The United States lags dangerously behind China in the development of an advanced battery industry.  This lag endangers the U.S. economy threatening the long-term loss of a domestic automobile industry.  It also endangers U.S. national security by ensuring that U.S. warfighters will be using less advanced and less powerful electronic gear than their potential adversaries.

The U.S. strategy for addressing this dangerous deficiency relies heavily on persuading U.S. allies that have technical knowledge and experience in advanced battery technology to help the U.S. build a secure and robust domestic lithium-ion battery supply chain.  Foremost among those allies has been the Republic of Korea.  Korean companies have a competence and experience in lithium battery manufacturing technology on par with the Chinese.  For the past several years, U.S. industrial policy has focused on persuading Korean companies not just to make investments in U.S. but to send trained experts in battery technology to the United States to help build the U.S. industry and train the U.S. workforce.

The arrests, deportations and humiliations in Ellabell, Georgia were nothing short of a disaster in U.S. industrial policy.  The deportation of 300 potential trainers was a shameful own goal. Those actions subverted longstanding U.S. efforts to build a domestic lithium-ion battery supply chain and jeopardize U.S. defense and economic security objectives.  Something went badly wrong on September 4.  It is important to figure out exactly what happened and to fix it.

Analysis of the Ellabell disaster is hampered by the lack of detailed information about exactly what happened.  It appears, perhaps, that most of the Korean workers were employed in tasks for which local U.S. workers were not trained.  It also appears, perhaps, that the work papers of most of those workers were technically defective.

If those assumptions are true, then the question is: whose fault was that the work papers were defective?  If the presence of Korean workers in Georgia was important to U.S. industrial policy, it was the responsibility of the U.S. government to make sure that those work papers were good.  Any defects should have been resolved through administrative with the full assistance of the federal government.  The fact that they were resolved through a police raid and deportation smacks of gross incompetence. Ellabell was black eye for America.

At the same time, local U.S. laborers need to be assured that Korean and other foreign laborers working on battery projects are bringing specialized expertise to battery projects in the United States and are not just displacing general domestic labor.  The purpose of admitting foreign laborers into the United States should be to train domestic laborers and to encourage the immigration of skilled workers.  The U.S. visa system should provide this assurance.  The Ellabell disaster clearly demonstrates that it does not.

The U.S. government and U.S. industry need to work together to overhaul the standards for qualifying and admitting to the United States the trained workers who are needed to establish strategic industries.  The Ellabell disaster seriously undermined this objective.  We need to do better.

But the loss of manufacturing itself is not the crisis.  The crisis is the loss of investment in manufacturing infrastructure.  Manufacturing lithium batteries, like any other product, cannot be established and sustained in the United States unless investors can see a path to profitable investment in the sector.

Over the past decade, Congress has taken steps to make that path more evident to investors in advanced battery manufacturing.  Investors have responded by investing billions of dollars in new manufacturing infrastructure and creating thousands of jobs.  Advanced lithium batteries are a core, strategic technology of the 21^st Century.  They are a ubiquitous technological tool that power and improve the performance of thousands of products large and small.

Reducing tax incentives for investors in advanced battery manufacturing would be a costly and counterproductive mistake.  Reducing incentives would not only stymie investment in the short term, but would by withdrawing retrospectively incentives on which investors have already relied compromise the long-term appeal of investing in manufacturing in the United States.

NAATBatt and its 380-member businesses applaud efforts to bring fiscal responsibility to the federal budget.  Everyone who runs a business knows the importance of fiscal responsibility.  But NAATBatt is gravely concerned that short-term budget math not compromise the long-term goal of rebuilding the U.S. manufacturing base.  If it does, the deficit will grow larger, not smaller, and become increasingly difficult to address.

NAATBatt urges Congress to make American manufacturing great again by retaining for investors the tax incentives necessary to build and sustain new advanced battery manufacturing capacity in the United States.

First is that advanced batteries and electric vehicles are not the product of government policy.  They are the product of fundamental changes in energy and automotive technologies that will continue regardless of political leadership.  Government policy cannot affect the existence of this change (though it can affect its pace).  Politics will not prevent the adoption of a superior technology by U.S. businesses and consumers.  As long as we in industry keep our eye on the ball, no change in government policy will cripple our industry.  And the ball is: better, cheaper, faster.

Second, there is a difference between politics and policy.  Modern EV’s, which are still a new and relatively expensive technology, make a great punching bag for a political coalition marketing itself to hard-pressed blue-collar workers.  My guess is that Henry Ford took political heat in the early 20^th Century from politicians representing the vast majority of U.S. voters, who could not yet afford his products.  But Henry Ford got his costs down and ended up doing just fine.

Third, a new approach to some of the challenges of the advanced battery industry in the United States might prove refreshing, and perhaps even beneficial.  Everyone who runs a business appreciates the prime importance of efficiency.  A new focus on efficiency could be beneficial to all good businesses in our industry.

Focusing on the fundamental needs of business in the battery industry could be even more beneficial.  As I have long observed, every business has two problems: a balance sheet problem and an income statement problem.  Over the last four years the federal government has provided necessary and invaluable assistance to many of our members in solving their balance sheet problem.  If the next Administration chooses to focus more on the income statement problem, our industry could benefit as well.

Finally, China.  I have written previously in this blog that we need a new approach to China.  What that approach needs to be and what issues that approach needs to cover go well beyond batteries.  While I will not weigh in on the wisdom of across the board tariffs on everything made in China (and everywhere else), it strikes me that a deal needs to be cut with the Chinese.   Because of the peculiarities of U.S. politics, it needed to be Nixon who went to China.  McGovern could never have done it.  So let’s see what happens in 2025.

I do not wish to discount the apprehension in our industry or to be overly Pollyannaish.  The advanced battery industry received unprecedented moral and financial support over the last four years, which it badly needed.  It may be that we will not have that level of support over the next two to four years.  But the future is far from bleak.  We have a strong technology wind at our back.  The best days of the advanced battery, EV and renewable energy industries lay before us, not behind.  Let’s just keep charging ahead.

NAATBatt’s core mission is to promote the development, commercialization and manufacture of advanced battery technology in North America.  No organization has been more concerned about the growing concentration of lithium battery supplies and manufacturing in China than has NAATBatt.  And no organization has been more active in seeking ways for North American companies to compete more effectively in the growing lithium battery industry.

But however the market has arrived at its current state, North American manufacturers must respond to the current situation realistically.  It is one thing to try to grow domestic capacity.  That we must continue to do, and we need to do it in a number of different ways.  But it is another thing to cut ourselves off entirely from Chinese companies and Chinese supplies.  That makes no sense and will ultimately undermine the goal of creating a robust domestic advanced battery supply chain.

One of the first things we need to do is re-engage with the Chinese scientific community.  There was a time when that community was small, insignificant and sometimes rightly suspected of trying to acquire North American intellectual property not always by honorable means.  But that time has passed.  Today, the Information Technology & Innovation Foundation reports that Chinese institutions account for 65.4 percent of the high-impact research publications in electric batteries, substantially outpacing U.S. institutions’ 11.9 percent.  Chinese entities’ global share of patents in the field of electric propulsion increased from 2.4 percent in 2010 to 26.9 percent in 2020, again substantially outpacing the share coming out of North America.

The greatest long-term threat to building a robust and sustainable advanced battery supply chain in North America is the loss of scientific and innovation leadership.  North American governments and scientists need to work hard to get that leadership back.  But cutting ourselves off from leading innovative companies such as CATL rather than trying to learn from them is not a path to leadership.  It is a path to long-term, second-rate status.

We need a new approach to China in the battery and electric vehicle industries.  While we need to be mindful of possible threats and smart about how we mitigate those threats, simply cutting ourselves off from Chinese supplies, Chinese science and Chinese business leaders is not a smart strategy.  We need to start thinking hard about how we do better.

Several factors will make the workshop unique.  First and foremost, the workshop will be the first conference that NAATBatt hosts in Canada.  The organizational mission of NAATBatt focuses on the North American advanced battery market.  So we are thrilled to have our Canadian friends more directly in NAATBatt programming.

The agenda for the workshop will address issues and challenges that are emerging and international in scope.  Coordinating regulatory recycling schemes between the U.S. and Canada will figure prominently in the program.  The impact of emerging carbon regulation in the EU and the possible regulation, or at least measuring, of carbon in North America on battery recycling and the sale of recycled materials will also receive attention.

The program will likely examine issues that have been percolating for several years in the battery recycling community, such as the viability of profitable LFP recycling and emerging technologies and new chemistries designed to lower the cost and environmental impact of lithium battery recycling.   The workshop will also cover efforts to make recycling, and the logistics involved in recycling, safer.

As usual, NAATBatt will work to maximize networking opportunities for NAATBatt members, and the exchange of pre-competitive market intelligence, at the workshop.  NAATBatt is considering how best to facilitate short member firm presentations as part of the workshop.  Following the debut of the Grip app at NAATBatt’s annual meeting last February in Carlsbad, NAATBatt also plans to use the Grip app again to help attendees communicate with each other and to set up meetings during the workshop.

Finally, NAATBatt will offer a special opportunity to members in connection with the workshop:  The opportunity to tour the Becancour industrial part outside Montreal on Friday, August 9, and to hear from Quebec economic development authorities about exactly how they went about designing an industrial park specifically targeted at lithium battery technology.  In the view of some, the Becancour project is the gold standard for battery manufacturing-centric industrial parks.  NAATBatt members that are looking for sites for their own development, or looking to established development locations in their own jurisdictions, are strongly encouraged to attend.

The final details of the NAATBatt Lithium Battery Recycling Workshop VII are still being finalized.  But the final details should be available on the NAATBatt website very soon.  Keep an eye on your e-mail and be prepared to act quickly, as certain events such as the dinner on August 7 in Old Montreal and the August 9 tour of Becancour will have limited availability and may sell out quickly.

This week NAATBatt announced the scheduling of 109 Member Update Presentation talks during the NAATBatt 2022 program.  Member Update Presentations are short talks given by every NAATBatt member firm that wishes to speak.  The talks describe what that member does and what it sells.  While that format sounds like it would produce a mind-numbing series of self-serving commercials, the result is exactly the opposite.  The Member Update Presentation talks provide the best market intelligence anywhere about who is doing exactly what in the North American advanced battery industry.  The short time allotted for each talk ensures that speakers get immediately to the point.  The talks consistently rate as the most valuable and popular part of every NAATBatt annual meeting.

The following member companies will be making Member Update Presentation at NAATBatt 2022.  The times of the individual company presentations can be seen on the online NAATBatt 2022 program agenda at: https://nac.naatbatt.org/agenda/

In addition to the Member Update Presentation talks, NAATBatt 2022 will also hear presentations by the Top 10 New Battery Companies of 2022 as selected by a committee of NAATBatt officers and by the six finalists in the Department of Energy’s Battery Recycling Prize competition.

There will be no better place to get market intelligence about what is really going on in the North American advanced battery industry than at NAATBatt 2022.  To register, go to: https://nac.naatbatt.org/register/

The program of the meeting continues to develop.  Monday will be the golf and tennis tournaments and tournament dinner.  Tuesday will see meetings of the Battery Recycling Committee, the Manufacturing in North America Committee, the Second Life Battery Committee and the Zinc Battery Committee.  The program in chief will start on Tuesday with annual reports about the state of the science and the state of the technology of advanced batteries by Chief Science Officer and Nobel laureate Stanley Whittingham and by Chief Technology Officer and former CTO of CATL, Bob Galyen.  The day will continue with reports by leading analysts about the outlook for business development in various sectors of the advanced battery market, including EV’s, ESS, cell, pack and electrode manufacturing, micro-mobility and beyond lithium-ion technologies.

Wednesday will see a discussion about just how constrained the supply of energy materials might be for North American lithium-based battery manufacturers.  That will be followed by presentations by the finalists in the U.S. Department of Energy’s Battery Recycling Prize Phase III competition.  The program on Wednesday will conclude with presentations by the winners of this year’s Top 10 New Battery Companies competition.  The winners for 2022, just recently announced, are: AM Batteries, Battery Resourcers, Lyten, LiCAP Technologies, South 8 Technologies, C4V iM3NY, Intecells, Solid Power, Pure Lithium, and OnTo Technology.  The NAATBatt annual dinner will be held on Wednesday evening and include presentation of the 2022 NAATBatt Lifetime Achievement Awards.

Thursday will include a panel of financiers and investment bankers talking about the alternatives for early stage battery companies to raise money, though venture investment, private family offices, SPAC’s and IPO’s.  That panel will be followed by another looking at new approaches to controlling lithium battery fire propagation risk.  The day will end with a tour of an ESS project run by Salt River Project located near the Wigwam Resort followed by a Farewell Reception.

Interspersed with regular program sessions on all days will be the Member Update Presentations.  Member Update Presentations are the hallmark of NAATBatt annual meetings.  Each NAATBatt member is encouraged to give a short talk during the meeting describing exactly what it does and highlighting its most important products and technologies.  These short talks have historically generated a large number of new business opportunities for the members that give them from new customers, suppliers and partners who, prior to the talk, did not really understand what the presenting member did.  NAATBatt is all about maximizing transparency in the North American advanced battery market and encouraging our members to do business with each other.  The annual Member Update Presentations are an important and surprisingly effective way of doing just that.

Finally, a word about the elephant in the room: Covid.  The last two weeks have been worrisome as infection rates have risen sharply around the country.  We take encouragement in recent news reports from South Africa noting a sharp if inexplicable fall in the rate of infections following several weeks of sharp, omicron-fueled increases.  There is some speculation that the United States is just a couple weeks behind South Africa.  Omicron may be burning itself out.  We will know for sure by the time of NAATBatt 2022.

But one thing we know for sure is that NAATBatt has been lucky with Covid in the past.  NAATBatt 2020 was held just a few weeks before the first wave of Covid shut down all trade shows and a good part of the economy.  I am hopeful that NAATBatt 2022 will dodge the same bullet a second time.  NAATBatt is committed to going forward with an in-person meeting in Arizona next February.  We will take all precautions necessary to maximize the safety of those who attend.  Please stay tuned to this newsletter for updates on exactly what those precautions will be.  But I hope and expect that by February the worst of Covid will be behind us and that we will all have the pleasure of meeting again in person at the Wigwam in Arizona.