The Lightest Metal with the Heaviest Impact
By Noam Maital & Shlomo Maital
In the 1967 movie The Graduate, Mr. McGuire, played by Walter Brooke, tells the young Dustin Hoffman: “There’s a great future in plastics. Think about it. Will you think about it?”
Spoiler: Hoffman doesn’t. He’s thinking about Mrs. Robinson. And massive mountains of plastic are now polluting our land and oceans, endangering our future. A remake of The Graduate might rephrase Mr. McGuire’s advice. “There’s a great future in lithium. Think about it.”
It is hard to imagine life without the all-pervasive lithium-ion batteries in our phones, laptops, electric cars and other appliances. Dr. Akira Yoshino, who shared the 2019 Nobel Prize with John Goodenough, observed that “Lithium-ion batteries have made today’s mobile IT society a reality. And in the future, they will play a central role in building a sustainable society.”
The lithium-ion battery technology is in part a story of tacit US-China collaboration.
The American engineer John Goodenough (yes that is his real last name…) figured out the science of how to make superior lithium-ion batteries. And the Chinese chemist Wang Chuanfu figured out the technology of how to manufacture them efficiently.
Goodenough, who passed away on June 25, age 100, discovered how to layer lithium with cobalt oxide, producing rechargeable room-temperature batteries with three times more energy, yet smaller and more compact than other versions. He won the Nobel Prize for this at age 97 and never patented any of his breakthroughs, making his discoveries freely and widely available to all.[1] Goodenough was a deeply religious Episcopalian and eschewed the wealth he could have attained.
Wang Chuanfu was born in a poor remote Chinese village in 1966 to a peasant family. Through sheer will, he fought his way to a Master’s degree in chemistry and discovered how to make powerful cheaper lithium-ion batteries, without cobalt. Rather than stop there, he chose to move his lithium battery startup BYD Build Your Dream into making electric cars. Warren Buffett’s Berkshire Hathaway in 2007 bought a 10% stake — and made another fortune on it.
To our knowledge, Goodenough and Wang never met. Yet the combination of an American scientific innovator and a Chinese technological innovator has immeasurably changed the world. It is regrettable that US-Chinese hostility may in future truncate creative technologies that enhance our lives, when once tacit collaboration leveraged the core competencies of each nation, e.g. Apple’s designs and its Chinese plants.
In the race towards electrification, two pioneering companies, Better Place and Tesla, emerged around the same time. In 2008, Tesla introduced their Roadster sports car, captivating the world with its electric power. Coincidentally, Better Place, an Israeli EV startup, also launched their ambitious vision for electric mobility. However, their paths diverged, leading to vastly different outcomes.
Better Place, backed by substantial funding ($850 million in total), aimed to revolutionize the electric vehicle market with their robotic battery swapping stations. Unfortunately, their model met resistance from owners who preferred the convenience and certainty of charging at home with fully charged batteries. With only 21 battery replacement stations available in Israel, Better Place filed for bankruptcy in 2013, ending its short-lived five-year journey.
In contrast, Tesla recognized the importance of charging infrastructure and addressed the consumer’s need for accessible charging. The company strategically built its fourth-generation Supercharger network across the United States, enabling rapid charging of lithium-ion car batteries in just minutes. Their approach resonated with consumers and played a pivotal role in Tesla’s success, garnering partnerships with industry giants like GM and Ford.
The story of Better Place and Tesla underscores the critical decisions that can shape the destiny of groundbreaking technologies. While Tesla flourished and propelled the electric vehicle revolution forward, Better Place’s was left as a cautionary tale told at top business schools on finding the right go-to-market strategy and ‘riding the wave’ vs. ‘creating the wave’.
The rise of electric vehicles and the growing demand for lithium has sparked a global gold rush to secure supplies. In the second part of our blog, we will explore the race to secure lithium and the implications it holds for the future of electric mobility.
[1] Some 26,000 lithium-ion patents were filed globally in 2019, doubling in just five years. Two-thirds are held by China.