China EVs & More MAX Episode #6 (ME) - Steve Levine, The Electric newsletter - Part #1

In Part #1 of this MAX episode, Tu & Lei welcome Steve Levine, global citizen, adjunct professor at Georgetown University, and editor at The Electric - a premium newsletter that specializes in the EV & battery spaces. 

Steve talks about the journalism journey that brought him to cover EVs & batteries, the challenges he sees ahead including consolidation in the automotive space, and how he thinks things may shake out in 2030 and beyond. 

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Transcript

CEM MAX #6 Steve LeVine Editor, The Electric (Part I)
 Recorded on April 27, 2022

Tu Le:
Hi everyone, Tu Le here, one-half of the China EVs & More duo. Lei and I are always thinking about different ways to bring you, our audience, relevant and compelling content about the China EV, AV and mobility sectors. Especially now that several companies that we’ve tracked over the last 60 or so episodes have become global phenomenon. 

China EVs & More MAX is where we bring you special content, in the form of conversations we have with special guests from those sectors. 

In this episode, we talk to Steve LeVine, Editor at The Electric, a new, exclusive premium publication at The Information, where he writes about batteries and EVs. Steve is one of the most prominent experts on the battery space. Based in Washington DC, Steve is also an Adjunct Professor in the Security Studies Program at Georgetown University and a Senior Fellow, Foresight, Strategy and Risks Initiative at the Atlantic Council. He is the author of three books: The Powerhouse: America, China, and the Great Battery War, Putin’s Labyrinth, and The Oil and the Glory, two of them, The Powerhouse and The Oil and the Glory revolve around geopolitics and energy. 

Here’s Part I of our conversation with Steve. That’s right, we had to break it down to two parts because we had such a compelling and interesting conversation with him. This is where he tells us about his early globe-trotting journalist days, how he got into EV batteries, and how he met Wan Gang, the godfather of China’s EV industry, which led him to writing The Powerhouse, a book about batteries; EV affordability, battery supremacy and the debate over LFP vs. NMC battery cell chemistries.  

Tu Le:
Hi, Steve, can you please introduce yourself to our audience? Tells a little bit about your background, how you got to where you are today, especially I’m interested in understanding how you came about writing this newsletter of yours, The Electric.

Steve LeVine:
Thanks, Tu. So I’ve been a journalist my whole life. I started out straight out of college, two days out of college, working for the AP in West Virginia, very rural and small state. And I was there for five years, not knowing a damn thing, and then slowly figuring things out. And I got a bug that I really wanted to go abroad. And so at that time, the biggest story in the world was in the Philippines. And Ferdinand Marcos looked like he was in trouble. Corazon Aquino, Aquino’s husband, had been assassinated, returning to the Philippines on the tarmac, the airport tarmac, big story. So I quit, I sold my car for $3,700 and took that money, and I flew to the Philippines. And I was very, very lucky. It was December, it was pretty lonely, I didn't know a soul. But within 6 weeks, there was a coup. And Marcos was overthrown, and I ended up being inexactly the right place. I got rehired by the AP in the Philippines to be a local reporter. And so…

Tu Le:
That’s a crazy story right there, right in and of itself, right there.

Steve LeVine:
It was a good place to be. And I stayed there for 3 years. And so there were seven coup attempts against Aquino while I was there. So that was a primary story, was covering the military again and again, rising up against Aquino. There was a particular Colonel Gringo Honasan, who kept leading these uprisings, and he was captured. I was with him when he was captured. That was my biggest story that I did in the Philippines. I happened to be interviewing him at a condominium in downtown Manila, and the military came in while I was there. I witnessed it, it was, yeah, that happened.

And anyway, but that story was kind of dying down and Pakistan was starting to rise up. And Afghanistan was, a plane, you may recall, went down with president Zia and his top 10 generals and the American Ambassador. They were all killed. And so Benazir Bhutto, 36 years old, went back to Pakistan to run for Prime Minister. And at the exactly the same time, I know you guys are good history, the Soviets were withdrawing from Afghanistan. It was the first time that the Soviets withdrew under fire ever in their history. And so I got a deal from a couple of newspapers to go look at the election in Pakistan. I got a visa. I happened to get a visa to Afghanistan. That time it was a hard thing to do. I spent Christmas and New Year’s in Kabul and met Naji Bullah by the way, while I was there, and I went back to the Philippines and just told the folks I was working for, that I wanted to move to Pakistan and lucked into Newsweek, wanted someone to hang out in Peshawar on the Afghan border in Pakistan, and cover the Soviet withdrawal from Mujahideen side. That sounded good. I got that job. And I just moved, picked up all of my stuff and moved to Peshawar, and ended up staying in Pakistan for the next 3 years. So that was the Soviet withdrawal, that was the Mujahideen screwing everything up and not, it was forecasted that they were going to be able to overthrow Naji Bullah instantly, the American Ambassador at the time famously called the Kabul government “a building without girders,” but it wasn't it. It would stood. And then other things happened while I was there. Gandhi was assassinated in India, flew out to Madras and did that story. The Tamil Tigers, a very big force in Sri Lanka, I went out to Sri Lanka and hung out with the Tamil Tigers. And so that was a good or pretty fun 3 years, Benazir Bhutto became Prime Minister and was overthrown twice while I was there. And then the next thing that happened was Soviet Union fell apart, Soviet Union fell apart, and I decided I wanted to be part of that. So I got a deal from Newsweek to move to central Asia. I moved to Uzbekistan.

And so I got a deal that so they said, okay, you can cover central Asia, but you've got to do the caucuses, too. What? Well, if you force me. Suddenly I had eight countries, these eight new countries, right? And so all the Stans and Georgia and Armenia. And so I stayed there. You guys, It didn't seem like, I stayed there 11 years. I was covering those countries, and I continued to do,  return to Afghanistan when it percolated up. And that was the result of that time in the former Soviet Union resulted in my first book, that was Oil and the Glory, it was the story of the conflict between the U.S. and Russia to control the oil on the Caspian Sea, and the rise of these new nations attempting, Kazakhstan, Azerbaijan, Turkmenistan, which were never countries. In fact, they weren't divided into countries, they were one big space, Turkistan. In the 1920s, the Soviets divided them up into country, so they didn't really have a notion of statehood. And the whole story about them, discovering Statehood, becoming countries, gaining true sovereignty from the Russians. This was a pretty good story.

Tu Le:
Can you tell us a little bit about how you ended up back in the U.S., becoming a professor and all this other stuff?

Tu Le:
I told you that it would get long…

Lei Xing:
This is fascinating, by the way, it's, you're a global citizen, you've been through all the turbulent times. 

Tu Le:
You must be bored now, because you like lived in all the, like the most dangerous countries in the world.

Steve LeVine:
You don't think batteries are dangerous?

Tu Le:
No, I mean, like, 

Lei Xing:
And that.

Steve LeVine:
I’m joking. But what was the core thing about that place and about that book Oil and the Glory? It was energy, oil, and geopolitics, right? It's a geopolitical struggle, Russia, and the U.S., and I went back.

Tu Le:
Didn’t Russia just cut off the gas to Poland, today.

Steve LeVine:
It’s the same thing, pipeline politics. That's what that it was all about. That's how power derived from who, that's how the U.S. fought that conflict, was building a pipeline, an oil and gas pipeline from that area to the West. And the idea was to give them economic sovereignty from Russia. It didn't work out that way, because Russia did to Georgia the same thing, that it's doing now to Ukraine. It showed. So you think you guys have got sovereignty? This is your sovereignty, right? Anyway, what happened, I went back to the U.S., I spent a couple years at Stanford writing that book. And then the bottom fell out of journalism. While I was there, that's when the whole problem began that we know about. Now the internet came in and sort of robbed newspapers and magazines of their power.

And so I was working for the Wall Street Journal at the time, I was supposed to be shifting from central Asia to Eastern Europe. My job was supposed to be based in Warsaw covering the tent new entrance into the EU and the Editor in Chief Paul Steiger called me to New York and sat me down and said, did we say we were sending you to Warsaw, we meant Dallas. I got posted to Dallas. That's how I ended up back in the U.S. and writing about oil from there, right, just the same sort of specialty. And anyway, I ended up being able to get from there. I did second book from there. You probably remember Alexander Litvinenko, the Russian KGB defector to the UK was assassinated using a nuclear element polonium-210, right? It was put into his tea, at a sushi restaurant in London, and he died this horrendous death. My publisher asked me to write a book about that, but what I did, the book is called Putin’s Labyrinth, and its murder in Russia. So I focused on six people like Alexander Litvinenko, who you come to know, and they they died these horrendous deaths. It's the story sort of understanding what is Russia, who is Putin, through the lives and deaths of six people. But after doing that, I and my wife, so my wife is from Kazakhstan, so Dallas is a big, was quite a shift for her, so she really wanted to go to Washington.

So I got a job with Business Week to be their foreign affairs writer in Washington. And that's when these things lined up. That's when I got this post at Georgetown Adjunct Professor in the security studies program, it’s a course in energy and geopolitics. Basically, it's teaching this skill of understanding how different forms of energy affect power around the world, give and take away power, and then how to use that to forecast, how you can forecast of events by understanding who has energy and who does not. Anyway, Business Week fell apart, right? They decided to sell themselves, sold themselves to Bloomberg. All of the people who were in the Business Week office were laid off, including me. And so that started this run that I’ve been on for the last few years. So I went from there to writing about energy and geopolitics for Foreign Policy magazine. Then I went to Quartz, Axios, Medium, and now The Electric, so five digital publications. So I continue to be an Adjunct at Georgetown. I'm a senior fellow at the Atlantic Council in a thing called the Strategic Foresight Initiative. Again, it's forecasting about risk and geo strategy. And then I’m doing this, this newsletter, The Electric, which is, it kind of replaces the idea of oil and geopolitics with batteries and EVs and geopolitics. And along the way, I wrote a book, a third book called the Powerhouse, which is there it is.

Lei Xing:
I’m going to ask you a question on it later. So I’m going to throw you some curve balls.

Steve LeVine:
All right

Tu Le:
I have it as well.

Steve LeVine:
So for that book, I just serendipitously ended up, I wanted to, right, after I’ve been laid off, right? So one of the things I wanted to do was write a new book. So what am I going to do? And I got onto this idea of batteries. Batteries seemed like a big thing around the world. 

Tu Le:
So you were never really like a car guy. It was just more about the energy and the geopolitics that attracted you. 

Steve LeVine:
Yes. And I saw that in this, right? You could just substitute batteries in for oil. But how do you, does that work, am I right? Does it really have a role in geopolitics? Is there something there? And so I started looking around, I ended up finding this team of battery guys at Argon National Lab in Chicago that worked on NMC. Now, at that time, what the hell is NMC? So right, not used, right, it was just formulation, but they in invited me out there. It seemed like a good story. So I sold a book based on spending like a year or two embedded with the battery team there. And it just turned out serendipitously they are the guys who invented NMC, right? NMC turned out, ended up being the major chemistry in EVs, and I ended up with them. They're trying to invent NMC 2.0, what's the next iteration that will bring, their idea was, can you make the 200 mile car, right? At that time the Volt was 37 miles, and Leaf was 84 miles, can you get to 200 miles, right? And it was regarded as this like this crazy (holy grail), how can you do that? And so they were trying to do that. And I was there and that turned into, that’s what that book was.

Tu Le:
Very cool.

Lei Xing:
That was, by far, the most, the longest and the most informative, and the most interesting introduction we've ever had from our guest. And in itself, it's worth an episode.

Steve LeVine:
I apologize.

Lei Xing:
No, I’m being, everything is coming full circle, I think, starting out from your early days in the Philippines to now on batteries, everything has a connection, right? And if I can go next, before I ask you a question on the book, one thing, let's make this into, we might give you some curve balls along the way. I know we have a question online, but let's make this more conversational. When was that light bulb turned on of the narrative of China, of what you are doing? Especially pertaining to the battery energy space? I know your book started with Wan Gang, right? But what you're doing, your newsletter, when did China got switched on? You believe that China is at the center everything?

Tu Le:
And let me add to that question, Steve, did you foresee the EV sector growing and being a huge opportunity? Is that also why you're like attracted to batteries as an energy source?

Steve LeVine:
Yeah, so that's exactly what happened, just responding to both questions at the same time. The thing that captured my attention was initially seeing, remember, this coincides, this was 2010, 2011. And it's the aftermath of the financial crash. And at that time, why did batteries, why did EVs come into the public sphere? Why were people talking about it? Because of the financial crash? It was because everything had fallen apart, the financial crash, which is the latest thing, right? There was a real estate crash before that, there had been a dot com crash before that. And the feeling was, can we do anything that's real, all of this stuff was fake, right? And fortunes being earned in industries that turned out to be fraudulent, and you end up with recession around the world and stock markets collapsing. And what I saw was that countries were attaching themselves to batteries and EVs as the first real new industry.

And so I noticed first that Obama and Hu, the Chinese leader, both of them were talking about batteries and EVs. We're going to create industries, we're going to lead, this is going to be the new big thing, EVs are going to be everywhere, we're going to make this, everyone's going to make this switch and we're going to lead it. And then I started looking on Google. I was plugging in electric cars and then one country after the other, Japan, England, France, Germany, all of them were saying the same thing: we're going to own this, you think you're going to, no, we're going to own it. And then it's, okay, let's go to the second tier, Brazil, South Africa, Israel, I started with it, all of them, all everyone had their angle on batteries, either batteries or EVs, something having to do with those for those two, not industries, right, potential industries.

So that's when I knew that, okay, this is a thing. And it could be a geopolitical thing. And I was kind of tipped off by the guys at the Department of Energy here in Washington, that China was very, very serious about this. It wasn't just words when Hu was declaring this was going to be a thing, he was serious. And there was this guy Wan Gang. You had to meet Wan Gang and I got a phone call from someone at DOE Wan Gang is going to be at the Kennedy Center tonight at 7:30, your name is on the list. And then this sort of dude hung up. I went to the Kennedy Center. I put on a suit, went down there a little bit early, like 1/2 hour early. There was Wang Gang early with no one, him on the balcony. And I think like there was a disconnect about who I was. Like. I think he thought that he didn't know. You didn't know as you could see, but you thought that I was someone who he should…from the government or from the car company. He and I just sit down, we talk for like 45 minutes. It was really great. And then the next day he flew to Argon. I was going to Argon.

Lei Xing:
Remind us, when was this, what year was this?

Steve LeVine:
2010, 2011.

Tu Le:
So just to let our audience know, 2009 is when the Chinese government really formalized that commitment to electric vehicles and batteries via subsidies via investment in R&D in battery cell manufacturing. So this aligns really well with that timing of 2010 for you, right?

Lei Xing:
So 2009 is when they announced the “10-City 1,000 Vehicles” demonstration project for EVs. 

Steve LeVine:
And Wan was the guy, right? They pulled him back from Germany.

Tu Le:
He’s the godfather.

Steve LeVine:
From Audi, and he had been there, am I right, was he there for like 12 years?

Lei Xing:
He was there a long time.

Steve LeVine:
They recruited him to come back and put him in this slot, and he was really the right guy for the time. Anyway, that was perfect. So I had at Argon, David Sandalow, who was the Deputy Energy Secretary and Wan Gang going all through Argon. And that was it, right? That's the geopolitics. And that's, I got that. This is it, right? This is the, but then just not intending to speed forward. And we can stay with Arg, but just to say that the U.S. ended up dropping it, China stuck with it. And that's why we have the current…

Tu Le:
And we can get back to that a little bit later, but that's why it's important for us to acknowledge that the Chinese government stayed committed for over 10 years to really nurture the EV sector and battery cell manufacturing, and increasing capacity to where it's at now, right?

Lei Xing:
In retrospect, it has always been a geopolitical thing, because when they started at the very top of one of the reasons why China was doing this was the talk of national security, right? The whatever energy security. And the next, the second thing was, this Chinese saying called “over taking the competitors on a curve.” Now we see after more than a decade.

Tu Le:
But even they realized that without a catalyst or a catfish like a Tesla, it would have still taken much longer in China for that inflection point to happen in my humble opinion. And so that's why they rolled out the red carpet for Tesla. But what an interesting, like in all these intersections in your professional career, Steve, or like major historical moments in different industries and sectors. But I guess that common thread is the geopolitics part of it, right? 

Lei Xing:
So Steve, on the book, I started reading it. I know it started with Wan Gang’s visit. Without giving away too much, what was the conclusion of your book in retrospect and considering what is happening right now in the battery space, is that conclusion still valid?

Steve LeVine:
Yeah, so this is good, because Tu, I forgot to respond to one of your questions was, did you know that EVs were going to end up, everyone knew, right? Then they didn't know, right? Because if it turned out that it was way early, and it took until like two or three years ago for things like to become the world we know now. It turned out that those early days were aspirational. People turned aspiration into something more concrete than it was, batteries were not ready at all, nowhere near ready and EVs were not.

Tu Le:
We can point back to the EV1, and we can point back to 2003 when Tesla was formed by the original founders, right? 

Steve LeVine:
So that's 2003. Now we're talking 2010, 2012. The book came out in 2015. When that book came out, no one understood. Why are you writing about batteries? Do you mean the Duracell? You mean this thing in my flashlight? I was literally told by people, by my editors, this is a stupid idea, don't do this. I think it doesn't ring, it’s like that's just five, then the paperback came out 2016, like 5 or 6 years ago. Batteries and EVs were thought of as something stupid, right? This was not going to happen, it's not going to be big. It went a different way. Lei, I apologize. I completely lost track of what you had asked.

Lei Xing:
No, I was just asking about the conclusion of the book comparing it to what's going on now, is that conclusion still valid?

Steve LeVine:
Yeah, so the conclusion is valid, but inadvertently.

Tu Le:
So you stumbled upon it.

Steve LeVine:
So it did, right? Look, the 10 or 12 years of incremental improvement in batteries ended up bringing the cost down enough that you could have, and the energy within them, right? So you could have a 300-mile car, which is, that's the inflection point. That's the point at which ordinary people take them seriously, and you could bring the cost down within the spitting distance of what people are willing to pay.

Tu Le:
And Steve, I know you had spoken recently with Mujeeb Ijaz. He theorized that 300 range number is kind of a random number that's based on what ICE cars range generally are. So this 300-mile range thing is kind of this bogey that is a nebulous bogey that people just kind of stick to for some reason, right?

Steve LeVine:
It’s a, well let me ask you this, Tu. Why are hamburgers a quarter pound, the quarter pounder?

Tu Le:
I have no idea.

Steve LeVine:
Right, right. There's a right, just a little thing, natural thing takes off. And there's something about 300 miles. It resonates. 

Tu Le:
But a lot of that to me and this is me getting on my soapbox growing up in Detroit. A lot of that is the auto industry, the legacy automakers, planting these seeds that really create these barriers or these blinds for the consumers, right? Because in any normal circumstance, you wouldn't spend $50,000 on any other product that you use 5% of the time. But in the case of a car, they've told you it's an emotional buy. They've almost brainwashed you into attaching your heart and your emotion to I’m going to buy this car because it reflects who I am, but so amazing, they've done an amazing job, but your electric vehicle is kind of their penance. I feel.

Steve LeVine:
So there's this thing right now. And I think it's worth discussing because it's very current. So before 2007, almost no one would have said, you know what, I'm going to routinely every 2 or 3 years pay $750 or $1,000 for a new phone. I'm going to stare at it all the time, right? It is just like, right? And then suddenly, so my question is right now, the average cost of an EV is not $50,000, it’s $66,000. That's the average. And so I’ve actually tried to explore, but it really is a question. Is the car, the phone, right, in the sense that does it move, the paradigm, are people now going to like accept, and yeah, I'll pay $66,000 a car for the reasons you just stated. It's my identity. I'm throwing that out to you guys. Do EVs take off on a mass market at a $66,000 price point?

Tu Le:
But now we have to look at it from a stance, from the stance of, I'm not actually paying the $66,000 in one lump sum, because that would be extremely intimidating, right? Americans, they borrow from tomorrow to pay for today, right? And so a $66,000 car might be a $600 or $700 payment a month, so they don't look at the $66,000, they look at the $700 a month. In a lot of times, it's even less than that, right? A $66,000 car you can get for $500 a month. So I think that big number is pretty intimidating, but as a society, Americans anyways, because credit is growing in China as well. So I think that could become an issue here, too. But the whole credit thing and the ability to buy 2, or 3X what you would normally be able to afford with a credit card really allows you to stretch yourself, right?

Lei Xing:
So my answer will be no. Because as you said, there's that quarter pounder and there's what, the 300-mile sweet spot. I'm sure there is also a sweet spot for an EV in terms of pricing for me personally. I'm still looking forward to, GM has announced post 2027 they're going to launch something below $30,000.

Tu Le:
Yeah, it's supposed to be the Blazer, right?

Lei Xing:
Below that. It's something they're working on with Honda, right? So it' artificially way too high right now. That's my take.

Steve LeVine:
I just did the calculation, guys. And it's if you go on an 8-year, so usually people are buying cars in 3 years, so 8 years, it is $700 per month. I don't know Tu, I think you make a lot more money than I do. That seems like a lot to me.

Tu Le:
No, it is I was just kind of making up a number. I just feel that how the car makes them feel, makes them want to stretch to be able to afford it, right?

Steve LeVine:
This fixation of mine right now is the supply chain problem. That's the reason that prices have gone up. One of the main reasons they have gone up to $66,000. One is the supply chain thing. There's a shortage of battery metals and computer chips. So the car companies can't make all of the EVs they want to make. They also can't make all the combustion cars they want to make. So what are they making? They're making the price point, but there's not, guys, there's not, I just did this story in the latest newsletter, the forecast of, so in 2025, the forecast is that when you count up the vehicles that the EVs, that the carmakers want to make, just the majors and really not including China, 10.7 million EVs in 2025. When you count up the nickel supply, that's forecast to be available in 2025, 7.7 million, so 3 million fewer EVs than they want to make so Lei, and it gets worse. By 2030 and make 40%, of the EVs are possible with nickel. And it's the same thing, say the nickel is okay. Go to lithium, check the lithium, it’s the same thing and so Lei, so my question is, do you get to this sub $30,000 car this decade?

Lei Xing:
Well GM’s planning to do it. I don't know about others.

Steve LeVine:
This is what they're saying. This is what they say but let's look out of the window at reality. And so do they forego right now what they're doing? And it makes sense to serve their shareholders. There are turning out the highest margin vehicles and they're earning like incredible margins on the F-150s, a on these trucks and on the Hummer, like $15,000 per vehicle margin. I don't know how that stacks up to, what is Tesla making per.

Tu Le:
34% last quarter on gross margin.

Steve LeVine:
So what does that come out to in dollars?

Tu Le:
I forget.

Steve LeVine:
You've got like a say, a $70,000 car divided by 0.3, it's $23,000 per car.

Tu Le:
They're getting F-150 type margins.

Steve LeVine:
So I don't know. So Lei, this is what GM promises, Musk has stopped talking about the $25,000 car.

Tu Le:
He's still talking about 20 million by 2030, though.

Steve LeVine:
Yeah, so what do you think about that? Is that real? 

Tu Le:
Well, but let me turn this back on you because your intersection with the geopolitics, right? So how, because right now lithium mines rights are primarily owned by Chinese companies. And the processing is 90% done in China, right? And so come from Chile, come from Australia, get refined and then ship out to other places. Do you think that's going to be a leverage point perhaps in the future?

Steve LeVine:
So what you have, let's talk this through. We can just brainstorm it through. So one fact fact that there's a shortage of the battery metals. It's a crisis point. It's not just a shortage, but not for China. The Chinese carmakers, NIO, Li, BYD and the battery makers as well, Gotion, CATL, they've got the supply and they've also got the processing capacity and the battery making capacity, they are in the driver's seat and then they own Volvo, Polestar, 20% of Daimler, right? And so Daimler is now Mercedes, also MG, that's the geopolitics, right? So that's what's going to happen this decade, right? So China and Tesla also of the Western OEMs, it has done the best at acquiring assets, metals, assets.

Tu Le:
Here's a quick stat for you, Steve, that you probably already know. CATL or Tesla, CATL's largest customer, about 20% of their revenues come from Tesla alone. So they're joined at the hip, they're joined at the hip.

Steve LeVine:
They are and who and Gotion announced that they're producing enough LFP for 2 million cars a year for some American, who we don't know who that is.

Lei Xing:
We talked about that in our conversation, right, a few months ago.

Steve LeVine:
But who is it? But anyway, so what you have, I'm trying to address your question or two and when we can talk about it and that's that. So Tesla and China are in the driver's seat this whole decade from the standpoint of being able to produce what they actually want to produce or close to it. For everyone else, it's, they're going to be scrambling. They're not going to be making and they're going to lose. So what does that look like?

Tu Le:
Well, so my question, I guess, Steve, because you've spoken with a lot of startups. Do you see any technological breakthroughs on the charging side, on the density side, or on complete revolution, solid state, or any, you know Mujeeb is talking about doing two different battery chemistries in one battery pack, right? Do you see those making up that delta that you've just talked about between raw materials and then demand over the next several years?

Steve LeVine:
So I also did the calculations using LFP, and using LFP in small batteries, 60 kWh batteries. And for most of the decade, you still have that gap. This is because LFP even though it doesn't require nickel or cobalt, it requires lithium. And there's this incredible overstatement, hubristic overstatement of how much lithium there is every year. I'm sure that you guys have had Joe Lowry on your show. Here's a guy who know, who really knows that field and he's talking about a really substantial decade long. And so it doesn't get you there, but it gets you closer. So then what do you do? And Mujeeb Ijaz, I'm also a big fan of Mujeeb’s, his idea and just for your listeners, what's the idea? It’s you twin LFP and manganese to ample metals on the cathode side, and you do it in a way that doesn't require meeting these very, very high auto specs. You're able to use what other automakers would regard as inferior battery and inferior cathodes.

Tu Le:
Can you really quickly tell our audience, Steve, who Mujeeb Ijaz is and what company he founded?

Steve LeVine:
Yes. So Mujeeb is a very interesting guy. He was at Ford for many years on their fuel sell side. He was in charge of batteries for the Apple car that Apple doesn't talk about, but he was the guy, he was at A123, the CTO at A123, which in that period we were talking about, 2009 to 2012. That was the it company. They were all about LFP, and they were producing the batteries for Fikser when Fisker was in its other, in its earlier iteration, the Fisker Karma. Yeah, and then things fell apart, they had the battery recall, but he was the guy.

Tu Le:
So really quickly, Fisker, the original iteration and A123 are now both Chinese companies, by the way.

Steve LeVine:
Right! Exactly!

Lei Xing:
And A123 and its current, whatever form it is in, as one of the suppliers to Volkswagen.

Steve LeVine:
Right, it's owned by Wanxiang. Now, he's got this company, Our Next Energy (ONE). It is, when I first heard him talking about this idea of the double cathode, I just thought it was cookie. Right? But then when you look at his background and you listen to the logic behind what he's doing, it makes perfect sense. CATL is doing it too, but with NMC, it is NMC and LFP together, right?

Lei Xing:
I think so, the hybrid battery.

Steve LeVine:
So I think this is a way, like he is a pioneer, that's a way of the future. That's one of the ways you get there at a much lower cost and you do resolve some of the supply problems.

Tu Le:
We should add, Steve, that he had a proof of concept. He bolted on a prototype battery pack using his technology on a Model S, he drove it 725 miles on one charge. He didn't go past 55 miles an hour, but he did it, 725 miles.

Steve LeVine:
All right. So we got to have truth to power. So I love Mujeeb, but that was not a proof of concept. That's an NMC cathode in there with LFP, it doesn't have the anode-less. He's going to have another proof of concept at the end of this year with the real battery, right? With the manganese LFP anode-less. And he's going to do the same kind of a test. And that's when we'll be able to say, and it's obvious, I do think that he gets there. And that's sort of wakeup call for everyone. But I do see Tu, obviously, this crisis that we're talking about, the carmakers which are so slow. The major carmakers, they're so slow in waking up and not just wake, I feel like they're kind of awake. But it's like 7:00 am for them. They're not really awake. And so they're not, they haven't gotten out of bed yet, or maybe one leg is out of bed.

Lei Xing:
They haven't gotten their coffee yet.

Tu Le:
They're still wiping the sleep out of their eyes. 

Steve LeVine:
Yeah, they are. But when they have both feet on the floor and they got that Joe in their, they’ve had a couple of sips, they are going to make a dramatic shift away from these nickel and cobalt metals. They have to, it's not, it's not a choice, right? Either you're going to survive or you're not. I want to throw this out you. Remember, in the 1990s, oil prices plunged, the big oil. Oil went through like a war, and the oil companies all combined, Exxon bought Mobile, Chevron bought Texaco, BP bought ARCO, the whole industry consolidated and shrunk. That's the decade we're looking at. Look at the car companies, the way they are now, and then let's talk in 2030. I guarantee you this decade looks like oil in the 1990s. Those car companies are going to combine. They're going to be forced to combine, the chemistries, it's going to be different chemistries, they're going to go way into LFP, sodium ion is going to be, it's been a very big these kinds of hybrid cathodes, like CATL and Mujeeb are talking about, that's going to come in. There's still not going to get there, but they'll get closer. And the 2030s will be better than the 2020s.

Lei Xing:
Hi, your co-host Lei Xing here. Steve’s self-introduction at the beginning of this episode itself is worthy of an episode as he definitely has the most interesting background among all of the guests we’ve had on the MAX series to date. That was a huge history lesson for me and being such a global citizen has afforded Steve with that unique perspective on geopolitics and energy, from oil to EV batteries, and somehow, they are all interconnected as we see the battery war currently being played out in different continents and among various stakeholders. Will the 2020s for batteries turn out to be what the 1990s were for oil? I guess we shall see. Stay tuned for Part II of our conversation with Steve in the next episode of our MAX series, as he gives his perspectives on solid-state batteries, EV volumes, battery swapping, and more! 

Tu Le:
Lei and I will be sharing more of conversations with the men & women around the world moving the EV/AV mobility sectors forward as part of this China EVs & More MAX series. Some folks will be instantly recognizable, but some will just be people that are doing amazing in the space that we think deserve to be highlighted. 

Don’t worry though, Lei and I will continue to host our live weekly China EVs & More Twitter Spaces room that summarizes that week’s most important news coming out of the China EV, AV and mobility space. For those that can’t catch the live show, you can find the China EVs & More Pod on all major platforms or wherever you normally get your podcasts. As EV adoption reaches its global tipping point, it’ll be even more important to stay updated on everything that’s happening here. Lei and I are confident that China EVs & More is the best resource to do that. Until next time, as always, thanks for listening!

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