Bouldergramp
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11/3/2019 WSJ The Key to Electric Cars Is Batteries

Sun Nov 03, 2019 8:46 pm

11/3/2019 WSJ
The Key to Electric Cars Is Batteries. One
Chinese Firm Dominates the Industry.
Beijing built the world’s largest EV market, then pressured foreign car makers to use its batteries
SHANGHAI—A little-known Chinese company has become the world’s biggest maker of electric
vehicle batteries.
Beijing engineered a scenario that didn’t give the world much choice.
China is by far the biggest EV market, and to boost its standing in the fast-growing industry,
China began pressuring foreign auto makers to use locally-made batteries in the country
several years ago. One company—Contemporary Amperex Technology Ltd., known as CATL—
was the only shop capable of producing them at scale.
Auto makers weren’t pleased, but they fell in line. During a visit to CATL headquarters in 2017,
three Daimler AG executives displayed their irritation shortly after the meeting started,
recalled Jiang Lingfeng, then a CATL project manager who prepared a technical briefing for the visitors.
One Daimler executive cut off his briefing, said Mr. Jiang. “We’re not interested,” the executive said, according to Mr. Jiang. “The only reason we’re here is that we have no choice, so let’s just talk about the price.”
China accounted for 60% of the 2.1 million electric vehicles sold world-wide last year. By 2030, global plug-in car sales are expected to be between 23 million and 43 million annually, according to the International Energy Agency. In its highest estimate, EVs will comprise 57% of vehicle sales in China, 26% in Europe and 8% in the U.S.
To meet demand, auto makers will need millions of lithium-ion batteries—by far the most lucrative part of an EV.
Leading the charge is CATL, which became the world’s biggest EV battery maker by installed production capacity this year—the number of battery factories and their combined scale—according to Benchmark Minerals Intelligence, a research firm. CATL modeled itself afteranother Chinese company, telecommunications giant Huawei Technologies Co., copying its
departmental structures and culture of demanding workloads, employees said. CATL also
mimicked Huawei’s practice of prioritizing research and development to deliver frequent
technology improvements.
The U.S. government has restricted business with Huawei, citing risks to national security.
Electric batteries don’t pose the same pitfalls.
Yet China’s dominance in EV batteries is a worrisome development for U.S. and European policy
makers, who are increasingly wary of the Communist Party’s influence over new technologies
and products, such as Huawei’s networking gear. China has also been seeking to lock up much of
the world’s supply chain for cobalt, a vital battery component, through purchases from mines in
places like the Democratic Republic of Congo.
“China’s dominance over the critical minerals supply chain and the EV battery market presents
both commercial and security-related concerns,” said Alaska Sen. Lisa Murkowski, a
Republican who introduced the bipartisan American Mineral Security Act in March to address
the U.S.’s dependence on foreign resources. The bill would designate key minerals and promote
research on how to develop them, including the possible creation of a local supply chain for
batteries.
While Asian companies took the lead in EV battery technology, the European automotive sector
was focused on developing diesel-engine technology until recently, and U.S. companies have
doubted the business case for electric vehicles at home.
The U.S., which accounted for 13% of global EV sales in the first half of 2019, has so far let the
free market take its course. One promising battery startup went bankrupt and was acquired by
a Chinese auto parts company. Tesla Inc.’s “gigafactory” in Nevada, which it operates with
battery maker Panasonic Corp., is designed to supply only Tesla’s vehicles.
General Motors Co. recently suggested building a batterycell
factory near its idled Lordstown, Ohio, assembly plant as part of negotiations with striking workers.
In Europe, leaders are forming a consortium of public authorities to help develop a vehicle
battery industry there, with several plants now under development and at least €1 billion ($1.1 billion) in public money flowing into the sector.
CATL, meanwhile, said in July that its profits in the first half of 2019 more than doubled to roughly $300 million. By 2028 it will have enough capacity to supply 4.2 million EVs annually, narrowly ahead of South Korea’s LG Chem Ltd. and way ahead of the industry’s other major
players, including Samsung SDI Co. and Panasonic.
CATL is branching out beyond China. The company is investing $2 billion in its first overseas
plant in Germany, to open in 2021, with BMW AG as its first major customer. It also opened a
U.S. sales office in Detroit in December, though U.S. trade battles with China make its prospects
uncertain. The shortage of U.S.-based battery production makes the opening of a CATL plant in
North America a likely next step, politics allowing, said Simon Moores, managing director of
Benchmark Minerals Intelligence.
CATL was founded eight years ago by self-made tycoon Robin Zeng. A physicist and engineer by
training, he spun the company out of a supplier of cellphone batteries to Apple Inc. which he
had started in Hong Kong 12 years earlier and then sold. He was largely unknown in China until
his recent appearance at number 53 on the Hurun China Rich List, having amassed a $5.8 billion
fortune following CATL’s 2018 listing on the Shenzhen stock exchange.
CATL officials, including Mr. Zeng, declined to comment.
Mr. Zeng poached staff from other foreign auto firms, while consciously striving to make the company operate like Huawei,
Mr. Jiang, the former project manager, and others said. That included handing employees
multiple roles and asking them to work long hours as CATL rapidly grew.
“I was hired as a supply-chain manager,” recalled another former employee, Win Tsao. “But
then they also made me program manager, and then also design-quality manager. It was just
like Huawei: high loading, high pressure.”
Mr. Zeng also hired Bob Galyen, an American battery expert and longtime GM executive, as its
chief technology officer after hearing him speak at a conference. Mr. Zeng invited Mr. Galyen to
dinner in the coastal city of Ningde, where CATL is based, according to someone familiar with
the encounter. Expecting to meet Mr. Zeng, that person said, Mr. Galyen found the company’s
entire senior management and engineering staff—around 60 people—waiting for him in the
restaurant.
Most of all, Mr. Zeng had support from Beijing, which wanted to build a viable EV car industry
powered by local manufacturers.
Beijing rolled out a subsidy program starting in 2013 to encourage local and foreign auto
makers to sell more EVs. China promoted EVs as part of a program to boost its capabilities in
future industries, and as a way to combat pollution and reduce its dependency on foreign oil.
As the market took off, in 2015, the
government told auto makers they
would only qualify for subsidies if
they used batteries from a list of approved suppliers, which included dozens of Chinese firms
but excluded foreign ones.
Auto makers willing to forgo subsidies were still free to use foreign batteries. But executives at
global car companies say they were warned by Chinese officials to use local batteries or face
reprisals in a country where foreign companies face a constant struggle to stay on good terms
with the authorities. China’s Ministry of Industry and Information Technology did not respond
to requests for comment.
At the time, many global auto makers already had longstanding agreements with foreign
battery producers. GM had invested in a Shanghai battery-pack facility with LG Chem,
according to a former GM executive, while Ford had a global supply deal with Panasonic. Those
deals went into limbo.
“It was incredibly frustrating for us,” said a former executive at one foreign battery maker. “We
were building new factories in China, and suddenly we had to watch our auto maker partners
going off to join lesser rivals.”
Unable to sell in China, the Korean and Japanese makers began using their existing factories to
produce batteries for export, while new projects were delayed.
A Samsung SDI spokesman said the company’s Chinese factories mainly produce batteries for
European customers but that it hopes to also profit in the future from China’s EV market.
Panasonic declined to comment. LG Chem didn’t respond to questions. By 2017, nearly 100 Chinese
battery makers had sprung
into existence.
Though inferior to top
Korean and Japanese
batteries by some measures,
CATL batteries
outperformed Chinese
alternatives in output and
stability, and were available
at a scale few others could match, the former GMexecutive said. Many other local players struggled to stay afloat.
“We started testing batteries from all the Chinese suppliers,” the executive said. “We soon
realized that if you’re going to go with a Chinese company, you go with CATL.”
People in the battery business say CATL has now substantially closed the gap in cost and power
output on Korean and Japanese companies, and will draw level within three years as it plows
funds into research. It is in position to be at the top of the market pyramid, with many auto
makers having already factored the company into their long-term plans. Still, auto makers bridled at CATL’s dominance, according to Mr. Tsao, the former supply-chain
manager there. CATL’s batteries also cost 25% more than those of leading rivals because the
company was still learning to mass-produce cost-effectively, he said.
“The price is high, and the service is slow,” he said, summing up CATL’s proposition to auto
maker clients.
A spokeswoman at Daimler, whose executives initially flashed annoyance at having to buy CATL
batteries, said the company was an “important and valued partner,” adding, “our supplier
relationships are based on four main values: innovation, top quality, partnership and stability.
CATL is no exception.”
In September, the German company agreed to begin using CATL batteries in Daimler trucks and
buses in Europe.
Having agreed to start using CATL’s batteries in their cars, foreign auto makers then felt
compelled to help make the company successful for the sake of their own reputations.
“Everything these companies had done previously with Samsung or LG—all that work was now
channeled into CATL” to ensure sufficient quality of supply, said the former GM executive.
GM, through its main Chinese joint venture, signed a strategic cooperation agreement with
CATL in 2018. A spokeswoman for GM said the company doesn’t comment on matters relating
to its suppliers.
Other global auto makers, including Honda Motor Co. , Hyundai Motor Co. , Nissan Motor Co. , Toyota Motor Corp. , and Volkswagen AG , have contracted CATL to power their EVs. In
September, CATL signed a deal with Robert Bosch GmbH, the world’s biggest auto-parts
company, to develop high-performance batteries for the German supplier’s hybrid powertrain
systems.
CATL in 2018 produced 27 gigawatt hours, according to Benchmarck Minerals Intelligence, and
plans to add about 20 gigawatt hours of production capacity every year for the next decade.
Tesla’s Nevada “gigafactory,” by comparison, currently produces around 24 GWh of EV
batteries a year.
In June, Beijing announced plans to scrap its controversial restrictions on foreign EV batteries
and reopen its market to the big Korean and Japanese players. China needs them, said Mr.
Moores at Benchmark Minerals Intelligence, with total demand for EV batteries forecast to far
exceed levels Chinese producers can meet by themselves.
“What the government did was a good thing for China,” said Mr. Jiang, the former CATL project
manager. “Without its restrictions, I don’t think CATL would ever have been successful.”

sendler2112
Posts: 261
Joined: Wed Jan 06, 2016 5:05 pm
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Location: Syracuse, NY USA

Re: 11/3/2019 WSJ The Key to Electric Cars Is Batteries

Mon Nov 04, 2019 4:49 am

Batteries will be the choke point for electric car adoption. We currently have 1.3 billion light cars and trucks in the world. Mostly in OECD countries but China is catching up. And 4 billion more workers that never had a car yet, but want one. 60kWh is becoming the defacto desired battery size. Just replacing the current number of cars with EV's requires 80 TWh of batteries!!! CATL and GigaFactory 1 are at 25 GWh/ year. That is .025 TWh/ y. Total reported EV battery production in 2015 was just .060 TWh. It is forecast to double twice to be .220 TWh by 2025. It would have to double twice more by 2030 to reach 1 TWh/y. At which point it will take 80 years! to build enough batteries. Just to replace the cars we have on the road now. Let alone heavy trucks and farm tractors which are expected to use 1 MWh each. And earth movers? Not to mention stationary storage that will be needed by the hundreds of TWh's.
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At some point the availability of minerals will become constrained even as we quit leveling mountains for coal and start leveling mountains for Cobalt, Nickel, Copper and Neodymium. We are going to come up way short of everyone owning their own electric car.
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https://www.rechargebatteries.org/wp-co ... --WRS-ZTlM
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powersurge
Posts: 1579
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Re: 11/3/2019 WSJ The Key to Electric Cars Is Batteries

Mon Nov 04, 2019 9:47 am

This is a mostly unknown factor to the question.... Why are we not buying more EVs in the US???

I kind of wonder that this may be the reason for Nissan to not push Leaf sales, and why there are so few Leaf + cars in the dealers???

WetEV
Posts: 3312
Joined: Fri May 04, 2012 8:25 am
Delivery Date: 16 Feb 2014
Location: Near Seattle, WA

Re: 11/3/2019 WSJ The Key to Electric Cars Is Batteries

Mon Nov 04, 2019 10:19 am

powersurge wrote:
Mon Nov 04, 2019 9:47 am
This is a mostly unknown factor to the question.... Why are we not buying more EVs in the US???

I kind of wonder that this may be the reason for Nissan to not push Leaf sales, and why there are so few Leaf + cars in the dealers???
If you can sell them somewhere else easier, why sell them here?
WetEV
#49
Most everything around here is wet during the rainy season. And the rainy season is long.
2012 Leaf SL Red (Totaled)
2014 Leaf SL Red
2019 eTron Blue

powersurge
Posts: 1579
Joined: Wed Oct 21, 2015 10:24 am
Delivery Date: 06 Dec 2014
Location: Long Island, NY

Re: 11/3/2019 WSJ The Key to Electric Cars Is Batteries

Mon Nov 04, 2019 11:51 am

What I am getting at is that this article seems to be explaining that the weak link in the EV market is the battery...

Both in their ability to bring replacement batteries into the US or For Nissan to increase their production of High capacity Leafs for our drooling mouths to be fed!!...

This may really slow down the proliferation of the EV in our country, especially if Trump is playing hard ball to tax Chinese importation of all of their crap. I can easily see China cutting us off from a lot of things just to prove a point. They can be ruthless in business... As in war.

GaleHawkins
Posts: 109
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Location: Murray KY

Re: 11/3/2019 WSJ The Key to Electric Cars Is Batteries

Wed Nov 20, 2019 10:51 am

Clearly the Key to electric cars is batteries like drilling for oil, refining it and building gas stations for ICE's took years.

The market will provide the needed batteries in time but I think the battery supply will be there at some point in time. ICE's can not be replaced in mass if there is a shortage of EV battery sources. There is new battery technology being researched today.

The Nissan batteries of 10 years ago where not as advanced as they are today. Recharging while driving I expect is going to become a reality taking the stress off of battery size.

kuroneko
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Re: 11/3/2019 WSJ The Key to Electric Cars Is Batteries

Wed Nov 20, 2019 6:37 pm

powersurge wrote:
Mon Nov 04, 2019 9:47 am
This is a mostly unknown factor to the question.... Why are we not buying more EVs in the US???
Honestly it's a lack of advertising and push by car manufacturers. There's only just recently been any regular advertising of EVs by major car makers that I've even seen. I didn't even know about the Leaf until earlier last year and found out that we'd finally moved from hybrids and PHEVs to full electric cars (outside of Tesla of course). Most people I talk to are completely unaware that EVs are even available to the general public or that we even have any kind of charging infrastructure to support them. The people that know of them don't think highly of them due to poor quality of the first generation batteries and the upfront cost of the vehicle.

Maybe things will change now that more EVs are being made and actually advertised. I still think the batteries are going to be an issue. Even if people aren't driving 200 miles a day they'll still get hung up on the whole range thing. The running joke in my house is that the one time of the month I borrow my husband's ICE car it's almost always at a quarter of a tank and still has double the range of my car at a full charge. Granted, I have one of those aforementioned first generation batteries, but still even those new 200+ mile batteries will degrade and won't be able to go as far too.

Until you can convince people that the cost is worth the loss of range and ease of just stopping at one of the million gas stations across the country, it's just not going to be a popular option. The price needs to come down and the charging infrastructure needs to be built up enough. You also have to convince people that they don't actually need 300-500+ mile tanks to do 90% of their driving. Even if you do all that battery degradation will be an issue and until there's some kind of solution to that problem, it's just not going to be worth it to a lot of people.
01/2013 Leaf SV 8/12 bars left

GaleHawkins
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Re: 11/3/2019 WSJ The Key to Electric Cars Is Batteries

Wed Nov 20, 2019 8:36 pm

kuroneko wrote:
Wed Nov 20, 2019 6:37 pm
powersurge wrote:
Mon Nov 04, 2019 9:47 am
This is a mostly unknown factor to the question.... Why are we not buying more EVs in the US???
Honestly it's a lack of advertising and push by car manufacturers. There's only just recently been any regular advertising of EVs by major car makers that I've even seen. I didn't even know about the Leaf until earlier last year and found out that we'd finally moved from hybrids and PHEVs to full electric cars (outside of Tesla of course). Most people I talk to are completely unaware that EVs are even available to the general public or that we even have any kind of charging infrastructure to support them. The people that know of them don't think highly of them due to poor quality of the first generation batteries and the upfront cost of the vehicle.

Maybe things will change now that more EVs are being made and actually advertised. I still think the batteries are going to be an issue. Even if people aren't driving 200 miles a day they'll still get hung up on the whole range thing. The running joke in my house is that the one time of the month I borrow my husband's ICE car it's almost always at a quarter of a tank and still has double the range of my car at a full charge. Granted, I have one of those aforementioned first generation batteries, but still even those new 200+ mile batteries will degrade and won't be able to go as far too.

Until you can convince people that the cost is worth the loss of range and ease of just stopping at one of the million gas stations across the country, it's just not going to be a popular option. The price needs to come down and the charging infrastructure needs to be built up enough. You also have to convince people that they don't actually need 300-500+ mile tanks to do 90% of their driving. Even if you do all that battery degradation will be an issue and until there's some kind of solution to that problem, it's just not going to be worth it to a lot of people.
kuroneko you have summed things up well.

I bought my first and only new Nissan (Datsun back then) in 1973 and owned one or more through 2016 but I only saw my first Leaf this last summer that I realized what it was. I went the Nissan store in Paducah KY and was told they did not sell them because they are only sold in large cities. The Chevy dealer across the street now stock Bolts.

When talking about our 2016 SL sometimes I refer to it as our 6th Nissan but the first one without a gas tank. Some flat out question be about the no gas tank as being correct because they know about the Prius in this area but not a Nissan EV. Tesla is better known but I saw my first one in Murray KY at a tire shop a few months ago.

The Leafs were never promoted and perhaps in part getting enough batteries was an early issue then the degradation issues. Our 2016 SL (30 kWh battery) at 21.5K miles is only showing 9/12 battery health bars. I have yet to track down a Leaf service center to ask about the firmware update that may fix a math problem but will be doing that next year when things slow down a little in the family.

Everyday I learn more about the Leaf and drove 50 miles for the first DC charge at Walmart in Paducah KY. That was a real learning experience as I was monitoring the charging session with Leaf Spy Pro.

Something that I did not not expect was a lady who reported she was a retired school teacher pulled up and asked me why I bought a expensive Zero Emissions car and I said that I was in the market for an EV and that one was only $13K. Then she asked me if I was some kind liberal on a 'save the planet' kick then started talking about the present and prior presidents and made some political incorrect remarks about the prior one. She informed me she was buying a black over red new Trail Blazer when they come out soon for the price of $50K. She said I was the only car she has ever seen at the chargers since they were put in back in the summer. She did not seem happy about the chargers being installed.

Most people come up to me are very positive and asking the same questions that I had. Some have commented they have two cars but one only does like 15-20 mile trips on a daily bases so an EV would work for them. I think as people see others that they know go EV that is going to make a difference. When I went to the courthouse to register it there was a lot of interest because they did not know Nissan had been selling EV's since late 2010. More EV's that show up locally owned by people that they know will have a positive impact I am sure. Believe it or not the chargers showing up at Walmart has had a big impact on EV awareness.

Since most of the new EV's now have a range of 200+ miles that will be a plus. The 4 door Mustang has been announced and it is to be carried by most dealers. That will help in small town America to get the word out better. I expect we are one generation (20 years) away for EV sales to get to 50% of new car sales in our area.

EV's are not for everyone today for sure.

WetEV
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Re: 11/3/2019 WSJ The Key to Electric Cars Is Batteries

Thu Nov 21, 2019 10:43 am

GaleHawkins wrote:
Wed Nov 20, 2019 8:36 pm
Since most of the new EV's now have a range of 200+ miles that will be a plus. The 4 door Mustang has been announced and it is to be carried by most dealers. That will help in small town America to get the word out better. I expect we are one generation (20 years) away for EV sales to get to 50% of new car sales in our area.

EV's are not for everyone today for sure.
Conventional BEVs may never be for everyone. Some small fraction of people will perhaps pay far more to drive with something else. I'm not sure what technology will win in the future. Pick one or more: hydrogen, battery swaps, biofuels, other renewable synthfuels. Or perhaps BEVs take over everything, and 15 minute charges every 4 hours of driving is just normal.

Fossil fuels are non-renewable. Once extracted and burned, are gone, basically forever on a human time scale. The cheap fossil fuels have been extracted first, the cost and price will rise with time.
WetEV
#49
Most everything around here is wet during the rainy season. And the rainy season is long.
2012 Leaf SL Red (Totaled)
2014 Leaf SL Red
2019 eTron Blue

sendler2112
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Location: Syracuse, NY USA

Re: 11/3/2019 WSJ The Key to Electric Cars Is Batteries

Thu Nov 21, 2019 11:11 am

bicycles and living quarters closer to real work (not "jobs"). Some electric trains for longer trips that move in the day and wait at night.

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