The Powerhouse: Inside the Invention of a Battery to Save the World

by Steve LeVine

  Also by Steve LeVine

  Putin’s Labyrinth

  The Oil and the Glory

  VIKING

  Published by the Penguin Group

  Penguin Group (USA) LLC

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  First published by Viking Penguin, a member of Penguin Group (USA) LLC, 2015

  Copyright © 2015 by Steve LeVine

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  ISBN 978-0-698-17024-7

  Version_1

  For Avery LeVine and Muratbek Nurlybayev

  Contents

  Also by Steve LeVine

  Title Page

  Copyright

  Dedication

  PART I. THE STAKES

  1. Jeff Chamberlain’s War

  2. Why Argonne Let Wan In

  3. A Good Place to Do Science

  4. “Discouraged Weariness in the Eyes”

  5. Professor Goodenough

  6. The Double Marathoner

  7. Batteries Are a Treacherous World

  8. Creating NMC

  9. The Man from Casablanca

  10. Theft in the Lab

  11. The New Boss

  12. A Little Talk with the South Koreans

  13. What Andy Grove Said

  14. How to Navigate Great Minds

  PART II. FOREIGNERS IN THE LAB

  15. The Start-up

  16. Out of India (and China and Africa)

  17. Why We Stay in Chicago

  18. IPO!

  19. The Car Man

  20. Bell Men

  21. The No-Start-up Mystery

  22. “The Damn Hub”

  23. Team Argonne

  24. Fire

  25. A Chance to Win the Lottery

  26. “There Is a Problem with Your Material”

  27. An Engineering Solution

  28. Going Deep on the Fade

  PART III. RECKONING

  29. Orlando

  30. The Old Technology Guys

  31. Only the Irrational or the Naïve Will Win the Day

  32. A Three-Hundred-Mile Battery

  33. ARPA-E

  34. The Old and the Young

  35. Red Team

  36. War Room

  37. Getting to a Deal

  38. “So What Is Wrong with Me?”

  39. “Throw Out the Old Paradigm”

  40. The Waiting

  41. Deal

  42. The News from Envia

  43. The Big Man at Argonne

  44. Second Quarter Review

  45. Black Box

  46. Back to the Race

  Acknowledgments

  Appendix A

  Appendix B

  Notes

  Index

  PART I

  THE STAKES

  1

  Jeff Chamberlain’s War

  Wan Gang worried Jeff Chamberlain. Before returning home to Beijing, Wan, China’s minister of science, had asked to visit two places—Argonne National Laboratory, a secure federal research center outside Chicago, and a plant near Detroit where General Motors was testing the Volt, the first new electric car of its type in the world. Jabbing his finger into a book again and again, Chamberlain said that Wan was no mere sightseer. He had a mission, which was to stalk Chamberlain’s team of geniuses, the scientists he managed in the Battery Department at Argonne. They had invented the breakthrough lithium-ion battery technology behind the Volt, and Wan, Chamberlain was certain, hoped to appropriate Argonne’s work. But Chamberlain was not going to let him. A war was on, he said—a battery war. And he was right.

  Wan turned up at Argonne in the summer of 2010, animated and unfailingly polite, with gentle eyes and the look of his fifty-eight years. A senior Department of Energy official climbed onto a bus alongside him and his retinue for a tour of the laboratory, and Wan posed a fusillade of questions while offering his own observations. “We are experimenting with the creation of hydrogen fuel from the gas created by waste,” he said. “It costs half the price of gasoline.” Such talk charmed the battery guys. He was himself a materials scientist, with his own record of advances, speaking openly with equals. It helped that Wan did not explicitly mention nickel manganese cobalt, or NMC, the compound at the core of the Argonne invention contained in the Volt. In addition, he had quite a personal story. Growing up in poverty in the countryside surrounding Shanghai, Wan recalled going hungry and navigating fields in a tractor, the only motor vehicle he ever drove. From there, he worked a series of research jobs and won his first break—admission to a Ph.D. program at the Clausthal University of Technology in Germany. After he graduated, Audi hired him as an engineer and he rose to be design manager in the automaker’s Stuttgart-based electric car unit, an exceedingly prestigious position. In all, he had been working at Audi for eleven years when, one day, his former academic mentor at Shanghai’s Tongji University visited the plant. He suggested that Wan transform his own country, and not Germany, into an electric-car powerhouse. Wan returned to China, where another break came: President Hu Jintao requested that Wan formulate a policy on electric vehicles and make China the world’s number-one producer of them. He elevated him as the country’s first non–Communist Party minister since the 1950s. Now it was Wan’s job to execute Hu’s will. The prevailing view abroad was that, it being China, Wan would succeed. Which brought the Americans back around to their original angst after having warmed to him.

  The evening before his visit to Argonne, Wan was munching shrimp hors d’oeuvres at a reception on the terrace of the Kennedy Center in Washington, D.C., when an American recognized and approached him. Wan seemed to have been waiting for just this chance conversation. He took a last bite and passed the tail to an aide. “Why don’t we sit over there,” he said, gesturing to the café. They exchanged talk on personal topics, and when they turned to cars Wan said he agreed that a race was under way among industrialized nations. All of them were determined to create a great new battery that in turn would propagate the large-scale manufacture of electric vehicles. They were merely using different methods to get there. Wan was too genteel to predict outright that China would win but cited markers that would signal progress. “The big thing is getting the first one percent of the market,” he said, meaning 150,000 electric cars on China’s roads. “That will prove the technology. From there, it won’t be that hard to reach ten percent of the market three or four years after that.” His initial goal was the sale of 500,000 cars, about the same aim as Barack Obama had established for the United States, and one million by 2015. It was a lot of cars. But the numbers also reflected bravado. Both countries inflated their numbers to impress and psych out rivals.

  The next morning at Argonne, Wan and his hosts filed into a conference room. A senior American scientist named Al Sattelberger led off the presentation. He flashed slides on two large sc
reens. Wan interrupted.

  “You have made remarkable achievements here,” he said. “So today I have many questions for you.”

  “That’s why I’m sweating,” said Sattelberger.

  The room erupted in laughter. It was mostly the Americans, who were sweating. Argonne possessed formidable intellectual firepower and inventions, such as the American patent for its NMC breakthrough. It achieved three grand aims—allowing the Volt to travel forty miles on a single charge, to accelerate rapidly, and to do both without bursting into flames. But despite the recent accomplishment, the United States trailed far behind its rivals. After more than a decade of manufacturing, Japan and South Korea controlled two thirds of the market for consumer batteries such as AAs, AAAs, and the lithium-ion technology used in smart phones. That gave them preeminence on the proving ground where new technologies were validated or broken: the factory floor. Most winning inventions became so when the kinks were worked out through trial and error with actual consumers—what the Japanese and South Koreans had done—and otherwise might be destined for oblivion. Now, the Chinese had adopted the principle and issued an edict requiring some two dozen companies to market models within two or three years. That had led Chinese manufacturers like BYD, Chery, and Geely to introduce experimental electric vehicles. None of China’s rivals, the United States included, could simply decree the manufacture of one million electric cars with the confidence that they would actually appear. China’s leaders had accomplished innumerable such feats. They terrified Jeff Chamberlain.

  2

  Why Argonne Let Wan In

  One might fairly ask why Wan was allowed to visit Argonne. The perverse rationale was that the United States was so far behind. The Americans resembled the Japanese in the 1970s and the Chinese in the 1990s—they were very much at the bottom of a learning curve others had scaled before. Given that reality, the shrewdest path was to humbly work with the best in the world, glean what you could in visits such as Wan’s, then trust in intellectual brawn to push through to victory.

  The global meltdown of 2008 and 2009 had put a scare into Americans, who were determined to build a fresh economy on a foundation of substance and not financial, real estate, or dot-com bubbles. Europeans were similarly fearful and determined not to be left out of such a new frontier. Asia’s export-propelled economies knew they, too, had to find another way. History told Wan Gang that global financial crises breed the type of fundamental technological discoveries that move economies. He observed before him the makings of just such a breakthrough in energy technology. Like the Americans and Europeans, Wan said that powerful, affordable batteries and the cars they propelled were bound to initiate the next great economic boom. Batteries were an underappreciated technology—they were already enabling the revolution in electronic devices, he said, and now were on the cusp of much more.

  Others focused on how a transformed battery could shake up geopolitics. An electric age would puncture the demand for oil and thus rattle petroleum powers such as Russia’s Vladimir Putin, Saudi Arabia’s ruling family, and the Organization of the Petroleum Exporting Countries as a whole, stripped of tens of billions of dollars in income. China could put its population in electric cars, shun gasoline propulsion, and clean up its air. Generally speaking, the world might spend less on oil and worry less about climate change.

  The numbers behind all this maneuvering were large. Forecasts of the annual market for advanced batteries in 2020 were about $25 billion, half the 2012 gross revenue of Google.1 That sum would double in the likely event that oil prices settled near or in the triple digits per barrel and drove more motorists away from gasoline propulsion. Battery-enabled hybrid and electric vehicles would command sales of $78 billion by 2020.2 If large-scale batteries could economically store electricity made by windmills and solar cells, that would be tens of billions more in annual sales.

  Yet those figures accounted only for the current decade. The general thinking was that, after 2020, the new industries would be even more gargantuan, on the scale of today’s ExxonMobil, General Electric, and Toyota, the kind of rare, high-value enterprises capable of firing up an entire future economy. By 2030, advanced battery companies would swell into a $100 billion-a-year industry and the electric car business into several $100 billion-a-year behemoth corporations.3

  When you sought justification for this enthusiasm, you heard a mainstream assumption that hybrid and pure electric vehicles would make up 13 to 15 percent of all cars produced around the world by 2020; a decade or two later, they would reach about 50 percent.4 These estimates did not seem unreasonable when you considered the twenty- and thirty-year-long sales trajectories of previous consumer juggernauts like laptops and cellular phones.

  Regardless of the care with which they were calculated, the sums were mischievous—no one could accurately project the market for products that did not yet exist. But the leaders of most of the world’s industrialized countries—Japan and South Korea, Brazil, Finland, France, Germany, Israel, Malaysia, Russia, Singapore, South Africa, and the United Kingdom, not to mention the United States and China—decided it was a race, and so it was. In the words of a French government minister, it was a “battle of the electric car.”5

  Because of its record for executing goals at large scale, China loomed over the contest. Yet the Argonne guys felt comfort in that China was not there yet. For one thing, it was still cranking out second-rate technology. Japanese companies, with their two-decade manufacturing lead, conversely enjoyed a commanding 43 percent of the global market for lithium-ion batteries. South Korea held another 23 percent. As for the United States, some people counted it out, but not many. Because lithium-ion had theoretical room for more or less double its current performance, and the United States had both serious scientists and a large market, it still had considerable room to try.

  A senior Argonne scientist said that when Wan toured the lab, the undercurrent was, “How can we benefit from this visit?” This created a double intelligence game. Lab managers focused deliberately on the snippets of conversation in which Wan might tip his hand. Yet they could push the boundaries of politesse. During his turn at the podium, for instance, Chamberlain mentioned a clutch of German, Japanese, and South Korean companies—BASF, Panasonic, Samsung, LG Chemical—that were reconfiguring their batteries with the NMC. They were seeking twice the energy of the lithium-iron-phosphate compound favored by Chinese battery makers. Chamberlain was sure that Wan already knew this, making the remark simple candor. If Wan perceived a dig at Chinese strategy, his expression did not betray it. Having gained privileged access to the lab, he rather seemed extraordinarily attentive as he listened to Argonne’s history and inspected some of its crown jewels.

  3

  A Good Place to Do Science

  Although venture capitalists and other titans of Silicon Valley could belittle government-run science, they spoke differently about the Department of Energy’s seventeen national laboratories. Argonne commanded particular respect because of its past. It went back to 1942, when Nobel laureate Enrico Fermi traveled to Chicago as the Manhattan Project was getting under way. Fermi set up a makeshift laboratory underneath the Stagg Field football stadium at the University of Chicago and called it the “Met Lab,” for Metallurgical Laboratory. Obsessed with secrecy, he and his collaborators kept even their wives uninformed of the big breakthrough—Fermi’s creation of the world’s first self-sustained nuclear chain reaction, which began the nuclear age. Their sole disclosure went in code to the project leader: “The Italian navigator has just landed in the New World.”

  “Were the natives friendly?” came the planned reply.

  “Everyone landed safe and happy.”1

  Fermi then moved on to Los Alamos to help build the world’s first atomic bombs and the Met Lab went on without him.

  • • •

  Eighty-nine-year-old Dieter Gruen had worked at Argonne for six decades, since almost the beginning of the
Stagg Field days. “That’s Glenn Seaborg,” he said in his office, pointing to a framed photo of the cocreator of plutonium. Gruen was smallish and wore a silk, herringbone blazer. When he was fourteen, Gruen and his older brother fled Nazi Germany and made it to the United States. Gruen ended up attending high school in Little Rock, Arkansas, then Northwestern University, where he studied physics. In 1944, he turned up at Stagg Field with a bachelor’s degree. He was twenty-one. World War II was at a critical stage—D-Day had just happened—and young people like him were in high demand by Manhattan Project managers. He was dispatched immediately to Oak Ridge, Tennessee, to help produce sufficient uranium-235 for shipment to the bomb makers at Los Alamos, an effort that was behind schedule.

  Gruen found some thirty thousand people already at Oak Ridge. The town had been built practically overnight just for them. There was a sea of mud. Construction was everywhere. Gruen slept in a barracks known as West Village 54. Enormous machines called calutrons had been built to produce uranium-235. Oak Ridge had been chosen because it was near powerful Norris Dam, the first big project of FDR’s Tennessee Valley Authority, which could provide the immense volume of electricity that the calutrons required.

  So it went for eighteen months, until the war ended with the atomic bombing of Hiroshima and Nagasaki. The work at Oak Ridge wound down. Gruen returned to Stagg Field while beginning graduate studies at the University of Chicago—the Met had been named the country’s first national laboratory and had plenty for him to do. There was so much activity, in fact, that the Met felt cramped for space. Lab scouts began to hunt for a new home. They settled on a place called Tulgey Wood, a two-hundred-acre spit of farmland twenty-four miles southwest of the city along Route 66.

  • • •

  In 1936, Erwin O. Freund, a sausage titan who invented the skinless hot dog, named Tulgey Wood, his new estate, after the forest in Alice in Wonderland. Freund was extravagant and eccentric. He placed small, painted carvings of Tweedledee, Tweedledum, and other Lewis Carroll characters along bark trails through the property. He kept two pet chimps plus sheep and peacocks, raised championship boxers in an air-conditioned kennel, and dug limestone-lined lakes for boating in summer and ice-skating in winter. When a clothier friend gave Freund seven fallow deer—a species called Dama dama, which are born tan but in adulthood turn completely white—he cared for them, too.