Episode 241: Dr Yuan Gao

Hi, it's Joe Lowry. Welcome to another episode of the Global Lithium Podcast. Today is episode 241. My guest is Dr. Yuan Gao. Yuan and I worked together at FMC for a couple of decades. I got to see firsthand the respect that battery producers, cathode makers, from Japan to Korea to China. Had for Yuan. I always preferred to meet with the technical types when I was meeting with battery players. Simply because they knew where things were going and the purchasing people tended to just want to talk about. Volume and price. If you've read my book, you know that I consider Yuan one of my most important technical mentors. I learned so much from him and I continue to and that's why I like to have him on the podcast regularly. Because you'll learn things by listening to Yuan that go beyond what even the best analysts can tell you. Yuan was really at the beginning and forefront of the battery space when Sony was first producing cells when the Koreans got into the business when BYD started and we talked a little bit about that in this episode. The early days talking to BYD. He goes back to the beginning with Robin Zung at ATL and now I'll see ATL. The average person pontificating on the Lithium space just simply doesn't have the background or the depth of knowledge that Yuan Gao has. No matter how smart they are, you cannot easily replicate the kind of experiences that more than three decades in the industry with all the main players provide. So without further ado, Dr Yuan Gao. You're listening to the Global Lithium Podcast. Yuan Gao, welcome back to the Global Lithium Podcast. Thank you, Jill. It's my pleasure. Things are rarely dull in the battery space, but I would say since your last visit to the podcast 15 months ago, it seems like three or four years of battery happenings have occurred. What do you see as the two or three most important trends going on in battery? Well, I think there's a couple of things. If we may in the general Lithium space or battery space, since our last interview, I think the Lithium market is tightening. The other thing is energy storage, ESS, someone called BESS, the battery energy storage system, whatever you call it. I think we have seen the inflection point. The people talked about it for many, many years. It's coming, it's coming, but now I think it's really taking off. In terms of battery technology, fortunately, I haven't seen anything that's as earth shattering in the last few years, but I think it's about to change. People have been trying to make a Lithium metal work. Some people call it a holy well, but in any case, if you replace current anode with a Lithium metal, you can increase energy density quite significantly, but you know, Lithium metal is hard in a, well, in a primary battery has been for decades. People try to use the Lithium metal as anode in back in the 80s. You resolve it in quite a few summer runaways. That's why the industry moved to Lithium I to avoid a dandruff formation on the Lithium metal after many, many cycles that can cause internal short or summer runaways. So people have been working on that. One of the ways to solve that problem, to use solid-state electrolyte, it turned out to be very difficult. That's why we have heard a lot of thunders last decade, but we don't see commercial product in your hands. Even though I have to say there is a solid-state battery that has been running for a long time by blue solutions, but that's not a mainstream battery, but we don't see solid-state in a mainstream. Let's step back to the energy storage system. What are your thoughts on how big that will become how fast? For so long it was just nobody paid much attention to it because it was less than 10% of battery demand. Now it looks like the question becomes when will it get to parity with EV demand or when will it exceed EV demand and what are your thoughts on that? I think it was the reason we all of sudden, well even though people have been talking about it for a very, very long time, more than 10 years, we didn't see much activity until the last few years is the cost. So I've seen a cost of a less than my battery, quote, as slow as like a $40 per kilowatt hour. Actually a few years ago when I saw $100 per kilowatt hour, I was like, wow, I imagine both. It's slow, but now it's even as slow as a 40. So because for a lot of the ESS applications cost is very important. I think the cost has dropped below a certain point, a critical point. That's why we saw the inflection point as the last 12 or 18 months. Once it costs dropped below a certain point and the economic change and then it starts to take off. Now once it takes off, I believe the market size is a spake as a EV market. There's a lot of things I can't, I think you can benefit from ESS system. Yeah, well we've actually had this conversation on prior episodes and this was before the big spike in everybody talking about it. But when we were both at FMC, I can remember presenting that I believed that just after traveling in China and seeing all the solar and seeing all the wind that I said in 2012, or actually it might have been 10 that I thought energy storage would be bigger than EVs by 2025. And that was when neither one of them were significant. Back then the EV thing was less than 5% of total lithium demand. Right, right. We're early. I remember the first ESS conference I went to in California was 2010 during my last days at FMC. People were talking about low leveling and frequency through their own sort of application. But remember at that time the cost of listening on battery was like in the neighborhood a $1,000 per kilowatt hour. There's no way you can make it work with that kind of price. Even so people were talking about a molten sodium for energy storage or flow battery or other things or flight, even flight whales. So it's a cost. Cost is a main factor. As we look at that, would you put this in a bucket with an unprior episode you talked about how when we first started, China's big gift was that they could change rapidly. And they, it was always about manufacturing flexibility. It was doing almost everything by hand back then. And then you had the transition into what you were over there for was you poolied and you're supplying Apple and that whole thing where China then became a critical supplier to Apple who is going to become the biggest name and handheld electronics at least during that time. Then we went to the EV, totally dominating the demand story. And now it's almost always characterized as EVs are slow and energy storage is taken off. So is, is that the fourth leg or is it a combined EV energy storage? I wouldn't say EV slow. Actually, I'm a pleasantly surprised to see the resilience of EV because last year I saw, oh, EV, we're going to see a hiccup in EVs with all the policy changes in the US and so forth. But I think EV might not be, EV growth might not be as high in percentage. It can't be. It's been out out there for too long. If you look at sales number in China. I think it's cross-ass threshold, 50% threshold some time ago. So once your penetration rate is so high, you can't have that kind of high growth anymore. But this year, number in the EV sales is pretty, pretty significant. So I think if you look at the market driver, EV is still the main driver. ESS has a higher growth rate, but it's from a small base. So it's still not the main horse yet, the main horse, the main driver is still EV. But I think in the coming years, we're going to see ESS becoming more and more significant, but not there yet. Clearly, it's not there yet. I was really referring to the narrative. Journalists always want a headline in a story. Yeah, and especially since the US has done very well in deploying energy storage, much more so than North America's the weakest link in the EV growth story. So I think when you look at what gets reported, especially by the Western press, it tends to generally be negative on EVs. And now it's just super positive because everybody likes to tie ESS to the AI boom and data centers. Right. Yeah. I think in a way, they're right. ESS is critically important for us here, especially there's two ways, one of course, data centers. That's a one new application for ESS. But the other thing people probably don't pay attention to, it just, you can liberate more capacity from existing power plant that matters gas powered or co power or traditional powered because usually your power plant is designed for the peak power. And a lot of that capacity is unused with ESS, that part of an utilize capacity can be liberated, especially in this country, it's so hard to build a new power plant. And we do need more power. If you look at the comparison of increase of power generation of the China and the US, where our line is very flat, the airline is very steep. For in the age of AI, we need a lot more power. But it's very hard to build new power plant. So I think ESS can help the data center itself or need needs ESS too. This is a little bit the different than the ESS demand in China. In China, renewable energy already, I saw articles the other day, I think almost like a 30% they will really need ESS to be paired with renewable energy so that otherwise you can not tie them into your grid. You need some stability, you know, solar and wind just not as the varies. So you need something to stabilize it. So just to make it clear on the liberating our existing capacity part of that, if I'm hearing you right, you know what you're saying is you can run the power plant when you otherwise wouldn't be and store that energy. Yeah, for the time that you need it. So it's just about getting maximum utilization through energy storage. Exactly, exactly. For instance, 3 a.m., you're probably don't consume a lot of energy, but you can store it. And you release a 6 p.m., which is a peak. And for individual household, you can use, you can buy some power walls or whatever energy storage to reduce your state. Now they have many utilities and closes the time and we use rate. So you can also business, you can save quite a bit of money. So there are many different usage scenarios for ESS. So China is now approaching it's not an exact number. So nobody needs to write in about the number I'm about to say. But 90% of the battery market, it's pushing that. And that's largely on the back of what CATL and a few others have done. Do you see any real change in that in the next five years or when we're if we were talking five years from now, it'll it'll still be a 90% number. I put the five years too short. I think we need to put structure a little bit longer. Let's say 10 years. If I stretch it to 10 years, my answer, my short answer, but yes, I know, yes, they will maintain their dominance. If we stay in in the mode of a business as usual, we don't put our acts together. You will continue. But no, if we really put, if we realize how important this is it, we put our acts together. Especially if we innovate, I think we have a chance. But five years, maybe too short, we need to a little bit more, more years more time. But I think we do the point I want to make it so don't give up. We still have a chance. But we have to realize this is a big talent to us. It's not going to be easy. We need to start acting now. Then we'll have a chance. Let's talk about the mix inside China's massive battery operation. Last year when we were talking, I think we were talking in 25 and you quoted 24 numbers and saying that LFP had roughly 80% of the China market. And the whole transition to more best just seems to support the continued LFP run. But you also have these extended range cars, you've got autonomous trucks now in China, you've got autonomous mining equipment, you've got all this really high power demand coming. So does that. In our often we talk in terms of the battery market trying to go to a balanced state, where do you see nickel in light of the changes with best really supporting continued run of LFP, but some of these new things supporting higher nickel. Yeah, I'm often opinion that every chemistry has a song plays in the space. It depends on application. I you can never just spell the say a one chemistry take over everything. Oh, because I know a lot of observers, so under this one time, they will say, Oh, F a piece that another time, they'll say, and I'm see is that no, or sodium, I will take over or sodium air is useless. No, no, no, they each one has its own place as the depends their application. I think with the heavy truck, long haul trucks, I think the list of mine start to enter this space. I want to see a demo. I think it's a late March in Beijing. Yeah, I saw a lot of a heavy box. It's amazing. So I know also we see a list of mine going into flying vehicles, ebato or drones, or that sort of thing. Oh, this application requires high energy. When they when you require absolutely require high energy, you do need high nickel. But if you are talking about a regular commuter car, I would prefer F a P, because it gives you the best value. And consumer usually vote with their wallet and it's just, I don't need a thousand kilometer per charge. I need to buy something I can afford. Then I'll have P. Well, if you look at the improvement China's made in China has more high end eb's now than that Americans will ever see, probably amazing. And what percentage of the high end is LFP versus high nickel? Oh, on high end cars, of course, is mostly in MC or high nickel. But if you have a main strain cars, price in the range of between 100,000 to 200,000 RMB, that can be wrenched mostly F a P. Let's say that's like 15,000 dollars to 30,000 dollars US hours in that range. That kind of the car, a regular Chinese family be more interested. But if there are a lot of men, you look at BYD's top and cars, they're pretty amazing. But I think it's a price is a half a gap. It's like a minute RMB or something. Very If you were Chinese family, would be able to afford that kind of a car? - Well, if we're also looking at the other big trends in the China EV space in the last two years, it would be exports. And the export market would seem to be LFP batteries more so than the high end. Because I think China's strategy to pretty well take the global EV market is happening as we speak. Some of the markets where you might have seen a Suzuki or a GM or something in the prior years is all going to, or mostly going to the low price Chinese EVs. The majority of batteries will continue to be made inside China, where the cost of maybe just the greatest. So interesting times, but now we're also talking about maybe for a lot of hours or more in 2030. And we can get into a brief discussion on a topic we have covered in prior episodes, but that would be the lithium intensity. How is lithium intensity and the use of excess lithium changed over the last five to 10 years, especially when you look at applying a number to the gigawatt hours to say this would represent roughly a certain level of lithium demand? - Yeah, I think it's been coming more towards the theoretical. Say the theoretical should be a one gigawatt hour, maybe a seven or 800 tons LCE, but we saw closer at thousand, which is way above the theoretical. One part of it, you do need lithium excess in high nickel castles. The other major part, the main reason was yield loss. It's not every 100% on SPAC. So you have some of the lithium in the system. So over time, what two reasons? One is over time people do increase, improve their yield. Number two, it's not totally lost. It just got so back to the front end of supply chain because people do recycle. You can argue people tend to recycle 100% of NMC and LCO because the nickel and the cobalt value, recycle less of FYP, especially when losing prices low, but more or less, they are not wasted. They're just even people don't recycle. Probably sitting somewhere, waiting to be recycled. So this is factory floor scrap. There's a lot of factories floor scrap from castle to jelly rolls. I've seen a lot of jelly rolls from battery makers as sitting in some recyclers or place. So the whole supply chain, there's some sort of yield loss. The factory scrap is sitting somewhere. Over time, you will catch up. So just to listen value will come back. So gradually, you should see the number moving towards towards the-- - Towards point seven, I mean towards your absolute theoretical. - Right, right. - You should get a little, maybe you have a 10% excess or something, but not a few years ago. I think we saw like a more like 20, 30%. That's really factory scrap. - And that's really what I'm asking because in the past, we talked about how the excess lithium usually wasn't recovered, especially in high nickel. We talked about the fact that you just had some unavoidable inefficiencies that pushed that number more towards a 1.0 than a point seven. And now would you say on a rough average, if you were gonna say we're gonna do two tarot lot hours this year, you multiply it by 0.85, 0.8. - No, I would say today is more like somewhere between 0.8, 0.85, it's no longer one. - Yeah. - It's a getting closer. Also as the industry become more and more mature, that number will be closer to 0.7 one day. - Yeah, so at all you analysts that listen to the podcast that have been using 0.7 for a long time because it's very interesting to look at other people's numbers and how they're derived. And we're still not in an ideal world of the immunization and battery. - I think we're somewhere in between. We're somewhere, so 0.7 is one hand, one is the other hand. I think we're somewhere in between today. - Not as bad as a three years ago, but nowhere near the theoretical number yet. - With the most specialized team of lithium-brime professionals in the world, Solandez is dedicated to providing exceptional customer service and support throughout every stage of lithium-brime field development and production. From the Atacama to Ambrimuerto, to the USA and Canada, go to Zalandez.com for more information that's zel-a-n-d-e-z.com. What would you say now that most of the capacities being built in China, if we have a rise in what happens in North America or Europe in terms of non-Chinese players, you're probably gonna have a whole era where the learning curve and the high level of rejects that don't get recycled as efficiently because they're not inside China. So we may be in for another round of intensity bumpiness, I guess I would say. - It's very possible if we build a whole supply chain here. Here in North America, in Europe, you will have to go through that learning curve period. During that period, you will have a lot of factory fore scraps and we're gonna see that. So that's one thing we need to be prepared and that all the recyclers will come in handy. The other thing is I've been trying to get people attention. Maybe I think as soon as I started to be on some stage or get interviewed, been calling for people attention to the cost, learning curve costs. Someone needs to pay for the learning curve cost. When you start up a new operation, your yield is not gonna be ideal. The cost is really mostly driven by the yield loss. Someone needs to pay for that. In China, it has been paid for by all sort of incentives. Heavy supply needs many years ago. Now, of course, the yield is very high. So their cost is very low. But if I start up a new pot, my cost could be at least twice. And the consumer do not want to pay for that cost. Someone need to pay for it. And you have to go through that period because if you don't run that, you don't run, you don't learn. You don't improve. So the first, say, a year or two is very critical. You cannot stop. You know your cost is gonna be high and you have to go through that, the difficult period. Then you're able to go up and then you'll be on par. Was there a cost? - Well, let's talk a little bit in that light about. If we went back to the beginning of the Biden administration and I was doing presentations all over the world and I had the big map of these are all the gigafactories that are planned. And as it turned out, without the rest of the supply chain, it doesn't really make a lot of sense to build all those gigafactories in North America. So very few have been built. But now we also have the situation where you have some of the Korean companies just saying, oh, ESS is booming. And EVs aren't really doing that well in North America. So we're gonna repurpose our gigafactory to do ESS cells, or best cells. How much complexity is there in decision like that? Because the demands of the batteries probably aren't exactly the same. - Right, yep, the whole classification is very different. Ideally, you want to redesign yourself for the different usage pattern. But I suspect they don't redesign your unit cells, they just maybe redesign the pack. So you make a compromise because if you have to redesign the cell, you have to change all these things on your production lines, be very, very costly. Besides, you hope, I should be able to increase my EV battery production in now too long a future. So you don't want to. so much money completely redesigned. So I suspect if I were them, I would just, I'll keep my unit sales the same. I just repag it. So it's not ideal, but I can live with it. So that's doable. Yeah, the other question I have is you are very much in tune with what's going on and all the battery producing countries. And it's easy to say we're going to start making LFP energy storage cells in America. We don't make LFP in America. You've got one major project I guess in Korea. You have others that are talked about, but should we expect all the new best cells coming out of non-Chinese factories to be using non-Chinese LFP or is that really a pipe dream? Oh, well, unless we build LFP supply chain in this country, we are left with only the choice of continue to buy LFP from China or by import LFP from South Korea, not yet, but I think hopefully in a few months. In a few months, we can buy some from South Korea. But today, you probably have to buy from China unless we build our own supply chain. That's the thing. People don't realize we can make LFP battery here, but we have to, if it's a completely China independent, you need to build your complete supply chain here too. Yeah, that's the interesting. And I have to point out the other thing, even you buy LFP from South Korea where the precursor is from. I don't think they make precursor in South Korea. So the precursor problem is from China anyway. Well, as you look back, it's both a experienced industry observer. A guy that sits on a couple of boards and you listen to the talk about the robust US/North America with the MIA battery supply chain. Is that another thing that we need to say needs more than five years? It probably needs 10. Oh, but closer to five than 10. I hope, I hope. We need to act very quickly. I think we, it's not too late, but we have wasted a lot of time. Well, if we just look back at the nano one journey, which I've been involved with now for a full decade and you, I think, is very close to a full decade. And yet we're still not doing their model. Their model is designed once, build multiple times and you got to build the first one before you can do the multiple times. What else do you see any other green shoots or potentials besides what's happening in Korea? I think the DOE should have supported nano to a much greater extent or some other multi alpha character entity. We just, we're still sitting in our hands, it seems. Yeah, yeah, I know a few years ago, many big names. We're trying to set up a shop, to build a supply chain, your own material supply chain in Quebec, a place called Beacon Core. Taking advantage of their very cheap electricity rate. If I remember correctly somewhere in the neighborhood of four cents per kilowatt out, which is very cheap? You know, making parcels very energy intensive. So cheap electricity is a big, big competitive for the advantage. But then you don't see a lot of things that are happening now with all this fat, with the Canada, all this things that it is, it makes things very difficult. You mentioned the 901, a lot of the things that are criticism. I think sometimes I always think back. Sometimes we probably put too much on a home run. We just change everything completely, a home run, just ideal. But maybe sometimes we need to do a, maybe step-by-step approach, get the food in the door. First, otherwise you will never take off, we just have to start somewhere. Maybe we can have a huge, completely new FLP plan, but let's have something on the ground. First, supply, but you require half the whole supply chain. Maybe the cell makers or the OEM have to support the upstream material supplier a little bit more. You can't just say I want a, I want a U.S. made material, but I want Chinese price. It will never happen. You need to allow some sort of premium. First, give them a couple of years time to get more efficient. But again, the raw material supplier need to be more realistic instead of hitting a home run first. Let's get first space, second base, and just get something on the ground first. But just to do that, doesn't that come back to the who's going to pay for it? Right. Nobody in North America seems to want to. Right. That's another problem. So I think we do need some stable policy support. We need to design a good industrial policy to support it without because first thing, I think it's just hard for people. First thing we have to admit, we're behind. If we don't admit it, it's very hard. We admit we're behind. We need to catch up. To catch up, you need to span more energy, right? Play it like in a race. If you're behind, wouldn't you need to run faster? You need to span more energy. So it needs more support. So I hope our policymakers can realize that the industry, if you want to have an industry, if you want to rebuild manufacturing in this country, we need a supported policy. And that's a consistent. It doesn't get changed every few years. Every time we need bipartisan support, it's not like every time you have a change in Washington, we have a 180 degree change. So you have a consistent policy support. I think we can get there. The only thing in this supply chain that I have really seen on this bipartisan support for was stacker pass. And I think John did a great job working both sides of the aisle too. Yep, but originally approved at one level when Trump was president, got the DOE loan under Biden, and despite the hiccup from Secretary right, managed to start getting the loan proceeds now again in the Trump era. But it seems like everything else, you're right. Our policies, our incentives constantly change. Nobody can plan. And that's not the way China behaved. And China didn't run around making announcements about all the great stuff that we're going to do. They just did it. And that's my recollection of when I was there all the time. And it just seems now like people get called to the White House. There's a big announcement. And then you wait for stuff to happen. And we're still waiting for LFP. We're still waiting for a lot of things. Yeah, I think you and I both hope the US gets our act together. But I am not super optimistic that that is going to happen. Let's talk about CATL and sodium ion for a minute. CATL is obviously the big gorilla and lithium ion. But they're also probably the one who makes the most announcements about sodium ion, especially when lithium prices are ticking up. Where do you see the state of sodium ion? I don't personally believe it cannibalizes much of lithium. I think it's another solution that's really almost a separate market in some cases. But what is your assessment of where sodium ion is and probably where it's going in the next, put whatever frame you want on it, five years? Yeah, sodium ion. Let's look at the performance parameters compared to lithium ion. The energy density obviously, it's not there. But people argue for a certain application you do need that kind of an energy density. People argue sodium is more abundant and look at them, but I just point out today at least sodium ion is not cheap. It's not cheaper. It's not depending on loss in price, of course. So I think people use sodium ion as a hedge against a loss in price. And Vincent, this French company did analysis last year, they basically said, "List in carbon price has to be more than $30 per kilogram for sodium ion to be cost competitive." So I think people use the sodium on a hedge against the a extreme high loss and price. The sodium ion does have a certain advantage compared to the lithium ion depending on your application. One is that the lithium ion cannot be totally discharged. If your voltage becomes zero on the lithium ion, that means you completely discharge a battery. You will start to curl the copper foil on the anode. That will damage your lithium ion. So your lithium ion, you don't want to completely discharge. It's always some control. So if you have a device sitting in your garage, I have for a e-bike. But I don't use it for extended period of time. I want to make sure I still have some charge in it. Sodium ion doesn't have this problem because both sides is aluminum. You can use aluminum as a current collector on both sides. So you can be struck. It's nice that you forget about your sodium ion battery in your garage for five years. It doesn't damage the current collector. You can recharge it. That's advantage. Maybe for a certain application where you don't use your battery very frequently, that's advantage. The other thing, people argue it has a better low-temperature performance, not an odorless amount and alpha p. But again, alpha p can be designed to have a low-temperature, good low-temperature performance too. And no, for a fact, puberty has a grade of alpha p that does very well at low-temperature. But as a cost of sacrificing some compact density, in the alpha p space, everyone drives towards high density. But if you make it low-temperature well, and you can have very high density, but still compared to sodium ion, the anti-density is still not bad. So I think, I welcome, actually, I welcome sodium ion into the battery space because a little bit of sodium ion can serve us as regulator for us listening industry. So you will reduce the volatility of a listen price because if your listen price goes to 40 or 50, then you will see the market share of sodium ion start to increase, then you will bring the listen price back. I think we will have a health year industry. You don't, to manage a business, you will need this kind of a huge variation, right now? Because every time, if your price, a listen price go too high, which means it can go in the other direction, the other direction can be pretty severe too. But if you always in the healthy range, and you avoid the bottom two, it's just better. So I think sodium ion can serve us a listen price regulator. That's really the main purpose I see sodium ion because for most of the mainstream application, I don't see sodium ion as a threat replacement for a listen ion. Only for some niche, certain number one, for some certain applications, which is small. Number two, if the listen price goes way high, you can just replace some low-end uses. That's how I see sodium ion. - Well, I think that's really the way in which we've talked about it in the past as well, is that CATL now has made the announcement so many time that it has less and less effect on the psychology of the Western market. And then they also, you know, the story with the, their mind in each and where they start that up or not. They had a great playbook for 2022 and 2023 with those things. But I think as the market's gotten much, much bigger, and the ability to manipulate it is less, but they also are the biggest user of Lithium. And they have the most risk if investments not made outside of China. - It's a short-term thing. And that's why you, not only they, every time where listen prices high or listen become tight, not only they make a announcement on sodium ion, they also make a announcement, or not now themselves, maybe someone else, will say, hey, they're through the mind in Jiangxi province is about to restart or last sort of thing. That's the always, they're trying to press a listen price. But you're right. You have to balance the short-term interests and long-term interests because you do it overboard. You hurt your long-term interests because you discourage investment in this space and you don't get the listen you need longer term. This episode is also brought to you by MLC. Whether you need technical support for engineering, or setting up equipment for effective use of Lyme, MLC is your solutions partner. Visit Lyme4Lithium.com to learn more. That's L-I-M-E, the number four, L-I-T-H-I-U-M.com. We have seen C-A-T-L go from, in a decade, go from almost zero to total dominance. Why do you attribute that to besides Robin Zung's smart guy? Oh, he has a team, a core team of people. They stick together and they work very, very hard. I have to say, they work really, really hard. The very smart, they've been around together for over his core people. I think they've been around together for a more than a quarter of a century. So people will say, oh, C-A-T-L is a new company, but the team is not a new team. The team came from ATL. That was formed in 1999. We at SMC visited them when they started in the warehouse in Dongguan with only a handful of people. So that's where they came from. Then they became a holy own subsidiary of TDK early 2000. I don't remember exactly which year, probably 203 or something. So it has a lot of accumulation of know-how, technology. Oh, this thing is over quarter of centuries of accumulation of institutional knowledge, everything. So it didn't come from nowhere. It had these ATL before C-A-T-L. This is a smart guy, he has a core team of people very capable and they all work very hard. And between, I think they received a lot of policy support for many years and then they built their critical mass to compete with their rivalries. You put everything together. Oh, the other thing, ATL from the very beginning was very international. They had, if you look at the personal coach of a Robin, gentleman called Mike Chan, so Taiwan-born gentleman who came to ATL a long time ago and the other several people or they came back from the United States, some worked for IBM, big names. So they, from the very beginning, ATL, C-T-L, been very international. Half of this is an international vision. So they know how to do business on the world stage. So you put all this factor together. It's really a dream team, ideal formula for the year success. Well, and you know them well having worked with them over the years. And that's the great thing about having you on the podcast is because very few people have had the really privilege to live through every phase of lithium ion battery growth. Well, you're on the same stage with Robin in 2014, that belief, you're on the same page. I have the photo to prove that. Yes, I was, and then when there was dinner with the governor that night, I think it was that night. Maybe it was the next night. Yeah, yeah, yeah, not each and we're in the same banquet too. That was 12 years ago. Yeah. So you can, you can tell people you knew Robin before the birth of a state of health. That's so I think 2014, that's a before. That was the ATL era. Well, let me touch on something we've already spoken briefly about, but that's solid state. And as you've advocated on this podcast, since the first time you were on solid state batteries, been commercial at some level for years and years and years. More than decade. Yeah, more than decade. If you look at the. blue cars by blue solutions. We're FMT supported the lesson metal. It's been on the road in France many many years. But we keep talking about that being like potentially the next big thing. What do you see solid state in three to five years? Yeah, let me take a step back. Let's ask ourselves a question why we need solid state. What's the purpose? Why people spend so much money, so much effort, solid state. The answer is that we want to use the lesson metal. We want to use it because to use the lesson metal as an endote, that's the ultimate way to increase, to maximize any density of this rechargeable lesson battery. But they used to listen my design. Put a lot of wholesome material in the endote. We take the wholesome material out. You can again liberate a huge potential of any density and rechargeable lesson battery. But we got bored in the 1980s with the first generation rechargeable lesson battery. You can alert when you recharge many times. Please start a form of dandrite. So with solid state, you try to suppress dandrite formation. But however, why we don't see solid state in the mainstream, which once you replace a liquid electrolyte with solid state electrolyte, you saw one problem, but you create several other problems. Number one, cost of solid state electrolytes. Very high. Number two, conductivity. Solid state conductivity is low at room temperature. It becomes workable at high temperature. But by the way, blue solutions, blue cars, or whatever, they operate at elevated temperature. Number three, interfacial delamination. Because every time you cycle the battery, electrical move. So you have a solid, solid interface. It tend to delaminate when you move too many times. Number four, crack. Maybe you make sure, well, solid state electrolyte tend to be fragile, brittle. So maybe doing manufacturing is there. No cracks. You make sure there's no cracks. But how do you know doing in your consumer's hand? Let's say you pump into something. You drop on the hard floor or something happens. If you have a cracks, listen matter will just scroll through the cracks like a volcano. That can be very dangerous. Extremely dangerous, more dangerous. That's the internal force, right? I will not be in the battery industry. No, see it's the danger of the internal force. So this probably creates several problems. That's been very hard to thought. Over time, you solve one problem. I can't make sure there's no crack, but I can increase the cost significantly. Maybe I will hurt my conductivity. Or I increase my conductivity, I create another problem. So there's a multi-dimensional thing. It's making it very challenging. But I would argue, I ask the people with a question, do we know why, Denmark's form on the surface of the losing metal? Why don't we really, really study and understand the mechanism of Denmark formation? Once we understand what drives the Denmark growth, maybe we can solve it, we can manage it, maybe we cannot completely eliminate it, but we can manage it. Maybe we can use the losing metal in liquid electrolyte. I think if we can do that, that'll help be huge to our industry, because we don't need to worry about a solid state electrolyte anymore. I think we are on the brink of doing that. What does brink mean in your definition? You're talking about 2030, 2032. Oh, I think on the last scale, let me bring out a company I've been helping Purelossian. I've been helping Purelossian since about three years ago. Oh, thank you very much for it was you who introduced me to Purelossian. I believe after the fast market conference in June 2023, you introduced me to Purelossian and I wanted to visit them in August, exactly three years ago. August 2023, so at that time, their focus was a very low cost away of making loss in metal directly from brine, brine to loss in metal technology, which is great. I think still very important factor in your technology. They can make loss in metal. It doesn't matter. You can use the Lossian metal anode in your solid state. It's just a lower significant lower cost because it's shortened to supply chain. But once I saw in the lab, how smooth the Lossian metal deposit was. The life of instantly lived in my head. Hey, this is a great technology that can be used in battery. After many years of work, hard work by Purelossian's technical team. It turned out to be true, at least on the lab level, we have a test cell set for one over nanosouling cycles. You know, in the back in the 80s, late 80s, Lossian metal, rechargeable Lossian metal cell already can exceed 200 cycles. Because in less than 200 cycles, your Android would have growth through the separator. The cells already, you have a cell discharge, also a problem to sell with debt. You have to achieve, even today's Lossian mine cell, very few Lossian mine cell, have a P cell can achieve 9,000 cycles, 9,000 cycles, at very high, right? One C charge, one C discharge, which is Lossian metal cells is very prone to fast charge. So, so we can do one C charge for over 9,000 cycles. It's just a remark example. In a normally old, many people ask us a question, is it that you have a lot of Lossian no, or you have extremely high stack fracture, no normal conditions, just like the today's Lossian mine cell. That means I proved the theory that you can, I cannot be skilled too much because of teaching our competitors. We understand now what drives Lossian Android growth. No, we can then control it. We can manage it. No, we can achieve more than 9,000 cycles. Let's take a step back here, because this is significant for a couple of reasons to me is because when I made the overture about introducing you down, you were a skeptic. No, you were, and I think I told her. I was skeptic. I was skeptic on the cost because I saw the presentation at the fast market about directly from Brian who Lossian metal. I didn't talk, she wasn't talking about using this directly in the liquid cell, but that attribute is still there. It's still shortens, see the supply change. You became a believer. Yes. Now the question is, when will that technology be ready for prime time? I think it depends on how fast we can get funding because to scale it up, require building what you need to put in a lot of investment, because right now it's a lot of scale. We need to build pile of line, we need to build production line, or we need to partner with some major big battery makers. There's many, many different ways to bring it to the market, but you require a lot of funding. Okay, well, I guess this is a, we'll put it into coming attractions. Yep, yep. I think it's the only money is between the technology and the market. Well, I first met Emily in 2019 and she was talking so far above my head. I said, you know, you got to dumb it down, pretend you're talking to your third grade nephew, but she had a compelling story. I'm glad to hear that you're still advancing that forward. Let me ask you a little bit broader question is how do you decide who you're going to work with? I mean, you get a lot of, there's a lot of requests you've got over three decades of experience. You're working with Pure Lithium. Most of my audience is very interested in the fact that you're a board member of Lithium Americas. You're still involved with Pooley and some others. So what is the driver for you to say? I'm going to get involved in that. Yeah. First of all, of course, the project is interesting enough. Number two, I have to make a judgment whether my skill set is a good fit. I can really help. I can make a difference. So if the project is interesting enough to me, and I judge, I can really make a difference. It's not like, yeah, it's interesting to me. I can learn a lot of things. But I can now make a difference. That wouldn't work. So it has to be, I have to be useful to the project too. So I can make a difference. And it benefits me as an interesting enough to me. And it provides enough personal reward, everything to put together. Yes, chef. And it clicked. You've been on Lacks boards since 2019, I think? Yes, October 2019. You worked through the split. What have you learned from that experience? And what do you appreciate now about the lithium industry that you did before you got involved with them? Oh, I learned a lot. I enjoyed every single year, being at an old rack and then the new rack after split. Oh, I enjoyed single step away. If you remember, right after I joined-- soon after, I joined the board. We were head with COVID and building. We were in the height of building up our project in Caltraria, Argentina. And we were head to with COVID. Lockdown, all those things. So I learned a lot from my colleagues. I enjoyed working with my colleagues, board colleagues and management colleagues. I'm a little bit more involved with management than usual. But I think it's needed. For a-- I still think we're-- we're start up. And when I was working with a multi-core mountain pass right Earthman back in 2010, I was opposed a lot to money before at FMC. Even though I visited our homebrew mortal project, but I wasn't too-- I didn't-- to tell you the truth. I didn't pay a lot of attention to it way away. Absolutely, it's not my concern. The first time I was supposed-- I was at the multi-core mountain pass because it's really a mining project. But now, this is intimately involved. So I learned a lot about lithium mining. Today, on the lack board, I have retired senior executives from BHP, Rio Tinto, our chairman, very, very seasoned mining exactly from Barrick's code. So I'm learning a lot from them. I started appreciating before when I was purely, purely downstream battery scientists. I didn't appreciate mining piece. Now, I really appreciate this. This is really needed for our industry. Without critical minerals, you can make a motor fork. I require a rarest magnet. You can make battery works. I require a lot of critical mineral. So on the challenges, I set the cultural time. Now, it's archipage. Each time, yeah, having people like a jungle of us is really good to stay calm. Every time we have a crisis, we put our heads together. The team work well. The chemistry is really, really good. We put our head together at board level and the mansion level. We get problem solved one after the other. And you never know what's around the corner. Every time you think you solve a problem, everything's good. And especially in today's environment, I think crazy-- I called it-- forgive me. I called it a crazy time because a lot of things wouldn't have happened 10 or 20 years ago. You can't even imagine. But the days were different. One day, you have this. The other day, you have another thing. It's very hard to plan. But having this ability, a good team to handle unforeseen challenges is great. I learned a lot. I mean, drawing it. This episode is also brought to you by First Phosphate. The company is developing a rare igneous phosphate mine in LFP battery supply chain for North America. First phosphate has produced commercial grade LFP battery cells using phosphoric acid from its own mineral property. First phosphate trades on the NASDAQ and CSC under the symbol PHOS. Please visit them at firstphosphate.com. Well, as someone who was born and raised in China and is now an American citizen and also allowing for the political sensitivity of the question, what's your perspective on the current state of the US China relations? You can take that anywhere you want to. Yeah, sure. You're comfortable with. Sure, of course, I call the US home. My son was born here. My future generation is going to live here. This is their home. So this is important. I think in terms of US China relations, I think we just need to make sure we manage it. There's going to be a rivalry. I make no mistake about it. There's be a competition. There's a rivalry. But we just need both countries just need to manage it. I hope we don't see war at least not hot war because it will be catastrophic to either country. But if we welcome a healthy competition because it probably will benefit the world in terms of technology, more competitions are better. I hope, again, both the government can manage the relationship. So even though we'll continue to compete, we'll compete in a peaceful way. Amen. Last question before a rapid fire question. Looking back on your time in this industry, and you stir it off in physics and wound up, Jeff Dom got you to embrace the dirty black powders. But what have been the biggest surprises in your three decades in the lithium battery supply chain? Oh, if I say I predicted the lithium-ion battery or battery has become this big, I would be lying. I never-- back when 30 years ago, when I started the working on the Suman battery material, I never thought it was going to be a niche. It's going to be important for portable electronic. At that time, California already passed a law about this sort of a zero emission mandate, but I thought it's kind of a heart. And the auto company, remember, GM, turned out a let-ass at the car and didn't work. And I remember we're at FMC early 2000, 20 years ago. We get heroically reviewed by corporate, our CEO, Bill Walter, Mr. Bill Walter, always came to our division. I was one of them to present at the battery future. He always-- I remember vividly, he always said, hey, don't talk about EVs. Because people kept telling me EVs around the corner. I don't think I'm going to see it in my lifetime or something into that effect. You pull out your cellphone like a tiny small one. Because otherwise, once getting smaller, you put out a cellphone. So if you guys, because we're a huge asset, we're talking to the customer less or something, we'll talk about BYD enough so far. Hey, don't talk to me about BYD. He says, this is the thing. This is important to you. Work with Sony. Sony is the future. Don't talk about BYD. I don't want to hear. So today, if you go to Europe, you travel. You see BYD's theorem in many major European cities. I think Sony is the battery division's already devastated to a mirror time. And it has become a niche. Wait, you and I used to live at a mallah in Koryama. Oh, Shinagawa. Oh, we visited Nishi-san in Shinagawa. Big, busy place, all their factory, Koryama. Oh, that's really our foundation, our beginning of our lost in battery. business. But today, the biggest surprise is how big losing my has become, how big China has become. In the late 90s, when I started to visit the customer in Asia, Japan always my first stop. I would go on a three week trip, probably two-third of the time. I probably land, not even in Tokyo, I would land in Kansai. Because the center of gravity, remember a salio, panasonic, and the Japan storage, he patches your own Kansai area. So I would always flew into Kansai airport, not even take a train to Tokyo. So that's kind of a two-third of my time. Then only after year 2000, I think we started to make stop in China, Korea, and Taiwan. Then soon after Taiwan dropped off the list, because the list of my battery operation in Taiwan, oh, moved to China. Then we were thinking, oh, the old three places, like a three-like two. Yeah, three-like two. We make three stops, right? And I think at one point, the market share, one-third, one-third, one-third. So I never imagined one day at the beginning of this podcast, you set the China over 90%. That's a big surprise, I'm hoping, and this is related. Because of that, I think the list of my battery space is so much bigger. Because China, we have to quit in China for driving the cost. We done. What you're saying to me is one of the huge shocks, because you were born raised in China, you're a battery scientist, and even you are surprised by what happened. And I would give the same kind of answer as that. And the same thing is true now, in 2020, our forecast for 2025 were way low. In 2025, our forecast for 2030 have already been revised up by almost a million tons. It's just, there hasn't been a time yet, and it will come when somebody overestimates. Right, right. And also, I want to point out another number, it just came to my head. Remember when we started making calls to Sony, how much it sells for their batteries, the small 1860, the cylindrical cell, 10 US dollars a piece. What's the energy in that? It's a six to seven watt hour, six to seven watt hour battery, 10 dollars. So convert that to a dollar to kilowatt hour. It's just huge difference today. So I never, like, that's why people said it's our seals are correct. It's only important to smile electronic. You work with electronic company, don't bother with other people. So I, I never imagined one day, I would see so many EVs on the road. I never imagined Lusimah will be useful in the ESS. It could be some other application we haven't, we haven't imagined. Oh, I never imagined one day you could fly in an electric thing. You call it your own or it's not airplane, it's some flying vehicle to beat the traffic from probably not long distance yet. But again, I mean, I don't mind or something. Some, some more application, maybe you never know. All right. I'm going to ask you one rapid fire question, hoping I know the answer. What's the last book you read? Oh, last book I read is called the Lusim Confidential by a famous author to a lawyer. And in what's your assessment of that book? I'm biased, of course, I have to admit, because a lot of figures you wrote in the book, even your client, you did a name, your names. I knew them. As sort of a student, I read the description. I knew exactly who you were talking about. So it's a lot more interesting. So my wife, by the way, my wife has also read the book. So she's more interested in the aspect life and that sort of a social aspect of it. So I certainly enjoyed it, but I have to be her criticism is that, oh, for me, because I don't know, I don't care about Lusim industry. There's way too much, way too much industry information. So I said, hey, I enjoyed everything because in number number number one, I love to know this industry changes too. I also know those people, business people, he this wife, especially within FMC. And it's like, those people just come alive vividly, but to a to a casual reader, she's mostly interested in your aspect life. Yeah, well, and that really is the feedback I get from people from different backgrounds is that the book has different appeal than different people, which is what you hope for, actually. Yeah, we, we, well, thank you very much for your autograph. So she got that hard copy, and I had to read from a Kindle download. We were fighting for that copy. So it's really very interesting for us to read. And hopefully you have a sequel, maybe one day. I may, I may. I, I thoroughly enjoyed writing it. Having you on the podcast is, is really, it's a blessing for my listeners, because there are very few that have your experience. And thank you. Thanks for, I think this is the sixth time you've been on. If, if we include the geek squad, which was five guys, I believe. Oh, yeah. Anyway, you want. Thank you very much for your time. Appreciate it. And look forward to seeing you somewhere soon. Thank you very much. Always my pleasure, Jill. It is always a pleasure to speak with you on. I always learn some new things, although insiders in the lithium ion battery supply chain, whether it's lithium cathode or battery cells, no, you want. Well, I think he's still very much underappreciated by the broader community that comments on, uh, supply chain. There are very, very few people out there that, uh, have the contacts, uh, no CATO inside now, no BYD inside now. Uh, I spent a lot of time in meetings with you on all over Asia back in the day when we were both at FMC. And it was always a pleasure to see the level of respect he received for his intimate knowledge of the space. And that was contrasted a bit by, uh, the amount of respect he got from the company he worked for at the time. And, uh, I think for most of his career at FMC, Yuan was a very much underappreciated asset. I think finally when, when John Evans was involved, he, he got it, but FMC tended to not really understand the value that Yuan had. And clearly, what happened after he left FMC is testimony, uh, to the fact that, uh, he has been a major player for three decades. And I would just make the point that, uh, there isn't really a nicer human being in the space either. Okay, we're now at the part where I asked for the order with the um, confidential sold pretty well, but it's still not gotten the kind of percentage of the podcast audience, uh, I think it should have. And, uh, I will again ask you, not only to buy the book, but to review it. And, uh, go out on Amazon and just give it a review. And I do continue to apologize to the people in Australia and the New Zealand, Amazon is failing miserably to, uh, fulfill the orders. Uh, it's a big disappointment to me that they seem to dribble out a copy here, a copy there. If you order the book in North America or Europe, it's pretty easy to get based on their printing, uh, network in those places. But, uh, Australia, it seems like a lot of people are waiting and keep getting delay notices. So, uh, I wish I could do something about it, but in that regard, I, powerless. On the last podcast I asked if anybody from Africa had read the book and I have now heard from people on the continent of Africa that have ordered and read the book. So now all the major inhabited continents are represented. If you are going to Panorama Minero, the book will be available there. I have shipped 125 so far of a total of 150 that were requested to be there. So if you are going to the event in Hohui in October and don't have the book, I will be happy to sign it. You can purchase it I believe on the registration document when you send that in. Thanks again for listening.