Systems Build Or Block The Future with Asma Sharafi, Chief Executive Officer & Board Director

[MUSIC] Hey everyone, welcome to this episode of Enterprise Alchemy. As always, I'm Antt. Today I'm joined by Azmar Shiraffey. Now, Azmar, you are former CEO of Palako, US, so this part of Volkswagen's battery tech. You've got deep expertise in this electrification battery development space. So thank you so much for taking the time to come and talk with us. And I very much look forward to having a chat and learning all about this space. Yeah, looking forward to that and thank you Anthony for the opportunity to join you today and just having a conversation. Absolutely, so let's get straight into it. There's just so much stuff that I know you're a cross and that you know. So I think this one should be really interesting for those wanting to learn a bit more about it. So tell us a bit about your journey. How did you get to be the CEO of Palako? And also, I suppose, because I know like you've done a ton of stuff in terms of academic credentials as well. So just tell us a little bit about what took you to where you are now. Yeah, I am a material scientist by training the way I got into the battery world. I remember during my master's of studies, I worked on a chemistry LFP, a lithium ion phosphate material. I'm like, what is this materials used in batteries? And I started learning and digging deeper into the batteries and what I was fascinated by batteries was they are like a live organ. They evolve over time. They require a specific condition for better operation and they age under a stress like how we do. And it is sort of interdisciplinary complex system where there are materials, components, manufacturing, a lot that has to come together in a perfect organized way in order to make that battery coming to be that living organ. Right, right. At the beginning of my career, I work on this advanced battery technology looking into a case there is a lithium ion battery that exists. We are enabling electrification, but for enabling to push this boundaries for satisfying our customer and then means of different applications, there are different flavors that are required. So I started working on advanced battery technology, mainly on the fundamental aspect, looking into materials that are existing in nature. You walk in Arizona, you can pick up a stone, a garnered material, has a structure, it is red, beautiful, but you cannot use that in batteries, but you have this well-thought-priotic table in front of you that you can take out this component, replace it, to make it the right material, garnered material for battery technology. So I started working on that and I felt okay, I need to walk with my technology, we've done enough fundamental and innovation in order to see how we can work with this technology and now I want to take it from laptop market. And that was my transition to go at four, mainly focusing that on the aspect of finding out what are those technologies, how we can adapt it for automotive, into remin and cube work and then in my recent role of finding out okay now what can we do in order to take this technology from laptop market and that has my career motivation to walk with my technology, taking it from laptop market just because I feel innovation is no longer about materials, innovation today is about scaling what you have built in the lab. Okay, so your PhD, what did that cover? My PhD was basically working on that material, literally on batteries, maybe a brief about that, half-friar component, anode cathode electrolyte, you're getting lithium ions to shuffle from anode to cathode and then electrons to provide you with electricity. There is a lot that has to happen in order to make sure it is operating safely, so you don't have explosion, you don't get materials to catch on fire. So I started reading about the that's one advanced battery technology where this liquid electrical light component that enables this lithium ions shuffling from this to anode and cathode materials is the component that is causing a lot of safety issues. And there was a book I read by Huggings Advanced Batteries, I talked about there is a solid estate battery, you take out this liquid component that flammable component with a ceramic that is mechanically can enable like the lithium ions to shuffle back and forth while mechanically will not let this dendrite which will be lithium or like say if anode going through to connect this anode and cathode that will has a rush of electrons going through and catching fire. So I started working with this advanced battery chemistry in order to find out how we can push for that improved safety that causes a lot of anxiety and a lot of system integration engineering around the battery concept. And the other piece of it was really finding out how we can enable other materials as anode and cathode. And that was lithium metal, lithium metal can push the energy density to be 450 whatever per kg and in the battery chemistry today we are approaching 300 whatever per kg. Why do we care if you want to enable aviation, if you want to be able to lift that heavy electric aircraft, you need every grams of the battery and you need to enable that lithium metal. If you want to have your defense or I don't know the soldiers that are carrying a lot of weight that are carrying the batteries, you can go for much lighter weight batteries and safer. So these are the things I worked on. So I work on that new chemistry to enable that next generation where we can in electrification of EVs, we can benefit from longer range, safer system, we can enable aviation and aircraft to be electrified, we can help our defense and energy security to be there and also pushing for fast charging to compete with the charging, you know, like if you're going and getting gas in five minutes, you don't want to stay in the charging station for an hour or two hours that is going to add up to your road trip. So these, that was the essence of my PhD of finding out what is that group of chemistries that we can work in academia, handoff to industry to a scale up in order to push the boundaries of our current niche of my own battery technology. Right. Okay. This is really interesting. I don't pretend to be an expert, right? And I understand some of the basic chemistry, but at a rudimentary level, I would admit. So, but what to me is really interesting about what you're doing and you in particular is that you have this super deep scientific knowledge, but you also have a business perspective. So like you were talking about the scale up, right? You know, people like me and our audience to understand these things and the challenges, I think in a practical way that people can understand. There's a couple of things I'd like to explore with you. And now I know you touched on this briefly, but maybe just a little bit more on this sort of transition to electrification in various industries. And how you see that kind of transition playing out, whether it's like you said, automotive defense, whatever. How you see that? And then there's a couple of other things I'd like to explore, but just give us a little bit on that. I would say like originally every time we talking about electrification, everyone was like automotive, I get it. Like you want to make it these, but I don't think we are talking about electrification only to talk about automotive industry. Electrification is really becoming a part of our life. It is very horizontal these days. Consumer electronics, aviation, defense, energy security, all of that disconnectivity that we have. The presence of AI, you do have data centers, data centers needs and required energy to be live. You're putting a lot of stress and degree and batteries can be that supplementary. The energy storage supporting that power backup, those are required. So I would say electrification in touching every aspect of our life, it is not about only one industry is all of the industries. And it is where we need to make sure we have the right energy security. It's becoming that previous oil to stay competitive in the global market. You need to have a say to control the cost, to control what gets and what customization will require depending on the application. If it is your EVs, if it is your energy storage, it is like right now we have a lot of challenges with the power auditors due to the hurricanes or whatever is happening. And that is where electrification will play a significant role and connectivity that we have. The fact that the two of us are talking to each other. It is because of that electrification that we can sit at home and in our offices and connect. So I would say that is the new definition of electrification and it provides us with that global security and one part of it, one piece of it is battery is that enabler to make sure that connectivity exists and that burden from the grid is taken off by utilization of the batteries in different industries that we are operating with. Right. Right. And so battery have a role to play it. In terms of mobility, obviously, just in general, like having an iPhone or any phone and saying, well, it allows us to be untethered from a PowerPoint, right, and walk around with it. And I think, as you said, where there's like natural disasters, other events, the grids producing excess power to be able to store that. So kind of makes sense to me, like, that makes sense as a concept. So maybe going down one level, because this is something I'm really interested in and something you mentioned before, like energy density. The more energy dense us, like processes, if you like, we can release a lot of energy to do useful work. Something like you said, in a practical sense is like how far can an electric vehicle go on a charge? So it doesn't run out of batteries. And also, ideally, that it charges and take it now to charge. So you can say, right, it is actually comparable to putting petrol for diesel in my car. So what are some of the challenges, the practical kind of challenges you face? Because you're really developing, like, material science, chemistry, it's more than software developing this kind of technical hardware. What's the real world challenges to making this stuff more efficient? Yeah, I would say that's a good question. Like basically hardware versus software development. I would say hardware development is in a very different time constraint. Let's assume we are at the proof of it. We have passed the proof of concept. We know this technology, just hardware will work. So all they said, bad. It is working in the lab controlled environment. Now I want to scale it up. What I need is a design. I need to test and I need to build and then I need to test. And that is going to be a loop. Hardware development requires a significant capital investment to get to the point that you can design, build and test. And every iteration not only will cost millions of dollars, but a lot it takes time. So you get your data. You need to review it. You need to make sure you're validating that design after building all of those prototyping will take a lot of time and will cost. We need investors to be patient to invest to make sure we're creating that infrastructure. You need a footprint, you need the permits, you need landing, the equipment, you need to make sure that equipment does what you need to do. And once you start building as you're testing and validating, it is performing to the KPI. The KPI performance indicators are to say, okay, it is performing to this performance, making the safety is their reliability is there. So all of that will take time compared to software that scaling is easy. Like literally, first of all, go through millions of iteration. And again, I don't want to take away from the essence of what it takes for software development. But compared to hardware, software development, those iteration, you can go through millions of iteration overnight. It doesn't require that capex investment at the beginning in order to get it working. And once it starts working, deployment and scalability is much faster. So what will happen is we need to start utilizing AI simulation automation to go through that design build feedback loop. Like using the machine learning and simulation will help us go through faster iteration instead of physically building it. Once we go through that, we can save a lot of money in making sure my design is scalable. My design will operate within and all to get there, we need data from the previous words to feed into the AI to feed into the machine learning. So those feedback loops are faster and much more precise. And you can trust it because every time you have a simulation, like, but do I trust it? Is it really tell me how it will behave? And that is going to be that feedback loop. And not only that part, but the other part of the hardware development is it is phase gator. You need to go through phase one, do the iteration in order to do phase two. And then it is sequential. And as a result of it, how it is like the building up in time and it takes a long time. So we need to find out how we can compress that cycle loop and that learning by that utilization of AI and simulation and trusting the data in order to make sure in a faster time, we can get to that return on investment just because investors unfortunately are shifting today to support software just because they get that return on investment much faster. They're losing that patient. And if we just lose that funding coming in, we're not going to cross that value of death where you want to have that technology is working in a lab, but you need to take it to the mass production. So it is going to be in application. Go. Yeah. So if I can paraphrase the AI stuff helps you. And it's the question of how reliable is it, but to help you do more rapid prototyping. So you reduce the capex that's needed overall and reduce the time to market. Got you. So where is the battery tech market at the moment? And what's the state of play now? And what do you see being the state of play? Let's say five years from now. That's a tough one. Well, battery technology is everywhere as we mentioned, but there are maybe in the US. I will say the innovation happens in the US. We are not shy of innovating and we are not shy of funding innovation in the US. We come up with all this data, we come up with silicon chemistry, with sodium batteries, with how efficient the cycling can be, the AI driven, manufacturing, all of that. Those innovation can happen in the US. But unfortunately, we shipped this innovation to Asia market, Korea, Japan, China mainly are building and scaling up those innovations in a fast cheap while they have the entire infrastructure. They have the material, they have the supply chain, they have the equipment, they know the manufacturing, like that learning loop that I mentioned that cycle time of years, they brought it down to months. And where we are falling short is how we can keep that innovation in the US and scaling up, scaling up and industrialization. That is the biggest gap that we have. We had that manufacturing arm. I think the transition into innovation and this paradigm of China is sort of just a fast forward, they never innovate. They just get our technology and a skill. I think that paradigm has shifted. They are innovating in parallel. They are utilizing AI for that preventative maintenance. They are doing that automation, the efficiencies that are required. And right now that is where the US market in the battery sector is falling short. And we are falling behind that getting that market share in the battery production. If you see gigafactories coming in the US, it is LG of the different like Korea and like different like Asian countries bringing that manufacturing side here. We are lacking the workforce that can operate that manufacturing, we lacking the education needed. And again, by education, I don't mean take the people who are going to operate the line, put them in classrooms and teach them. That's not what I'm talking about. Learning as you're doing it because our PhD students are masters, students are under as higher schoolers. They learn the physics of it. They learn the fundamentals of it. But when you want to get the process done to get to that reliability, to the yield target, to the cost parity, to scrap reduction, to make it manufacturable, that is the skill set that we are lacking today in the US. So one part of it is really trying to find out how we can scale our innovative ideas, take that market share and scale up. But unfortunately, the more you're looking in the US, we try and then the companies are going down. They are struggling. They either do not have the support that they is required by our government to support them in the funding and the permitting and the policies. They are either getting there, but then they cannot really bringing the skill people and workforce who can take them through the finish line. We're either lacking the leaders who can bring that fundamental material, manufacturing, the business case, all of that into that cohesive leadership to guide that scaling up. And that is unfortunate. I don't think we are there and that will be the manufacturing muscle. As a muscle, we have to start exercising and reshaping again in order to be competitive in the global market. We're no longer competing, I think, in the US, we're globally competing. And it takes all of our different industries to come together in order to stay competitive in the market. So here's a question for you. I've often wondered about this and maybe to set the scene. I'm here in the UK. Let's say the time it takes here in the UK for a council to fix a pothole or a piece of broken road is about the time it takes in China to build a city. I think we have a bit of a problem in the UK at least. Obviously, you know the US far better than I do. But it just seems like we're just no longer equipped to do like that sort of advanced, manufacturing, the iterative stuff that needs people to work fast. It seems like countries like China, Taiwan, Korea, they just have an innate advantage in the way that they work forces are structured and what they're willing to do. Like you said, that commercialization leg to bring it to the finish line. What's your view like, does the US and the West have a part to play here? Can we win this game or are we fighting a losing battle? Do you think? It's an interesting one. I remember I was in battery show two months ago and everyone was like, so does it mean we lost the battle? Should we just give up and move on? I'm like, if we give up, then what is that energy security? What is that national security? So I wouldn't say we lost the battle any time you start getting there is going to be beneficial. We cannot adapt what has been working in China. The benefit that China for example, they have the materials they have the supply chain, they have the manufacturing mindset, they are having their incentives supporting the government supporting the manufacturer. They have the whole ecosystem. We don't have that ecosystem. We are relying on bringing material even if the material is coming in from Australia. It goes against the refinement in China and then we bring it in as Western countries if the Europe and US wants to compete against the Asian market and it's not a competition. It is that security, national security that is required. We need to exercise that manufacturing muscle and I think we are going after the perfection in instead of speed. We need to create that balance up. If you don't Elon Musk says fail fast so you learn fast to adapt and make the necessary changes so you can make it work. If you just stay in designing for that perfection you never exercise that manufacturing and finding out what are your gaps. I need that infrastructure. I need that material being refined so I can control the cost. I need the equipment landing to my happen faster. It takes us a year for like landing the equipment they get trapped in the customs during import. There is a lot of fluctuation into the pricing just because of the incentives that are going around these days. There is a lot that is happening and unfortunately we have to get to that design space and fast iteration in order to go after speed instead of just that perfection that you're going after. The other part of it is I feel we need to bring in industry, academia, startups, government all together. It is the matter of sort of solving these problems, getting everyone to get to collaborate, that collaboration and communication. If we haven't started up the startups are learning about faster iteration. Software, the reason they are much more successful that Harvard is that's faster iteration. How automotive can benefit from learning how consumer electronics are landing different phones on a yearly basis instead of EVs every five years. What is that faster iteration learning from the different disciplines coming together when we're having the academia working on that foundational and fundamental chemistry or material design or whatever that is. How they can have that mindset in their brain for the manufacturing we don't think about manufacturing as a last piece we think of manufacturing as you're building as you're innovating we bring the startups with the OEMs come together that faster iteration and that manufacturing discipline that the OEMs can bring to the table the government today needs to support that uncertain scale of phase by creating the necessary policies. I react I think was beneficial just because it push and the right button to say hey like you need to start manufacturing otherwise you find actually you're going to be under a stress. So that button was necessary for us to wake up to say okay like we are losing that battle and as a result of it we don't control the cost we don't control what gets into our application. We just have to pay significant premium prices to really have that battery manufacturing and I think that the interdisciplinary different components coming together the government support the funding that is required the learn to fail and on learn and learn again these are all necessary different aspect that has to come together so we can say competitive. So it sounds like obviously China has some advantages in terms of access to the raw materials which is in itself I think in advantage but the other thing that I'm hearing and it's interesting is they have a lot of sounds like a pretty locked in ecosystem where the government has said we want to be good at this so we're happy to invest money and what's required and help these manufacturers and everything else. And so in terms of energy security energy independence. The battery tech has a big piece to play potentially in that overall mix but in order to do that there has to be like not just cross industry collaboration but governmental collaboration with you know the universities and things of that nature to say we're all going to work together to bring this. To the finish line if you like so let's say in the US what can the government do to support this toll battery development and electrification process so I think one part of it is really the workforce that I mentioned I think everyone was talking about the capital intense and how the funding of that capital investment at the beginning so you can get it done is essential but we have. A lot of the equipment that just landed but we need operators to operate it and we need the training of the workforce and I think that is through the government support to make sure we are not only funding the innovation and we are funding that workforce training the other one is a policy if I want to set up a lab here the permitting and all of these roadblocks that I have to go through in order to get operation. This hard I was reading this book abundance and they were talking about there was a rail that they wanted to have between San Francisco to LA and it take them eight years of evaluation of the environmental impact and what does it take the permitting in that age is millions of miles of rails was built for connectivity in China that is a speed process that I'm talking about at government should believe in an unfortunately lost that trust. In the battery sector that we got the funding but we couldn't get it through that finish line it is not the money it's not just all about the money it is about that building that ecosystem accessibility by having the right support for the training for the incentives for the permitting for the policies that enable us instead of block us from taking it to the next level that is essential for us in order to really get there and again creating that urgency. For us to get there and making sure if I fall if I fail I'm just not being blamed your lesson learning the lessons of why did I fail what was the component that caused me fail let's fix that component in order to make sure we can get there we have lost that scaling up and we are relearning it we reshaping it while Asian countries mainly China has been doing that a scale up and they went through the process. And they went through that aeration they shorten that efficiency that they've done they benefited from utilization of AI we always believe because we're innovating we're going to be successful they are innovating in parallel and what happens is the government is giving them incentives their government is triggering them to a cake go and risk it is OK I will be behind you to back you up I will provide you be that infrastructure and by being that in neighbor. I think that is what we need otherwise we're going to just talk about it we will acknowledge our problems we will like your gap but we will never close that gap yeah yeah yeah it's so this is I think quite a salient point and something I've been thinking about a bit lately is in the west whether we have lost somewhere the balance between risk and opportunity. So and not to say that you should do things that are stupidly risky at all costs i'm not saying that at all right so just for the listeners to get that point straight from the get go so don't get me nasty emails because everything now is viewed through a prism of risk right that at the end of the day it slows things down and you might say well that's the price we're willing to pay but I wonder whether people really truly understand the price that you pay which is that you can't compete in things like this which are potentially like you said nation changing in terms of energy security energy availability you can't beat a nation that has a more flexible iterative approach and is willing to to embrace risk and this maybe goes back to your earlier point where they say you're chasing perfection and letting perfect be the enemy of good and saying well well in actual fact sure fact what we need to do. is just try it and yeah things like it's not going to be a perfect linear path from experimentation to investors make loads of money tomorrow but it is a potentially transformative technology. So I don't know it seems to me like there's a part, there's just a mindset in general that's in the West has a bit of a part to play in this. And that's exactly like what we talked about. We need to take risk but we need to take a calculated risk. We should not just go and build the design and say okay I'm just building it I'm earning. You need to utilize the sort of platforms and again I think AI is not an option now. AI is a significant part of that risk taking assessment and what you can do is utilizing that automation. You're realizing that AI feeding if you have a garbage in you get garbage out. So you need to feed AI, you're feeding your machine learning with the right information so the output is going to be correct. And then as you're taking those risks if you want to speed up your risk wouldn't cause a lot of damage. You know like that mindset like I feel we need in the West looking to what is our strength and having that communication and transparency will help us utilization of that AI. And again without risk you're like your high risk high reward I think you need to assess what is the risk that you're taking what technology are you trying to scale up. What are the potential failures and then how can you think about that as you're innovating as you are iterating on your design. And as I said if you just think about okay I do all of these busy work at the beginning without in my startup I have this unique technology that I'm just iterating and I'm shutting the doors. I don't want to release any information because people are going to steal my idea. But if you start connecting with the industry with the OEMs let's say I'm a battery company OEMs are my customers by onboarding those customers early on I can validate my technology with them together collaborate with them have the government see that this collaboration is showcasing and I'm validating the my technology with the external sources being OEM the actual customer they are getting exactly what I'm telling they will get I build that trust with my investors being government or being the private sector and then I'm having that manufacturing mindset so that is how I can de-risk up instant up creating silos I am in my silo developing the technology automotive is in their silos working in their different platforms and then we need to start communication much earlier on and those will help us in de-resking the learning opportunities and we can benefit from a biotech biotech has been scaling up for a long time under a very precise controlled environment we can help and find out what has worked in their industry so we can benefit from it in our battery industry biotech can benefit from semiconductor how they've been pushing for higher yields so I feel right now everything is so interdisciplinary and if we just create those separation into different segments and we don't bring everyone to collaborate together in the west then we're going to just be very slow in adaptation and yes maybe five years from now 10 years from now I don't know what is going to be that time for them then we can just say okay we lost that battle we are behind there is no way that we can catch up I think we are now awake we realize our gap then I went to battery show it was always like this is my technology give me the money I will put it in your application tomorrow but this year was this is where we are falling short every single one of us it is not about which technology you're working on it is not about if it's automotive or if it's aviation or if it's medical or if it is consumer electronics we are behind it is not about if you're working on silicon chemistry or solid state we are behind how can we come together to build that ecosystem and infrastructure and collaborate together to a state competitive globally but what's very competing against in mainly Asia market right so here's a final question for you on this are we now in this kind of battery tech let's say in the west right and and other let's call it adjacent you know manufacturing efforts and from what you've seen at the recent show in Detroit the battery show is this kind of the pivotal moment where if we don't embrace this idea of saying we need to collaborate we need to change our approach to risk and and how a fast we can iterate that it's literally like this sort of thing where it can go one way or the other we we'll look at this in five or 10 years time and say we are competitive on the global stage or have we've lost the battle yeah I think definitely this is a pivotal time we are late already but it doesn't mean just accept failure and accept that you're defeated there is still time and when we were successful was when everyone from different discipline came together during World War II where we were behind in the west if we wanted to stay live we needed to have the government backing we needed to different automotive started building tanks and aircrafts and it was just like go beyond what you define yourself come out of your bubbles and go after that and again that communication that collaboration is required and I see that momentum I see that everyone the more I'm engaging with my network who are in battery sectors I see how the everyone is acknowledging that if you repeat the same thing over and over you cannot expect a difference we have to do different and I think the problem has been identified and we acknowledge we went through these two phases the third phase is what are those solutions how do we make it task oriented to get there these are the actions that we take and I think that there is a lot of momentum that we're building is just about working on it and really taking actions on it instead of talks talks are cheap is easy you don't take risks you don't make decision you just talk about it and like my goal if I have little tiny impact is how I can create those actions how can I take those actions in order for us so five years from now we say okay look what we've done five years ago that impacted us to be here and stay competitive in the market yeah I admire you taking on it's a big thing it's a big challenge it's not for the faint-hearted but the world needs people like you who are willing to take on stuff at that level I can only wish you all the best but thank you so much for coming on and spending a bit of time and shedding some light because I just think this is applicable to so many situations and so many industries as I was thinking about it but I love that we were able to actually lay out this challenge and kind of stake out the global landscape on this and since say okay well where realistically are we and what are the options going forward so thank you Asma so much I hope Anthony I can come to your show I don't know three four five years from now I say you know I did it I'm hoping for that I will have my champagne and we will open it and we will cheer together and hopefully we can celebrate I think we can do it it's just a matter of putting our energy into it and getting that that across their free slime yeah yeah absolutely yeah well look hey I keen to hear updates on where you're at and what it's doing because it's a massive issue so all right everyone that's all we've got time for on this episode of Enterprise Alchemy as always I'm Ants see you on the next one