Instigators of Change

Can batteries solve everything?

May 25, 2022 Khosla Ventures Season 1 Episode 9
Instigators of Change
Can batteries solve everything?
Show Notes Transcript

You want to do what’s right for the planet. So you buy an all-electric car. Right? Well... not always. Jay Whitacre, one of the country’s foremost experts on batteries, tells us why where you live may dictate the answer to that question. Which speaks to the strange moment we're in right now, when it comes to batteries. Whitacre says that getting batteries - for cars, for large-scale energy storage - from where they are to where we want them to be is going to be tough. Money is flowing into cutting-edge science, but what's likely to move the needle? Whitacre, a professor at Carnegie Mellon, argues that there’s a real tension between what investors are willing to pay for and how quickly batteries can actually revolutionize our lives.

Kara Miller:

Welcome to Instigators of Change, a Khosla Ventures podcast where we take a look at innovative ideas, the people who come up with them and those who invest in them.

Kara Miller:

I'm Kara Miller. And this week, the huge challenges and constraints we face in moving away from fossil fuels. Challenges rooted in geography, material science, logistics, infrastructure, and cultural divides.

Jay Whitacre:

There's like a constant question I ask myself when I do technical diligence for venture firms is how many miracles need to occur between now and when this product is on the floor somewhere, is doing its thing? And the answer is sometimes there's multiple miracles. It's not even one. There's a couple.

Kara Miller:

Jay Whitacre of Carnegie Mellon University talks about the hurdles we must overcome, especially when it comes to the batteries we increasingly rely on. That's coming right up on Instigators of Change.

Kara Miller:

So sometimes a scientist tells you something that blows your assumptions out of the water. Like for example that a hybrid car containing an internal combustion engine can be better for the environment than an all-electric vehicle.

Jay Whitacre:

Honestly, at least the last time I reviewed this analysis currently the least emitting way to travel around in my city is still to own a Prius.

Kara Miller:

Jay Whitacre has long been on a quest to develop better batteries. He's the director of the Scott Institute for Energy Innovation at Carnegie Mellon University as well as the professor of energy, engineering and public policy. For his work, he won the $500,000 in Lemelson-MIT prize, and he built a company that manufactured environmentally friendly batteries in the US. But he'll be the first to tell innovators, investors, regular folks. Energy is always more complicated than you think.

Jay Whitacre:

There's huge variability in terms of how many emissions you are responsible for, if you have electric vehicle. It's very low, for example, in the Pacific Northwest because most of their power is hydropower. It's very low in places that have nuclear power, but it's quite high in the Pennsylvania area where we have a lot of coal fire or natural gas fire power plants.

Kara Miller:

The fact that where you live impacts whether owning a hybrid car or an electric car is more beneficial for the environment, well, that underscores how complex the energy picture is and how patchwork our move into the future may be.

Jay Whitacre:

You can drive this vehicle around Pittsburgh every day and have no emissions out of your tailpipe. But it's hard to argue that the electricity that's charging that car is not coming from some fossil resource.

Kara Miller:

Which has affected Whitacre's own car buying decisions.

Jay Whitacre:

Yeah. I mean, I badly want an electric vehicle, but I can't ethically bring myself to purchase one because I believe that I should be buying a vehicle that represents the lowest total emissions for where I live. So I would buy one in a heartbeat if I was in the Southwest or out in the Northwest. But here in Pittsburgh, and it's changing slowly.

You can do things like at-home by carbon offset electricity where through a market exchange, the electricity in principle is coming for wind power, for example. And you could feel better about that. But the reality is when I plug something into an outlet in Pittsburgh, it is coming from a fossil based resource almost certainly.

Kara Miller:

"What we should probably have," he says, "is batteries get more popular, but grids struggle to keep up is a regional approach to all electric cars." What do we have? Well, a cultural divide rather than a logical one.

Jay Whitacre:

We see urban areas with wealthy people or people who are more forward thinking for whatever reason, early adopters. They are all jumping on this and they're doing it for a lot of reasons. And if they're doing it just for emission reasons, some of them are misguided.

Kara Miller:

The world around us is powerful in other ways too when it comes to influencing our behavior, which can alter the fortunes of green energy companies, often in the blink of an eye. During the 2008-2009 recession, for example...

Jay Whitacre:

On a weekly basis, the sales of more gas-efficient cars tracked with the price of gasoline, which is really foolish, but people were literally going to buy a car that week and looking at the price of gas that week and making a decision, a five to 10-year car decision based on the spot price of gasoline that day. And as soon as gas got cheaper, SUV sales went up and hybrid sales went back down.

Kara Miller:

Whitacre talked to me about what startups in this space are grappling with, what big investors are seeing and trying to move away from fossil fuels and how the American public is on board for the ride.

Jay Whitacre:

I think the biggest variable or one of the biggest variables in this transition we have to electrified transportation is market acceptance, and it's going to vary by location. And it's going to vary by socioeconomic status in my, say, location. I mean, around the world and within the United States. I think because of that, it's hard to offer a single answer.

The other key thing by the way is going to be materials availability, and the economics of scaling this globally, simultaneously. It's actually a massive engineering task as well. But let's go back to the market question, the market pull. I guess I can list three or four things that I think a typical electric vehicle consumer both likes and dislikes about these vehicles and what it means technically. I think primarily there's cost and the trajectory is strong that way.

We've gotten not just the batteries, but a lot of everything else financially streamlined. Just like this always happens in the automotive industry. Automotive OEMs are very aggressive in costing down and squeezing every penny out of their suppliers and out of their own production processes to get something that can be sold for profit at a reasonable price.

We're getting much closer than we were five, 10 years ago. So that pressure is relenting a bit. The other thing that really is crossed with this a little bit is driving range. Initially, there was a push to have 3, 4, 500-mile driving range vehicles for the US anyway. And now there's some thought that maybe we don't need quite that much, maybe 200. Mazda recently released an SUV that has a 100-mile driving range. People are questioning whether or not that's a good answer.

That's a little bit on the review. Or the review that I recently read, I think it was on the Wall Street Journal, was skeptical, and their experience was that was too short. They were always worried about having to charge. They couldn't really get around much point to point. So there's some range that... And of course the short of the range, the less expensive the car the smaller the battery pack is, et cetera.

But there's going to be some challenges around getting people to accept something that's a little bit less than or significant less than what they would have on a single tank of gasoline.

Kara Miller:

Don't you feel like people have that kind of range anxiety where they're like, "I don't know. Normally, I go to the office and that's only 10 miles away. But what if I wanted to go visit grandma? Oh my gosh, I can't do it in this car."

Jay Whitacre:

That's right. And so that's where, I mean, the bridge technology, the plug-in hybrid vehicles where you get tens of miles, all electric, and then the internal combustion engine kicks in is obviously very appealing for those people especially individuals or families who are single car. There's also an argument that if you have couple cars, you have one electric commuter car that you don't do long drives with. And you keep the gasoline engine car for the longer haul.

Now, all of this is fine in the near term, but we're talking about putting tens of millions of electric vehicles on the road, light duty electric vehicles for consumer transport on the road in the next decade. The curves, if you believe them are extraordinarily aggressive. I have so far been dubious about this, but I have been wrong. The growth of the industry has surpassed what I thought the number of electric vehicle technology.

Europe is just sprouting battery factories everywhere and the US is not far behind. So understanding are these folks who are building all these battery plants, is the market going to meet them halfway and consume those batteries or not? I have to take off my hat of skepticism and perhaps put on my hat of acceptance that this is maybe really happening. I'm not so sure exactly what rate, but it is going to happen.

Kara Miller:

Do you think when the big automakers are like, "Yeah, we are totally in on this electric vehicle thing." Which they seem to be. I mean, obviously, you've got Tesla out there and then odd folks are like, "Oh, let's chase after that." Can you describe for me if there are limits on this dream of everything being electric all the time?

Jay Whitacre:

Well, before I answer that question, I'll qualify my answer. I'll put it this way. The qualification is that limits in what timeframe, right? In 20 years, we can do a lot. In five years, there's some constraints. In 10 years, somewhere in the middle. Right?

Kara Miller:

Okay.

Jay Whitacre:

And the constraints have to do with how many charging stations will be available and how fast can we adapt our electricity grid to be able to handle very low level nighttime charging that's happening in most residences, presuming the uptake is high, and the sort of network of level three fast chargers that consortium of utilities have agreed to put across the country, along highway routes and so forth.

A lot of it is about the availability of the infrastructure to support these vehicles. The more common it is and the more comfortable people are pulling up and spending a half an hour charging their vehicle somewhere, and then moving on, the more apt we're going to have a wider acceptance where people don't even have a plug-in hybrid, they have a regular just plug-in vehicle. They are happy to figure out how to drive between fast charging stations, and they go long trips when they have to.

Maybe we see a pivot back to other forms of transportation between cities. There's a whole other model that's much more European, that's trained based or other non-individual vehicle based where people stop thinking about driving that six-hour drive across the country to visit the parents. But instead they hop on the train somewhere. I mean, there's a lot of other infrastructure things that can accommodate a different mode of transportation that would be more amenable to electrification of light duty vehicles more quickly.

Kara Miller:

So take Pennsylvania then for a minute. And you said right now a Tesla is probably actually a higher carbon emission's vehicle than a Prius. When will that change? How will that change? How does that tip?

Jay Whitacre:

Yeah. Like I said this data that I just said that is probably one to three years old. And things are moving pretty quickly. We are putting more and more natural gas into our electricity generation fleet. We're in the PJM interconnect. So PJM is the primary utility provider that we have in terms of electricity backbone. And they are in slowly decommissioning really carbon intensive power like coal and moving over to more natural gas and more renewables. So the trajectory is not bad. It's probably months and years, not decades until that crossover is clear.

Kara Miller:

Really? In a few months, if we had this conversation again in six months or a year, it might be better to buy a Tesla?

Jay Whitacre:

Maybe. I don't know. But I want to say one to three years, that kind of thing. There's a lot of motion because of the cost of coal and the decommission of the coal plants. They're by far the biggest liability here. Natural gas is better. We're in standing up a lot more wind and a lot more... Depending on where you are and how far the long haul transport electricity can be, there's more solar coming online too.

And solar is very inexpensive and obviously way less carbon intensive. So there's an awful lot of movement. I don't think this is a chronic problem. At least where I am. I think it's something that we are definitely moving in the right direction for, but it's not solved yet. So I think I imagine five years from now, 10 years from now, probably the least emitting solution is a straight electric vehicle in most places, but we still have a fair amount of work to do in some of the more especially coal intensive, local grids.

Kara Miller:

So for a person who cares about this, is there any way for somebody to actually make a smart decision about the best... Let's say you are in the market for a car and you live in wherever you live, Utah or whatever. How do you know?

Jay Whitacre:

Well, it's a fantastic question. I wish that we had... Much like you go to buy a water heater or something like that at the hardware store. There's a sticker on it that says this many kilowatt hours per year, this is your cost electricity per year. It wouldn't be too much of a stretch for them to say in this location, it's this much emission. This much carbon is emitted.

We don't have that as a standard labeling procedure. And there's an awful lot of misdirection in the communication for sure. So I don't know what to say. There's certainly a lot of places one could go and there's certainly a lot of technical papers that exist that could be shared more broadly with the public. But on the other hand, I think automotive makers now that they've really invested a huge amount of money into this global transition to electrified transportation, I don't think they're that interested in creating this nuance.

They want the entire population of people who might buy electric vehicle to buy electric vehicle regardless of whether or not that transition in their city makes sense from an emissions perspective.

Kara Miller:

That's Jay Whitacre. He is the director of the Scott Institute for Energy Innovation at Carnegie Mellon University, as well as professor of Energy Engineering and Public Policy. We're going to take a quick break here for a word from Khosla Ventures, but we'll be right back.

Speaker:

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Kara Miller:

I'm Kara Miller talking with Jay Whitacre from Carnegie Mellon. And I want to ask you about another sort of piece of electric cars that I don't think people really think a lot about, which is at some point you're done with the battery in your car and there's this issue of how do you recycle that battery? Can you just give me a sense of how big a problem is this?

Jay Whitacre:

It's not that big right now, but it's going to be a massive problem. I do some of my research threads here at Carnegie Mellon are on the recycling sort of like challenges and potential benefits. One of the realities of vehicle batteries is that the battery industry and the car industry as I mentioned earlier has been working incredibly hard to make the batteries as inexpensive as possible. And part and parcel to that is they have been reducing the value of the materials inside that battery to the lowest possible value.

When you do that, the recycling benefit of taking that battery apart and re-harvesting the materials is very low, right? So we have this strange outcome where we've actually been creating things that are less appealing to recycle from an economic perspective. Not too long ago, I talked to a recycling firm who's considering recycling lithium-ion batteries and their fast response to, "What can we do to make you more interested in recycling these batteries?" They're like, "Well, put some platinum in it."

Put something really high of high value in there because they're deeply interested, for example, in recycling catalytic converters in vehicles because there's a small amount of platinum in there and they can get a huge amount of value out of those. They will dig in and do that and find a process that does it because they can make money by rescuing that material and reselling it on the market.

These batteries that have graphite and lots of manganese, maybe some iron, maybe some phosphate, those are not that valuable materials wise. So it's very, very difficult to make money recycling that.

Kara Miller:

When you think about... Before we leave cars, the single biggest kind of technological challenge for switching cars over so that they're not using internal combustion engines. What do you feel like that big challenge sitting out there is?

Jay Whitacre:

Yeah. I mean, the technology is there in terms of everything front to back. And I guess parenthetic to your question is to reduce overall emissions from a carbon dioxide perspective, right? So the answer is yeah. This is a systemic problem. It's not a vehicle problem. And electricity system has to be net less emissive for this to work. I do want to make one of the comments to you.

I lived in Los Angeles for seven years and the problem in Los Angeles is not just carbon dioxide emissions. There's a couple other things that come out of the tailpipe of internal combustion engine vehicles like NOx and SOx and so forth that really do create some really nasty smog. Smog is a huge deal in urban areas around the world. Transitioning to electric vehicles in those environments will have dramatic local health benefits and quality of life benefits even if somewhere else, carbon dioxide is being emitted to charge those vehicles.

So there is some mitigating things where we could talk just about CO2 and up until now I have. I want to have a side note that if everybody in Los Angeles converted over tomorrow to electric vehicles, the air would be better. Certainly this happened during COVID when there was way less driving in that area. And in general it makes a big difference when you have less emissions locally. So there are places that also should be incentivized one way or another to adopt electric vehicles regardless of where their power is coming from.

Kara Miller:

So connected to all this, but backing up away from transportation is the big storage problem. As we hopefully go more to wind and solar and other things, this issue of storage. Before we talk about the company is kind of chasing after that problem, explain to me how you see it at the moment.

Jay Whitacre:

Yeah. So to sustain the problem and the state of the solution is certainly we're seeing a lot more renewables being used. The dollars per kilowatt rated solar panel or wind turbine is incredibly compelling right now. And we're able to, in the near future or in some cases right now, generate electricity from renewables. That's significantly less expensive than from a fossil resource. That's amazing that has happened.

So now the question is how do we get that more commonly available around the country, around the world and how do we make it so that it could be used all the time? So that's the problem and the firms that are chasing this or the concepts that are chasing this are, I think, fall into a number of categories. There's the folks who are still looking at some kind of electrochemical battery.

At some point you realize that if you're really going to do this, if you're really going to take all of your fossil assets, offline, turn off your gas turbines completely and not have them on standby, you have to have a battery that's very large because it has to last 100, 200, 300 hours in the worst case scenario. What if the wind stops blowing and the sun is behind clouds for multiple days, right?

Kara Miller:

Right.

Jay Whitacre:

You need to be able to completely supply. So we're talking about very long duration storage, and that's really where the focus is now. I think lithium-ion batteries that are being repurposed from the automotive industry are going to service a lot of the two to eight hour of energy storage needs because they're cheap enough and they can be deployed, I think pretty readily. That's happening now.

There's an open question if those batteries will have the right durability because they're optimized for vehicles and the use case for vehicles is actually really different than for a lot of grid storage. But at some point, they're going to have convergence and that's probably where that's going to go. So the real vanguard here is to try and many day long storage that can do this.

Kara Miller:

As I said, there are a lot of people trying to solve this problem. There's a lot of money going after it. Form Energy has iron, air batteries. You've got ESS with iron flow batteries. AMBRI has liquid metal batteries. So people aren't taking different approaches. To you, what are the most promising, interesting potential solutions?

Jay Whitacre:

Sure. I'm going to talk about two different classes of solutions. I need to disclose. I am on the scientific advisory board for Form and I'm very good friends with the founders and have had... One of the co-founders of Form was a co-founder with Aquion Energy my company years ago too. And there's a lot of like crossover there. I support them in in a fair number of ways. So obviously, I think that they are one of the leaders in this sort of segment and they're going after very low cost, very long duration storage.

It's a hard problem I'll be honest with you. And it's hard not because it's technically difficult to do, it's hard because the economic goals that you have to have, like the dollar per kilowatt hour battery, you have to achieve to make this like financially-sensical is really hard to reach. So they're fighting the good fight and they're picking the right materials.

What's the lowest cause bulk produced material in the world. It's probably iron. So that's why a couple of companies are looking at iron as an electrode material. What's the other very common electrochemically active material? Oxygen, right? So iron and oxygen are obvious things to pick from an electrode active material perspective. And then the challenge is how do you engineer something around those two resources to get the cost down? And that's really where they're focusing in ESS and others who are looking at low cost sort of like bulk batteries.

But the other side of this that I think is really important to keep an eye on is hydrogen. Hydrogen can be created from water anywhere. And with the price of renewable electricity becoming so low, it's now very plausible, or it will be in the very near future to electrolyze water and generate hydrogen that you store. And then you turn back into electricity either using a fuel cell or more interestingly and also maybe for good and bad interesting, I would say can be combusted in natural gas turbines.

So there are a number of companies like Siemens Energy North America, for example, comes to mind that on their roadmap is generating hydrogen from renewables and then combusting it when they have to in turbines to buttress renewables. So this is just like energy storage in a battery, except you're storing it in the form of compressed hydrogen that you then somehow convert back to electricity when you need. This is a really interesting play as well, and I think there's a number of large ventures in companies that are chasing this as well.

I don't think this is a one solution problem. I think there's going to be places where these large format electric chemical batteries are going to be the right answer and there's going to be other places where hydrogen is the answer. But those are the two categories that I think are most compelling in terms of electricity.

Kara Miller:

Is this an area where funders often don't want like small incremental improvements? And so then there's a pressure, as you say, to meet a certain financial goal. How tricky is that in this area?

Jay Whitacre:

Man, I think it's tricky. And it's not just in terms of the venture investors, I think it's in terms of also support and funding from the Department of Energy or other government sources or federal sources, and maybe this is worldwide, but I think it definitely is the case in the US.

Most people who are successful in getting money to do this kind of venture have extremely lofty goals and extremely sort of... I think just extreme promises, right? You have to be able to make an extreme promise and have evidence that you could get there if the entire thing works perfectly in order to get something like this funded because most investors want to swing for the fences. They want something that's not incremental improvement.

They want something that's a step change and many smart people can create concepts that will be step changes if everything works. And then there's the very painful multi-year process of trying to make that work. And usually because it's a step change, it's hard. There are things that are unsolved. A constant question I ask myself when I do technical diligence for venture firms is how many miracles need to occur between now and when this product is on the floor somewhere, is doing its thing.

And the answer is sometimes there's multiple miracles. It's not even one. There's a couple. And the scariest case is they don't even know. They don't even know if they don't know, right? This is another classic venture capital investor question is what do you think you don't know, right? What are we going to do when something crops up and we don't even know that it's a problem yet. Our biggest problem is we don't know what our problems are going to be.

Kara Miller:

Right.

Jay Whitacre:

And electric chemistry and energy storage in general is wrought with these kinds of things where something works fantastic on the bench and the academic environment, it's very difficult to scale. Or you think you can scale a material up because you can do it in a fume hood, but then you realize that it's absolutely impossible or super expensive when you scale it. I mean, there's all kinds of things like that are not easily anticipated and you can legitimately go out and ethically raise a lot of money and pitch your heart out and do really well.

And then a year into the venture be like, "Oh my gosh, there's two or three roadblocks I had no idea existed." And you have to get to a certain place of technical maturity before you understand your roadblocks. And that's where we see a lot of the challenges here, right? But fortunately there's an investor base out there that has an appetite for 10-year long like decade old missions.

Kara Miller:

Right.

Jay Whitacre:

They are funding the companies that we're talking about now. It's like, "Look, this is going to matter." Another thing that could really upend all of this, if and when that ever comes to pass is fusion. Commonwealth Fusion is in Boston. There's a couple other fusion plays. If these hit, again, these are not short-term place. These are long-term investments by deep pocketed people who believe that this is what it's going to take to really change the world.

Talk about a step change. If we are able to eventually generate a sustainable fusion reaction that is energy positive anywhere in the world, then we can economically recreate. That would solve a lot of the trouble. Renewables would have a different place. We would have a whole nother perception of the importance of energy storage. But that's also not known that it could happen. I mean, physically it's possible, but of course there's, again, a huge amount of work to be done to make it real.

Kara Miller:

I wonder when you look forward 10 or 20 years, what you think battery technology is going to look like? I know it's just a best guess, but how do you think things will change given what you know about the science of it?

Jay Whitacre:

Sure. So there's a couple facts about energy storage right now that are... And I'm going to talk about two different kinds of energies. So let's start with vehicles. There has been billions and billions and billions of dollars around the world spent on current and currently being built factories to make lithium-ion batteries. So much infrastructure in fact that the chance of the form factor of those batteries changing significantly in the next decade is very small. I'll also say that lithium-ion batteries have looked about the same for a number of decades already.

Tesla put into the model S among the very first kinds of batteries that were produced in the early '90s. They use variance of that to this day. So they look the same and they will probably continue to look the same. We'll see different materials being put into them that are better for a lot of reasons. They cost less. They have other performance attributes. They increase the driving range because they have more energy density. But that's going to be a year over year, incremental evolution and improvement, which that's been happening for decades and that will persist for a long time. I'd be very surprised in the next decade that we see something different. 20 years maybe, but I don't know. These are really becoming amazingly efficient and fantastic devices. And it's not too-

Kara Miller:

Lithium-ion batteries?

Jay Whitacre:

Yes, Lithium-ion batteries.

Kara Miller:

Okay.

Jay Whitacre:

I'll say that the internal combustion engine has been around for well over a century now, and it's just been incrementally refined over that century. There's no reason to think that Lithium-ion batteries won't have the same sort of story. At least for vehicles. We'll see fuel cell vehicles, I think, grow, and that's hydrogen. That's going to be maybe for longer haul transport of freight, things like that. And maybe even vehicles, some vehicles that are lead duty will become fuel cell as well. So there'll be some hydrogen mix in there. I think that's true, especially as the hydrogen infrastructure for the world grows. But basically that's going to be sort of set.

Now, for stationary storage, who knows? Form could win. Right? And then we have this like large format, iron air based system that is all the things that they are disclosing, that could be very different. It looks different. It functions differently. It doesn't look like discrete battery cells. It looks more like a chemical processing plant. So we may have that for stationary storage.

Kara Miller:

And that would help us charge up our phones and all the stuff that we want to do.

Jay Whitacre:

Yeah, for sure.

Kara Miller:

Potentially.

Jay Whitacre:

That would help Form Energy or some other large format, stationary, electrical battery system works. It's just going to do what we talked about. It's going to load level renewables and we're going to take more and more fossil assets offline. And that would be our daily sort of electricity that comes out of our outlets will be some blend of renewables and battery stored renewables.

It could be a battery that looks like a factory. That's how I would qualify a lot of these are. Big flow batteries. Again, these are just where giant tanks are used to store anode and cathode materials that are liquid in phase that have been reacted during the charge and discharge. That is a constant source of research as well. Those could be a bigger role or it could be that we are doing a lot more hydrogen, right? And maybe it's some portfolio of all of these things.

Again, this problem is so big and so diverse that I think the solutions are going to be diverse as well. So it's going to be a portfolio outcome.

Kara Miller:

Jay Whitacre is the director of the Scott Institute for Energy Innovation at Carnegie Mellon, as well as a professor of Energy Engineering and Public Policy. That's it for today's show. If you liked what you heard, take a minute to leave us a review on Apple Podcasts. And if you haven't already, don't forget to subscribe. We're on Apple Podcasts, we're on Spotify, on Google Podcasts. The show is produced by Matt Purdy. I'm Kara Miller, have a great week.