Bottled Lightning

by Seth Fletcher

  That a gadget revolution was imminent should have been obvious to anyone paying attention to the plummeting cost of computer chips, the growth of available wireless spectrum, and the arrival of battery technology that could at last make the pocketable sci-fi phone a reality. In 1994, Electronic Engineering Times identified lithium-ion batteries as the “‘enabling’ technology” that could “ensure the continued rapid growth of the portable electronics industry. These revolutionary batteries, which are now under development and are just beginning to emerge, will certainly be a critical factor in the proliferation of portable electronics.”

  In Japan, manufacturers were scrambling to meet demand. That year, Sony began building a second lithium-ion factory. NEC started expanding, and newcomers such as Mitsubishi Cable entered the lithium-ion business. In time, this early boom would result in total Japanese dominance of the lithium-ion industry. “As they did with flat liquid-crystal-display screens,” wrote a Nikkei Weekly correspondent, “Japanese companies are securing a near-lock on producing an increasingly key electronics component—this time rechargeable lithium-ion batteries.”

  John Goodenough never met any of the Sony scientists who commercialized the lithium-cobalt-oxide battery. He had no idea that Sony’s 1990 announcement of impending full-scale commercialization was coming. He said he has never received royalties for inventing the primary active material in the battery that now powers nearly every one of the billions of mobile phones and laptops and iPods and digital cameras in the world.

  He holds no grudge against Sony, however. “I congratulate the Sony people for having the idea and doing it,” he told me. “They deserve credit.” He reserves his ire for England’s Atomic Energy Research Establishment. He said that when he couldn’t find a company interested in licensing his lithium-cobalt-oxide cathode, he turned to the AERE laboratory in Harwell, near Oxford; he was working with scientists there to obtain battery research funding from the European Economic Community. It didn’t work out so well. “The lawyers at AERE Harwell swiped everything,” he told me.

  “I had an agreement with the people there by word of mouth that sure, you’ll patent it, I’ll let you recoup all the costs of patenting, and then we’ll split things after that,” he said. “I thought that was a reasonable offer. But the last day when we went to sign, they said, ‘The lawyers will not do anything unless you sign your rights away.’ I didn’t know that it would be used for cell telephones, and there wasn’t any battery company in Europe or England or America that wanted it at that time, so I signed my rights away.” Here he laughed his bellowing laugh. Until the patent on lithium-cobalt-oxide expired in 2002, every lithium-ion battery manufacturer had to pay Harwell licensing fees. “They made billions,” Goodenough said. “And they wouldn’t even give a little bit of money to my college.”

  The rapid and eventually ridiculous shrinkage of the mobile phone began in earnest in 1996, with the arrival of the Motorola StarTAC. Its release was an inflection point in the history of wireless communications, the beginning of the age of the ubiquitous tiny, fashionable cell phone. Weighing only 3.1 ounces, StarTAC was the first clamshell, or “flip” phone. Unveiled at the glitzy annual Consumer Electronics Show in Las Vegas, it was pitched as the first in a new product category: the “wearable” cell phone. “Because StarTAC is so attractive and discreet,” read a press release for the European version of the StarTAC, “Motorola believes that many users will WEAR rather than carry it—on a belt, in a top pocket or even pendant-style on a necklace cord.”

  It’s unclear how many people wore the StarTAC pendant-style in the late 1990s, but the phone, which sold for between $1,000 and $2,000, did indeed become a fashion item. “A big cellular phone used to be a sign of power,” read Forbes. “Now a small one is.” Fortune included the StarTAC in a list of “twenty indispensable luxuries for those who travel enough to call airports home,” alongside a $350 Brioni robe and a $375 Arte & Curio leather golf travel set. StarTAC was even singled out in an Entertainment Weekly article on the murder of Tupac Shakur as a choice gangsta fashion item: “Living the life for many high-profile rappers actually means wearing the best Versace and Moschino, downing Cristal, checking the Skypagers and dialing up their tiny $1,000 StarTAC cell phones.” Unlike many fashion items, however, the StarTAC would have a lasting influence. Nine years after the phone’s release, PCWorld ranked the StarTAC as the sixth greatest gadget of the past fifty years. (Number one was the Walkman.)

  StarTAC’s tiny size was made possible both by lithium-ion batteries and an accompanying advance—the affordable 3-volt RF power amplifier. “Now you could get away with a single lithium-ion cell to run the phone,” said Jason Howard, who started at Motorola as a battery researcher in 1993. “You get out of all the problems associated with putting cells in series to get to the required voltage.” Together, the high-voltage, high-energy ultralight lithium-ion battery and the lower-voltage RF power amplifier meant that cell phones had gone from running on six batteries to one in just a few years.

  By 1997, there were more than 120 million cell-phone subscribers in the world. In a year, that number would more than double. According to an industry publication, new subscribers were signing up at a rate of two each second. The lithium-ion market, meanwhile, had been growing at a clip of 200 to 300 percent per year.

  By 1999, the cell phone had begun its transformation into the smart phone, the handheld everything-device that we’ve grown accustomed to today. That year the Japanese phone giant NTT DOCOMO came out with an Internet-capable phone called i-mode. The merging of the cell phone and the Web-connected Internet led The Economist that October to trumpet the “conquest of location.” “Until recently, one of the most bothersome aspects of the information age was that people risked becoming powerless whenever they left their home or office,” the article read. “Now mobile phones are putting communications in their pockets.”

  A piece in Time the following year was breathlessly enthusiastic about wireless. After noting that Qualcomm had seen its stock rise more than 3,000 percent in just over a year, the article explained that “we’re on the brink of a major technosocial upheaval that’s right up there with the steam engine, car, and computer. It promises the ultimate technological breakthrough for the information age. Virtually all information will be available to you at all times, whether you’re taking a day off from work, visiting the in-laws or traveling to Fiji. With the importance of physical location diminished, even irrelevant, you’ll be able to answer an e-mail from your boss, shift your 401 (k) or sing your child a video-and-sound lullaby wherever you are.”

  It didn’t take long for people to realize that always being connected had drawbacks as well. “Perhaps the more worrisome outgrowth of the wireless Web is the never-ending workday,” warned BusinessWeek in 2000. “Cell phones and the Net are already stretching work at both ends. The marriage of the two technologies puts the trend on steroids … And while it’s easy to say workers should simply turn off their machines, those that do may well find themselves competing for promotions and bonuses with others who don’t.”

  Not that concerns like these had any effect. By 2002, cell phones, and with them, lithium ion, were everywhere. Some 95 percent of the cell phones on the market that year, regardless of cost, used lithium-ion batteries. The once exotic technology had established itself in less than a decade as the standard power source for consumer electronics. In 2002, The Economist anointed lithium-ion batteries the “foot-soldiers of the digital revolution,” comparing the cell phones of the day to the Mobira Senator, the 21.6-pound cinder block of a car phone Nokia unveiled in 1982. “Today, a typical mobile phone is a hundredth of this (i.e., 100 grams or less) and can be tucked discreetly into a shirt pocket,” read the story, headlined “Hooked on Lithium.” “This 99% weight reduction has been achieved largely through advances in battery technology. Above all, it is down to one particular breakthrough: the advent of the lithium-ion rechargeable battery.”

  4

  REVIVI
NG THE ELECTRIC CAR

  Inevitably, the lithium-ion battery leaped into the automotive realm. Martin Eberhard, 1990s e-book entrepreneur turned 2000s electric-car impresario, was an essential early actor in this technological transfer. A Silicon Valley electrical engineer, Eberhard first encountered lithium ion in 1996, when he and his partner Marc Tarpenning started the e-reader company NuvoMedia. They wanted to put it in their first product, but in those days lithium-ion batteries were still delicate and not fully understood, and the battery companies were selective about whom they’d sell to. Lithium ion required more care and handling than the existing standard, nickel metal hydride; it needed voltage balancing, and if that wasn’t done properly, the batteries could become dangerous. By the time NuvoMedia was building their second-generation reader, they found a willing supplier for lithium-ion cells, as long as they sent some engineers to lithium-ion charging school and submitted their control-circuit designs for approval. They acceded to the demands, and they were glad they did. Eberhard said he found lithium ion to be a major improvement over everything that had come before.

  In 2000, Eberhard and Tarpenning sold NuvoMedia for $187 million. Flush with cash, they started thinking about their next business venture. “I was pushing for electric cars for a lot of reasons—political, ecological, and so on,” Eberhard said. “Lithium-ion batteries were at the top of my mind, because in my rough calculations you could actually fit enough batteries into a car to make a meaningful car.” Meaningful meant more than two hundred miles of range on a charge. It meant a car that would bury the reputation of electric cars as sub-golf-cart transport suitable only for gated neighborhoods.

  Eberhard and Tarpenning sketched out their idea for a lithium-ion-powered car and convinced themselves that it was feasible. Coincidentally, Eberhard had just put some of his NuvoMedia earnings to work rescuing the boutique Los Angeles car builder AC Propulsion, creators of a lead-acid-powered electric sports car called the tzero. Soon Eberhard was asking them about lithium ion—ever think of putting that in a car? “At first they didn’t want to talk to me about it,” he said.

  Probably because they had been thinking the same thing. Before long, AC Propulsion came around and started comparing notes with Eberhard. “They had this idea of basically Krazy Gluing the cells together and attaching them with connectors at the top and the bottom,” Eberhard said. What they needed, in addition to the advice of an electrical engineer, was money, and both of those things Eberhard could provide. Together, Eberhard and AC Propulsion built a lithium-ion-powered tzero, and it was just as cool as Eberhard had hoped—a one-off, sure, but still a purely electric sports car that darted from zero to sixty in 3.6 seconds and ran up to three hundred miles on a charge. Electric drive and high performance were no longer mutually exclusive.

  Eberhard wanted a lithium-ion tzero for himself, even if he had to start a car company to get it. AC Propulsion, however, had no interest in becoming a full-fledged carmaker. Eventually they even begged off of building Eberhard his own tzero, saying they didn’t have the resources. “I suppose if they had actually done that,” Eberhard said, “I wouldn’t have started Tesla Motors.”

  On July 1, 2003, Eberhard and Tarpenning incorporated Tesla Motors with the goal of building the hottest electric cars the world had ever seen. Eberhard was unfazed by the recent bursting of the 1990s electric-car mini-bubble, in which GM, Toyota, and a handful of other car companies built small fleets of electric cars, only to drop the programs when they succeeded in killing the pollution laws that inspired them. Not only was he going to use technology far superior to anything tried before, but now that everyone else had gotten out of the electric-car business, he had the field to himself. He began courting investors. “Part of my convincing them was that this car”—the lithium-ion-powered tzero—“shows that you can make an electric car that’s fun to drive,” he said. “And we’re in this unique position where all the people who would otherwise be competitors have bailed out of the market.”

  The idea behind Tesla was to compete on performance rather than price. At a higher price, they could afford a $20,000-plus battery pack, and they could use an advanced electric motor. By starting at the top of the market, they could show what electric cars could do—what they could, with twenty-first-century technology, really be.

  Immediately after incorporation, Eberhard and Tarpenning rented a two-suite office in Menlo Park with room for five or six people. They had no garage, but that was okay, because they weren’t anywhere near ready to build a car. It was all design work on computers, refining a business plan, and searching the world for partners, hunting for those rare suppliers who, although accustomed to dealing with the likes of GM and Ford, would be willing to meet with a couple of guys who had a PowerPoint presentation and a dream.

  They got their first big break at the end of the year. “Marc and I went down to the LA Auto Show and basically forced ourselves upon the Lotus people and made them listen to our story,” he said. “And they liked it. We had a handshake deal that they’d work with us.” Once they knew they were working with a Lotus platform, they could begin computer modeling of the car they hoped to build. They could start finding concrete answers to essential questions. How many batteries will fit in a roadster based on a Lotus platform? What kind of range will that provide?

  They soon arrived at the design for their battery pack, a conglomeration of 6,831 laptop cells. It would take an incredible amount of work to turn this idea into a production-ready battery pack. They had to carefully measure the efficiency of each cell, because inefficiency means heat, and heat can mean disaster. What was the best way to get rid of the heat from the cells? They tried liquid cooling, they tried air cooling, they fought and gave each other ulcers about the decision. They conducted computer simulations. They watched cells in laboratory conditions using thermal-imaging cameras. Finally, they settled on a liquid-cooling system.

  Then a potentially show-stopping problem arose. “About a year into our design, some of our engineers went to a battery conference where a couple of people had presented papers talking about the possibility of thermal runaway in a lithium-ion cell,” Eberhard said. “And that was a surprise to us, actually. If you read the data sheets from those days from the cell manufacturers, they talk about the cells’ being safe when you penetrate them and overcharge them and crush them. Every way you read it, you think there’s nothing that could go wrong with these cells. And these papers that were presented suggested otherwise.” Before long, word of the occasional laptop fire started spreading across the Internet, and Eberhard and his team decided to conduct some experiments of their own.

  For the first test, Tesla engineers went to the parking lot and laid down a single laptop cell (called an 18650 cell because of its dimensions), wrapped it with nichrome wire (the highly resistant wire used in toasters), and cooked it. “It went off like a Roman candle,” Eberhard said. Next they dug a hole in Eberhard’s yard and buried a group of battery cells that were wired together and outfitted with thermal probes, voltage probes, and a video camera. Then they set one of the cells on fire by overheating it. “It was quite dramatic,” Eberhard said. The cell eventually became an inferno and set its neighbors aflame too, starting a full chain reaction. “That was very scary to us.”

  Eberhard announced to the board that they would stop production of the car until they had solved the battery safety issue, and before long, they did. “We learned that if you design the battery system right, you can design it so that if one cell burns it doesn’t catch anything else on fire,” he said. “You can prove that through testing and through modeling.” Still, the battery safety pause delayed the company by months.

  Fortunately, they had enough funding to endure such a delay. In February 2004, they had persuaded Elon Musk, a cofounder of PayPal who in 2002 had founded the space-rocket company SpaceX, to join them as a major investor. As a condition of his investment, he would be appointed chairman of the company. Musk presided over several subsequent rounds of fundi
ng, and he convinced fancy friends to invest, including Sergey Brin and Larry Page of Google and eBay’s Jeff Skoll.

  The delay still hurt. The Tesla team had been obsessed with secrecy, going so far as to code-name the car that they would eventually christen “Roadster,” the generic name for any convertible two-seat sports car. (Instead, the Roadster was “Dark Star.”) Yet Tesla revealed its car to the public before anyone would have liked because they felt it was essential to prove that the company was serious. They had to “separate ourselves from the AC Propulsions of the world,” Eberhard said, in order to attract better engineers and to get big-time automotive suppliers to take Tesla seriously. “Just imagine, picture yourself back in 2005 or so. You call up Siemens: ‘We’d like to buy some air bags from you. Custom design one for us, by the way.’ They’d laugh in your face, a bunch of fruits and nuts in California. There’s just no way that would happen,” he said. “The idea of becoming public was to show that what we had really was going to go into production.”

  The launch happened in a hangar at the Santa Monica airport on the clear California evening of July 19, 2006. Michael Eisner and Arnold Schwarzenegger showed up, as did the core of the West Coast electric-car intelligentsia—the investors, the documentarians. Eberhard was effervescent.

  Low-slung and sleek, essentially a Lotus tastefully electrified, the Tesla Roadster was by far the sexiest electric car anyone had ever seen. For hours, attendees were given rides around the airport tarmac. A few big shots were even allowed to drive it. The car bolted from zero to sixty in four seconds, putting it in Porsche and Ferrari territory. It did so in silence, powered by the electrons coursing from its massive battery to its custom AC induction motor.