Battery Revolution Clubhouse Recording - Battery Hype

0:00Transcript

0:00Brilliant. Yeah, it looks good. So I think we're just getting started. I get a few more people in the room, but people will tend to join in a bit as well. And if anybody's here who wants to invite some people, as you know, there's a little plus at the bottom, and that's how you can invite other people on the platform, as well as you also have this new scissor sign on the bottom, which you can use to record a snippet of 30 seconds or so and post it on social media. And then other people can hear it, for example, Twitter, LinkedIn, etc. And you can share with them and other people can find about today's session as well. Brilliant. I see a couple more people joining if you want to add some more people. Otherwise, I think we might going to get started and I'm sure more people will join shortly as well. Brilliant. Okay. With this, maybe I can kick us off for today. Because yeah, today is another battery evolution session. It's actually our 41th session. 41 session we have had over the last almost a year. So this is quite exciting for us. These sessions are co-hosted by Catherine and myself.

1:14Catherine will join us a bit later today. She's sold up. But she will be with us in about half an hour or so. And it's great to already see quite a few familiar faces. So for the people of regulars, you know the housekeeping, the house rules. But I will just repeat them for anybody who's new today. Essentially, you know, we're going to have a bit of a kickoff, a bit of a conversation starter with Ulduriko. We're very excited to have him with us. We're going to introduce the topic of the day, which is battery hype. And then he's going to share some thoughts about like 10 minutes, 15 minutes or so. And then we're going to open up to the floor for other people to ask questions, but also contribute their own thoughts on this topic and beyond. And yeah, so the entire session will run for about one and a half hours. And from experience, in the end, it tends to be the most busy. So if you have a question, please raise your hand early on so we can make sure we can address it. Because again, the end tends to be a bit more hectic. Brilliant. And yeah, I think with this, you know, I think we can pass it over to Ulduriko to maybe quickly introduce himself as well, and then kick off today's topic and we go from there. Thanks so much, Ulduriko for being with us.

2:24Thanks to you, Simon. I'm really glad to be here today. Let me know if you hear me well and so on, because I'm testing the app pretty much. So just to explain to everyone my background, I'm a battery scientist pretty much by trade. So I started working on batteries about 10 years ago during my bachelor degree. And I was working in Italy in one of the, you know, leading groups in this field. And from there, I basically always studied and worked on batteries. So did my PhD in electrochemistry in Germany, then worked for a startup called Oxys Energy, which you might know, it went bust a couple of months ago, probably six months ago, eight months ago now. And after that, I joined Nissan, where I worked as a battery research engineer. So I was managing in a way the research portfolio of, you know, battery and energy storage for Europe. And my job was a lot across academia and the industrial world. So I was working a lot with startups, with academics and basically scouting in a way for new technologies, pretty much on managing collaborations. Now I'm an energy storage lead at Romotion, which is a consulting firm based in the UK. And we work, you know, with different type of clients coming from, I don't know, banking, finance, from OEMs, from tier one, tier two suppliers. And again, we advise with market trends and technological trends in the field of electrification in general, I would say. So in my career, I always worked on, let's say, innovation on lithium-ion and energy storage technologies. And I've seen quite a few things work in a startup myself. And I've seen a bit of dynamics, if you want, firsthand, which was quite interesting. So I worked, you know, interfacing the startup with corporations, for example, and then I worked in a corporation doing the opposite, trying to understand if a technology is good or not. And the topic of today, which is a battery hype, is about, you know, is about, you know, discussing the common override that we have in this field as of today, and how it led, in my opinion, to a number of disasters during the years.

5:24There are a few, of course, notable exceptions. You know, we have some very successful startups, which emerged. Tesla's probably the most famous one. But at the same time, we also saw a lot of failures. And being a scientist, again, I like to restart a bit from history. And that's how I got passionate about science, to be honest. And batteries are an invention which is 20, sorry, 120 years old. And I'm sure that Alessandro Walter couldn't imagine when, you know, it was sandwiching basically, cardboard between zinc and silver plates. I probably couldn't imagine what kind of revolution it could initiate, if you want. I pulled out some data today, from IA, which I'm sure most of you know, and the they estimated that for this year, the investments in clean energy and energy efficiency exceeded 700 billions, which is, which is a lot. And Chinese leading, of course, at the moment. With spending, you know, such increase dramatically in this field, we can expect that money in energy storage will keep increasing because they do play a very, very, very important role.

6:59And money is coming basically from a few streams. There is corporate spending, there is government money, and there is venture capital money, if you want, pretty much. So private investment, corporate, and all of that. And now, you know, we are hopefully emerging from the pandemic, except in the UK, it doesn't seem so positive, the outlook at the moment. But in these situations, you know, investors look for stories. And what's now interesting, I think, is everything around ESG, so environmental, social and corporate governance, because it's becoming an increasingly important factor for, you know, companies and so on, to invest on. And that's the other point. So, basically, it means that, you know, companies will need to clean up pretty much. There is also another important point to remember is that that most big economies have committed to net zero targets. And basically, again, all countries will need to start decarbonizing, because they started to realize, in my opinion, also talking with governments that, you know, the risk and the cost of climate change is real. And you cannot any longer ignore it, pretty much. There is also COP26, of course, which is incoming, and is going to be this year, I think, very, very important. And I would expect a lot of announcement, to be honest, a couple of weeks. The point is that, you know, we have all these stakeholders, all these people who need to innovate, who need to make green innovation, we need to decarbonize. And we are starting to have, you know, good targets, maybe in technologies and so on. But the point is that when you speak with people in governments and companies, maybe they have their set of performance indicators, but they still don't know how to get there. So they have their targets, they know what they need to achieve. But then they come to us and ask us, how do we do it? And to be honest, you know, you can give ideas, but nobody really knows what to do. So people are scrambling for innovation. And there is pressure on all the stakeholders to bring results to be the first to, you know, achieve and bring something new to the market, pretty much.

9:57Now, in my opinion, what I want also to discuss with you guys is that a lot of innovation starts at university. So myself, I did a PhD, I have a very academic background. And I've seen how research is done there. And actually, maybe later, we can also share some links and so on to material. I think the problem starts there, to be honest, in academia, there was a paper by Professor Johansson, recently really showing some of the problems and the ways it is to cheat in academia, basically. So, for example, by, you know, writing misleading reports, by misreporting data, or just by mystifying, or having bad comparisons, if you want. And the point is that also technology transfer today, in particular in the West goes through, you know, university and startups. So there is a, what we call a linear model, if you want. And it's basically coming from the 70s or 80s. It's the Bayh-Doll Act of the 1980s, basically. And that's how IP is transferred.

11:28And most commonly, we go through this step in which we have establishment of our startup, which is, you know, you can imagine it's academics, which set up a company pretty much. And they don't have a clue in the end about for most of the time, how to do real manufacturing, or how to scale up a technology. And universities work with a mechanism, which is, you know, basically, they always need to find money from investors, from stakeholders, from the public or private sector. So they basically always have to oversell their technology, trying to attract more money. And if you think about what I just told you a few minutes before, that, you know, sometimes research is done in a not so transparent way, then you can see you start to have problems. And again, these people are then starting to transfer their technology. But, you know, very often, they're faking it or not doing like technology, which is directly transferable to the mass market. So it's very complex to imagine how they can scale up for them. And basically, there is this continuous hype, which is being generated by, you know, startups, by academics, and you always have to sell your research, you're not allowed to, you know, have bad research or publish failures, pretty much. What is fueled during the years, is a fraud, pretty much. And we had a lot of examples in the, during the last, I think, five, 10 years. GM, unfortunately, has been involved in at least two very big ones. And the famous one, there was MBS system back in 2013, which was trying to sell a new battery technology, which was supposed to be, you know, a breakthrough in terms of energy cost. And it was quite interesting to read some of the industrial reports showing that basically, they were selling a battery that was saying that it would achieve 400 watt hours per kilogram. And what it was achieving in reality was much lower. So at the first cycle, this battery would give the energy and after like, 20-30 cycles, it would be already around 300 and 250. So formally, you know, they weren't lying when they said, we can achieve 400 watt hours. But in reality, when you look at the results, it was all made up. But anyway, it wasn't transferable to a real system. And there were a few more notable cases, again, going through everything in detail, it's something that we can discuss, but it would take probably more than one hour and a half. There was SAC-T3, for example, where Dyson pretty much wasted $93 million.

15:14There is a CEO, which was another very famous failed investment, this one by Bosch. And it was for solid-state batteries, which today, you know, causing still a lot of noise. And that one in particular caused the closure of a whole division in Bosch. So, you know, probably 100 jobs lost. And you can see, you know, myself being in academia, being in startups, you can see how this mechanism is easy. And you can see that, you know, these two groups are usually using pretty much the same ways to cheat their way in. And the problem is that today, we are crowded by this large number of companies without a real product. And what most people ignore is that scaling up a battery technology is really, really complex. So setting up projects take a very long time. There are some set times to do it, which, again, people just ignore. And again, today, I will have to discuss topics to understand what is the perception of, you know, the audience and so on around how long it takes to bring a technology to market.

16:48And the last point I wanted to also a bit discuss is that this is really damaging our field and our sector. So scientists and, you know, people working energy storage start to lose credibility in a way. And it's becoming cloaked, shown by this news, which, you know, in the case of honest researchers or honest people like doing the work, they basically have no lower chance of succeeding because, you know, if you don't oversell, if you don't over promise, and basically it's going to be very hard to get funding. So what I would like to discuss what's their ways out on how to, if you want to solve these problems. So some of the things that have been proposed, you know, by other people, which I think would work are, for example, more rigorous testing for this technology, startups having to go through maybe some sort of more stringent validation. Academics, likewise, were meeting from fraud, they're usually going unpunished. And I think it is something that really should change.

18:20And the other problems is also, you know, in corporations, in the executive boards of these corporations, like most of the time, people don't have a technical background, and they make decisions out of, you know, very often. There is just so much pressure on investing. And I feel like sometimes it should just take a pause and reflect on what is really realistic, what is coming and what won't make it, to be honest. Again, yesterday, I think yesterday, it was two days ago, I was discussing with one of my former managers from Samsung. And we were just saying how we have these companies which may be set up for six months, one year, put a lot of money in the field, and then just are forced to close down. So really, what I would like to a bit brainstorm today with you guys is what we can do to have a more healthy investment environment. And in general, what is the perception also from everyone around related technologies that we can see, assuming the market or not.

19:58So what is perceived by everyone, if you want, and we pull a bit of opinions and start to discuss really what we can do. Again, I hope in this maybe 10-15 minutes, I gave you some food for thought to really start the discussion that my points were clear. Again, this format is a bit new for me. I'm usually using slides and presenting data or, you know, showing charts. So I hope my opening was really clear for everyone. And again, Simon, looking forward to starting maybe some questions or if you have anything to add, or give some thoughts, because I know you have been in this field for quite long. You're proposing a lot of exciting technologies. So, yep. Well, thank you so much, Odirika, for this introduction to the topic. And I think you brought up some really interesting points, you know, from, you know, I mean, one is, I think, what's the current situation? You know, that there's a lot of money moving into the field, and that, of course, also attracts bad actor.

21:17On the other hand, you also have maybe like some, you know, some projects which are meant really well, you know, they just don't manage to produce what they were anticipating. So it's getting very confusing, I think, for many people also from the outside, even sometimes inside, to understand what's real and what's, you know, what's just hyped in the title. And I think one thing also here is, I just had this idea, you know, just thinking about that us, you know, let's say, as a battery community, you know, that we should really, you know, really want that, that only the, you know, only the real kind of startups, et cetera, are funded. Because otherwise, as you said, you know, it will, it says like a bad precedent to other startups, and people getting more skeptic, et cetera. But often, you know, as you said, it's just like people playing like the field to kind of, you know, try to make it happen, and they might do, and they might not. So it is, it's a complicated field. I mean, we're looking at this as well, as you said, quite a lot ourselves. But one thing I just want to add is because I thought maybe it's an interesting thought, and then I think maybe also Milo's wants to come up right after.

22:17Because I spoke to Akshat Ratti, who's now at Bloomberg, and he's quite an esteemed reporter in the space. And we had like, it's probably years ago now, during my PhD, we were talking about the role of startups and, you know, big companies related to batteries. And he was really strong at the time, I don't know if it's in the case, might have changed or modified or et cetera. But at the time, he was really strong about that he thinks, you know, that innovation, like especially chemistry and things like that, should come from large companies, because they just have way more, you know, resources, et cetera. And a startup would have a very hard time to be successful. And he thought this wouldn't be the right place for that, especially on this innovation. On the other end, of course, you can see there's all these startups and their successes as well. But yeah, he was, at the time, I was quite clear about, I mean, that this might not be the best place, and maybe larger companies can do this better.

23:08But again, you also brought the example with Bosch. I think that's quite a famous example, where maybe things didn't go so well internally. And I don't know if you have any more information on this, you can share. But yeah, this might be just a few cents of mine. I'm also going to get up my loss. But if you have anything else, Udviki, you would like to add on these topics, it would be great. Udviki Hsiep Yeah, no, I really agree with your points, Simon. It's a very good point. And again, I, my impression is the same, like, it's very hard to get these technologies from the lab in a university to the real world, if you want. And the other point, maybe just to add before Milo's word is that we have a finite number of resources. So the money we have available are just so much. So we need to be very critical. We need to assess exactly where they go. Because anyway, we are fighting our war, if you want, against climate change. And Milo's?

24:17Milo's? Yes. I would like to start with a one thought that the hype in the battery is nothing new. So in 1883, Thomas Edison warned about the battery hype. And I think the battery hype is coming in the way, you know. So in that time already, I have one paper, which he was publishing in that time, 1883. And he worked, he, it was precisely the same situation like it is today. So he's, he said something like, if you see the guy talking about battery, what kind of battery he's got, be sure that most probably he's trying to milk, to sell you stock, basically shares, which are worthless. And basically he's trying to milk money from you. So basically it's coming, I think it's coming from the, in the way, the battery hype. Whenever importance of the batteries, batteries like the technology is increasing, the hype is also increasing, you know. And whenever you can gain some quick richness or quick money from the hype, the people find the way how to do it. So exaggerate. And in many cases, like you already said, older Rico, they are not lying. They are exaggerating, or they are trying to do the tricks, like the first three cycles and everything else. And basically the data are right. They are not, they are basically fooling the public, but the public doesn't understand it. Or investors, they don't understand it. And I think another factor for the, for the being able to, the batteries, this technology, which you are able to do it, it's a complexity of the battery system. So battery is very complex system, or it's like small chemical factory, chemical factory in very, very small scale.

26:43So because of that, there is not clarity for a lot of people, the how battery works, how difficult it is to make revolution in the battery, I mean, the breakthrough changes. So because they are using this word breakthrough changes, yes, like the breakthrough invention, for the, for the hype. What do you think about it, older Rico? No, I think you're totally right, Milo, when you touched on one of the points that is very, very important in my opinion, that as you said, batteries are extremely long. And uh, I really liked your point when you started by Edison. I think we need to, uh, I will need to look for that paper that you mentioned. Um, I can send you right now. I have it open. Uh, if you can send me, I would really love to see it. And I can probably, I can publish it right now, uh, the copy to your direct message because I just opened it for the discussion. So I am sending you right now through, uh, whatever, uh, I don't know, maybe I will send you later because yeah, yeah, we can connect. But, um, the most important point is really the, and I think also Simon touched on that, is the complexity on bringing in this, uh, technologies to market figures. Um, for a battery scientist, already, you know, you can understand a few parts, um, of the battery very well, but already it's very hard for the whole chemical knowledge because you need like different branches of chemistry. There is electric chemistry, thermodynamics, organic chemistry, polymer chemistry, uh, organic chemistry. So usually people understand very well only one side of that. And I think you are right. It's just, um, really there, um, but then it goes on because, you know, maybe myself, I was a bit between materials. So I have, um, general overview of, uh, most things, um, how they work, not especially, but then you have to think about moving into, uh, filling up. And, uh, that's where the, uh, art part of the, um, you start to have to build a large prototypes in that you need processing knowledge.

29:23You need, uh, people who are able to know how to make flurries, how to create the same things, the very complex technology. And batteries have, uh, a precise, a quite precise manufacturing. You know, the important point, making batteries expensive. Yeah. Yeah. Yeah. Yeah. I would also like to make distinction between the two kinds of the heights. There is one kind of the height of which the, uh, actors are coming with a clear intention to, uh, gain some value or usually money by the lies and the exaggeration, uh, basically bad actors. And there is another height, which the, uh, usually scientists usually coming from academia, like you said already, they believe in their story, you know? So they are in their mind that they are not, uh, exaggerating. Uh, they believe that they are right. This is true. There is a, that part of, uh, ignorance in a way. You just don't know how it's done because you read only papers. You have no idea about what it takes to look inside.

30:41Yeah. And, uh, you point, you pointed very right, uh, um, problem that it usually, uh, the, uh, those companies, the, uh, initial, those companies, uh, which they are, they are coming from academia from spinoffs or some two scientists are establishing one company and they don't have idea how the business is built. Yeah. So basically, uh, the, it's not, uh, the, uh, the, the company to be have a lack of the entrepreneurs in the business who are, uh, coming to this field and building the companies. Experienced entrepreneurs, you know, for the startups. So the company and the, usually those, uh, those guys, uh, they feel like it's their baby. This invention. So they are, they don't want to reveal it. They don't want to, uh, uh, give control of this company to somebody from outside of the, outside of their circle, you know? So then they are running this company like the academia. Yeah. Yeah. Yeah. Yeah. And marketing current environment allows them to do it.

31:51Um, because, uh, the, in many cases, they are hijacking the issue of the global climate change and, and so on and so on, you know, global climate change, this word, that's the current wave, uh, um, current wave, uh, when the battery, uh, can be, uh, by exaggeration is about battery breakthroughs. You can, uh, you can milk money from the investors. Yeah, definitely. Um, and you pointed a very, um, good discussion, uh, point, I think that, um, you know, in startups, in academia, there is people without any management or any way, uh, financial, uh, knowledge, at least if you're a scientist in, uh, chemistry, you're not an entrepreneur. Uh, same time, what, uh, what was interesting for me to read is that, um, in Bosch, the problem was opposite. Um, so basically the people giving the money there, uh, they have no technical knowledge. So they were basically, uh, you know, making this decision, uh, based only on this, um, announcement if you want, by the scientists and, um, and they didn't listen to the technical side of the business, if you want.

33:15Um, and this is, uh, considered one of the causes for, uh, um, probably the main cause for this, uh, failure because, uh, also in GM, uh, with the system, I was speaking with, um, the therapist, uh, some time ago, was one of the leading scientists in, um, in the company. He mentioned that, you know, they were warning them, uh, before and that, um, you know, MBR would be a probably bad investment because they didn't have the data. Um, the other point I was also discussing, which was, uh, very interesting for me, um, the other day, his manager, we were discussing really this topic, um, is that very often in this big, when, you know, uh, maybe a corporation makes an investment in a startup or, uh, you know, a smaller company anyway, maybe they're promoted also to as board members in the startup. So, you know, there is also some personal gain, um, also there, so maybe in the beginning they're willing to close more than one eye over the technology and are more prone to accept the promises because there is a bit of a reward for them. You see this happening very often that a technical lead or an executive accepts a new job posting in the startup that is just acquired. You can imagine their salary is going to quite a bit.

34:52Yes, so like you said I came to one company because my firm is an investment firm so one very good company, I mean with a very good reputation you mentioned management of the company or financial prudence or something like that no usually they have it I mean the company was well well organized around batteries so well organized company and a well managed company but what what was missing they they had zero idea how to build a business so basically the they managed the company like the like the university institution you know so not for profit I'm saying so they were they had well organized bureaucracy how to spend the money how to but only one way how to how to have the cash flow and that's from the selling the stock so that's how those companies are organized you can sell the product or you can sell the stock and many of those companies are selling the stock from here comes the hype yeah at this point I never considered to be honest but it's again really really good really interesting and in the end it's just difficult to navigate I think this ecosystems for everyone and you know again everybody's rushed to invest I guess how is it in the investment world how do you see like yeah so that's what I see the major major reason for the hype is if you want to sell stock you need to hype only stock I mean if you if your aim is to sell the products and services means that real company revenue generating yes you need to have the path to commercialization and you need to show the investors you are selling the you are selling your projections for the future path to commercialization and you are looking for the investors and you are looking to raise minimum money because you don't want to delude yourself from those investors until you are going to be able to get cash flow from the from the selling the products and services but when they are organizing those companies now many of them I would I would say more than 50% of them they are organizing the company how to tell the story to the investors basically how to sell the stock and how to maximize the how much money I can I can gain to the cash flow to the company by selling the stocks and you see on the market like 100 million here 100 million here so it's very attractive for them and they forget that the business is to selling the products and services that's that's true and again I you know let's say I was involved in crafting stories or seeing the process firsthand which was very interesting from the inside it's one of the reasons why I moved away from startups because sometimes we were just in the end selling smoke pretty much like I have seen people maybe advertising technologies by saying I don't know these batteries safe high energy long cycle life and in reality maybe they had three products in reality it was one was high energy one was long lasting one was cheap but the cheap one would have very bad performance example yeah yeah one more thought before we will give the voice to Mark I think the major way why the companies are able to do it basically selling the story and selling the stocks to the to the buyers of the stock is the not investors I am saying that battery is most important technology for this decade I can argue and I can defend it yes more important than AI more important than robotics they are more in for this decade I'm saying not for the next decade so importance of the batteries it's huge and that's what they are taking like the that's the raw material that's they are converting this importance of the battery for this decade for the economy for the countries and so on and so on and they are converting it to being able to sell the stock but Mark what do you think of yeah I agree with your assessment of these companies they there's a lot of pressure to create money from innovations which have not been a medium level because in order to survive as a startup you have to have that money and so they try to appeal to people who don't have a technical background to get that the capital and I think there's a you can you can hear a lot of these webinars and public disclosures these people talk about ESG and a lot of that is basically a lie in the sense that it's not been proven it sounds really great and there's a focus of trying to appeal to the broader market of ESG front and to get investors who are not technically trained so I generally agree they need that money now on the academic front academics has changed over the years whenever you write a grant because I've written grants you have to make an ESG statement and if you're trying to create some basic innovation say in batteries it's really hard to make that statement for a long term innovation and so it's turned academics basically into liars I don't think it's intentional they're just trying to get that money and so they have to make this statement in order to get this money and then after that they have to follow up with some sort of demonstration of this ESG improvement which may not be ready for that innovation yet there may be some time or some scale up or some proof at a larger scale to really state that so it becomes a continuation of sort of and I don't think their intention is a lie but basically non-actual statements that have to are added to in order to get the grant to demonstrate to universities and then ultimately maybe perhaps to publish think about it how many journal articles have you seen where they make these broad claims they show this huge economic values innovation how many of those have actually been gone to the market or licensed pretty much zero like far less than 1% and it's become increasingly so in this particular situation what you voiced right now I think you are right those companies those inventions or those work of academia is coming prematurely to the private business so basically those inventions should stay longer in the academia until they will mature more enough to be able to establish business based on these inventions yeah I think it's a very good point both yours Mark I totally agree and I really like the fact that you when you said like academics in a way are forced to turn into liars which unfortunately is very often true and the difficulty there is also the scale of investment I think like scale up these technologies you need billions most probably like Bosch was estimating that for their solid-state battery business to get competitive at 200 gigabatt hours they would need 200 sorry 20 billion dollars which academics that just don't have the ability to do we see why Chinese are succeeding because they can raise so much capital look at CATL they basically were born from nothing anyway maybe let's give also the word to Katarina and Michael who wants to start yeah hi everyone thanks for putting me upstate so say what would you look for then say you are an investor who wants to invest in battery companies and you have maybe a general knowledge of the technology but not like a PhD in electrochemistry if you would say three questions you would ask or three bullets you really need to look at to make sure that it's a solid company or at least a promising technology what would those questions be would you say I am investor Katarina and I can tell you one major one most important I don't even cannot find in my mind right now another two because this is most important question in those startups I want to believe in any company which I'm investing money to in battery company now I want to believe I want to be convinced by the company to pass for the commercialization I want to see clear picture how they are taking this invention to commercialization it means that how long time it will take them to build to finish this invention and to make the prototype then how long time it will take them to build the factory and then how long time it will take them to plug this business development to the supply value chain and start to supply the products or services that's the major question by far which I'm looking to the companies I think that's a very important one because most people will not have a clue just setting up the timing and the money required to get to market means already your thought about it the other thing I usually used to do when I was assessing startups and so on was ask maybe also how much data they can share and often asking for third party validation or in-house validation by the technical team in the end if they're open for sending you samples for example or sending like implementing your technology right away it means there's something tangible more or less otherwise you know it starts to be really really dodgy yeah Katarina I am investing to the business not to the academic institution so I'm looking to when they will stop to use my money for the building the business and when they will start to use the money from the customers to build the business and start to return my money back yeah that makes sense Milos thank you maybe also Michael did you want to ask or add something yes actually I'm very curious about what are the standards and regulations around around batteries and especially those for EV and also how do you make sure that it is sourced from ethical suppliers or sustainable suppliers so the regulations are there's a number of standards in industry which are adopt for certifying a product if you want to send you some references as well they're in books and so on easy to find the main point is that validation EV is long so it takes maybe I would say a minimum of three to five years to develop an EV platform that's the minimum development cycles I would say and that takes time so you have to go through a set number of technical tests of design validation phases and some are actually dictated by standards on the sustainable if you want I think you're referring more to the SG part I think it's quite unregulated at the moment I'm not a specialist in this area so maybe somebody else has something to add but I think as of today because ESG is still unregulated if you want and sustainability is not so well defined always it's quite difficult to say like we have 195 countries and 195 different regulations so I cannot answer you the question plus we have the other regulations like European Union like United Nations so there are many regulations and many of them are totally different that's true that's also why you see development cycles which are different depending on the count like China generally has accelerated timings because they have less region regulations most of the time while Europe United Nations is faster sorry slower and more tight and those regulations in many cases confusion in those regulations again helps to hide yes like using like using buzzwords like ESG you know yes true so which international standards or certification would a good EV provider show in order to prove that they are a credible partner or credible supplier of good quality battery if I may chime in here so there are quite a few standards that EV manufacturing need to comply with one first would be UN 38.3 and it's for transportation the others would be in the UL sections where it's mostly related to safety so they have to pass necessary nail penetration tests impact tests just to see whether there will be thermal runaway or explosion in event of a destructive situation battery so there are a lot of standards I would say mostly on the safety aspect of the batteries but as to your question on whether there's anything on sustainability that really depends on the region so there are some countries that's already looking at sustainable regulations such as recycling life usage etc and maybe Simon could chime in here about the European region looking at battery passport but these are fairly new initiatives in the battery world we're not talking about carbon tax or anything like that but just with reference to what EV manufacturers have to do for their batteries these are just some of the standards that we are looking at so to answer your question in short basically a lot of these revolve around safety for now and some regulations kicking in for recycling repurposing reusing the battery materials and also sourcing from sustainable supplies okay I see thank you so much for the information yeah I think we need to start to when we are talking about hype and about who is we need to look who is hyping who is hyping and what's the reason for the hyping so basically is it the crook who is trying to gain some wealth quickly or some money quickly or is it some scientist who believes in his invention even if it's not truth or is it somebody who is trying to take advantage of the regulations in many cases counterproductive regulations like the buzzwords like hydrogen for the basically it's a big scheme how the government is channeling the money to their friends do you see also a lot of I've been generated by maybe the investors who have invested in the technology or you know for example when we had Volkswagen energy they were selling a lot and that's quite a big stake of course yeah you are right also the investors are hyping in many cases like I know about one case I don't want to name it in order to get money back because they invested to the stupid venture they basically major investor invested to the not profitable not good venture so they started to hype it in order to get their money back and it worked in in that case it worked this scheme they were supposed to lose their money because they didn't pick up the good investments but hyping about this venture and changing the story they got money from the retail investors who invested to their hype and they got money back with a hefty profit and still no product which is quite set for us we have technical background we can't maybe want you to also join the conversation thank you so one more question what I have is whenever the companies are putting data they should also show some of their validation plans but I haven't seen much of that from the startups or any other companies the most important validation because this validation of the data that's another hype you know the validation of the data that works in the academia so they are bringing it from the academia to the private sector most important validation of the data is free market if you can sell your products and services on the free market you don't need validation of the market it is true but you need to raise so much money before you can get to the market yeah I think there should be a standard agent of a third party who is validating the data for example for example I work for GM when we go to a particular startup to say they have a material which can work well they're probably not ready to share the material to us but they can actually give the material to a third party benchmarking and they run it and give another amount of trust basically yes I made mistake I didn't make it clear validation of the free market I mean when they are selling the goods and services to the customers customers for the goods and services are validation of the data I'm saying not market investment market sure the other point maybe around you know standards and so on as we were saying before it's also that it's difficult to get people together to write standards to agree on standards because everybody wants his own standard if you want to be the dominating one also in the charging infrastructure we have seen it it's on different types of standards but you know there was basically a standard war between CCS and you would need people to really get together and agree but very often it's very hard because everybody has its own ideas on what is needed and it's one possible solution however I think I think it's a very important part and forcing really these people to validate that technology might solve some issues the other point is that also when you do these tests you know some of those sometimes can be meaningless in a way so Catherine before was talking about the abuse testing and some of these are not really represented or don't really give an answer so it must be they don't get designed they just tick a box sometimes and it's very easy to fake a penetration test you can change state of charge again and you just don't disclose the full number of parameters so I think there is a need for an external body but it must be like 100% agnostic if you want and it should be a common effort but which doesn't exist yeah 100% independent body which is reliable doesn't exist by the definition because one human being or group of the human beings can not replace 7.8 billion people the market free market I'm trying to say decentralized free market so I'm saying this external validation of the data from third party validation it came from academia and that's not the metric for the building the business so that's temporary metric for the building the business for being able to sell the stocks I can manipulate third party data whatever I want so basically I can show to the buyers of the stock whatever I want to show them and I can prove it if I want to defer them this is true but in us we have us abc protocols which we typically encourage all the doe projects to follow I'm just surprised why the other like for example the new startups wouldn't follow those protocols to benchmark their materials or their technology it's simple because they can okay is something there in Europe as well just like here we have usabc which is like mostly the protocols defined by the three OEMs what they think that would satisfy the needs by the EV you mean like parameters I don't know in terms of energy density and so on not just parameters just the test protocols yeah even the parameters test protocols how should we test it yeah how long should we test it and what are the targets everything with Europe is anything like that but okay I don't know maybe Simon do you know more about this no I don't have it right now either so I know we have been looking for some other kind of countries different testing protocols but I don't have something specific for you right now we standardized but maybe one thing I can share here and so I had conversation recently with DIN which is like the German standardization like ISO or something because you also spoke about battery data and it's so we're developing this open source battery cycle at the moment with battery associates and here we were discussing a lot with one with the European parliament and all kinds of different people that we understand is there any standard on data we can use or should we create our own kind of thing and with them et cetera so yeah I anywhere in stone so yeah so I'm not familiar with anything fixed right now but I know there are low organizations especially all the certification organizations like TÜV we know them in Germany as well we know them quite well too and so there's of course a lot of interest to kind of create more standards because it's a big issue right if there's no common platform nobody else can rely on there are some but I think there's definitely more which can be you know another problem I could see from OEM perspective if you want is that we don't like our standards so it's one of the biggest secrets for an OEM how you validate a cell how you validate how you build it how you design it just like it yeah but you can you cannot over regulate to the success so forget about regulation I mean they are important but you cannot regulate to success and success means the commercialized in the case of the battery commercialize your invention and means the sell the battery battery or material for the battery or battery pack sell to the market so for profit yeah they can't want to add something I was saying that I know that OEMs won't share the exact protocols they'll use to validate their system in a vehicle but they'll actually share in a hybrid version that's what happens and as I said USABC here or even in the department of projects what they do is they come together and say instead of giving a complete drive cycle they would say okay even if you satisfy this particular hybrid version that should be good enough I think some understanding can come they could come but you are right they wouldn't share the exact protocol but they would be open to share some of the hybrid protocols !

1:06:06okay so those companies they have the troubles to survive so it means that whatever they are doing is defensive you know they are bribing the president Biden they are bribing union they are bribing everybody in order to be able to survive because they have the big chance that they will go in the end of the decade they will not exist okay thanks everyone we've got Javik and who just joined us yes i'm sorry i didn't follow the thread i listened to you for the last maybe three minutes so i'm not following the thread so maybe if you can just yeah yeah yeah sure Javik thanks for joining us hi so just just one point maybe we can discuss about that or after Javik will send his opinion not to lose the track those three we should also discuss about this hype about hype of the existing especially automakers whatever hype they are established automakers like the general motors like volkswagen and like Toyota they're hype they're also hype with Colin, it took a while for me to come back.

1:08:00I mean, I came in a little late, but a little that I followed, I personally think that OEMs, like what Shikant was saying, I mean, it's not necessarily the incumbents. I mean, even the startups as well. I don't think if anyone would have ever come to me and said, hey, you know what, I want to see your battery data, that is something that we'd ever give. And also, I mean, since there's, I mean, at least when you look at an IC vehicle, there's the whole CAN 2.0 standard, which is quite easy to kind of capture information on the go. That's not there with EVs. And I think that's going to be that hidden agenda for every single company. I mean, that's my take. I mean, I came in a little late, but I would definitely add value. That's an interesting point. But again, if we cannot see it, usually it's very hard to judge. And, you know, we need some kind of transparency to establish, you know, there must be an exchange at this point.

1:09:11And maybe let's also go back to the point by Mylosch about the ICOC OEMs, which I think is another very important one, because most legacy OEMs now are, you know, facing trouble ahead. That's another problem, I think, for them, mostly for the industry, because they need to reconvert their whole fleet. So, because they're trying now to come up with, you know, proposals, agendas. In the end, what really accelerated EV adoption was the, the state and the Volkswagen, and then they needed to go all in on EVs, now that we've talked about combustion engine anymore, or oil and gas for every company now was to reconvert. Sorry, what did you want to say? I didn't, I wanted to argue with you that I don't think that the Volkswagen gate accelerated EV adoption. Arguably, I think that maybe there was very small factor, single-handed with Tesla accelerated EV adoption. It's not regulation which is driving this, this electrification of the transportation. It's technology driven. So, that's a common mistake for the people, judge the disruption.

1:10:50This disruption is technology driven. It's simple like that. It means that the electrical vehicle, whatever vehicle it is, is much better vehicle, and it will be also much cheaper vehicle than the combustion engine vehicle. They adoption. That's another buzzword which is wrong. It's EV, it's a vehicle disruption. It means that it's automobile disruption business. It's an interesting point. Again, it's true that, you know, with EVs, EV prices dropping, basically, customers will want to buy an EV quite soon, because it's just better from every point of view. I mean, the car is more exciting to drive. It's cheaper to run. It's less parts, so probably less maintenance. But I do think, you know, that, I mean, the biggest, or one of the biggest OEMs, really committing to EVs, and there is also Chinese factor, you know, China was basically, and this, the near side, it's not only Tesla. I think, these are Western misconceptions, in my opinion, that Tesla is the only one driving the innovation.

1:12:24I think China is doing much more, they're much more advanced, they own the whole supply chain. And, to be honest, I think that's another important factor, which is accelerating everything. There is also, you know, the risk of nationalization, and there is connected with China, if you want, owning the whole supply chain, pretty much in particular, upstream. So, basically, at the moment, you know, everything is owned by the East. So, there is also need to make these studies, to make this hype, to really motivate investment, in the West. Otherwise, we stay left behind. this connects us with, what we were saying before, that legacy OEMs, are really risking, to be left behind. So, your point that it's technology driven, I think, we should say, by saying that, there are different factors, playing, all at the same time. But, from OEMs, I don't know, maybe, Shrikant, has a similar opinion. Internally, it was always seen, like, it happened too fast, in a way. And, that I think, that's large.

1:13:47And, these OEMs as well, played a major role, in accelerating the technology, adoption. The problem that, now, OEMs are also facing, just to add another point, and I will leave the, word, is that, they need to reconvert, and they basically need to use, a different business model. So, they basically need to operate, like startups, in a way. That's what probably, also fueling, this hype generation, from the, OEMs, from legacy. Because, they need to enter, a different speed, of development cycle. Cars were made, until now, with very small improvements. You know, you release model, by model, which are, basically the same, with some, added features. Designing, EVs, you need to change, quite a lot, in the car, and the costs, are impressive. I mean, OEMs, and so on, slow, by definition, of the, they operate. Yes, so, exactly, like you said, it right now, it's not, a technology adoption, it's a technology disruption. So, disruptors, are almost, always coming, from outside, of the industry, in the history, of the 10,000 years, of the civilization, and always, it comes, in the S curve, not in linear, so it's not, technology adoption, it's technology disruption, and, that's why, they are hyping, because they think, that with the hype, they can survive.

1:15:25Yeah. They think, if they will hype, hybrid, that the hybrid, is electrical vehicle, they think, they can survive, and they can, save their factories, but they cannot, because, it's not, it's not, the, it's not, the, technology adoption, because, that would be slow, it's technology disruption, which is fast, it means that, the, the, they can change, the, combustion engine vehicle, to hybrid, and, they still, will not be able, to compete, with the electrical vehicle, they can even, change it, to plug-in hybrid, and they're still, cost of their vehicle, will be more, because, they need to, have the boat motor, engine and motor, and things like that. So, they are hyping, in order to be able, to survive, but, if they will not, see, like, the, technology disruption, they will not, be able to survive. So, in my opinion, there is like, 80% of the, of the established, automakers, they go out, of the business. I agree, that's actually, one of the, questions I wanted, to a bit, ask to the, audience, if you want, what, who do you think, would survive?

1:16:43Another thought, while you were talking, and, I think you touched, on this, Marish as well, is, around, lobbying, that's another reason, why you craft stories, that's another reason, why you come out, with, these, because, the other strength, of these, companies, if you want, is that, they, basically, have strong influence, on policy makers, so, you know, that, that's another reason, why you, um, come up, with these, narratives, because, basically, you try to direct, fund towards, you try to direct, decision makers, toward, um, doing what, what you need, to keep making, profit, because in the end, that's what, moving everything, it's money, in the end. I just had a point, uh, if I may, Ulricho, I, I mean, this is, this is what, my assessment, of the data, that we end up, collecting out of our vehicles, has been, uh, and, what I strongly see, uh, of the data, that we end up, collecting, whether it be, not only from the battery, whether it be, from the complete vehicle, by itself, is, we have utilized, close to anywhere, around about, 30 to 40 percent, of the information, in terms of, improvising the battery, or improvising, the complete system, but the 60 percent, driver, of the data, that we've ended up, collecting, is only, giving us, opportunities, to get into, newer business models, so, the data, when we, I mean, I'm just, talking about it, from a complete vehicle perspective, it is two-folds, A, 40 percent, is our utilization, from, uh, improvisation, of the product perspective, but, the majority, will be with, newer data models, because, newer business models, because, here, you're recoupling, a hardware, and a software, which was, decoupled, with an IC engine, and that is, the direction, that I feel, that EVs, is eventually, moving towards, that's going to be, so, Divik, to make it simple, you want to say, that the new, electrical vehicle, uh, which used to be, electrical vehicle, uh, last decade, this decade, is becoming, digital electrical vehicle, is that right?

1:19:13Right, I mean, uh, the last, the last generation, I mean, or the last decade, it was a gasoline, which, which was connected, via software, uh, Milo, just to give you an example, I mean, GM was making cars, and Uber was, giving in the software, and that's how they got into business, right? Now, from an OEM perspective, there is software, already built in, which is, typically, going to make, I'm, I'm just hypothetically saying, that an Uber, a redundant company, going forward. Yeah, I'm saying the same, Tivik. I'm saying, the electrical vehicles, which they came, uh, last decade, in the market, the small number, they were only electrical vehicle, but they are becoming, now, electrical vehicle, with the software, it means, that they are becoming, digital vehicle, so, uh, and, uh, established automakers, Uderiko, they are still competing, against the electrical vehicle, they don't realize, that this electrical vehicle, is not anymore, electrical vehicle, it's digital vehicle. So, uh, this is another, uh, extremely important point, um, I think the data, I was referring to, in the previous discussion, were more like, from, um, I don't know, battery cell, or, uh, battery pack validation, point of view, the data you, you mentioned, I totally agree, there's a different, uh, importance, it's a different discussion, if you want.

1:20:40I will give you, I will try to, uh, uh, real, derail the discussion, back to the hype. Um, I will ask you a direct question, Uderiko, which, of those companies, uh, I will ask you first, direct question, provocative question, what do you think, about, uh, QuantumScape? Is that hype, or is that real? Um, to be honest, I think most of these companies, are still, um, very overhyped, they haven't shown, um, real, uh, results, they haven't shown, like, it's, it still feels like, it's, uh, a bit, uh, lab scale, and I think, what a lot of OEMs are promising, with, uh, solid-state batteries, in EVs, by 2025, um, hype, um, it would probably, really happen, given the amount of money, that it's going into, these, uh, companies, but, um, I think, it's, uh, way too, uh, optimistic, saying, uh, that, in the next five years. So, politely, you told me, answer, that, uh, QuantumScape is hype. I think, there is a huge portion of hype, like, uh, most of these companies.

1:21:56Uh, it's not only hype, for sure, but, uh, at the moment, is mostly, in my opinion, again, I'm happy to discuss, uh, what's your view, Mike, or anybody else? I have the same view, um, uh, like you, I agree with you. Anybody with different opinions? I think, for me, it's not hype, it's more like, they are overpromising, whatever the, what they can do, in the next two, three years, or let's say, yeah, three years, if you talk about 2025, I think it's maybe, they are overestimating their abilities, to industrialize, but, I think they are, on the right track, but, it's, it's a bit too fast, what they are talking about. But, Beysam, that's what you told us, is the definition of the hype. Um, I don't know, because, like, I, but I cannot put it in the same place, where I put Nikola, when it went out, you know? But Nikola is not hype, Nikola is fraud. Yeah, okay, okay, then, then, then, then it's hype, according to that, then it's a hype, yes, okay.

1:23:13Yeah, there is difference between fraud, hype, and exaggeration. There are three different, uh, yeah, I mean, yeah, okay, then I would put it in the hype, then, because Nikola is not, Nikola had a big hype around them, but then it was fraud, so, yeah. Uh, I think the only best data with quantum skip short, till now is a four layer cell data, right? I think if they showed, uh, a large scale, multi-layer, post-cell data, I think it would take at least, from that day, it would take at least three to four years, to get the product to reality. So, it's only the amount of time they'll take from now to make that, uh, an actual shell. Yeah. For me, uh, no type is the company, which I see, and I believe that their product, uh, like, in the case of the quantum skate, their battery, I believe, uh, in the timeline that, uh, let's say 2026, the, the vehicles will run on the quantum skate batteries.

1:24:22Then for me, it's not hype, but I don't believe it. So it's hype. I, I think there are some, like, I really like the points around digital, um, technologies, because these are also a much faster time to market, and then the margins are, uh, much bigger. So I think this space is much more interesting. Watch. Yeah. 2026 is too early. Perfect. Um, I was just wondering, so, so it seems like, uh, what we're trying to discuss is, uh, do we think the market is over, is, uh, is, uh, uh, too hot? Is that, is that the idea where there's too much hype in terms of valuations? Um, I, I certainly think that EVs especially are really going to drive so much, uh, um, you know, the, the, the, we can't contemplate yet the amount of demand that's going to be required in terms of battery, uh, just, you know, uh, just pure output, not even innovation in terms of chemistry. So I think for purely from a supply chain, that is such a big challenge that I don't see how we can really sustain that, uh, at the rates at which we're developing at the rates at which we will.

1:25:38So I, I, I'm one of those that believes that what we need innovation and is really changes in architecture that can allow us to be more effective in, um, look in redefining the paradigm such that we're not really, uh, growing and needing to grow our linearly, but really fundamentally changing. How is it that we're using batteries and it could be digital solutions that help, uh, with, uh, you know, active battery management, for example, or some other types of, uh, ancillary services. But I, but I do think that's where the value is needed. And so much of the, uh, development is around, um, incremental improvements as it relates to electrochemistry or some other elements, but they're not fundamental to, to solve the demand growth that's necessary in my perspective. Yeah. But, um, what you said right now, the, we discussed, uh, probably you didn't hear us that, uh, in the battery, such complex, um, technology that, uh, very difficult to find the breakthrough technology. So in love, in history of the 220 years of the battery, we had only like handful, you can count them on one hand, the breakthrough technologies and over 220 years.

1:27:03So this battery, what we have today, it's, uh, uh, 30 years ago, it was commercialized, but it's still new. So 30 years old, it's still new. Battery is actually 50 years old, 50 years old battery. It's still new. I got it. I got it. And I agree with that. I know, I know there's a lot of, uh, you know, uh, breakthrough type of technologies or, or let's say battery companies. And then you look at it and it's based on white papers and on, on batteries that, you know, were already proven in labs 30 years ago. So, so I understand that. And, and that's why maybe the development has primarily been in terms of supply chain and just commercialization. And, um, I, I think as much as we're looking for scientific breakthroughs, the battery improvements and the breakthroughs are going to happen around supply chain and who can really create the demand for a certain types of, uh, battery technology. And I say that having worked in utility scale battery systems and, yeah, and, uh, installations.

1:28:08And, uh, as much as there are other technologies that could benefit and, you know, really have a better LCOs and, uh, better, uh, performance. There's still an, uh, lack of, you know, there's a hesitancy for, uh, financiers and developers and projects to, uh, adopt technologies that haven't been fully scaled and fully vetted. And that gap in time of adoption really goes against bringing in new technologies as, uh, as other ones come in. Just a sad one answer, because we are already short on the time is not adoption. Of the technology, those technologies are not adopted. It's, uh, uh, uh, those technologies are only used. Basically, I don't see a prematurely adopted technology in the market, in real market. I mean, those batteries are not used in the cars or phones because it would explode or something like that. It wouldn't work. It's just, you, those batteries are used for the milking money from the investor. Okay. So maybe I, I know you mentioned there's a time constraint.

1:29:18So I want to maybe just ask a question, which is in your perspective, given that battery development, there's a cycle by which time it can actually start being, you know, fully vetted, certified, and then finally brought to market. What type of improvements are necessary for an investor to actually consider this as a worthwhile investment? Because, uh, if, if it's five years down the line and the improvement is just minimal, then maybe that's not worth, uh, and they could be milking the money of investors, as you mentioned, Milos, but would love some of the experts to kind of provide that perspective. I'm just going to jump in here to, uh, really quickly say that actually this room, uh, the time for this room has already ended the usual time, but I think today we actually have a very interesting discussion and, um, Simon and I would like to try something different, um, for today, which is to keep this room open by passing the moderators to onto, you know, whoever who's here, um, on stage, and you guys can have a, a, a continued discussion.

1:30:20And the, the discussion would not be recorded. So, um, Simon and I will log off, um, because Simon actually records these sessions for, um, Spotify and also Apple podcast. Um, I see how I might have mentioned at the start of the, the, the discussion. So, um, if everyone's okay, we can pass on the mod, um, to people here in the audience and you can feel free to continue the discussion. If that works. Well, let me know what you guys think. Yeah. Thank you. Yes. You are right. Natalie. Thank you. Perfect. Thanks. And also on my side, yeah, just a quick one. Um, just cause I think we're going to wrap it up now for the recording. So we have a closing to it. And then as Catherine said, we're going to pass it on to you, um, to, to keep it up. Um, but just real quick. Yeah. So if you're interested to listen to any of it, maybe also start, you know, when you joined later, we can listen again to the recording by going to battery insiders.com or looking for battery insiders on Spotify, Apple podcast, anywhere else you listen to your podcast.

1:31:21And there's a, quite a library there from all kinds of different talks. We already got a quite interesting lineup from, from other experts for, for the coming weeks, but there's still also some slots available. So if anybody's interested, please get in touch with Catherine and myself. And I also want to give a really, really big shout out already to Odurico who joined us today and, um, give us a nice kickoff, but also, and it helped us to steer the conversation. And I think you can tell it's, it's, it's an interesting topic. Well, if you're interested, which kind of leads Catherine and myself now to, to keep it open. Also one quick thing to say, because I didn't say it earlier, but I'm, we see this also now, for example, that quite a few companies actually approaching us for due diligence on a bunch of different startups for investments, et cetera. So it's actually something we started working on. I was very associated. So if anybody's interested and to kind of be on the other side and help some investors, you know, who might not have all the technical expertise, but just Milo's and others, of course are really well versed, but of course there's many others who can use some help.

1:32:16So I think that's also a nice opportunity to actually help them, um, to, to make the right decisions. And we really can try to keep the resources on the startups and on the meaningful projects rather than just purely hyped up versions of them. And yeah, this again, big thanks to everyone involved.