Battery Revolution Clubhouse Recording - Battery Investments

0:00Transcript

0:00And welcome everyone, thanks so much for joining for our 62nd, 62, battery revolution or Battery Insiders session. It's part of the battery insiders podcast. We do these live conversations here with great experts in the field of batteries and everything connected to it. I'm joined here by fantastic Bavia, who is our co-moderator of the day and has been for a long time. As well. And we are very lucky to have also a fantastic speaker with us today, who has a lot of experience in the world of batteries as well as the world of investing and the crossover, of course, being battery investing as well. So very excited to have you here, Catherine, to hear from you, your perspectives on this topic and then hopefully have a very engaged discussion. Thank you, Simon, for the introduction. And hello, everyone. Right now I'm in California, San Francisco in the morning. Just wake up with my SOC 100%. It's taken me for a while to redownload the Clubhouse app to figure out how to get back to this room.

1:15But it's so exciting to meet everyone and talk about batteries, investments and more ongoing excitement, excited new trends in the battery field. Fantastic. Thank you. And maybe we can start and Bavia, if you want to say a quick few words about yourself, because I know you also have some experience on this topic as well. And then we go for to Catherine. Sure. Thank you, Simon, for hosting this and for inviting me to co-moderate today's conversation. It's a pleasure to meet all of you. My name is Bavia. I am actually currently in New York, where I'm about to wrap up my policy degree in energy policy here at Columbia. And I'll be working in renewable energy project finance afterwards. So very excited for today's topic. And Catherine, you have an amazing background. So I'm definitely excited to hear about that, especially given that I, too, was once in the Bay Area working at Tesla on batteries and then did battery research in Europe on a Fulbright, which is actually how I was able to connect with Simon.

2:19And so I've been deep in battery world, deep in policy world, now getting deep in finance world. And all of those really do come together right now, especially in the U.S. with the Inflation Reduction Act and whatnot, which I'm sure we'll jump into throughout the conversation. But it all comes together with clean energy and investments. And so I'm very excited for today's conversation. And with that, Catherine, I'd love to hear what you're working on right now about TDK and your background and the number of aspects of batteries that you touch. I did have a chance to look at your bio. And it sounds like you and I could probably have a very long conversation about being in the battery space. And so with that, please, we'd love to hear about your journey into battery world. Of course. Thank you, Babi. I'm also very interested to talk to you. I think we're very similar from technical engineer background and then moving to more on the finance side.

3:27So, yeah, I realized I forgot to introduce myself and my background. My name is Catherine. Right now I'm an investor at TDK Ventures. TDK Ventures is the venture arm of a big company called TDK. I think probably our generation might not recognize it, but probably when you go back to ask your mom and dad, you know, they will recognize, oh, TDK, the cassettes have very famous cassette product like 20 years ago. But business already face down, face out. But TDK is still a very big company. Already been there for 87 years, starting the business, magnetic ferret materials. Thus, that's why, you know, ferret tapes, magnetic tapes is one of the product. TDK continue to develop the business and product into other areas. Basically, all kinds of electronic components, including batteries. In 2005, TDK acquired a very big battery company called ATL, which is one of the largest battery manufacturers making consumer electronic batteries. So that's kind of the reason why I'm here in TDK Ventures.

4:47Because my background is on battery. Got my PhD in material science, working on lithium-ion battery, especially silicon anode and some electrode processing for seven years. And then I was a battery engineer in a startup in Boston, kind of ceramic. And then now I joined TDK Ventures one and a half years ago. I think almost one year and 10 months ago. Yeah, already one year and 10 months. And then I joined the company and helping the team to look at battery startups and beyond battery. Because we also made investment in the more broad climate tech, clean tech. Basically, right now, the whole energy transformation is a big topic. So we also made investment in green hydrogen, nuclear fusion. But in battery space, we made investment in battery recycling. The company is called Ascend Elements, which is one of the largest battery recycling startup in the U.S. Now they have a plant in recycling plants in Georgia with 30,000 tons of capacity. And then they're investing another $1 billion to build a PECAM precursor of cathode material plant in Kentucky.

6:12Because right now we all see the IRAs driving, building the local supply chain. Well, you know, U.S., we barely can find a cathode or PECAM producer. And then Ascend Elements is sitting at a place to really contribute the cathode material and PECAM that direct recycle from the black mass. And so this is one of our investment in the battery space. Another one is called AM Batteries, which is a dry coating technology. I think people in the battery space know dry coating very well, especially with a Tesla. I think, Bavia, you also heard about Tesla, Elon Musk's battery day announced dry coating technology. Yeah. So with the dry coating, it could potentially reduce 40% of the energy consumption in the gigafactory during battery manufacturing process. Because when you use dry coating instead of right now, we're using the solvent-based wet coating. You could basically eliminate the solvent, which is very nasty. I know Europe is going to ban NMP as well. And also, you know, eliminate the solvent, organic solvent, as well as the whole system.

7:39Right now we are using for solvent recovery, which is very expensive. So you can save not only carbon footprint and also save a lot of investment on your equipment. So you can save on capex. You can save energy consumption. And also there's other benefits from dry coating as well on the battery performance. So that is another investment that we make in the battery space. Yeah, probably one more. It's not really battery, but it still relates to the battery supply chain. The company is called Novelis. It's an Australian startup working on direct lithium extraction. So we actually just announced it two weeks ago. So they're having a very cool technology to directly sequester carbon dioxide, basically the industry waste gas, carbon dioxide, to directly convert lithium from the liquid spodium into battery grade high purity, 99.5% or higher purity of lithium carbonate. So this is also after several months of research that we find out, wow, lithium will be a big problem for the entire battery industry.

9:00Because you see gigafactories built here and there. We can build gigafactories in one year and one half year. But building the ramp up of the materials takes, you know, three to five years. But looking at mining to achieve the production level that we want, it takes 10 years or more. So we realized that, okay, we need to find a better, cleaner, quicker lithium extraction technology. Not only extraction, but also processing. Because we know right now most of the lithium are extracted from either South America or Australia. And then shipped back to China for the processing. Many of the traditional lithium concentrating, refining, converting process is still very dirty, very high carbon intensive. So we're looking for new technologies to totally give a kind of to, we are finding game changers for the lithium industry as well. So, yeah, yeah. So these are three battery related business that we have made in T-Dig Ventures. And then we are continuing looking for exciting opportunities. Hope to contribute more in the battery investment sector.

10:27Great. Great. That is amazing to hear, especially as someone who has been curious for a long time about where and how these battery investments are happening. And so, I mean, you told us a little bit about the where. And now I'd love to know about how. You know, you're at a venture. It's a VC. Like you're obviously supporting early stage innovation. How, what are some of the investment considerations that you think about when like assessing any of these three? I mean, obviously success and, you know, profitability are important from the investment and financial standpoint. But how is that? How have different policies like the IRA and whatnot also changed how you all approach investing and the considerations that you have when assessing a project? Sure. So in T-Dig Ventures, we have, we designed a process called deep exploration. So when we make an investment, it is more proactive that we do a deep, deep dive in one area, which means we'll spend three months, four months, or sometimes half year to looking at the problem in one sector.

11:46We will talk to basically all the startups in the space, talk to all the experts, talk to all the customers from, you know, cell manufacturers, from car OEMs, to really understand the problem. And at the same time, to compare startup solutions and then to find out the KPIs to solve these problems. And then we will choose, we call it the king of the hill. And then, you know, this is based on the investment thesis that we developed after the several months of deep exploration. And then we started to do the due diligence, look at the technology, look at the team, look at the market fit. You know, for us, we're doing early stage investment from series C to series A. So not too much on the financial side. Most of the companies do like not having revenue. But I think we kind of from a big picture, look at the problem and then build our investment thesis and then pick the startup that we see our most promising problem solver.

13:03And then we start out with due diligence and then we end up with a kind of due diligence report or some, we call it insights, investing memo. And then we will decide whether to invest or not. If we want to invest, if we have a strong conviction on the startup, we will also love to lead the investment round or share our insights with other of our, some of the really good co-investors to together, getting the rounds to help the startup to build the dream syndicate. Not only provide money, but also provide money to bring on the people from strategy, strategic or from finance to help them for their future development. Yeah, I think this is kind of our investment process. So you mentioned about IRA for sure. I do feel like the first year that I joined TD Ventures, which is exactly before the IRA. I feel there's not really too many people, you know, a better investment is hard for sure. But it is after the IRA, I realized that I received much more interest from the general VC sector.

14:28Many of the investors, especially many of the financial investors, financial VCs, who usually are not really touching these, you know, better investment or deep tech hardware. You know, you're really, these better investment are pretty time consuming, capital intensive. That's some financial VCs don't really want to touch on. But I feel like after the IRA, it's excited many investors, either in or not in the energy sector, that they become excited and curious to look at battery startups, battery technologies, battery supply chain, upstream and downstream. From mining, processing, manufacturing, of course, materials, and all cathode electrolytes, to like manufacturing, how you make the cell, how you make the module pack, and also in-line inspection technologies, as well applications in EV, in EV toll, in energy storage, as well as recycling, and also reuse like second-line batteries. So all the topics become hot. But I'm really happy for that because it shows that, you know, the IRA is really, I think not only the $369 billion from the government, but it will trigger both the public and private investments that up to, you know, trillion dollars to put into the clean energy, but the energy industry.

16:18 You can, and we already see how much more investment spillover there is that thanks to the government's commitment, at least here in the US. One more question I had about your investment considerations. It sounds like battery recycling for you all was one of the deep exploration topics that you chose to kind of dig deep on. Correct me if I'm wrong. There are multiple processes that I just happened to have researched myself. And I was wondering within that, are there, I mean, it sounds like you've already made some investments, but, and probably are up to speed on what these processes look like and how they differ for different battery chemistries. But are there some that you, or TDK has prioritized investing in over others because there are a lot of side effects and other environmental impacts of these processes. Mostly the pyrometallurgic and hydrometallurgic options. And so I was wondering if there's been more of an uptick in direct battery recycling, which is a process I think developed in Germany.

17:29Sure, sure. Thanks, Pavia. It is a very interesting topic. Look at hydro, pyro, and also right now more and more direct recycling technologies are emerging. So actually we made a better investment in TDK Ventures before I joined. I would really appreciate, you know, the decision making actually is from my manager, Anil. Right now he's the managing director at TDK Ventures. So he shared some of the stories that why the process, how he, how he did the evaluation, how he did the validation, and then why he choose a send elements. I think back, back to the day, they have the previous name is called battery sources to be our investment target. So why, because in the US, you know, they're top players like Redwood Materials, like Cycle, like Cycle already a puppet company. Redwood Materials is funded by Tesla previous CTO GV. So, ascent in comparison is from University lab. Professor Yang Wang from WPI invented the technology. So, the reason that we choose Ascent is that Ascent at that time is the only company that is doing hydro to cathode, which is meaning, you know, right now many battery cyclers, when they get waste batteries, use batteries or scrap.

18:59What they do is they, they, they collect the free stock and then the crush it. And then they, they, they recycle it back to black mass using, you know, either pyro hydro process. And then after that, they, they do a lot of processing and then they separate the materials into different metal salts or other intermediates. You can bring them back to LME or some business, they directly sell black mass. And then some of them, they can sell different state of metal salt that you separate and the process from the black mass. But Ascent elements is doing, I would say is kind of in situ, impurity removal, and then they doing, they're directly to convert what you have in the black mass into cathode materials. So the process, the process, the biggest differentiation is that we don't really separate them into different metal salts and then resynthesize. We just kick off all different impurities and then you can co-precipitate a lot of precursors to form cathode materials.

20:26So this is only hydro to cathode technology. Basically right now you will see more and more recyclers trying to do the same. But I would say whoever right now claim hydro to cathode, they're infringing Ascent elements IP that they filed 10 years ago. So this is the one of the key insights we have that we hope to directly convert black mass to high value end product, which is cathode materials instead of, you know, to break them into, to, you know, just recycle black mass, separate them to different metal salts or intermediate. So this is actually the same investment thesis that we made when we look at the lithium space. You know, there are people doing extraction, there are people doing refining, there's people doing final step converting. But when we look at it, we're looking for end to end solution, which is, that's also why we choose novelist. It's kind of from, from spodermine to final battery grade lithium carbonate. So we're having similar investment thesis here to find the interrupter, the innovator in this space that could bridge or simplify the process flow to directly provide high value product because, you know, there's a lot of lithium, but not too much battery grade lithium.

22:01And also for battery materials is the same, you know, you can buy lithium salt, you can buy cobalt, nickel salt everywhere. But to synthesize into battery materials into cathode material or PCAMs precursor of cathode material is need extra level of technology. And in the US we barely have that. So that's why we choose Ascend Elements to be our bet in the battery recycling space. And for another consideration is that we are also looking at many direct recycling technologies are very exciting, very interesting. However, the biggest concern we have is most of the direct recycling technology will be hard to scale. This is a big learning that we have from making the investment to Ascend Elements is that for recycling, you have to have the ability to scale. If not, you will not get a fee stock. And then if you don't have the fee stock, then your business cannot scale. So it's kind of, you know, the all the gigafactories right now have pretty high defect rates, pretty high scrap rates.

23:23And then it has to, to work with someone who have the capability to deal with tens of thousands black mass. For pyro or hydro, it is easier to do that. But for many of the direct recycling, they do not have the capability to scale their processing. So I think the applications for them might be limited in some of the smaller scale, like consumer electronics, like your small, like batteries from iPhone or so I also in that space, probably direct recycling can handle. But for the mass scale EV battery or gigafactory plants, I would say still probably there are more work that need to be done for direct recycling. And also in Argonne, there's a resale, the program to track all the direct recycling technology. And then in the past 10 years, we're not seeing any of them that's being really validated in scale. So we're still exciting to look at the space that right now we're having the new learnings, having looking at different evaluate different opportunities.

24:46We still feel like right now in US in Europe, where we are at the time window of building supply chain for the electrification. And then we need the technology that is, you know, not only fancy in the lab, lab results, but could really be practical and scale at the fastest speed. Great. Thank you for that insight. It was really helpful. And I was thinking about those processes, which I think we have some questions about in the chat. Maybe one thing is, thanks so much for sharing. I think there are a lot of questions and also, I think we want to go to you in a second. And I know, you know, we love getting out on recycling, so I want to make sure we can. But of course, we also want to talk about the process of battery investment more broadly, right? What it means. And so I have a few questions on that, but you're right. I will go to Beibuff before, and then I will dig into some more battery investing topics as well.

25:45Thank you. Hi, Simon. How are you? So it's my first time here. I'm not sure if we're running short on time or not, but I'll just quickly get to my question. So, Catherine, I wanted to understand a bit more about when you mentioned challenges with scaling up, you know, direct recycling. Is it a challenge because you don't know what, so the feedstock has a variable chemistry that you get in. It could be 532, 611 or whatever. And on the output side, you don't get enough clarity on what chemistry you want to produce. Is that the reason why it's not scalable or it's a bit of a challenge? Or is it that the process is not modular enough to, you know, run in batches or smaller scale? So just a couple of questions around that. Sure. I think at least from my understanding, direct, I think there are recycling, many of the direct recycling, they are using different technologies to fix some of the, you know, material surfaces.

26:45But in some cases, they are not really, really fixing the internal like materials, crystal and also many, you know, we, especially when you recycle the materials, there are a lot of internal phase change and surface, surface change. And then some of the direct recycling, they're just remove the, you know, like some polymers or other stuff, but it cannot fix the internal crystal structure. And also some of the direct recycling, they still need to add extra external like lithium salt. They have to, to buy lithium hydroxide or to, to buy other, other chemicals to, to, to add to their direct recycling process. And however, compared with that, Ascend could do right now, they're doing a very unique process to extract lithium from the black mass with very high recovery rate. So they're right now, not only providing the PCAM, but also providing lithium. They also signed a big contract with Cora on the lithium supply. And then another key learning probably on the market side is that market or customer need side is that many of the customers, they actually do not want cam.

28:17They do not want cattle material, but they want P cam because, you know, big companies, especially tier one OEMs, tier one cell manufacturers. They actually have their very unique cell design. They have very, very unique cathode design. They have their cell manufacturer to work with. So they would love to prefer to get precursor of castle material instead of cam so that they can work together with their cell manufacturer, cathode manufacturer to make the castle that they want. So this is actually, and then in comparison, many probably tier two, tier three companies, because they do not have the capability. They will want cattle material. So this is another conviction that we, we do not bet on direct recycling that directs go to cattle material. Because many of the tuning and also extra layer of material design is the, the big company. They still want to keep them, keep these at, at, you know, at themselves. They do not want a third party to handle that. So that's probably another reason that right now, Ascend, they could do precursor of castle material.

29:40And then that is per many customers asked and requests that they are building this PCAM plant in Kentucky. Did I answer your questions? I remember you asked quite a lot of questions. Yeah. So thanks a lot. That's a really interesting insight. So I do see some challenge and some opportunity on the side of integrating the whole value chain. So that's it. Thanks a lot for this insight. Really appreciate it. Thanks. Thank you. Thanks a lot. And of course, there's also more questions on the topic of recycling. And it's definitely one of these really exciting topics. And we know that we had some sessions on that as well. And I don't want to, you know, if we want to give some space also for Mark, I think had some, some great questions there as well. But maybe before we do so, I'm just curious about, I mean, I know also the, the exciting story of course was ATL and CATL. And I think maybe that's something that was interesting to explore at some point, you know, with CDK.

30:34But I guess the one question I had was how to get investment maybe into less attractive topics, right? Because we know there's an entire battery value chain to, you know, to, to, to ramp up, right? And of course there's some topics always more interesting than others. And so about business cases, et cetera. And yeah, maybe that's one thing, how to move, you know, the money into the important areas, maybe which are less, you know, attractive and how to, how to find the money for that. Maybe more long-term stories as well in ways. And then the second I'm curious because of course, you mentioned Inflation Reduction Act and topics like that. And I'm, I saw, for example, you know, there's a lot of support, for example, from South Korea, right? Where there were 5 billion US dollars will be made available, right? A support for South Korean companies to, to expand in the US, for example, right? So I'm wondering, yeah, if you're seeing this as well, you know, you know, how governments may be really, you know, try to boost the investment sector and these areas.

31:29So I'm just curious for that. Sure. Simon, for your first question, we all see, so CATL just announced their 500 watt hour per kilogram, condensed matter battery for electrification aviation. They also announced sodium mine battery, both CATL and BYD, they build a sodium mine battery prototype for both EV and for energy storage. So for sure, I think it's bring us a lot of thinking, how we should allocate our money to, you know, there are for sure big guys, big players like CATL. Once they make some move, the entire industry, the entire supply chain will be ready for them, like for them for sodium. I've seen that happen in China in six months to one year. It looks like the sodium mine battery supply chain is now ready to go. But that probably won't happen in the US. So, so that's kind of what drives our investment. We invest in this in the battery space that we are right now less and less bet on new materials, because we find out that no matter how good the new materials, a new battery design, either solid-state or, you know, lithium anode or silicon anode.

33:00So, so, so, so there are a lot of innovations in the material level in the solid-state batteries in the US. But in US, we are lacking the capability on the battery manufacturing. So no matter how good the cell could be designed, it will be very hard to, to be produced. And then, so the business might struggling. So we are seeing those already public company, already spec company having a hard time. So from the investment perspective, we're, we're more looking at the big trend. The next big trend, for example, on supply chain, US does not have the supply chain. We do not have, you know, material, large battery material makers, large material processors in the US. So that's why we invest in battery recycling, which is not only, you know, recycle the used battery, but it is a much faster way to provide battery materials. So right now, a certain element, it is upcycle. It is not only recycle, it is upcycle to provide all the precursors for battery manufacturing, which if not using upcycling, it will take another five years to build and ramp up the production that we need for the electrification.

34:28So battery recycling is a big trend that we bet on. And then another thing we bet on is right now with everyone come to us to build big gigafactory, we need to leapfrog what right now Asia is already doing. So that's why we invest in AM batteries, which is dry coating technology. We try to build a next generation gigafactory with a much higher efficient, much smaller footprint, much better, much better capital cost. And also a lot of savings on energy. So I think these are kind of we are looking at a big trend, what exactly US could do and take advantage. Because I think right now US to really for us to advance material manufacturing scale, if it's still hard to compete with China, South Korea. So that's why we bet on recycling and also dry coating to to to to more of thinking what's unique situation US stands and also the lithium extraction, which we invest in company in Australia. Australia is also one of the FTA free trading partners of US that US could take advantage of their technology to accelerate the lithium supply.

35:58So this is kind of a strategy lithium battery investment. I'm still looking at like new battery technologies, the next generation like lithium metal batteries, but I'm thinking more on the reverse side. Like, is there any way that companies in China or in South Korea, they can out licensing their manufacturing technology to US companies? I think this is already happening between CT and Ford. So because of the IRA, you know, there's a lot of constraints for Chinese companies to come here to build factories. The CATL's with Ford, they are aligning CATL only license to Ford without touching the management, without touching the equity. the it's not a joint venture, it's not a investment, it's only licensing the battery manufacturing to Ford and then Ford build and operate the the plans, the better plans here. So because I feel right now there's a lot of know how actually from Asia, from China, from South Korea that US should learn from. So, so, so in with the drive the policy.

37:25I think I'm actually not that worried about our where the materials come come from, because right now, look at North America, look at all the FDA partners, South Korea. And also, Japan is not adding to the list. And also, Japan is not adding to the list. I think it's happening, right? I think that is probably Japan also added to the list. And then Europe is doing the same thing. So I think sourcing the materials, sourcing the battery materials and even the battery cells is not really a big problem. But, you know, but manufacturing, I think in the US or in the Europe, I think Europe, North vote. We also probably need more battery manufacturing for Europe as well. I think probably could learn from what CATL is doing with Ford kind of out licensing from Asia back to US and also Europe. I think Europe has less concern because CATL already have two plans there. But in US, you know, with a very sensitive geopolitical relationship between US and China, I think right now companies are trying in more innovative ways to make the manufacturing happen.

38:48Great. Thanks a lot for sharing. Maybe one quick follow up on this one. And I think, yeah, that's interesting also, before we go, and go to. Just one quick follow up one. Like, how do you identify that? Because now you mentioned also, you know, topics like countries and like, you know, how to be specialized and how to be competitive. And how would you look at size, right? Like, you know, I mean, smaller investments, larger, I mean, because you mentioned also CATL, right? Can we bring on something really exciting on the market, right? Never a lot of resources to do so. So smaller companies may be very innovative, but it's quite a hard challenge to scale up. So I'm just wondering maybe what's the right place for startups, would you say, compared to like big companies? Like where is, you know, their specialty? Like where should they innovate each of them? I think right now, look at the big environment. Many startups are having a hard time.

39:41So it's not only the startups in the battery space, but overall, I think clean tech space is actually much better than other industries. But in the past one year, we're seeing a lot of startups having a, you know, a down round or they're no longer increasing the valuations as crazy as before. They have a flat round or down round. And then we are seeing more trends or like higher possibilities now and in the future years of acquisition M&A instead of go spec or go IPO for battery startups, especially with many other industries trying to get, trying to come to join the entire energy transformation. They want to, they, who did not have a better business before right now, they're trying to, to have this port to, to, to, to want to have, to build new, better business. It is actually a good opportunity for better startups to target at licensing or being acquired by big, big companies. So I think this is one way that better startups right now having good opportunities as a, not that bad way to exit.

41:11Another way I'm still from investments perspective, we still want to bet on the true winners, probably, you know, the next CATL in the U S because right now the market is in the U S is massive. If you look at the electrification percentage in China, it is about 30%, right? 30% EVs running on the road, but in U S this number is only single digit 6%. So a lot of, um, um, market drive here. Um, think about the 90, the, the rest of 94% of the car running on the road, they will all become electric. And also the energy storage and their storage. I think this is growing even faster than EV industry. Look at all the renewables, all the solar wind. So, so I see us has actually much larger markets, um, like in both EV and energy storage, uh, that's require, uh, local, uh, battery supply. So I do see there will be a chance for, for us to see, uh, a startup that could grow into a kind of, you know, Northvolt or CATL in the U S. Uh, yeah.

42:39And what is your second question? No, I think you, you answered perfectly. No, no, no, no things. I think that's, it's on me. I think. And God had a question. I've also, I see you want to speak. Yeah. Do you have a quick follow up? Yeah. Yeah. So Catherine, uh, how big of, uh, I mean, how big is the gap when you tell, when you say that, uh, you know, uh, the ecosystem in China or the readiness in terms of, uh, cell manufacturing, battery manufacturing, how big is the gap between China and the U S ecosystem? Or is it just a matter of some teething issues, you know, uh, till the time the process stabilizes, uh, in any, in any new plant in the U S. So is it a matter of teething issues or it's, uh, a clear gap of, uh, technology? So I would say the gap is large and also wide. Um, the reason is that, so we used to think, okay, us, we're really good at, you know, innovations.

43:37We are really good at, um, you know, from zero to one, and then China is good at from one to N. And, but right now look at the battery industry. When I seen better startups in the U S they are struggling to achieve, you know, their, when I saw their deck, oh, we are going to achieve 450 watt hour per kilogram in 2027. And then CTR already announced 500 watt hour per kilogram of, um, um, battery and which highly possible if they announce it, it might be already on their roadmap, how to mass produce it. Um, but my point is that right now in the battery industry, China has been doing that for the past 30 years, but U S startups, you know, we're having much less shorter accumulations. Um, than companies in China. Um, and so the IP actually, this is what I heard is that Chinese companies like CATL top companies, BID, they are having IPs in the battery space from materials, innovation, to cell design, to manufacturing, even the equipment.

44:50And so how to make these batteries, um, are much widely covered. And many of them are, uh, are like global patents. Basically the people, the engineers, the scientists, they're incentivized to file international, uh, patents. So, so actually it's, it's also surprised me as well, because I used to think, oh, us is, we are probably more advanced. We are good at, um, innovation in the battery space, but this is, this is no longer. Not, not exactly the true, um, the big battery companies, the tier ones in China, they have IP covered almost everywhere. Um, like you name it, lithium metals, sodium-ion battery, not, not only on the innovations, but also, uh, how to make it. So I think the gap I'm seeing not only on the manufacturing, but also on the innovation on the IP. Uh, I think many of the companies in Asia is, um, much ahead than us startups. Um, and also speaking of manufacturing, the level of automations is also, um, beyond my expectation, because right now, if you're visiting, uh, battery startups here in the U S making battery pack, you'll find it.

46:12Looks like more of a workshop, still a lot of manual, um, process, a lot of human intervening, but in China, if you look at those gigafactory assembling lines, it's fully automated in scale. So, so, so many assumptions that we really need to refresh our assumptions. We used to think, oh, us, we need to, we have, we can leave broad, we can build, um, auto automated production lines, but that is actually already done in a, in a much mass scale way in China. And there, I would also like mention that, um, not only battery cell material design, but also the pack design right now in China is much more advanced. So there, the pack design is the level of simplicity, uh, and also the way how the design is for inline manufacturing is much advanced and ahead than U S companies. So, so I think from design to manufacturing, I do see the gap in between the two countries in between the startups and big companies.

47:26Um, yeah, I would say, um, there's still a lot of opportunities in the U S you know, with IRA, with a big market, um, but startups might really want to find a unique way. Um, and I would really recommend, you know, to think about some of the collaborations or reverse licensing, um, to, to help startups here in the U S. You know, it's kind of exchange of market and IP. We used to do that like 10 years ago when companies go to China, when company won the big market in China, they kind of, you know, to extend their IP. But right now I think we we're doing that reversely. If China wants the big market of U S um, EV batteries on electrification. I think there will be opportunity that, um, you know, the market IP exchange can happen. And a U S startups can take a, take advantage of that. Great. Thanks a lot. I think in goto has another question. Wow. Thanks so much.

48:35Um, it's a real joy listening to you, Catherine. Um, to echo what you're, you're, you're talking about in terms of China being advanced. There is a fair and, um, and you know, I was amazed. I won't be attending, but one of my colleagues, you know, um, and that over 2000 companies dealing in the battery infrastructure. So yeah, you're absolutely spot on them. Um, my, my question, um, is really now from, uh, you know, when you put back on the investor hat, um, and you, you know, talking about, you know, like target, target horizons, you know, is it the typical VC structure, you know, where you're looking at five to seven years to exit or, you know, is it factors of being in a corporate setting that you have a longer term horizon to get your return back? And I can ask that in the context of, you know, if I'm investing in battery technology, it's, it's the benefit is really with the uptick. Um, the uptake here seems to me to be, uh, manufacturers who might want to see more traction, um, before they become a user.

49:51Uh, sure. I think from, uh, I think you mentioned kind of horizon or, um, time, time span. Um, I would say right now the industry is moving fast. There's so much money poured into, uh, the battery space, but it doesn't really accelerate the, the process of, you know, from, um, lab scale innovation to the level of, you know, high MRL, high manufacturing, Venice level. So that's why we're seeing a lot of companies, even though I, they go IPO, they're still have like zero yield rates. So, so, so, um, so, so I think for time wise from Tdk ventures, we are a corporate VC. You really compare with financial business. We are more, um, patient, um, because we, there's a value of strategic concern there. I'm also seeing this, that for many, you will see many of the like solid-state startup investments. The investors are OEMs, the investors are strategic because for them, the main goal is not to get financial return. It's not, you know, after five to seven years, I expect the company to give me, you know, um, how many times return it is more like strategic, strategic considerations.

51:18It's like a company like, um, Hyundai, they make different bets. They put their X in different baskets, right? For example, they made an investment in SES, factorial, uh, so, so they solid power. So they made investment into different like a liquid metals, sulfide, uh, and also, uh, polymer. They made that into different technologies. Uh, so, so the goal probably not exactly on a financial return, but more, um, to explore these opportunities together with startups. So I would say investors right now, um, in battery space, like strategic and also financial, some of the impact fund, um, they're also pretty patient. Um, they're also getting more and more familiar with the timeline and the readiness level of the technology and the manufacturing that, um, better startup, uh, should takes. Um, but I would say right now people are more patient and, and, um, and the timeline wise people are expected that right now we're getting more and more learning that, you know, it won't happen. You know, it won't happen in five years.

52:32We have to continue support, um, uh, these innovations. So that's also why we save half hour of fund for full on investment. Um, so we give our first check, um, probably in C series A, but we will continue, um, invest in there be later round B stage, C stage as long as we can, uh, support, because we know all these are like very deep tag hardware investments. It takes time. They have to be patient. Wow. Thank you. Thanks so much for that. Thank you. Thank you very much. And, um, with this, are there any questions still from the audience or above here? Anybody on the panel? Otherwise we're also wrapping coming towards the end as we plan. So we might be very on time, which could be very good as well. Um, I also know Mark had a question earlier. I'm not sure Mark, you want to still ask it, um, about some of the challenges, which was more recycling, maybe focused or otherwise. Oh, there we go.

53:36Perfect. Hi, Mark. Thanks for joining. Good morning. Yeah. I saw his question about. Good morning. Good afternoon. Yeah. So my question was in, um, in, um, traditional. One second. In, um, a lot of battery traditional, um, companies, a lot of processing, sodium sulfate production, say in the, in Asia, a lot of that's dumped in the ocean and a lot of those processes. And, um, in a lot of companies, you know, current companies, new companies, uh, being in the United States or Europe, some are still producing a lot of sodium sulfate or could potentially, uh, with that. There are also some that produce zero sodium sulfate. Um, and there's also companies that, for example, have issues with, uh, air emissions, pyro companies that. Um, it's acceptable, say in Asia, but not acceptable United States. And then the other issue is the scalability, meaning some companies have, you know, they're, they look really good in the lab. They have amazing results, but. They've never shown any scalability.

54:50Uh, some companies maybe don't have zig sign results, but they've shown they can scale. What, what are the important parameters in terms of the things that's mentioned scalability, uh, waste production for your investments? How important those parameters? Yes, Mark, you actually, um, made a really good point. Uh, many of the waste, um, is a big concern in the industry. Um, because we should not only look at what production you have. We have to look at the entire, um, the entire process. Uh, what is your input? What is, what is your output? Uh, what is your input? A lot of hazard material has a byproduct, uh, has been, uh, produced at the same time when you, when you're producing, um, like batteries, materials, uh, your battery cells. So, so that is actually one of the big concern. Um, if you look at our latest investment in novelists, uh, novelists is actually have a big advantage of zero solid waste. So, so in novelists compare with traditional, um, lithium extraction and processing, uh, methods, they will not have, they will not produce, um, sodium waste, uh, in compare with other, um, in other process.

56:12Like you need to add soda, you need to add all the other, um, chemicals. And then you end up with a lot of, uh, um, a lot of, um, waste, um, chemical waste that you have to deal with, which is very, uh, nasty. So I think this is a very important consideration, um, for mature, for the level of maturity or, um, like whether they can scale. So, uh, this is another, uh, consideration, uh, as you said, many of them have very good, uh, lab results. Uh, so I think that's another level of consideration and the risk that we are evaluating because many of the investment targets we are looking at, they only have lab scale. Um, but I, I believe right now, uh, a lot of investors are realizing the problem of looking at the LCA, looking at the whole life cycle, uh, looking at the whole, uh, production. Not only on the product, but also the environment impact that's the, the startup made. And then, um, I think this is a very good, very important KPIs that right now, uh, we are, uh, looking at.

57:22So that's a really good point that you made. Thank you, Catherine. I appreciate your presentation. I have no other questions. All right. Um, anyone else have any questions? Just opening it up to folks. Uh, not a question. Uh, just a comment or just, just an add on to, uh, what Mark, uh, ways. So I have closely worked, uh, you know, in lithium-ion battery recycling in India and, uh, the issue of, uh, dumping of, uh, solutions like sodium sulfate. So these are very strictly dealt with, uh, in India, as far as I know. Uh, so you've got very strict environmental norms, where then you have to submit, uh, you know, a periodic mass balance reports. And that, those, that level of detailing, uh, about how your, how your plant runs. So, so these things are catching up and investors are also looking at very detailed documents when it comes to ESG and, uh, the unit economics and the entire, uh, mass balance of these plants.

58:29So this is something that is, uh, being dealt with very strongly, at least in the Asian part of the world. Yeah. Thank you for sharing that. I think India is also very large market. Um, so, so for our company, uh, ATL is one of, uh, subsidies in under TDK. They have two plants, um, in, in India. And then right now the big electrification wave in India, we're also like, um, trying to move. We're looking at startup that is moving ahead to try to find a much cleaner way, um, to produce, uh, materials and batteries. Yeah. Yeah. And there's, it's a huge market. Thanks for that. Uh, comment, they love, um, I think with that, are we, any other questions? I think Heinz came up as well. Probably. Yeah. Yeah. Hi everyone. Yeah. Thank you very much for, for this, uh, very, very nice room. Um, I really appreciate the, uh, investment insights. So I myself invest for quite some time in the battery space, mainly on the stock market.

59:40I created a couple of companies myself. I IPO even one mostly in the space of, of battery tech, but more on not, not like so deep in the chemistry, but more like on battery system technology. That's like my, my primary focus of my like private, um, uh, angel investments, like the stock market part. I, I look to be like really broadly invested in the value chain, like from mines, mining the raw materials from people making the precursor materials over to, um, actually sell manufacturing and system integrators where. Um, I try, try to have like a good balance in, in, in the portfolio, but obviously if you have the ability to be invested in a lot of small startups with interesting technology, which are not on public stock markets. And it's a very interesting, um, uh, prospect you have, which is mostly not possible for private investors. Um, so it was quite interesting to, to listen, um, what you said. I, I, I, I myself, um, want to add if, if, um, I'm currently, I'm leading a team of battery test engineers for an aerospace company.

1:00:52So if you guys know anyone who is interested in a battery testing, uh, engineering job, um, please let me know, reach out to me. Um, this would be located here in Germany for a German EV toll company. So if you guys are interested, uh, or, you know, somebody would be interested in the job, please, please reach out to me. And thanks again for this wonderful room. I really enjoyed it. Thank you. Hence which company is that? I, I do hear a lot of good news from EV toll industry recently. Yeah. Um, it's, it's, it's, it's a Munich based company. Um, as I'm privately here and I'm, I'm also here with a pseudonym. I don't want to disclose my, I, I can disclose it to the people who will write me, but I would prefer not to disclose it here. Um, sure. No problem. I'm just sitting here. It is a public listed, it is a public listed company. I think most people can figure out which company it is, but I would prefer to stay private here.

1:01:51Um, because I, uh, it's, it's, uh, not business related. My activities on clubhouse so much is more private, but, um, I really enjoy, um, your professional rooms on the industry I'm working in. Um, so I wanted to chime in and, um, said if, if you guys know good battery test engineers, please, um, they should just ping me or, uh, and then I give them my like real world details, but I would not like to share this publicly on clubhouse. I hope you understand that. Sure. Sure. I think right now is a lot of exciting, like news on EV toll, both from the policy, regulatory, I think, complex getting progress of getting permits. And also on the battery side, you know, with the CATL battery, we're also seeing a lot of lights there, uh, for better, um, battery and power, um, support for EV tolls, UAMs. Yeah, I think probably right now it's a time for EV tolls. Yeah. I think the whole, whole EV toll industry is lining up to sell their grandma in the moment to get a, get a hands on the CATL 500 watt ourselves.

1:03:02Yeah. Quite convinced of that. Yeah. Yeah. Catherine, I had a quick question. If you would be comfortable disclosing any, uh, recycling startups that you have been exploring in India, uh, or if you could recommend a few, few names that you mentioned about, uh, direct recycling, uh, who are pretty ahead of the curve. Uh, recycling companies in India. Um, we actually, uh, I, I, I, I won't put my comments there, but we did, we did see some companies that from India, but right now they also have business in the U S. Um, and then I saw a company there also could do LFP recycling. Uh, which is pretty interesting because if you can do LFP recycling, um, with a good economic cost, um, that, that would be interesting. Yeah. I, I, I don't think I can disclose the name, but, um, yeah, I think there are very interesting startups in, uh, India. Uh, they also expanding to us markets. Thanks. Any other questions? Okay. I think we have.

1:04:12I had a number of questions. Uh, thank you so much, uh, to all of you for joining and most importantly, thank you Catherine for your time. Um, I didn't forget you're on the West coast. So I know it's very early and, um, we're so lucky to be able to hear from you, get some insights, um, and, you know, have a conversation. About investments and where the world of batteries, um, is headed in the, in related to, um, financials and investments and what that might look like going forward. So thanks so much for your perspective and your time. And thank you everybody else for joining and participating and ensuring as usual that we have a lively discussion here. Thank you, Bavia. And thank you, Simon. It's a really good, um, good time discussing chat. And we'll be discussing chatting with everyone around these, uh, exciting topics. Thank you, Catherine. Thank you, Bavia. Thank you everyone for joining. And yeah, just as a note, cause also the chat was mentioning, can we summarize it, et cetera.

1:05:14Um, the recording actually will be made available, um, on our battery insiders podcast, which you can listen anywhere. You listen to podcasts, such as Spotify, Amazon music, Google podcasts, and, um, all these other platforms. And, um, also one, just put your email in there and then you can, um, get a notification. Um, as probably some people got here also for today's room. Um, we actually have a very exciting room already planned for next month. Um, so look out for that. So it should be, it will be a bit of a different style. It will be a panel from a lot of interesting experts. Um, you will, yeah, you don't want to miss it. So, um, make sure you stay tuned. Also the next few weeks and months, I will be on the road a lot visiting conferences, such as the, um, now next week in London, feature of the car summit from the financial times. Then the one that you win battery show, then also in Birmingham, the battery expo, and there's a lot of other conferences and events.

1:06:08And I'm actually going to bring some of my podcast equipment with me as well. So maybe also expect some podcasts from the road. Um, they won't be live, but they will be possible. You can listen to them on Spotify and all of these platforms under battery insiders. With this just a massive thanks again to all of you and speak very soon. Congratulations, Simon. That's a, sounds very, sounds super professional. Thanks Catherine. Have a good day. Bye bye. Bye bye.