One of the brains behind Tesla found a new way to make electric cars cheaper
What’s the secret to building a more affordable electric vehicle? JB Straubel has an answer. It starts with a pile of old cell phones.
Almost every day old iPhones and other used personal electronics arrive by the truckload at a warehouse in Carson City, Nev., where workers crack them open, pull out their batteries and strip them for raw materials.
To JB Straubel, one of the brains behind Tesla Inc., that refuse holds the key to driving the electric car revolution forward—and making the vehicles affordable enough for everyone to own one.
Mr. Straubel, Tesla’s longtime chief technology officer, pioneered the lithium-ion battery powertrain design that helped propel the Silicon Valley company to what is now the highest valuation in the car industry. Since leaving Tesla about a year ago, he has been trying to solve a problem created by that success: Where to find all the nickel, cobalt and lithium needed to make the batteries that power Tesla’s cars and their growing list of rivals.
Extracting those materials from nature, through mining and other processes, is costly and difficult, and production is lagging far behind expected demand. Mr. Straubel’s company, Redwood Materials, is taking a different tack, quietly aiming to build the biggest car battery-recycling operation in the U.S. The 44-year-old is betting that he can perfect a fast and efficient way of collecting and repurposing those materials to disrupt the centuries-old mining industry.
“Forever the entire market has been dictated by the commodity price of these metals,” Mr. Straubel said in his first in-depth interview about his new venture since it was formed in 2017 while still at Tesla. “This is a chance to change that whole equation and to realize material cost savings in a way that short circuits that industry.”
He and Tesla Chief Executive Elon Musk share an obsession with electric vehicles but in other aspects are mirror opposites—Mr. Musk a swaggering showman, Mr. Straubel a behind-the-scenes engineer whose former employees tell stories of him swapping out lightbulbs at hotels that he found inefficient. Mr. Straubel has been interested in chemistry and batteries since childhood in Wisconsin where a lab accident left a scar down his left cheek and a story to tell when he went on to earn degrees at Stanford University. At school, he gained a reputation in the burgeoning electric car crowd, for converting an old Porsche into an electric car and drag racing it for fun.
Now he is engaged in difficult and sometimes hazardous work on a grand scale. The ovens involved in the recycling run at temperatures of 2,700 degrees Fahrenheit to reduce the materials to brightly colored powders. Lithium-ion cells are prone to catching fire if not properly handled, and the packs housing them often weigh thousands of pounds and come in different sizes and configurations. It isn’t clear yet what kind of market there will be for the recycled car batteries and who the competition will be as an assortment of longtime recyclers, mining companies and startups are eyeing the market. Few are willing to make huge investments yet required for the machinery and tools needed for such work.
It is work that is essential, Mr. Straubel says, if the industry is going to continue to increase production of electric cars at the pace companies are planning. Regulatory pressures to lower emissions and falling battery prices have led almost every major car manufacturer to include electric vehicles in their product lineup. That is expected to drive a surge in global demand for lithium-ion batteries in the next five years to almost 800 gigawatt hours from 177 gwh last year, or about 22 times the amount of cells produced at Tesla’s giant factory outside of Reno in 2019, according to Simon Moores, managing director of researcher Benchmark Mineral Intelligence.
The cost of batteries has long been the biggest obstacle to making electric cars affordable for the masses. As a result, electric vehicles still carry a hefty price premium compared with gas engine cars. McKinsey & Co. estimates that premium at $12,000 on average. Hyundai Motor Co., one of the few to offer the same vehicle in an all-electric and gas version, charges $17,000 more for the plug-in Kona sport-utility vehicle.
Tesla has made great strides in reducing battery costs and is expected to detail further advances during its Battery Day event on Sept. 22. In its early days the biggest cost of the batteries lay in the complex processes to assemble them. As those processes have been perfected, Mr. Straubel says 50% to 75% of the cost of a battery for the industry now lies with its raw materials—where he sees potential for recycling to lower costs.
At the same time, the supply of used batteries is exploding. Half-a-million electric vehicles are expected to be scrapped in 2025, according to environmental engineer Maria Kelleher, who specializes in recycling and renewable energy. The figure should jump to more than one million vehicles in 2030, she projects.
Mr. Straubel already has won over some big name investors. In his first fundraising round this year, he raised around $40 million from investors led by Capricorn Investment Group and Breakthrough Energy Ventures, an environmental investment fund that includes Amazon.com Inc. founder Jeff Bezos and Microsoft Corp. co-founder Bill Gates. Dipender Saluja, a managing director at Capricorn, said what Mr. Straubel is proposing represents a shift in thinking. “It’s about rebuilding what I just finished using exactly the same material,” he said.
Tesla and Mr. Musk aren’t part of this venture, though Mr. Straubel remains on friendly terms with his former employer. Instead, Mr. Straubel aims to work with the entire automotive industry, developing recycling processes that work for any battery and car design.
Mr. Straubel first became enamored of lithium-ion batteries for cars around 2003. That year he hung around a Los Angeles area car shop that experimented with the idea of stringing together cells to power a car dubbed the Tzero. Mr. Straubel, then 27, wanted to create his own car with 10,000 cells that he estimated capable of crossing the U.S. in a single charge and sought money from Mr. Musk, who was sitting on a fortune from his share of PayPal and investing in a rocket startup called Space Exploration Technologies Corp.
During a 2003 lunch to talk about an unmanned, hydrogen-powered airplane, Mr. Straubel raised his other passion, noting his car project and the work at the shop called AC Propulsion.
Mr. Musk wanted an electric sports car of his own but the shop wasn’t interested in converting one for him. He turned instead to a tiny startup in Menlo Park called Tesla Motors that had just got off the ground in hopes of making its own sports car to be dubbed the Roadster and was looking for investors.
Through a string of events Mr. Musk became Tesla’s largest investor and the public face of Tesla, turning the startup into a household name in part through his showmanship and swagger. Mr. Straubel was hired as an early employee where his contribution was so great that Mr. Musk considers him a co-founder of Tesla.
The partnership has made Mr. Straubel a rich man. The small stake that he held in Tesla when he departed last year would be worth more than $600 million today if he didn’t sell any shares, according to FactSet data. His time at Tesla also introduced him to his future wife, Boryana, whom he married in 2013. She’s a self-described nerd who shares her husband’s affinity for data. They have a home outside of Carson City and in Silicon Valley.Read More..
Source : livemint
