A startup told Katherine it had a unique process that could bring battery formation down from weeks to a few days. Formation is slow, capital hungry and genuinely worth attacking, so the pitch had the shape of a good one.

Then she visited a factory in China. Formation there takes thirty minutes.

She has a second example of the same failure. A US startup was building inline inspection and quality control, collecting the data so that the step could eventually be automated. At the tier one manufacturers she has walked through, inline QC is already there and the line is already fully automated.

Her conclusion is uncomfortable for anyone three years into a technical roadmap. Many of the things founders believe are problems are no longer problems, and the only reliable way to find out is to go and look. If a founder gets the chance, she says, visit the top plants, either in the US or in China, and China is a little further ahead.

The money did not behave the way the macro picture suggested

Katherine, an investor at TDK Ventures, was speaking in London at the firm's Energy Week, its first event in Europe after previous editions in Boston and San Francisco, and its first run as a hybrid in-person event. The timing is not incidental: it lines up with a new fund, Fund EX1, and a plan to open a London office.

Her reading of the last year is that energy, battery and wider climate tech investment has become a hotter topic rather than a cooler one, and that the private side held up even though the macroeconomic picture has been a little challenging.

She has been doing her own research on megafunds, meaning funds with more than a billion dollars under management. Three new ones have started in London in the past one or two years. There are several more in the US.

What she finds more telling than the count is who is behind them. People who were not in clean tech or energy before are now putting money in, because the transformation is happening in every country and on every continent at once, and going green and reaching net zero has become a common mission rather than a national one.

China's lead was built by procurement rules, not by chemistry

Asked who is ahead, Katherine starts twenty years back, with ATL, CATL and BYD already in business. But the part of the story she emphasises is regulatory.

Around 2010 the Chinese government produced a list that restricted procurement to batteries made in China, and paired it with subsidies and incentives for people buying EVs. Production on one side, demand on the other. That closed the loop, and ten years of it has an outcome: EVs are now more than 30% of the market.

She went back to China in September. In Shenzhen the commercial vehicles, the taxis, the small buses, the large buses and the heavy duty trucks are all electrified. She counted ten or more brands she had never heard of, all making high quality cars.

The US number, for comparison, is single digit, around 6 or 7%.

Her account of that gap is not a dismissive one. The US is very good at innovation at lab scale, and a great deal of the battery IP that matters originated there before being commercialised and scaled up in China. What is missing is manufacturing, which is precisely what the Inflation Reduction Act is trying to bring back to the US and North America.

Europe is faster on rules and more open on supply

Europe, in her account, moves much faster than the US on mandates and regulation: requirements to convert a share of hydrogen to green hydrogen, requirements to electrify, timelines for phasing out internal combustion engines.

The second difference is openness. Europe is more open on the supply chain side, which is why CATL has already built several gigafactories here and other manufacturers are moving in the same direction.

She resists ranking any of it. Each continent has its own strategy, its own pace, its own next goal and its own electrification roadmap.

Where the opportunity actually sits

The startup activity she sees runs the length of the chain. New cathodes, new anodes, new electrolytes. Upstream lithium mining and direct lithium extraction. Lithium refining. Routes that go from raw material to cathode material without the precursor step. Dry coating and other new manufacturing processes. And recycling, to close the loop.

Plenty of opportunity, in other words, provided the founder has done the harder piece of work first: understanding the market, the real pain point, and the value the technology adds to an industry that already exists.

Then start.

This piece draws on the full conversation, which is available with a complete transcript on the episode page.