The Great Battery Race
A 19th-century technology could determine which nation triumphs in the 21st. Steve LeVine reports from the global competition to replace the combustion engine.
In 2007, the Chinese government approached Wan Gang, a 54-year-old engineer-turned-university-president from Shanghai, with a remarkable offer. Chinese President Hu Jintao had taken up the political mantra of "scientific development," and the authorities wanted someone of Wan’s caliber to serve as the country’s minister of science and technology — so badly, in fact, that they were willing to violate longstanding convention and elevate Wan even though he wasn’t a Communist Party member. It was the first time in more than five decades that such an exception had been made for a government minister.
What made Wan of such interest to Hu was his expertise in a once-obscure corner of automotive engineering: After 10 years working for the Audi car company in Germany, he was a world authority on electric-vehicle technology. Just as important, Wan possessed the technical know-how necessary to supervise groundbreaking research in advanced batteries, the make-or-break component that could separate an electric vehicle that consumers would actually want to buy from an expensive exercise in engineering vanity. Shortly after returning to China, he was named the chief scientist on the country’s blue-ribbon research panel for electric cars.
The Chinese government saw in the technology that Wan had mastered a potential future pillar of its economy. Starting virtually from scratch, Beijing announced last year it would become the world’s largest producer of the vehicles within the next few years. "China is committed to developing clean and electric vehicles," Wan told me when I met him in Chicago this summer. "Batteries and clean vehicles are a national strategic priority."
Indeed, the battery, among the most humble and unsexy of inventions, might just be the most important technological battleground of the next two decades. The discovery of the next key breakthroughs in the field could mean not just a fortune for a handful of companies, but the remaking of whole economies — and the rebalancing of geopolitical power that typically accompanies such shifts. A Chinese triumph could speed the country’s global advance; an American one could give U.S. dominance a new lease on life.
Two developments have brought us to this pass. Developed countries and rising powers alike are looking to curb their oil-guzzling habits, for any number of reasons: climate change, unsavory petrostate politics, the looming fear there simply isn’t enough petroleum on the planet to satisfy everyone. The result is a new global interest in alternatives to petroleum and the internal combustion engine — most prominently advanced battery technology, the necessary precondition for the development of an affordable, powerful electric car.
But the world doesn’t just need a better car — it also needs a better means of building and sustaining economies. Over the last 20 years, Asia’s growth has been mostly driven by manufacturing exports, while the United States’ was fueled first by Silicon Valley’s tech boom and later by elaborate (and ultimately ruinous) financial instruments. But those platforms have reached or are nearing their limits, and in the scramble to avoid another recession, the world’s great economies are looking for the next big thing, an engine of economic growth for the future.
These two aspirations — for a less oil-dependent world and for a more prosperous one — are rapidly converging in a global race for a better battery. By 2030, experts say, advanced batteries will swell into a $100 billion-a-year business. They will also enable an electric-car industry on the order of half a trillion dollars, on a par with the global pharmaceutical industry and capable of spawning companies on the scale of ExxonMobil, General Electric, and Toyota. "It is a matter of national wealth and national economic advantage in a way that few new things in society can be," Peter Harrop, who heads the Britain-based technology consulting firm IDTechEx, told me. "But it is a high-stakes game. It is going to be beneficial [only] to certain companies in certain countries."
Two of the likeliest beneficiaries are Japan and South Korea, the top producers of today’s cutting-edge batteries and the favorites to develop tomorrow’s. But the more interesting — and potentially world-changing — rivalry is between the United States and China, both of which are scrambling to get into the game. Each country has a great deal to win by establishing itself as an early leader in advanced batteries, in competition or in partnership with East Asia’s technological heavyweights. The contest has taken on ultraserious geopolitical heft for the United States, at its lowest economic ebb in recent memory, and for China, eager to cement its position as a globally influential superpower. Both countries’ governments have adopted an unapologetically hands-on approach, attempting to drive innovation from the top down and viewing the project through the lens of national strength. The analogies tend more toward the Manhattan Project than Microsoft.
On a July visit to the Smith Electric Vehicles plant in Kansas City, Missouri, U.S. President Barack Obama vowed that within five years, the United States would be making 40 percent of the world’s advanced batteries. (It made just 2 percent in 2009.) "That’s how we ensure that America doesn’t just limp along," he declared, "but instead that we’re prospering — that this nation leads the industries of the future." Obama’s point man for this ambitious project defines his goals in equally sweeping terms. "The ability of a country to manufacture batteries and vehicles will help to create wealth, will help to provide resilience against oil-supply disruptions, and help to create jobs," David Sandalow, U.S. assistant energy secretary for policy and international affairs, told me. "And those, in turn, will create national power."
But while U.S. officials have been sweeping in their rhetoric, China has been breathtaking in the scale and specificity with which it is ordering up an electric-car industry. Beijing in recent years has issued government directives that, if realized, will result in the production of some 30 electric-vehicle models by 2012; expanding lithium-ion battery manufacturing into a $25 billion-a-year industry by that same year; and the construction of about 100 charging stations this year alone across the country.
It’s not just the United States and China. Google the phrase "electric car" and the name of any reasonably sized country, and you will turn up yet another aspirant. More than a dozen would-be contenders from South America to Scandinavia are talking about the technology in positively existential terms, even those with little plausible hope of coming up winners. German Chancellor Angela Merkel hopes that "in the 21st century we are again the nation that is able to build the most intelligent and environmentally friendly cars." French Ecology Minister Jean-Louis Borloo has announced a government-industry plan to win "the battle of the electric car." Those who develop and manufacture the next-generation technology for electric cars, these leaders believe, will be the haves. And those who don’t will be at the mercy of those
ONE, TWO, THREE DOORS, AND JEFFREY CHAMBERLAIN is into the "dry room," a state-of-the-art, moisture-proof chamber customized for fiddling with the exacting technology of advanced lithium-ion batteries. Chamberlain, the 44-year-old manager of a scientific team at the U.S. Energy Department’s Argonne National Laboratory in suburban Chicago, walks over to a machine loaded with giant rolls of white plastic film. Peering through plastic protective glasses, he explains how the film is coated: slowly, with a liquid mixture of aluminum and carbon. The coating process is crucial to the lithium-ion battery. It’s also very, very old. "It’s a 19th-century technology," Chamberlain says; in labs in other countries, he adds in a whisper, he has seen scientists actually dip a finger into the slurry to judge its quality.
The battery, like the light bulb, is at its heart an archaic device, an artifact of the early Industrial Revolution tucked inside the gadgets of the 21st century. In 1749, half a century before Alessandro Volta invented the first battery, Benjamin Franklin coined the word to describe a rudimentary electric contraption he built out of glass panes, lead plates, and wires. The modern Energizer is a remarkably close descendant of the first lead-acid battery — two sheets of the pliable metal divided by a piece of linen and suspended in a glass jar of a sulfuric acid solution — invented by French physicist Gaston Planté in 1859. The world’s two largest car-battery manufacturers, Johnson Controls and Exide Technologies, both U.S.-based enterprises, make most of their money selling what are essentially variations on Planté’s 151-year-old workhorse.
The greatest advance in battery design since Planté originated in the United States in 1977. The world’s faith in petroleum had been shaken by the oil shocks earlier in the decade, and even Exxon, the world’s most profitable oil company, was in the market for alternatives. Exxon developed and commercialized the lithium-ion battery, which generated power by discharging ions from one side of the device and absorbing them on the other — an innovation that allowed the battery to store far more energy than earlier technologies. But as memories of the energy crisis faded, and with them the imperative to escape from dependence on oil, Exxon abruptly abandoned the lithium-ion business. Japan’s Sony picked it up, combining advances by American and Japanese researchers and releasing a much-improved version of Exxon’s lithium-ion invention in 1991; it packed four times the energy of its lead-acid predecessor.
Today, Japanese companies like Panasonic, Sony, and Toyota dominate a $9 billion-a-year lithium-ion battery industry. The future of the business is bright enough that even Exxon is trying to get back into it, belatedly reinvesting in lithium-ion R&D. The world is fast moving from nickel-metal-hydride batteries — an intermediary technology, also developed in the United States and commercialized in Japan, that is used in Toyota Priuses, among other things — to lithium-ion ones, which store twice the power in the same space. Lithium-ion batteries power most of our laptops and cell phones. For the next decade at least, they will be the favored technology as well for hybrid-electric and electric cars, which for the first time are being seriously contemplated as a widely used replacement for the conventional internal combustion engine.
But as they have gone from curiosity to great green hope, electric cars have run smack against the limits of today’s batteries, limits that are likely to keep such vehicles too expensive and underpowered to go mainstream if no one can figure out how to get past them. As it stands, lithium-ion batteries cost $1,000 per kilowatt-hour of energy output. Engineers say it’s theoretically possible to bring that figure down to $300, but the laws of physics prevent going beyond that. Even if they hit that target, however, battery-powered cars would still have costs too high, ranges too limited, and recharge times too long to truly compete with conventional vehicles. (Lithium-ion batteries also have a rather unsettling tendency, on rare occasions, to burst into flames. This is unpleasant enough when it happens in a cell phone or laptop, but an entirely different matter in a car.) The Tesla Roadster, a lithium-ion-driven electric car that debuted in 2006, has the range and speed — up to 130 miles per hour — to compete with sports cars. But it takes more than 6,000 individual batteries to pull it off, and the car currently costs north of $100,000. Both the American and Chinese governments are offering generous rebates to make their domestically manufactured electric cars more affordable, but even with the government discount, General Motors’ soon-to-be-released Chevy Volt will still cost a steep $33,500.
That’s why the future of the electric-car industry belongs not to the scientists and engineers who perfect the batteries we have now, but the ones who figure out what comes next, in the 2020s, the 2030s, and beyond. The holy grail is a battery powerful and safe enough to challenge the energy density of gasoline and the freedom of the internal combustion engine — if such a battery could be made, consumers would presumably flock to cleaner, quieter electric cars. Which is why scientists at Argonne and around the world are working feverishly to develop what comes next.
Consider the potential: Just the currently expected advances in lithium-ion technology will allow hybrid-electric and electric cars to take over up to 15 percent of the world’s new-car sales by 2020, estimates research firm IHS Global Insight; by 2030, the figure could rise to about 50 percent, according to U.S. Energy Information Administration projections. The 2020 prediction works out to about 7.5 million cars a year at today’s production rates. Let’s say that economies of scale bring the cars’ average cost down to $30,000 by then. That’s a $225 billion-a-year business, just under the entire global sales last year of Toyota, the world’s largest carmaker. By 2030, it could be more than three times that.
No one can accurately project the market for a product that doesn’t exist yet, of course. But these estimates matter because they are believed, to a greater or lesser degree, by the leaders of most of the world’s industrialized countries. And most of them seem to agree with Spanish Prime Minister José Luis Rodríguez Zapatero’s call to get in on a competition "not to be missed." The appeal isn’t hard to grasp: The possible windfalls are tantalizingly large at a time when nearly everyone’s economy has taken a beating. And the breakthrough is far away enough, and the terms by which victors will be decided are vague enough, that everyone can envision winning.
ON THE AFTERNOON OF JULY 21, Wan Gang and about a dozen other Chinese engineers paid a visit to Argonne National Laboratory. The secure research campus is the direct descendant of the University of Chicago lab where Enrico Fermi conducted the first nuclear chain reaction in the early days of the Manhattan Project; today it is home to the vanguard of the U.S. government’s advanced battery research. The Argonne scientists in charge of the work, along with Sandalow, the U.S. assistant energy secretary, had gathered in a conference room to meet Wan and his team.
"You have made remarkable achievements here," Wan told the Argonne researchers. "So today I have many questions for you."
"That’s why I am sweating," replied Al Sattelberger, a senior Argonne scientist. The room erupted in laughter — mostly from the Americans, who were acutely aware that they were the underdogs in their race with W
an and his team.
Although the U.S. government began promoting battery development during the George W. Bush years, its interest in the technology began in earnest after the pre-recession spike in oil prices, which reached an unprecedented $147 a barrel in July 2008. The following month, the newly nominated Obama declared in his Democratic National Convention speech, "For the sake of our economy, our security, and the future of our planet, I will set a clear goal as president: In 10 years, we will finally end our dependence on oil from the Middle East."
After the presidential election, Obama staffed his Energy Department with people who felt similarly. Steven Chu, Obama’s Nobel laureate energy secretary, had led pioneering alternative-fuel research as director of the department’s Lawrence Berkeley National Laboratory. Sandalow is a former executive vice president of the World Wildlife Fund who had spent the previous five years at the Brookings Institution puzzling over a technology he believed to be key to kicking America’s petroleum habit: the advanced battery. In his 2008 book, Freedom from Oil, Sandalow sketched a plan for how the next U.S. president could promote the adoption of electric cars, beginning with subsidized vehicle purchases and battery-performance guarantees and ending with investment in research to improve the technology to the point where it would be viable on its own. "The biggest barrier to mass [electric car] production," he wrote in Freedom from Oil, "is battery technology."
The American Recovery and Reinvestment Act passed by the U.S. Congress in February 2009 gave Sandalow the opportunity to road-test his ideas. The stimulus bill handed the Energy Department $167 billion for grants and loan guarantees, six times the department’s annual budget and a near-blank check for innovation; $2.4 billion of the grants have since gone to efforts to build a battery-manufacturing base, and Chu has included battery research in the portfolios of the nationwide network of energy research centers he has funded. Labs backed with Energy Department money, such as Argonne, are now experimenting with an exotic array of nascent technologies: batteries powered by zinc-bromide solutions, magnesium, lithium-sulfur combinations, and even just the movement of electrons.
But the United States is sprinting to catch up. Technologically speaking, Japan is the current leader — it has a two-decade jump on the competition in research and development. South Korea, which has dominated electronics manufacturing since 2005, is a close second. Still, it’s China that inspires the most fear in the United States.
In 1986, the same year that Ronald Reagan removed Jimmy Carter’s solar panels from the White House roof, Chinese leader Deng Xiaoping launched the 863 Program, an initiative with the aim of jump-starting technological innovation in the Middle Kingdom. In the 1990s and 2000s, as China’s accelerating growth brought with it dependence on oil imports and coal-fired power plants that choked the skies, the project’s attentions turned to alternative-energy technology. Funding for energy research under the 863 Program grew nearly 50 times its original size between 1991 and 2005, according to the New Yorker. Among the new initiatives was a push, launched in 1998, to develop a domestic lithium-ion battery industry. The Chinese government began handing multimillion-dollar grants to companies looking to get into the electric-car business.
In 2006, China ramped up its investment again, bankrolling 16 scientific research projects totaling about $147 million a year each. This time the aim was explicit: The Chinese government vowed to "build an innovation-oriented country," becoming a tech-exporting superpower. "Scientists and engineers are at the spearhead of China’s economic development," Mu Rongping, director of the Chinese Academy of Sciences’ Institute of Policy and Management, told the South China Morning Post last year. "They are aiming for the heart of China’s business rivals."
At the tip of the spear is Wan Gang, whose ministry oversees the 863 Program and virtually every other technology-oriented effort of the Chinese government. Speaking to Britain’s Guardian last year, Wan compared the global financial meltdown to past crises that had provided the impetus for great technological breakthroughs — breakthroughs that in turn became engines for new economic development. "This time," he said, "new energy technology will probably be the new driving force."
China may lag Japan and South Korea in battery expertise, but its size, not to mention its government’s ability to mobilize whole industries, is a substantial equalizer. Beijing is betting that by sheer force of will and scale of investment it can overtake its more technologically sophisticated neighbors. Working with the public encouragement of Premier Wen Jiabao, Wan has set targets that call for Chinese companies to put an unparalleled 500,000 electric cars on the road next year, up from a few thousand today (though Wan offered more modest goals in his discussions with American policymakers and scientists). By government edict, some two dozen Chinese companies are bringing models to the country’s auto market — the largest in the world as of 2009 — in the next two years. All-electric taxis built by auto manufacturer BYD already troll the streets of the company’s home city of Shenzhen. "China is spending more than anyone else. They are coming on very strong technically and physically," says Ralph Brodd, a longtime authority on the battery industry. "Being there recently, it was very much like what I experienced in the ’60s and ’70s in the United States — everyone is enthusiastic and working hard."
The United States isn’t just competing against China — it’s trying to escape its own recent history. Over the last quarter-century, the country has lost much of the manufacturing capital required to launch a new industry from whole cloth. The same trends that led American companies to hand over previous generations of the battery industry to Japan — the loss of heavy industrial capacity and diminished investments in research and development that followed the shareholder-value mania of the 1980s and 1990s — have left the country ill-prepared to establish itself as a leader in the next generation. Meanwhile, rising middle-class living standards and job opportunities in China, India, and elsewhere mean that the United States can no longer count on attracting the world’s best and brightest. Increasingly, the sharpest minds in engineering and the sciences would just as soon stay home — or, like Wan Gang, move back. "I fear for the Americans," says Harrop, the technology consultant. "They are so far behind in terms of mass production and also don’t have the customers in th
eir own area. The Obama money gives Americans a chance. But it certainly doesn’t guarantee success — and doesn’t outspend the East."
So the United States has done what any outmatched competitor would do: It has looked around to see who its friends are. Foremost among them is South Korea, which currently accounts for 33 percent of the lithium-ion battery market. Much of Energy Secretary Chu’s multibillion-dollar investment in the battery industry isn’t going to American companies, but to South Korean ones with assembly plants in the United States — enough, American policymakers hope, to build a strong production base while they continue to try to create the batteries of tomorrow. Of the U.S. stimulus awards to battery-makers, the second-highest sum, $160 million, went to Seoul-based LG for a factory building lithium-ion batteries for the Chevy Volt in Holland, Michigan. "We want to get these cars to market," Sandalow told me. "And if the only supplier right now is elsewhere, that’s a reality some of our businesses will have to deal with."
FOR ALL THE EYE-POPPING DOLLAR FIGURES thrown around when governments talk about the battery race, only one number matters to the scientists who are actually running it: 1,600. That is the number of watt-hours per kilogram of gasoline, the energy potency that people have come to expect from their personal transportation. Today’s lithium-ion batteries produce only one-eighth that amount; scientists believe the laws of physics will keep them from getting much better than double that figure, a paltry 400 watt-hours per kilogram. Ultimately, the winner of the battery age will be the country whose technology comes somewhere close to crossing the 1,600 bar.
Winfried Wilcke, a program director at IBM’s San Jose, Calif., laboratory, has been tasked with getting there. A physicist and brilliant polymath, Wilcke worked on heavy-ion nuclear reactions at Los Alamos National Laboratory before moving to IBM, where he developed the models on which some of today’s most powerful supercomputers are based. Lately he has turned his attention to lithium air, a technology that would replace some of the crucial heavy and expensive minerals in today’s batteries with, quite literally, air. In conversations I had with him over the past year, Wilcke sounded optimistic that his team would succeed — not soon, but perhaps in the next decade. Even if IBM could get lithium air reasonably close to the performance of gasoline, Wilcke told me, the auto industry would be "dancing in the street."
But lithium air has many skeptics. Jeff Dahn, who researches lithium-ion technology at Dalhousie University in Halifax, Nova Scotia, believes the breakthroughs Wilcke envisions are beyond the possibilities allowed by physics. "Lithium air is an oxymoron," he told me. "I personally believe [it] has no place in any discussion of advanced battery chemistry for policymakers." He enumerated the reasons: "It’s a totally unforgiving technology. You have to prevent moisture in the air from getting on the lithium. You need a flow field in the cell, and pumps. The cost will be through the roof. Lithium ion is so easy by comparison."
The disagreement illustrates just how difficult it is to predict the outcome of the battery race and just how ill-suited analogies are to the geopolitically charged technological competitions of the past — the atom bomb, the conquest of space, the perfection of the semiconductor. Compared with the rocket scientists who knew the physics of launching a rocket to the moon long before they figured out how to accomplish it, today’s battery researchers are operating without a map. The breakthrough that makes the technology a reality could come from any number of avenues of exploration — or not at all.
But the same ambiguity that makes the battery race so daunting is the source of its appeal to governments and scientists alike. All believe that someone, somewhere — whether it’s in a lab at Argonne or one in Shanghai — will make the transformative discovery. For them, the only thing worse than losing the battery race is not competing at all.
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