Battery Revolution Clubhouse Recording - US battery supply chain and LFP batteries

0:00Transcript

0:00Well, welcome John. Welcome everyone to today's episode of the Battery Insiders podcast. We have with us John Kemp, president of American Battery Factory, and he will definitely be introducing himself a little bit more. In terms of our topic, we have a topic related to U.S. battery supply chain and LFP batteries. Personally, I'm excited to learn a lot more about the challenges, the opportunities, the policies that John and his team are introducing to the LFP battery manufacturing world. And with that, I will kick it back to Simon and Bavia to introduce themselves. And later on, John will be introducing himself and his topic a little bit more. Thanks so much, Maryam. And maybe I can go next and then I'll pass it to you, Bavia. Yeah. Yeah. For today, also everyone here who's new. So I see a few new faces. As we said, this is the Battery Insiders podcast. And there's two parts to that. One is the, or three parts in a way. One is these clubhouse sessions with leaders in the battery space. So we had a range of different topics we already discussed. Like last month, we spoke about AI and the impact of on-device AI and edge devices and fascinating topics around that and impact on the batteries.

1:15But we spoke about recycling and different technologies and policies and business cases. And yeah, there's a lot you can listen to essentially if you go on Spotify, a podcast or anywhere else, listen to your podcasts. And yeah, today is a bit of a fun crossover. It's our 66th session. And we have Bavia with us who's also usually coursing with me the reflections of the session. But because today is quite a fitting topic, also with some of the expertise she brings, we thought it would be great to have her on here too. So Bavia, do you want to quickly say if you want to talk about yourself? All right. Yeah. Thanks, Simon. And so good to see new and old faces here. Like Simon said, we've been doing this for 65 sessions and excited to do this with you for the 66th one. My name is Bavia. I currently work in energy finance here in New York. Previously, though, I worked in, or rather studied international relations and was pursuing a much more foreign career. Ended up actually working at Tesla, though, which is where my role was still very global, but I learned a lot about batteries as well. And so that was my first foray into this industry, into this technology, and decided to pursue more research on that, specifically on battery recycling over in Europe, which is how Simon and I ended up connecting. And so after a nine-month stint in Europe, I just did my master's over at Columbia and ended up staying in New York and now work in finance. I haven't touched different industries, but energy and batteries specifically have been a constant throughout it all. And so I do have that, some more experience, perhaps on the more global side.

3:02Simon knows I love to talk about standardization and policies and really excited to dig into that today with all of you. So thanks for that introduction, Simon, and I will pass it back to you. Thanks. And I don't want to spend much more time also quickly from Mariam, CEO and founder of Posenix. So check them out as well, and myself, founder and chair of Battery Associates. But I think for now, we want to go for our amazing guests for today. And we have John Kahn with us, and who I think has a really fascinating background as being now the president of the American Battery Factory, but also having quite a few other steps in his career before. And I think looking at supply chains and looking at, you know, securing these war materials and equipment, et cetera, it's going to be really fascinating to have John's perspective. So with this, we want to pass over to John to give a bit of an opening, and then we're going to go to questions. So with this, thanks for being here, John.

3:51Thanks, Simon, and the rest of you. I appreciate you all taking part in this. Just a very brief background on me, just because in case it has any relevance for questions as they come up, and then I'll move over and talk more specifically about AVF and purpose and why it was founded. So John Kahn, I spent 35 years in the Army, retired as a major general. I was a Corps of Engineer officer in my last job. I was a Commandant to the Army War College. So, Bob, I can appreciate your comments about international relations and the challenges of a very complex world at the strategic level. In the Army, I spent time in Europe District of the Army Corps of Engineers. I was there as a Lieutenant right when the Berlin Wall was coming down. So I've been around the Army space for a long time. But in those different career positions, I was also head of the Northwestern Division of the Army Corps of Engineers, which is responsible for the hydropower system in the Northwest, much of the hydropower system. In fact, the Army Corps of Engineers, weirdly enough, is the biggest hydropower producer in the United States, or at least it was.

4:53A couple years ago, which is very different than most armies, but it goes back to the early days of the country and where the Corps of Engineers was asked to do things. So that's my background. About a year ago, I was asked just under a year ago to join ABF, first as an advisor, and then I've now become the president. And excited to be part of it. I think they asked me to come be part of it. I would say for the organization and leadership side of things. I do have an academic background. I had an MBA at Kellogg and went to West Point. I have a master's in environmental engineering. So talking about recycling and environmental things is very comfortable, but I didn't do that for my last 15 or 20 years. So I like to say I'm academically trained, but I personally wouldn't be the person I would hire to do it. But at least I understand it and can help guide the organization to get to the right place.

5:40So that's a little bit about me. Now a little more about ABF. So American Battery Factory was founded almost three years ago this month. And it was really a takeoff from a company called Lion Energy. And Lion Energy really is a battery storage solution company based in Utah. And it's been around for more than a decade. But the senior leadership there recognized that almost all the battery storage in the United States packs, the battery packs we all see, most of that's assembled in the US, but almost all the raw materials come from overseas, mostly Asia, a little from Europe, a few other places. And so they recognized about three years ago that that's not that's not the most sustainable way to do it. It's not the best way to do it and really wanted to insource as much as that could be done. This was really kind of pre Inflation Reduction Act. They were already working on all this part. And so that's really kind of the founding. And then why? Why is it so important?

6:35Well, if you look at the annual energy usage in the US right now, only about 50% energy consumption is electric. And that's after how many years we've been pushing to expand solar, expand wind power, all these things. So even today, about six to seven times what we're using would have to be transitioned to electric. And that's before we go electrify all the things we want to electrify, right? All the cars that haven't been done, all the other machinery. So there's the clear demand for a lot more energy, electrical energy. But then the ability to produce it and store it and distribute it is a huge problem. You know, the United States obviously is a very big, very big place. I think I remember the distance from Paris to Moscow was something like 1800 miles. Well, over 2500 from New York to LA. So you have very big distances and our grid, like many places, doesn't have the capacity, even if we had enough power to move it to the right places at the right time.

7:35So the idea is how do we create safe storage energy solutions? And the original thought was this is more about homes and businesses and to be able to provide, have their own energy storage capability and a little bit less about EVs. Although EVs are inherently part of it, but there's already lots of EVs and all those things. So we can come to that in the discussion if you'd like. But the original thought was if we want to transition to 100% electric, far more clean energy, then the only way to do that is to be able to store power at every home in America, at all small businesses should have some energy storage. That way, it can optimize, you know, we all know when the wind doesn't blow, the solar isn't working, or there's a storm or some problem. How can you get the power in the right place at the right time? And if the grid can't do it at peak moments, well, one opportunity then is to be able to spread that power distribution over the course of 24 hours and optimize when it gets where, which means we all need four to six to eight to 10 hours of power storage in all of our homes.

8:38Because then if for an hour it made more sense for what you have not to get electricity from the grid, it wouldn't affect you at all. You wouldn't even notice. So that's kind of the original part. But if you want to do that, how do you create safe storage energy solutions for that sustainable future? And the reality is lithium-ion phosphate batteries at this time is the right solution to do that. Right? They're safer. They don't have the same fire hazards. And if you're going to fasten something onto your house, you don't want a chance of it to catch on fire. Right? And then the second part beyond the safety part is much longer lasting. LFP versus NMC and some other batteries will literally, instead of having a seven to eight year life, typically we expect in some EV cars, we're talking 15 to 20 years. So all that huge value added. So the leadership of Lion Energy a few years ago said, let's create ABF.

9:34And so that we got started. And then the biggest challenge is one of the, you know, obviously the main component of battery packs, one of the most important is the battery cells. That's the whole purpose. That's what allows the electricity to flow. And so trying to make a vertically integrated battery cell manufacturing in the U.S. effectively didn't exist. And so we have done the groundbreaking and we've just started the factory in Tucson, Arizona. It'll take about 18 months to complete. But in the end, the real focus is how do we get, this is just the first, this first one will be a two by two gigawatt hour a year line. So about four gigawatt hours a year in this first line. But shortly after at that same site, we'll build another three and be in the 17 to 18 gigawatt line, gigawatt hour line. And so, and then they'd be able to expand and start to do that regionally in the United States to bring the battery cells closer to where the battery packs are needed and are being produced.

10:32So that's really the background on the company. I'm happy to talk in a lot of details about what we're doing and how we're doing it, but I don't want to just talk and talk and talk. So I want I just stop there and maybe we can start doing some questions. Thanks so much, John, for this introduction. I think that's super helpful and also understanding that the history there. Maybe to start right on this topic and I think because I mean, LFP, right, there's different chemistry as you mentioned, and I think LFP is definitely one, which is quite a hot chemistry in some way, right, has been really pushed also in the US with Tesla. And I think Elon Musk has been quite bullish about it and other companies as well, and, you know, especially also on the stationary market. But of course, there's a technology which has been mostly like most of the technologies coming from China, right? And there's a lot of overcapacity that we see in China on LFP and topics like that. So maybe you could also, and of course, there's also owner of the supply chain. So maybe if you could speak a bit about two of that. So one is, you know, how can you be competitive to the Chinese LFP maybe? And then the second topic, maybe on the sourcing topic, how vertical do you think you have to go, right? Like, do you eventually have to start your own mines? Do you have to buy them? You have to be part of them?

11:41Any thoughts on that would be great. Yeah, absolutely. Yeah, it's an interesting thing. So I think the competitiveness is a challenge. We think we will be very competitive. A couple of things comes in, even though people talk about LFP chemistries, the second part is actually the design of the electrodes. So we're going to, we are doing Z folding stacking and electrodes, and we're going to, I think, take advantage of, and we all know that the United States is very far behind in this kind of manufacturing at scale. Europe's a little ahead of the United States. And then China and other parts of Asia are probably 10 years ahead because we've really stopped doing this 15, 20, 25 years ago, not in the battery cell, but just kind of this kind of large scale manufacturing. So bringing that home has value added in a domestic supply chain part and bringing jobs home part and those things. But one of the things we think is uniquely capable and available for us, and it's similar to Europe, is it is, it is hard to compete a little bit in the pure, if you try to do things exactly the same as someone's doing in a place where labor is cheaper. But we think we get to bring in the best of US and European technology, technology and do things in terms of the cell design, in terms of some of the, how it's produced, using, we're partnering with companies like Rockwell and Honeywell and Siemens and companies like that, that are really true experts in, and how do you do, I'll call it manufacturing flaw identification early. How do you use AI to help you make much higher quality so you don't have that much recycling materials, you don't have all the flaws, you get a much better performance. We think we get, we'll end up with higher C ratings, higher longevity because of that. I'll give you one example. Most EVs, so we're going to do the stacking prismatic cells. That's, that's always been harder to do.

13:38That's why, because trying to do the, almost think of like stacking pieces of paper to make a flat cell and is, it is not been as fast to process, but that's now been over time people have learned how to do that better. But why is that better? Well, you can think of it as being a more consistent surface. When most car battery EVs use a cylinder type. So think about a can, well, the inside of the can, the outside of the can have slightly different pressures. So you keep winding material thicker and thicker and thicker, like you're filling a can. In the end, if you use the pressure on that has different stresses. And so you, it actually impacts the longevity and the quality of moving electrodes, electrons flowing in the chemistry. And so we think that's the value of some of the thing we're going to do with our Z fold stacking, with the cell enclosure design we're doing. We think we have, we can compete. But to do that, you have to do things at scale with people that are ready to work hard and do it the right way. And then to open up your question about supply chain, that's probably, that's the most unique challenge. And I personally find it the most interesting because we all know there's a huge move in Europe and the United States to source raw material, the raw materials for this, right? Where are you going to get the electrode material, the lithium? Where are you going to get the foils? What about the coatings for the foils? And then all those other components that are important to making a bet just for the battery cell itself. That's before you build the storage unit. So there's a lot of people trying to bring those things back into Europe and the United States. And so our challenge is how do you start to build and take advantage of those, but most of those are in their early stages or can't do enough at scale yet. So we have a couple of unique, so we have, I would say every one of those pieces of material, we have two or three partners that we're working with inside the United States, like First Phosphate in Canada and others that are trying to do those raw material sourcing. And then we're working with them on quality and those kinds of things on, on what we can do. And then we're fortunate in one regard, which is we have a very small pilot line in China. We, that we own, that allows us to produce some cells. We're using the raw materials that we, you know, cooperate with somebody to start testing with.

16:06And so we're not waiting for our factory to be open. We get to take some of those raw materials, take them over there, produce a battery, share with them and then test back and forth. So we're kind of excited by that kind of pilot ability to really, I will call it kind of test and proof the raw material side, even before the factory is complete. When I stopped there and we can, you know, do further questions then if you'd like. Well, thanks so much. I think that's really fascinating because if a lot of discussion is about the costs, right? Like, you know, half the cost produced in China compared to the US. So I think these pilot lines and scale up technologies, this is a really interesting one. I would now like to pass over to Mariam for the next question, but thanks already, John. John, I'm super curious to learn a bit more about the factory in a box, a concept that your team is building out. Can you tell us a little bit more about that? And does that factory in a box also include, say, supply chain partnerships and technology partnerships as part of that, you know, box package?

17:08Yeah. The idea on the factory in a box was after we produced the first one, which we're, you know, just ongoing with now the ability to do, to build these faster. Once you have the basic design, I mean, these are big, these are, let me, let me say it a different way. The main line in Tucson to do this at scale is about, is more than 1500 feet long. This is a very long skinny factory. And we're going to be producing, you know, 310 amp hour cells as our main one there. But there are, sometimes people need specific sizes, specific uses, and there's technologies coming related to using dry materials in a different way, dry coatings that we think will shorten that. And you can also then build these things much faster. You don't have, it won't take three or four years to build one. So as we start to expand, if, if in Georgia, based on the partnerships with battery storage and EV and other uses, want a specific kind of chemistry or specific size, we'll be able to build a factory much faster. That's why we call it factory in a box, because all the, the hard part will have already been figured out. And so you can put it together much quicker. That's the generic one.

18:20Then I would say for specific purposes, if someone has a very unique size or need, we do have some, I'll call them like, like, for example, our pilot line is not a big, long 1500 foot long runway. It's a few of the main machines, you know, I'll call them the size of a room in a house, three or four of those that allow you to produce at a much, you can't do it at scale as fast, but you can produce very unique and specialized cells. So the answer can be, if somebody needs a specific kind of cell and doesn't need, you know, annual production of four gigawatt hours, but needs a lot less. Now you have the capability to potentially do that at the big factory, or it might make sense to do it in a, in a factory, in a box much closer to where they are. And you don't need all this stuff. You'll have some of it there. Does that make sense? Absolutely. Thank you so much, John.

19:14I am curious a little bit about something you mentioned a few minutes ago, you touched on differences in labor between the US and, you know, I think you mentioned China, other countries. I, what, what is like, what is looking for, I'm pretty sure like, the number one job last year was a solar rooftop technician. And I'm sure that a battery technician may have almost been somewhere up there given the boom of manufacturing and specifically battery manufacturing that we've seen in the US. Given that you, or rather ABF is based in Tucson, what has recruiting a workload, workforce looked like? And, you know, how has that been bolstered by the IRA, if at all? And for those who are not familiar with the IRA, that's the Inflation Reduction Act, a massive package passed by the US government to bolster manufacturing, a clean energy transition, and a number of other things. The list really goes on when it comes to the IRA. Well, it's a good question, but it's actually kind of a hard one to answer. So good, good for you for asking a hard question. Up to this point, the IRA hasn't affected us. It hasn't either helped or hurt us, although it's in, it's going to help us. The reason I say that is, you know, our factory isn't done. We've just done the groundbreaking in the fall.

20:36So we won't be producing cells until the, you know, the back half of 2025, because we've got a commission bill to do all those things. So we have a pilot line where we get to test raw materials, but the factory line in Tucson to produce at scale, you know, we don't, it isn't there yet. It's just getting started. So we actually are in the early stages of figuring out, we know what we kind of want to hire. We know we're going to need about 300 employees in that initial two by two gigawatt hour factory, and then eventually be well over a thousand as we build the other three lines there. So we know we need that skill set. We've got a nice sense of what we're looking for. And I would say one of the ways that we think we compete is we're trying to bring in some of that smart technology. And I think that in the US and Europe, you see it the most in really technical places like pharmaceuticals and a few other places where you see very high end technological skill sets of Siemens, Honeywell, other people on, on using really high end computer assisted stuff to help you in production. So that's what we're going to be using those systems to help us do. It's kind of how do you run an entire factory?

21:49It's not going to be, you know, no people at all, not at all, but, but where can you have the machines helping people do it better? So these are not a traditional old factory job where someone's, you know, you'll Laverne and Shirley TV show, right? This is going to be computer aided work, lots of high end, you know, cool stuff. And then to assist us. So we haven't done a bunch of hiring yet, because there was, you want to hire somebody 15 months before you're going to start using them. And they wouldn't want that anyways, but we do have set up and we're cooperating with Pima Community College and some others in the area. For example, Pima Community College is planning on building a, I'll call it a, a school lab center that can, in manual for manufacturing, where people, they can start to do training and development, people can get certified. So they're more ready to go do these kinds of jobs and that will benefit from that. So we're, that's kind of one example of how you're getting the workforce ready for, I would call it cool manufacturing. And one last, let me ask one last comment on the, on the Inflation Reduction Act. So we're planning for the value of that. I'll give you an example. There's a lot of, you know, there's tariffs on certain things for materials you bring in from certain countries. When you, based on how much of our production is done using US and North American materials, you then get tax credits that are very sizable. So we're planning through all that, but the near term challenges, some raw materials just aren't available at the scale you need in the United States. So we kind of have a tricky thing of going, okay, we're going to get that raw material initially, potentially for the first six or 12 months from this location. And only a little bit we'll get from a, you know, a place in the US or Canada or Europe that, because they don't have enough production yet.

23:35But then as they ramp up, we'll use more of that because that does give us the tax credit, other parts don't. So it's a pretty interesting dance because you never know which of those will fully succeed and which won't reach their potential. Well, see, that's interesting because I didn't realize that this focus on domestic or rather, and as local as possible was causing this like piecemeal approach to supply chain. But that makes sense because that is something that the, that is something that North America is working on is like, you know, kind of beefing up their raw materials supply chain. So as, as a result, oh yeah. You know, of course where you're coming, I think that's the, that's the natural thing. If someone says, I'm going to producing the foils, right. For this, you know, from using in-house US materials. Well, if they haven't been producing it at bulk yet, because we're talking huge quantities, you know, we need, you know, I'll use lithium as the, we need 7,000 tons of lithium just for the first factory line a year.

24:33So there are people that are starting to do lithium processing, but no one is talking about numbers that big. And so you're, you're kind of having to plan for as it comes online. And that's across the board. That's not unique to just battery cells. That's the, you know, many parts of this thing. So it is, it's kind of, I would call it fun, interesting, and a little scary. That is a fun combination indeed. I, so as a result, it would then, you know, qualify for the, for domestic, the domestic manufactured battery benefits, among many other things. Absolutely. Yeah. It gets pretty complicated. What percentages count countries that are free trade, which ones aren't every, every year, Congress, you know, the, the administration, I don't mean the, more in the DOE and the, in the staff level, things that qualify and don't qualify or, or countries that are in or out kind of changes a little bit. So even some materials you think you might be, will all of a sudden not be and vice versa. So it is pretty, pretty interesting.

25:34Great. Thanks so much for that explanation. I'll pass it back to Simon. Thanks, John. Yeah. I think just maybe just quick anecdote from something where was at a conference last year in Germany, and we were talking to a few other, you know, companies who want to set up gigafactories in North America. And one topic they also discussed is because you mentioned, right, that you have to first get your production up and running to get a benefit most, right, from the Facial Reduction Act, because of course it's tax benefits, right, for the production. But what's quite fascinating, also we have heard now, and as people, maybe it's, you'll probably be aware of this, but maybe for some of our listeners, they've also seen our companies actually trying to bundle up these tax benefits, like these tax credits, ahead of time, which means they actually get a, you know, they essentially sell this to the bank later on saying, you know, we're going to have this output and we're going to get this tax credit, and we're going to sell you this now ahead of time. And you give us, you know, already like upfront payment, three billion or so with a discount. So there's interesting ways we've seen, might be people getting quite creative about the tax credits. But of course, there's risks involved and challenges, you have to convince the banks and things to do things like this. But it's definitely things to hear on the European side of companies looking to expand in North America and making benefits, like getting benefits for the inflation reduction actually ahead of time before production.

26:51David Pérez, Ph.D.: No, it is interesting. And it's not really, it's really, I would say, a takeoff of the miles per gallon or kilometers per gallon standards where the government has incentives for what does or doesn't count. And if you're producing cars that don't meet it, and you net you have to, so you're buying credits. It's a billion dollar, more than a, far more than a billion dollar industry in the United States and parts of Europe. So this is really, I think, just a next level of that kind of, doing it in terms of energy credits. David Pérez, Ph.D.: Good. This passing over to Marion. Mariam Sweeney, Ph.D.: John, specific to ABF, in terms of the scope of responsibilities, in terms of manufacturing, do you manufacture LFP cells? Do you manufacture specific or exact specifications? Or are you flexible in terms of manufacturing different types of specifications for the cells? And lastly, do you also package the cells into modules and packs? Or would you consider ABF to be an LFP battery cell manufacturer? David Pérez, Ph.D.: We, ABF is purely a battery cell manufacturer. And we have, we're doing some, our main production in Tucson will be 310 amp hour cells.

28:09So that's just because that's, there's a burning demand for that kind of size in terms of battery storage solution for lots of people. We have some other sizes that we do and we're doing some at a smaller scale. But that main line will be most, will be focused on that. And that's really intentional. And we're not, even though we got started from Lion Energy, who kind of got the headwinds going, we're not part of them. And the idea was, Hey, anybody I'm sure we'll be selling, we'll be selling battery cells to Lion Energy, but other people that want battery cells, we're, we're aimed to just be out there providing that capability to people who need them. So that's part one, I would say. In terms of the cell chemistry, we have the, we have a couple of benefits that we have right now. One of our, our chief scientists is Dr. Jun Liu, who teaches up in Washington, University of Washington, and as a long time relationship with in Pacific Northwest National Labs and other labs, and really a noted expert in the field. And because one of the things that I haven't talked about is just adjacent to our main manufacturing, you know, scale is a foundry innovation line, it's a built to be the building next door, much smaller. And the idea is that's a place where we get to experiment with different chemistries and manufacturing techniques, and then bring them and try to figure out which ones truly work.

29:36We all read, you can't every week, there's a new article in some magazine talking about some new cell chemistry that's going to change the world. And if you go back and look, most of those never pay off. In other words, yes, in a battery, you know, in a test tube, in a, in a university lab, you did get better electron exchange, right, or some kind of a transition of energy storage. But can you scale that? Can you actually produce that, make prismatic cells or a different type of cell, and then have it charge, recharge, and you end up with, you know, a likelihood of 15 to 20,000 charge, recharge with very little, you know, mostly 90% still good. So that's, this place is going to allow us to do that. So we're very excited about that. And we've got a number of universities we're partnering with, and some corporations that are like, hey, that's one of the things we're missing, we would, we can't wait till you have that. So we can try to see what can truly change manufacturing at scale to make better battery cells. And is that more, John, is that more on the testing of different battery chemistries such that you can choose the best chemistry for your battery cells? Or is this going to be sort of a testing lab that allows different partners to also test their own cells? Yeah, we're gonna allow different partners to test different components, I would call it from cell chemistry to how would you actually produce a battery cell with that. So, you know, changing some of the chemistries, doing NMP free, is there a way in the equipment process and the manufacturing process to be more energy efficient, right, in terms of vision coatings, or how you stack it, or, you know, we all hear about dry coating and people are working on that, but no one's doing that at scale yet. So as that comes online, how can you, I call it proof of principle, before you then go try to build a really big factory to do it. So we're pretty excited, you know, changing electrolytes, all that stuff, this will be a place where you can do that from chemistry to the physical part of producing and then testing it afterwards.

31:38And just lastly, John, in terms of you had mentioned working with companies like Honeywell and Rockwell Automation and Siemens, it seems that there's a large focus on smart manufacturing and data driven production and defect detection. So could you speak a little bit more to the role of these technology partnerships on the competitiveness of your factory? Yeah, absolutely. I mean, I think that's what we think will give us a competitive edge. Uh, we will, we think we're already gonna be pretty competitive even without that in terms of the price point. Uh, if all the raw materials in the U.S. production and being able to have that ready supply all works out as we, as we hope and we plan. But the ability to bring in that smart manufacturing, we think is truly a game changer. A great example would be just, uh, the, the old way things typically done was you would produce battery cells and at the end you would test them and find out they weren't, they were, they were a little bit off. They weren't the quality needed. It was clear they weren't gonna last as long. So they got to go in the recycling bin and we can talk recycling if you'd like a little bit more. But if using smart manufacturing, now you can identify far earlier, right? That's number one. So you can, I'll call it stop the presses and fix it early. Number two, the, the, in the modern area now, people want to know, have the history of that cell. So it's, you know, it's almost like you're almost stamping the cell in terms of the, uh, in terms of you think of barcoding early on, you're kind of barcoding the chemistry of that cell. So you know exactly which chemistry it came from. And then when it goes into the stacking and the folding and you finally get produced and now you're going to charge it, uh, you can keep track of where it was all along. And if a flaw happens in early process, you know it.

33:30If your scanner identifies that you're slightly off target and you're, you were supposed to get less than one and a half, a millimeter and a half tolerance, and you're bigger than that, you can fix it early. But also value added is when it's done and you're, it's out being used by somebody in a battery cell world and you have a problem, you now have some kind of a way of going back and going, this one seemed to have a flaw or it's lasting longer. I wonder why this one's so good. We'll be able to go back and have that kind of history down to this, that particular battery cell level, which is pretty powerful. And that's really where that kind of high speed U S is less European, um, you know, computer aided and, uh, the, uh, and all that really comes to bear. I think it's like having an identity card for each of the batteries that are, that's being manufactured and, uh, having that compounding effect, uh, over time gathering more and more data means that you'd be able to make smarter and smarter choices. Um, that's very cool. Yeah. And the second part is the, uh, need to make, I would call it the security part of that is recognizing that this will be done in U S and North America. So the quality, the controls are all the reliability is very clear.

34:47And one thing I haven't really talked about is on the environmental side. I would much rather produce things inside the U S North American Europe, because we know that during production, the safety controls, the pollution control systems, uh, the wastewater, all those kind of things are all being carefully monitored, right? Our, our, our, uh, our government agencies make sure of that. And so that means we're going to be producing them in the right. We want to anyways, but you're going to produce them in the, in the safest, most effective way. And you can't always say that everywhere else in the world. Thank you so much, John. Uh, Bahavia. Yeah. I, you know, as an ABF, as a manufacturer, ABF is putting batteries on the market and you touched on recycling, what's ABF's end of life plan, um, reuse, recycling, are there partnerships in mind or would it be something that you all do in house? That's the interesting thing. You, you must be sitting in our planning meetings. The, um, I say that because it was, it's the thing about this. So we're going to be producing cells right at the end, you know, in late 2025, we think our cells, our battery, you know, our, you know, 310 amp hour, uh, battery will have a, uh, 15 to 20 year life. So that means barring, you know, some issue where during income in, in manufacturing, you need to, you know, something's not going around, you got to recycle it, but end of life recycling. Well, that means the first one we think will happen is about 2040.

36:17So we're actually trying to think ahead to what is the more, most effective way that you could recycle these thinking ahead 15 years from where, where I think people might be. So I'll give you an example. The current way most, um, EV types of batteries are recycled is they get dumped in a big, giant crushing machine. It pulverizes everything. And then you use chemistry, magnets, shaking, all these things to separate out some of those raw materials from the mass of ugly stuff. And eventually you try to isolate down and then you recycle just those components. One of the things we're interestingly working on is working with some of the battery storage solution companies, like line energy on how could we make our battery cell better? So it's easier, I would call it to disassemble almost really easily. So you could get it back to the basic material parts, have the lid, have the canister, have the battery cell part pulled apart. So you wouldn't have to spend all that energy and chemicals and everything else to pull it apart. So you'd be much more back to raw material, almost raw material size to make, to make it much easier, faster, cheaper.

37:30That's kind of the long range for end of life recycling. And then internally, um, you know, it's just smart business, right? The, the chem, the chemicals we use, the material we use, if it can be recycled, we will, uh, in production. Uh, the last thing I said is, but, but there's also a, I guess certainly we're not going to do it in house. We don't think at the moment, but we do have partnerships with people that are interested in potentially building recycling on the, our, the land we have in Tucson. Um, the reason, and the reason it's not just us is there's a, when we talk to recycling experts, uh, companies, they're going, there's a certain amount of material you have to have before it really be competitive to recycle it for, you know, someone to do it as a, as a business. So we're going to do it internally where we need to, but for the other parts, they're basically saying, Hey, it's a little bit like we are, they're going, there's three or four people all doing what you're doing. Or if you guys are producing enough, then we might just stick a recycling center at your site in Tucson, cause there's enough to be worth doing at scale. Uh, so we're working, we're cooperating with people and trying to figure all that out. Great. Thanks so much for sharing, John. And I think it's fascinating, right? On the recycling topic also with LFP, right? It's a, one of these topics where there's concern right too, because it's, um, less, let's say less financially attractive, right? From a recycling perspective, because you don't have cobalt, you don't have nickel. So things like that. So finding ways, and I know actually from a military context, I, I know there's been topics, right? Like, you know, with DARPA and, um, you know, like where I was looking at what to do with all of these containers, you know, of old batteries and, you know, would be the best way to do it and look at lithium recycling, something which you then can do with LFP, right? Which is still getting pushed also, you know, from regulation in Europe to kind of recycle lithium, et cetera. But I think there's interesting topics, but it's fully understandable that if you build LFP, these batteries are supposed to last very long. So, you know, it will definitely be a topic more down the road and you are in. Um, I now also want to invite everyone to ask any questions. So if anybody wants to put anything in the chat, I want to raise your hand, would love to also incorporate some of our listeners here. So just want to mention that as well. We really welcome to, to ask some of your questions there as well. Maybe just one question before John, because you mentioned different technologies and I'm fully with you, right? We read a lot about, I mean, if you go online, you know, you read newspapers, you will read about all kinds of fascinating discoveries, which are very difficult to commercialize at the end of the day. And many of them are not. Um, but I'm wondering, for example, sodium-ion batteries, if that's something we have looked at, because of course we see a lot of discussion about that, you know, that it could be, you know, relevant in the LFP sector. Let's say it's might not be as stable as it looks like. It might not be as energy dense from a volumetric perspective, but gravity metric seems to be, you know, not too far away. So I'm just curious if there's anything you can share on that, just any ideas there as well, which would of course get rid of lithium, right? Which could be maybe easier from supply chain topic possibly.

40:29No, absolutely. You know, I mean, we're clearly playing coast attention. Uh, I think the, as we talk to some of the scientists, the true experts in this field, uh, they all say most things that are in the lab, uh, even if they, many will not turn be manufacturable at scale, the ones that are like the one you mentioned, um, that might to truly be able to do it right. It still might be five to 10 years away if it ever had, you know, and so, and then what other complications come with it? So that's why we're, we're not waiting. We're going to go, we're doing LFP cause we know it works straight now. It's going to give what we need. Uh, and then the good and bad points of those different chemistries, uh, really doesn't, won't come out for a little while. Right. So everybody gets excited. Uh, we're excited. We're hoping it all works out great. Anything that provides new capability, but it may come out that those have better applications for certain things than others, but we're not beholden to only be LFP for life. Uh, we just know that's why we think that our foundry line will be really advantageous because even if you find them different chemistries, when you start to produce it, let's pretend you're going to do something, you know, in a prismatic or a folding kind of way or a pouch configuration, can you do it? And then what are the consequences of that different chemistry with a different physical configuration? So we're excited by all that.

41:49Great. Thanks. Over to you, Bavia. Thanks, Simon. Uh, John, I'm going to pivot a little bit. I think it's always interesting to hear about people's journey to battery world. Um, as I kind of mentioned at the beginning, mine started in, in international relations. You have a career prior to this in the army, um, and have served in a number of roles. How, what is, what of that career have you brought to this career and how has it enabled the transition and what's that learning curve been like? Um, learning curve, I would say, uh, not as bad as you would think. I mean, I always have to learn something about battery chemistries and all those kinds of things, but in the end, I'm not the one doing the mixing on the floor. And so have knowing enough to not be dangerous, right? Uh, the, the real challenge is how do you bring an organization together to do something, uh, effective and, uh, and innovative. Uh, and I think that's where my time in the, in the army, um, was useful. I got to live in Europe. I spent time in Iraq and Afghanistan, lots of places in the U S I spent my last two jobs.

42:56I was the head of the committee, uh, deputy commandant for the conventional staff college, which is mid career education of army, Navy, air force officers, and some civilians on how do you transition from, I'll call it the factory floor, you know, inside troop units to more running, uh, middle level operations. And then at the work college level, you're going, how do you get leaders to transition, uh, from the, from the controlling most seeing most of the people they work with and things every day to strategic level where there is no easy answer. Cause it was easy. It already got decided. So how do you make an organization ready to tackle hard challenges and be flexible and taking care of people and, uh, providing education opportunities for people. All those things are what I did for 35 years. So I think that that's, that's the added part for me. And you mentioned that, um, you previously worked in, on hydro in that job. What did batteries come up later on, or has that been a learning curve in terms of, you know, learning all about the chemistries and the more technical aspect? Yeah. I mean, uh, I, I mean, I was the, it's the 5,000, four to 5,000 person organization, the Northwestern division of the army Corps of engineers. So there's people that have been a lot of different things. So I think that's the, the, the, the, the, the, the, the, the, the, the value I got out of that was not the battery part. Uh, for me, it was the complexity of, of doing change. And I'll give you an example of trying to renovate generator hydropower on the Columbia river and improve fish passage. So you have, uh, tribal groups, all the states, local environmental groups, national groups, states, and the federal government. You not, you not only have a fish and wildlife, you gotta get, you have NOAA, because if the fish like a salmon goes to sea, then NOAA is the agency that manages that inside the U S not fish and wildlife.

44:54So that complexity of who cares about something, how do you deal with them? How do you engage? How do you try to get cooperation in a difficult space is not unlike the supply chain, uh, over the next three to five years, right? Lots of places all over the U S North America, different places, different permitting, different rules. And by the way, they're probably going to change again next week. So I'm kind of used to that change. I think pretty often about the crossover of our two areas of interest, right? Like international relations and batteries. And one question I've been thinking about recently is what, how the role of batteries in our national security and where, what direction that's really going in. Did you have any thoughts on that? Well, I think part of it ties to my initial comment up front, uh, the, the, the ability to, on the home front, to be able to power our homes and our businesses, take care of people, run hospitals is going to be driven by reliable power. And we'll never personally, I don't think we'll ever achieve the electrification at the rate everybody says we think they want to, right? It's just too complex.

46:07Uh, but we're going to continue to get more and more and more. So how do we have a grid that can help us do that? So that, that part is the, I need a battery part, uh, upfront in terms of national security, I'll use the defense side. Um, the ability to, you to provide U S materials, North American, European, reliable countries, materials that we know the quality of that. We know there's no, you know, that can be hacked or easily modified is powerful. And, and you can think about, I know this from, you know, looking at future of warfare, uh, we're going to be operating where the enemy can destroy satellites, can jam GPS, can spoof GPS. Uh, so how do you find your way around? Well, the ability to do with, with battery cell battery storage is inherently part of that. I'll give you an example. It's easy to, it's getting easier and easier to keep track. You can't hide, right? And so the, it's not used to be just noise, uh, and sight was how people found if bad guys were, you know, driving a tank or operating in your area. Well, nowadays with thermals and satellites and all these other things, it's increasingly hard to hide. So how do you, um, reduce your signature? Well, things like electric drive vehicles, things like that, all, all tied to the battery space. Uh, and how do you do compute forward?

47:28If you want to do high end AI compute forward in the battlefield space, you have to have reliable energy systems and the high speed systems that Honeywell, Siemens and other companies do to enable that because it's going to be in the middle of nowhere and it's got to be reliable and you're not gonna be able to talk to satellites all day. So I think that's where the long-term battery value is. You need high end power, high end compute without a lot of, you know, heat and other things forward. Does that make sense? Actually, it does because our previous session actually was on battery and AI. And initially going into that session, I was like, oh, we're going to talk about how AI is going to, you know, help us on, help us be sharper about collecting battery data, et cetera. No, no, we need batteries that can support the AI that's coming down the pipeline in terms of power and the number of things that you just mentioned. And so again, that's very interesting and very curious to see how these batteries change to meet those performance needs. Um, so I guess something for all of us to keep an eye out for, um, as the space changes almost every week, like you mentioned. Absolutely. And it's complex, right?

48:44It's, uh, it's battery cells. It's also cooling, right? How do you cool all these things in a forward space? I'm thinking in terms of, you know, corporate in, in remote areas, you need it. And, but also for the military, you need light cooling in a forward space that it really doesn't exist right now. You're, we have many computers, uh, that don't operate at the capacity they could because we can't keep them cool enough. Great. Thank you. And maybe one thing I would love to touch on is from manufacturing perspective, right? So we now talk a lot about, you know, I mean, starting these gigafactories, I've seen this now in the U.S. getting pushed, you know, by the Inflation Reduction Act, we've seen this in Europe. Again, in between, there's been a lot happening in China and Asia and other, other regions. And of course, it also goes in circles in some way, you know, some regions have been stronger than outsourced it, bringing it back. I'm just kind of curious, maybe your perspective, like, you know, how do you ask could become like a manufacturing lead again, right? Or leader there in the, in this setting, right? And also from a training perspective, like, how do you get to people again, excited about it to go into this manufacturing jobs? I mean, I think Tesla has done a big push there and I have to add a different approach, but I'm just curious if you have any thoughts on that, how to medium-make manufacturing attractive again, also from a talent perspective.

49:59Absolutely. Well, I think there's a couple of ties to that. One is, is the work interesting or are you just filling a bag with, you know, with chemicals every day, right? So part of it is, you know, you obviously have to have attractive pay, attractive place to work, but you also have to have a job that people have to use their brain. It changes a little bit. It's interesting. And so people might think, you know, I just imagine the old paper mills in, you know, from 1950s and 60s don't, to me, sound very interesting. It's moving down the line and it's doing things, but they became more and more complex. Well, this is going to be a complex place. So I think people will enjoy and like the fact that it is both hands-on, but also you have to use your brain. So that makes it, I think, I think attractive in lots of ways. And then because we have the Foundry Innovation Line next door, you're not going to do the same thing for five years in a row, right? We're going to be changing chemistry, changing machining, trying different things, trying to optimize. So I think that part of it is, I think it's in the military. You have to enjoy the work you're doing. That has to be attractive. Number two, you got to enjoy and like the people you're working with, right? So how do you have a culture of cooperation? You hang out, you're working hard, but you're also, you know, no one's a jerk, right? So you have to, that's the second part, I think that's really important. And I think, I don't think that's that hard to do. I think people are looking for things like that in the United States, in Europe, right?

51:19And John, what is the current state of the Foundry Innovation Line? And also, what's the vision for ABF in the future? What's the sort of impact that you have in mind for the vision of what ABF will achieve? Well, I mean, in the end, I think that the power is we're going to really be a vertically integrated battery cell manufacturer, right? Doing things in an environmental effective way, and based on advanced technologies and manufacturing. So we're going to be doing that. And we're initially doing it in Tucson, but then we think we'll quickly establish in other parts of the US. So you have battery cell manufacturing close to where people that are trying to do some of this innovation with battery packs, industrial equipment. There's lots of people that reach out to us, they wish we already had our battery cells coming, right? At scale. Because you can look at anything from golf carts to mid-sized manufacturing in construction arenas or industrial sites. Everybody would like to transition to this. Whether it's hybrid electric drives or full EV for manufacturing, people want it.

52:31So how do we get there to help make that happen? That's really the value. That's our value proposition, I think. Fantastic. Yeah. And I think also we're looking at, you know, probably closing it soon. So in case there's any other question, feel free to put them in the chat or let us know. I just want to be also appreciative of everyone's time, especially John's time. And yeah, maybe I think something, you know, you mentioned, you know, from your transition hasn't been too difficult, you know, and to move over. And maybe anything, you know, other things that we, you know, you can encourage other people to join because we have a lot of these discussions, right? And we get a lot of people listening in, you know, who are maybe outside of the battery field and who are curious, you know, to explore and maybe get involved more. And we're always excited to have people like yourself who come from other sectors, right? And other regions and, you know, join, join this topic. So maybe is there anything, you know, you think you would like to pass on? What do you find fascinating or, you know, what maybe could be attractive to others as well? No, absolutely. And it's interesting you mentioned that because we do, I've had so many people in my last, you know, six to nine months with the company reach out to me that, that will talk about their in manufacturing in the past and got away from it, and they want to get back into it. I'm like mid-career people or young people that are in their twenties that are saying, Hey, I, this is really cool. I like the idea of helping in the environmental battery cell space, because it's got a purpose that's good for the nation in my community.

53:58But I also think it's a cool opportunity to go learn this stuff. So I think that's the power of doing something new and different and being able to bring in computer technology and physical processes. And I think people find that attractive. And then, you know, I would say, you know, in terms of people getting out of college, people that are trade school people, military, you know, young military, NCOs and officers that are getting out, you know, this is a great space to be in, because there are lots of opportunities, not just with us, but across the, I'll call it the higher end manufacturing space that most people, you know, if you didn't come from that area or don't live near one, you don't really have, you don't really know what it's like. You think it's like some old movie you saw when it really isn't. Right. And so I think that's the opportunity that that, and that's really the value of trying to bring manufacturing back to the US and Europe and those kind of things is people thought they weren't the good jobs. The reality is they are good jobs, particularly when you bring technology into them. And then we need good people, right? We don't want people just standing still. Fantastic. I think with these closing words, very encouraging. I want to thank you a lot, John, for joining us today here on the Battery Insiders podcast, sharing your insights. And I think, you know, very exciting to see, you know, your continued journey and with the American battery factory, we're very definitely going to have a look at it and see, see how it develops. So we really, really appreciate for you to spend your time with us and also two wonderful co-hosts, Mara and Bavia, to share their questions and insights as well. So with this, we'd love to wrap up today, our 66th session. But yeah, if you're interested, feel free to go on batteryinsiders.com. You can subscribe to get notified about future recordings and future sessions, or go on battery insiders on Spotify, Apple podcasts, or wherever you listen to your podcasts. And you can listen to other episodes there as well, as well as this recording in a few weeks. And they're going to be another session in about a month's time. So looking forward to that as well. Thanks, John.

55:59Thank you so much, John. This was so enjoyable. Thanks, John. Thanks, everybody. Yep. Have a good weekend. Have a great weekend, everyone. You too. Bye bye. Bye bye.