategic partners of the United States could benefit should trade relations deteriorate between the two superpowers countries like Indonesia without a free trade agreement with the us could be left out in the cold I think the potential impact is that Indonesia will lose out the access to US market given that uh this uh inflation reduction act requires uh certain percentage of the production of EV batteries without any agreement with the US to accept Indonesia EV products then it will be difficult for Indonesia to expand its EV export to other countries meanwhile to get around the IRA and other potential tariffs Chinese battery manufacturer Goan has a plan it's investing billions into setting up a factory on us soil by manufacturing batteries directly in the United States they can avoid trade barriers we are uh asking for the support of the government and the support means they just welcome Chinese companies for the Chinese companies you need to think not only manufacturer the battery sell there but you need to consider every materials that need to be fulfilled the ra required M and uh basically you need to make uh your materials yourself ourself or you need to bring your partners to USA But even this move is risky in the chips War the Biden Administration prohibited us investments in Chinese equities involved in sensitive Technologies should the mood over batteries turn sour American partners of Chinese firms could face similar sanctions it's a little hard to say you know how some of the Chinese investments into the US EV ecosystem uh you know can continue on uh there has been uh uh you know a lot of discussion within Washington DC as to uh the level of exposure that is approach there's a strong case made in the United States around the vulnerability of having an open market in P chips which will be exploited by the Chinese for nefarious aims to undermine the United States if that sentiment extends to more work a day items like things on four wheels I think it's going to be really unfortunate for consumers all around the [Music] world the battle over battery is at a critical point there is one dominant player China with a tight grip on much of the battery supply chain a grip it has no wish to relinquish China has the biggest Market China is the big largest producer in the world China has the best Upstream Downstream uh value chain supply chain China has the best talent you know every year have a 12 million uh college graduates many of them engineering background I don't see why China would not be the best innovator and producer for this kind of category because the market is there the demand is there the technology there the logistic transport is there and then the trading system is there as the world confronts the looming Spectre of climate change whether the battery Battlefield becomes one of contest or cooperation could could affect us all we're kind of at a fork in the road about whether we're going to see two worlds of batteries and electric vehicles a Chinese one and a non-chinese one it's going to be unfortunate for technological innovation and it's going to be unfortunate for the our efforts to combat the climate disaster the world needs a lot more EVS on the road if any countries or many countries are going to meet their commit ments right to towards net zero or towards uh other types of of climate commitments and we are very far away from that so what could be the worst case scenario if China does restrict say some of the minerals that it has access to that process will slow down that could be a negative outcome really for for many countries and for any kind of climate targets that we have
