➤ The federal government needs to step in with tax incentives and infrastructure support to encourage battery manufacturing in the U.S. or risk losing business to China or other countries.
➤ Solid Power Inc. was recently awarded up to $12.5 million in funding from Intelligence Advanced Research Projects Activity, within the Office of the Director of National Intelligence, to advance research into cobalt- and nickel-free batteries, which it considers crucial to lowering electric vehicle battery costs.
➤ The Colorado-based battery developer says its solid-state battery technology would reduce the risk of electric vehicles catching fire and prevent expensive recalls.
Colorado-based battery developer Solid Power has advanced an all-solid-state battery technology to a pre-pilot production line in Colorado and plans to supply automakers like Ford Motor Co. and Bayerische Motoren Werke AG. Volkswagen AG and Toyota Motor Corp. are also racing to advance solid-state battery cell research and development. The startup is undertaking a merger with Decarbonization Plus Acquisition Corp. III, a special purpose acquisition company, at an implied pro forma enterprise valuation of $1.2 billion. Solid Power's solid-state battery aims to increase vehicle range and safety while lowering costs. In a solid-state battery, conventional liquid electrolytes are replaced with solid materials.
S&P Global Market Intelligence spoke with Solid Power CEO and co-founder Doug Campbell on Oct. 6 to learn how the company plans to compete in the battery market and what it would take to bring more battery manufacturing to the U.S. The following conversation has been lightly edited for clarity and length.
Doug Campbell, CEO and co-founder of Solid Power.
S&P Global Market Intelligence: You founded Solid Power in 2012, so you have been in this industry for a while. How do you plan to outcompete other battery technologies?
Doug Campbell: We have a tremendous moat around us in the form of this huge barrier to entry. So, if a couple of kids with a computer and a dog in a garage come up with a great idea for a new battery, I'm not going to lose sleep over that. Their idea could be the greatest thing ever, but it's going to take decades to come to fruition. And so we've got this tremendous head start.
However, we have to recognize that we're in a very competitive landscape. So, how do we chart a path that threads the needle and ends with us as a successful, profitable business? It is by not endeavoring to go head-to-head against those behemoths, like Panasonic Corp. and Contemporary Amperex Technology Co. Ltd. That would be a suicide mission in my opinion. Even though we look like a battery cell company today, that is not our future. Our future is a materials company that is much less capital equipment intensive. It commands a much higher profit margin than the cell product. Then, it is not as crowded of a landscape. Not to say that there are no competitors, but they're not that much further ahead of us, and there are not that many.
What are the advantages of moving to solid-state batteries?
It's really two overarching things. It's performance, specifically the vastly superior energy density, or essentially the amount of energy you can store per unit of weight and volume. And that, of course, would translate into greater vehicle range. Then the second benefit is cost. The way solid-state delivers on low cost is by allowing for greatly simplified battery pack designs due to a combination of vastly superior safety as well as high-temperature stability. Another benefit is that by going to much safer chemistry, you substantially reduce the chances of an expensive vehicle recall. This is very germane because we're seeing two [electric] vehicle product recalls underway right now with Hyundai Motor Co.'s Kona and General Motors Co.'s Bolt.
What is your timeline for commercializing an all-solid-state battery for electric vehicles?
For the solid-state batteries that our electrolyte goes into, we're in the manufacturing stage right now. We have a fully operational, highly flexible, what we call, pre-pilot production line in operation. We're also expanding on the cell production side to install what we're calling an EV line, which is being designed to produce a full-scale cell product with our auto partners. We're targeting somewhere between 80 to 100 amp-hours for the full-scale cell, and that's what the EV line would produce. That is under construction. Assuming we maintain the schedule, we're looking at the end of the first quarter of 2022 for full completion.
You are based in Colorado. Why?
The basic research was started here in Colorado, and we continue to be exclusively located in Colorado because there's simply no compelling reason to leave the state yet. We are expanding. We have a second facility, about 15 minutes to the east of us. It's almost four times the size of our current facility, so it's quite large. And it will be dedicated to a combination of cell testing and electrolyte production.
Do you have plans to take your battery manufacturing elsewhere? How can the U.S. build out its battery manufacturing capabilities?
We, as American consumers, need to go out and purchase electric vehicles. We need to have a robust market for electric vehicles.
Then the second thing that needs to happen, and literally, this is where the rubber hits the road for Solid Power, is that in the relatively near future, we're going to be approaching a key decision point related to whether we continue to scale production, not only here in Colorado, but here in the U.S., or we ultimately leave the U.S.
We can do one of two things. We can either let market forces dictate how that goes and, frankly speaking, I can tell you how that will go. We will eventually leave the U.S. because that's what happened with the lithium-ion battery industry. Even early lithium-ion battery production was sort of fleshed out here in the United States, but now, by and large, it's over in Asia. If you want to influence that, I think that's where the federal government needs to step in. The federal government needs to provide incentives not only for foreign companies but American-born and bred companies to stay here.
Have high metal prices or other supply chain bottlenecks affected you?
Yes, absolutely. I mean, fluctuations in lithium prices and nickel and cobalt prices impact us as well. The upstream input materials, nickel and cobalt, are only going to get so cheap. They're probably always going to be relatively expensive. Obviously, they also come with some geopolitical and ethical issues. We're firm believers that you have got to come up with an alternative to nickel and cobalt.
With respect to lithium, lithium prices are going to do what lithium prices are going to do. However, I reject this at times alarmist position of, "oh, lithium is a rare material." It's not. It's extremely abundant. We, as a society, just need to establish more ways to extract lithium from different sources. Right now, we're depleting the easy ways to get lithium, which is evaporating it out of these big salt ponds down in Argentina and Chile.
Solid Power recently received $12.5 million to advance research into cobalt- and nickel-free batteries. Why move away from metals like cobalt to nickel and invest instead of battery chemistries with iron and sulfur?
It's super simple. If you look at the cost of lithium-ion batteries today, the cost is dominated by the materials, and the materials are dominated by the cost of the nickel-and cobalt-containing cathode.
What does a transition to solid-state batteries look like for automakers and other companies along the supply chain? Will it require a lot of changes, or can you just drop solid-state batteries into existing lithium-ion battery processes?
I mean, in theory, you could think of it as a drop-in replacement. At the end of the day, it's a battery, and it looks just like any other battery. And of course, in operation, it is no different. So, in principle, it's a drop-in replacement. Hopefully, in practice, it is not. And what I mean by that is hopefully, the integrators — in our case, this would be the vehicle companies — develop tailored solutions, which take advantage of the unique properties that solid-state brings to bear. Those advantages are namely vastly superior safety and superior high-temperature stability.