Monday, April 26, 2021
Sunday, April 18, 2021
My Incredible Trip to Portugal, and a Path to Citizenship HI BRUCE // is this program real? OR good price ? VISA. PAUL - btbirkett@gmail.com - Gmail
My Incredible Trip to Portugal, and a Path to Citizenship HI BRUCE // is this program real? OR good price ? VISA. PAUL - btbirkett@gmail.com - Gmail
My Incredible Trip to Portugal, and a Path to Citizenship
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Friday, April 16, 2021
A Missed Opportunity Saw China Fall Behind on Covid Vaccines - Bloomberg
A Missed Opportunity Saw China Fall Behind on Covid Vaccines - Bloomberg
How China Passed Up a
Vaccine Opportunity and Fell Behind
By Bruce Einhorn
April 14, 2021, 5:00 PM GMT+1 Updated on April 15, 2021,
8:49 AM GMT+1
The call came early in the Covid-19 pandemic. Drew Weissman,
an infectious diseases professor at the University of Pennsylvania and an
expert in messenger RNA, received a query from a Chinese company interested in
using the new technology to make a vaccine against the coronavirus.
mRNA, which
effectively turns the body’s cells into tiny vaccine-making factories, has
since become the breakout star of the Covid era, underpinning shots made by
Moderna Inc. and the Pfizer Inc./BioNTech SE partnership which have been among
the most effective in fighting the disease. Before Covid hit, though, the
experimental science had yet to receive regulatory approval for use against any
illness -- let alone against the mysterious respiratory infection.
“They wanted to develop my technology in their company in
China,” said Weissman, a leader in the field because of his work with research
partner Katalin Karikó on discovering mRNA’s disease-fighting potential. “I
told them I was interested.”
Then, nothing happened.
“I never heard from them again,” Weissman said.
It was one of the missed opportunities that have
disadvantaged the country’s Covid vaccine push and left Chinese companies
playing catch-up on a technology set to revolutionize everything from flu shots
to oncology drugs.
As the coronavirus spread globally last year, New York-based
Pfizer raced to partner with Germany’s BioNTech, an mRNA frontrunner that had
hired Kariko as a senior vice president. Massachusetts-based Moderna,
meanwhile, had $2.5 billion in funding from the U.S. government.
China Setback
By contrast, several Chinese companies focused on older
technologies that have proved far less potent. At a conference on April 10, the
head of the Chinese Center for Disease Control and Prevention, George Fu Gao,
said Chinese vaccines “don’t have very high protection rates,” local media
reported.
As the comments caused a stir on social media, Gao
backtracked, telling Communist Party-backed newspaper Global Times that he was
just referring to ways to improve vaccine efficiency. But no amount of damage
control can obscure the fact that no Made-in-China mRNA vaccines have been
approved yet.
That’s a setback for President Xi Jinping’s ambition to make
the country a healthcare innovation powerhouse. mRNA’s effectiveness with Covid
vaccines is opening up a new frontier for the technology, with researchers
looking at ways to use it to fight cancer, tuberculosis and many other
diseases, according to Surbhi Gupta, a healthcare and life sciences analyst
with consultancy Frost & Sullivan.
“mRNA technology has the potential to be a game changer,”
she said.
For decades, vaccines have been made using inactive versions
of viruses, but mRNA shots use genetic material to instruct the body to
create the spike protein the coronavirus uses to enter cells. That in turn
trains the body to fight potential infection.
Old-school Chinese-made Covid vaccines now in use from
Sinovac Biotech Ltd. and China National Biotec Group Co. rely on particles from
inactivated viruses and have protection rates much lower than the mRNA
vaccines’ more than 90% effectiveness in preventing infections.
Sinovac’s vaccine has an efficacy rate of a little over 50%
in protecting against symptomatic Covid-19, according to studies conducted in
Brazil, just meeting the minimum threshold required by global drug regulators.
State-owned China National Biotec, a unit of Sinopharm Group
Co., has said its two inactivated vaccines are 73% and 79% effective in
preventing symptomatic Covid but has not published data to support that
assertion. Sinopharm’s Hong Kong-listed shares jumped on Thursday, a day after
the company said that there had been no severe side effects related to its
inactivated-virus vaccines.
Meanwhile, China’s
CanSino Biologics Inc. has produced a viral-vector vaccine which, like
those made by AstraZeneca Plc’s and Johnson & Johnson, uses a
genetically modified virus to fight off infection. The Tianjin-based company
has reported 66% efficacy in preventing symptomatic Covid-19 in
its final stage trial.
China’s government has pushed aggressively to close the gap
with the West and become an alternative pharmaceutical and biotech power. It
allowed controversial treatments with stem cells and gene therapy, despite
concerns elsewhere about safety and efficacy. Yet China didn’t make mRNA
vaccines a priority.
“Before Covid, a lot of people still had reservations” about
the technology, said Lusong Luo, senior vice president at BeiGene Ltd., a
Beijing-based biotech pioneer and leading producer of oncology drugs. “It’s
new, it’s at the cutting edge.”
When Sinovac began working on a vaccine, it focused on a
familiar method in order to develop a shot quickly, after efforts at exploring
other alternatives didn’t yield promising results.
“For us the strategy is really to use the more mature
platform and technology to solve the problem,” CEO Yin Weidong told Bloomberg
News in an interview last May.
Now, with the success seen by Pfizer and Moderna, Chinese
companies are jumping into the fray -- but their efforts will take time to pay
off. China may not have mRNA vaccines
until the end of 2021, according to Feng Duojia, president of the China
Association of Vaccines, China Global Television Network reported on April 11.
BeiGene in January announced an agreement to cooperate with
Strand Therapeutics Inc. of Cambridge, Massachusetts on an mRNA treatment for
tumors. “Now people realize that mRNA vaccines really work, it will be a lot
easier,” Luo said.
China’s Walvax Biotechnology Co. began construction in
December on a facility to make mRNA vaccines, while CanSino struck a deal in
May last year with Vancouver-based Precision NanoSystems Inc. to develop an
mRNA vaccine. Contract manufacturer WuXi Biologics Cayman Inc. has said it is
devoting over $100 million to mRNA-related vaccines, biologics discovery,
development and manufacturing.
While China has largely contained the spread of the
coronavirus within its borders, more effective vaccinations and a wider take-up
among its population would enable the country to reopen sooner, reducing the
need for quarantines and lockdowns. China risks losing the edge gained by
stamping out the virus if its inoculation drive is less effective than places
where mRNA shots are the backbone of rollouts.
In Israel, where nearly 60% of the population has received
the Pfizer/BioNTech vaccine, Covid cases, hospitalizations and deaths are
plunging. As more adults get their shots in the U.S., which also relies largely
on mRNA vaccines, President Joe Biden has predicted Americans will be
celebrating July 4th with backyard barbecues once again.
China isn’t the only country that missed the boat with mRNA.
While companies in Japan, India and Australia are significant players in
fighting diseases like flu and polio, no company in the Asia-Pacific region now
makes mRNA shots. “Basically, mRNA was put
in the ‘too-hard’ basket for many years,” said Nigel McMillan, Program
Director for Infectious Diseases & Immunology at Griffith University in
Southport, Australia.
In March this year, Takeda
Pharmaceutical Co., Moderna’s local partner for Japanese trials of
its Covid vaccine, signed a deal with New Jersey-based Anima Biotech on mRNA
treatments for Huntington’s and other neurological diseases. Another big
Japanese drug maker, Daiichi Sankyo Co., announced on March 22 the start of an
early-stage trial of its own mRNA Covid vaccine.
In Thailand, Bangkok-based Chulalongkorn University has
enlisted Penn’s mRNA pioneer Weissman to help it develop mRNA capability.
As they try to catch up, Chinese developers and others in
Asia can take advantage of the lower barriers to entry for mRNA vaccine and
drug development. In addition to the market leaders Moderna and BioNTech, there
are other Western startups that invested
in mRNA and are ready to license their technology.
Making mRNA vaccines and drugs also doesn’t require large
capital expenditures on expensive bioreactors and other equipment, said Archa
Fox, an associate Professor at the University of Western Australia’s School of
Human Sciences and School of Molecular Sciences.
That bodes well for China’s ability to recover from not
focusing on mRNA sooner, according to Weissman.
“They are going to hire the best scientists they can find,”
he said. “Anybody can get in the game if they’ve got good people and money.”
— With assistance by Dong Lyu
Thursday, April 15, 2021
Direct Listings and Coinbase: Money Stuff:
Money Stuff: You Have to Get the Right Ticker - btbirkett@gmail.com - Gmail
Coinbase Global Inc., the big cryptocurrency exchange, went public yesterday in a direct listing that ended up valuing it at about $86 billion. Here is an odd fact:
Coinbase Chief Financial Officer Alesia Haas said in an interview Wednesday morning that one of the reasons that the company picked Nasdaq was because the bourse offered the ticker symbol “COIN,” which wasn’t part of the New York Stock Exchange’s pitch.
“Ultimately that they had the ticker COIN, and that was a really great ticker for us to get,” Haas said.
So, one, yes, she’s absolutely right, that's a great ticker for them to get, and of course they couldn’t go with NYSE if Nasdaq offered them the COIN ticker. Finance is not especially rational these days, and investors want a good ticker, so you have to give them one.
Second, how weird is it that Nasdaq owned the COIN ticker? As far as I can tell, the rules allow each exchange to reserve a small number of tickers for their own use forever, and a larger number of tickers temporarily (for up to two years). You might think that the way this would work would be (1) the exchanges pitch a company on going public, (2) the company chooses an exchange, (3) the company chooses its preferred ticker, (4) the exchange reserves that ticker, and (5) eventually the company goes public with that ticker. But apparently there is nothing to stop an exchange from squatting on a ticker and saying to the company “hey, if you want the only logical ticker, you gotta go with us.” What a strange competition.
Anyway, Coinbase was also the first big direct listing on Nasdaq. An odd thing about direct listings is that you don’t know how much stock was sold. In a traditional initial public offering, a company says “we are going to sell 10 million shares, and our current shareholders are going to sell another 5 million shares,” and then they sell those shares, all at once, at a single price that the company’s investment banks negotiate with public investors. And then the stock opens for trading and the public investors can trade it among themselves, but generally the company and its early investors sign lockups promising not to sell any more stock for a while. So those 15 million shares are all the shares that you can buy or sell, for months, and investors just trade them back and forth.
With a direct listing, the stock just opens for trading on the stock exchange. It opens with an opening auction, the same way every stock opens every morning on the stock exchange: People who want to sell put in sell orders, and people who want to buy put in buy orders, and the stock exchange’s machines match them up to find a market-clearing price. (In practice, the machines send out notices about what the price seems to be, so that people can put in more orders, in an iterative process that can take a while; Coinbase didn’t open until about 1:25 p.m. yesterday.)
Generally speaking you’d expect that the only people putting in sell orders, in that opening auction, would be the company’s private investors: They’re the only ones who have any stock to sell.[1] But a second after the stock opens, the stock will trade normally on the exchange, and there will be buyers and sellers. Some of the sellers will be people who bought the stock in the opening auction and want to flip it; other sellers might be early investors who owned the stock before the direct listing, decided not to sell in the opening auction, and then decided to sell later — a second or minute or hour or week later — in regular market trades. There’s generally no lockup, so they can do that any time. If you buy on the stock exchange, you won’t know if you’re buying from a hedge fund flipping stock it bought a minute ago, or from a venture capitalist who owned the stock before it went public, or from the company’s founder.
A theory that I sometimes hear from capital markets bankers is that IPOs result in higher stock prices than direct listings, because in an IPO there are just fewer shares available. If a company sells 10% to 20% of its stock in an IPO — sort of the normal range — then there just won’t be that much supply; people wanting to buy the stock will have to buy some of that relatively small supply from other public shareholders. (This is sometimes given as an explanation of the IPO pop.) If a company does a direct listing where most or all of its stock is available for sale, then there will be a lot more supply, so the price will be lower.
Coinbase has about 186 million shares outstanding[2]; it registered almost 115 million of them for sale in its direct listing. About 81 million shares traded yesterday, at an average price of $366.87, for a total of about $29.7 billion of trading. Presumably Coinbase’s private shareholders did not sell 81 million shares yesterday; presumably most of that trading was new public shareholders trading among themselves. On the other hand, in the opening trade, some 8.84 million shares were sold for $381 each, for a total of about $3.4 billion of stock that definitely came from Coinbase’s existing private shareholders. That’s the minimum amount of stock that existing shareholders sold yesterday — the minimum size of the IPO, as it were — and the maximum is something less than 81 million. A broad range.
You can see something like this in the price action: The stock opened at $381, and 8.84 million shares were sold at that price; the stock then climbed (as you might expect from an IPO with limited supply), and then it dropped (as you might expect if more insiders sold and more stock became available), closing at $328.28. If you are an early Coinbase shareholder who sold in the opening trade, you did well; you didn’t “leave money on the table” by selling at a low price and then watching the stock climb. You just sold at the market price, in a market without a lot of supply.
Inside QuantumScape's Secret Battery Lab and Its $20 Billion Breakthrough
Inside QuantumScape's Secret Battery Lab and Its $20 Billion Breakthrough
Hand holding QuantumScape’s proprietary ceramic separator that enables fast charge of lithium anodes at the Quantumscape Corporation in San Jose, CA on March 17, 2021
QuantumScape’s ceramic separator.
QuantumScape says its technology is
ready to move from the lab to VW’s dealerships. But this secretive startup is
very familiar with failure.
By Akshat Rathi
From Bloomberg Green and Hyperdrive
April 14, 2021
The future of batteries, sought for decades by academics, startups, and corporate R&D armies is—quite possibly—just a slender sheet of ceramic material that’s supple enough to bend between two fingers. But no one outside of a Silicon Valley startup is allowed to know what it’s made of. Even the color of this man-made substance is a closely held secret, so of course it’s never been independently analyzed.
And this battery material has already made Jagdeep Singh a billionaire, long before it makes its way into a single electric vehicle. His company, QuantumScape Corp., came out of stealth mode late last year for a public stock listing backed by promising data but no commercial product and zero revenue. In no time, the company briefly surpassed the valuation of Ford Motor Co., which sold more than half a million cars and trucks in the U.S. in the last quarter of 2020.
The battery leap claimed by Singh and his team promises to extend the range of electric cars by as much as 50% over today’s lithium-ion technology, while reducing charge time for a long drive to just 15 minutes. Investors swept up by Wall Street’s mania for special purpose acquisition companies, or SPACs, seem to particularly prize battery-related startups without profits. QuantumScape’s claims are now worth about $20 billion. To understand why, you need to look at the composition of the battery itself. QuantumScape’s story is one in which hundreds of engineers and scientists have spent round-the-clock laboratory shifts reimagining every atom in the modern lithium-ion battery. Without showing anything concrete to the public until recently. Or even telling who did what.
But, like, what is a battery even?
“I don’t want to give you names,” says Singh, a co-founder who serves as chief executive officer, “because I don’t want to risk other people poaching them.” The company even required the use of a color-shifting filter before a photographer could capture images, lest the material’s true hue give away hints.
Secrecy is standard in battery development. That’s because QuantumScape is hardly alone in its quest: Startups such as Solid Power, ProLogium Technology, and Ilika, as well as large companies like Toyota Motor and Samsung Electronics, are gunning for the big, difficult prize of next-generation energy storage.
Consider that lithium-ion batteries, with modest updates, have taken over the world since their first commercial use in 1991, powering everything from consumer devices to electrical grids. As costs have fallen more than 90% in the past 10 years alone, battery performance has improved only a little bit every year. These incremental gains have come from slowly reducing the amount of materials needed to store the same amount of energy or slightly tweaking chemical composition.
QuantumScape claims to have totally swapped out two of the four main materials in lithium-ion batteries. “It’s not impossible to visualize another few decades with this chemistry,” says Singh, who aims to radically upgrade electric vehicles and extend the reach of batteries into other technologies such as flying taxis.
Perhaps the biggest obstacle to glimpsing the battery’s future, other than all the secrecy, is that few of us know much if anything about how batteries have evolved. Floor the accelerator pedal inside an EV, and what happens outwardly is pretty much the same as before. Off goes the car, minus the vroom. What’s going on within? That’s something the average Tesla superfan might struggle to describe. Which is odd, since billions of adults carry the same lithium-ion technology with us all day and sleep beside it every night.
The invisible inner life of the battery involves trillions of charged lithium atoms rushing between two electrodes—cathode and anode—in a liquid electrolyte that makes the quick movement possible. Put an electric car or smartphone on to charge, and the same thing happens in reverse. And just as tires wear down with use, a battery suffers degradation with every back-and-forth swirl of a big chunk of its constituent atoms.
The breakthrough promised by QuantumScape is backed only by limited preliminary data released since December. It’s been achieved in large part by replacing the liquid electrolyte with something solid—a long-sought accomplishment that would earn a new name: the solid-state battery. But there’s a staggering risk that comes with believing in someone else’s unseen invention. Few battery startups subject their technology to independent verification, so comparisons are virtually impossible. Cautionary tales of overhyped battery advances are easy to find. British appliance maker Dyson Ltd. had to write down its $90 million acquisition of a startup called Sakti3 Inc. that had promised a solid-state battery. Pellion Technologies Inc. supposedly created a next-generation lithium battery only to have investors pull the plug once the cost of manufacturing skyrocketed to hundreds of millions of dollars.
QuantumScape’s biggest shareholder is Volkswagen AG, which means the world’s largest automaker is lined up to become its initial customer. In March, at a splashy PR event dubbed “Power Day,” VW executives laid out a plan to electrify almost its entire fleet. The transformation will likely cost hundreds of billions of dollars. The news sent VW’s share price up 23% that week; QuantumScape’s shares also surged. Solid-state batteries are “the endgame for lithium-ion battery cells,” said VW’s battery chief Frank Blome.
A battery revolution could not come at a better time. Governments are strengthening regulations to cut emissions, and every automaker is rushing to offer electric models. “It’s very rare to take one of the largest industries and literally swap out the heart of that industry from underneath it,” Singh says. “That’s what we’re doing.”
But a solid-state advance won’t help reduce emissions unless it can enter the mass market. And that presents a second enormous chasm of innovation that QuantumScape and its investors will have to cross. Not just secretly creating of a new battery material, but also perfecting industrial-scale production that can supply hundreds of thousands of vehicles within just a few years. Botching either step would mean inventing yet another failed battery.
“Five years ago, given the number of problems associated with solid-state batteries, there was skepticism if they could ever work,” says James Frith, head of energy storage for BloombergNEF. “That’s no longer the case.”
Fundamental battery innovations take more than a generation, and the process developed by Singh’s team promises to shave off at least a few years—and possibly many more. The world will need more advances to tackle the climate challenge, meaning many technologies will have to travel the arc from laboratory to the market as fast as possible. That’s why QuantumScape’s attempt to reinvent the battery may hold real lessons, even if there’s a danger its technology won’t work out.
Singh is a slim-built former marathoner who wears a turban as a practicing Sikh. Born in New Delhi, he came to the U.S. when his father worked as a statistician for the World Health Organization. He started college at age 15, studying computer science at the University of Maryland, and began working at Hewlett-Packard’s data communications division by the time he was 19. He founded his first company six years later.
His obsession with batteries started behind the wheel of a Tesla Roadster. It was 2009, not long after the debut of the first car sold by future battery-powered billionaire Elon Musk. The number of plug-in vehicles worldwide was still in the thousands, and the only way to achieve a driving range of about 200 miles with the latest technology was to drop more than $100,000 on the car. “I kept thinking that this could be the future of the automotive industry,” says Singh, 53, remembering his drives around Northern California. “But someone has to build a better battery.”
At that point, Singh was a serial founder who’d led his fourth startup, Infinera Corp., a manufacturer of equipment used for optical data transmission, through a successful initial public offering. He decided to resign and take up the role of “entrepreneur in residence” with a venture fund run by investor Vinod Khosla, a legendary Silicon Valley figure.
To get a better grounding in batteries, Singh started attending lectures at Stanford. That’s where in 2009 he met the physicist Friedrich Prinz, whose research group works on energy issues at the atomic scale. Prinz and a graduate student named Tim Holme were working on an all-electron battery, regarded as an idea far ahead of its time. Since they were first invented in 1799, batteries have remained chemical devices that shuttle charged particles known as ions back and forth as a means of moving massless electrons outside to power devices. The Stanford duo wanted to do away with bulky ions, in a shift that could theoretically allow the storage of more energy in a smaller space. The idea was appealing enough that the U.S. government gave the lab $1.5 million in what Holme describes as a “high-risk, high-reward” research program. The money came from the Obama-era stimulus package passed in the middle of the financial crisis. Tesla Inc., then struggling to introduce its slightly less-expensive Model S sedan, would get a far larger loan from the same stimulus.
.The material that was to underpin the all-electron battery was a type of quantum dot with distinctive electrical properties that result from oddities at the atomic scale. The material served as the inspiration for the name of the company Holme and Singh founded in 2010, with Prinz joining the board. QuantumScape was born with early investments from an all-star group that included Bill Gates, Khosla Ventures, and Kleiner Perkins.
The startup plowed a bit of the initial investment into a three-year lease for office space on North First Street in San Jose. “What if we go out of business in less than three years?” Singh remembers thinking. It wasn’t an unreasonable anxiety. Over the next several years, his battery startup ran into failure after failure.
To understand QuantumScape’s trajectory, we have to open the black box that is the battery.
The contents can be divided into four components: anode, cathode, separator (to stop the anode and cathode from touching, which causes a dangerous short circuit), and liquid electrolyte (through which the ions flow). This standard configuration hasn’t changed in more than two centuries; nor has the chemical composition of lithium-ion technology evolved much in three decades of tinkering. The cathode typically contains cobalt. The anode is almost always made of graphite, a form of carbon. The liquid electrolyte is often a lithium salt in a carbon-based chemical. The separator is a thin sheet of porous plastic. “Battery chemistry doesn’t change very quickly,” Singh says.
When QuantumScape began working on an all-electron battery, it set out as if from scratch. What would happen if engineers replaced all four main ingredients? This was the great promise of quantum dots that had convinced everyone from federal bureaucrats to the co-founder of Microsoft Corp. to put millions of dollars into a startup—and the theory that led Singh to Stanford in the first place.
But the big idea didn’t work, and QuantumScape discarded quantum dots within a year. Singh and Holme realized early on that trying to reinvent the battery was just too difficult. “Our mission to start the company was not based on a specific technology,” Singh says. The goal, he insists, was to build a denser, safer, faster-charging battery, no matter what it was made of.
Because the first failure came so fast, there was plenty of money left. The company had about 30 employees at that point, and the founders did what anyone in Silicon Valley would do in the face of a failed technology: have an awkward meeting with the money people, then pivot to something else. There was a less radical but still quite challenging idea they wanted to pursue.
“We told our investors, ‘Look, guys, we don’t know if this approach can be successful. But what we do know is that if it is successful, it can change the world,’” Singh says. “Luckily the core investors were visionary enough.”
By this time, in 2012, the lack of any tangible success beyond mollifying investors had the uncanny consequence of attracting even bigger investors. Prinz had brought QuantumScape to the attention of Volkswagen executives with whom he had a relationship. VW hadn’t yet been caught up in the 2015 Dieselgate scandal, in which the company admitted to installing software that let it cheat on laboratory emissions tests. The fallout led to more than $30 billion in financial penalties and would eventually force the German automaker to accelerate its transition to electric cars—so fast, in fact, that VW is set to sell more EVs than Tesla by next year.
A decade ago, however, VW had no fully electric car on offer. It was at this time that Tesla looked like it might be more than an annoyance, perhaps justifying a small bet on the battery-powered future. VW would end up investing $300 million in QuantumScape.
The next battery idea from Singh’s team was inspired by the past. The very first lithium-ion battery was invented in the 1970s by researchers at Exxon Corp., of all places. This was the era of the OPEC oil embargo, when even one of the biggest oil companies entertained doubts about the future of gasoline. Exxon’s original prototype had lithium metal on its anode. In a battery that depends on shuttling around charged lithium particles, there’s no more energy-dense anode than pure metallic lithium.
But there was an intractable problem that came with an all-lithium design. Peer into the battery through an electron microscope, inspecting the materials at the atomic level, and an all-lithium anode will likely be covered with hairlike structures called dendrites—the bane of battery engineers. Such nanostructures have the strength to puncture a battery’s thin plastic separator and reach the cathode, causing short circuits and fires. Because batteries are densely packed energetic materials, dousing a battery fire takes a lot more water and care than a comparable situation with an internal combustion engine. That’s one reason Exxon abandoned battery research and stuck to oil and gas drilling.
Researchers in the ’80s found that graphite made for a more stable anode, and it became the mainstay of the lithium-ion batteries that started appearing in consumer products such as bulky camcorders. Still, the dream of defeating dendrites and returning to lithium metal never died in academic labs. By the time QuantumScape began considering switching things up, scientists had an idea that could be the solution to the problem. That led to the next big question: Could the liquid electrolyte be replaced with something solid without adversely affecting battery performance?
Every company making a new type of batteries is, in effect, focused on novel materials. Without finding new materials, there was no way to make the battery Singh wanted. The failure of the first year hurt, but it wasn’t a surprise. Finding materials that can perform at extreme conditions is a really difficult problem.
As QuantumScape embarked on the search for a solid electrolyte, Singh and Holme went back to the drawing board. The team listed the properties the material would need to have: 1) resist dendrites and 2) enable lithium ions to flow freely. “We did not know if a material existed in nature that could meet the requirements,” Singh says. “Much less that we would be capable of finding it.”
To tackle such a challenge, scientists have one ultimate weapon: brute force. Conduct as many experiments as possible, learn from each iteration, and tweak the tests to perform yet more experiments. Straightforward, but expensive and slow. Luckily, QuantumScape had a surplus of cash. Thus began the build-out of what Singh calls one of the best materials labs any startup owns, powered with computers that could handle vast amounts of data. For a battery nerd, QuantumScape’s lab would be a coveted workplace regardless of what type of battery you wanted to research. Its suite of scientific instruments, Singh boasts, could be beaten only by what was on offer at the world’s top universities.
To cut down the time needed to make a breakthrough, if not the cost, the company turned the scientific work into a 24/7 operation. That practice continues today, almost 10 years on and with 300 employees. The process of creating a new material starts with shaping virtual prototypes inside supercomputers and testing their theoretical capabilities to a rough approximation. It’s almost like having a version of the replicator from Star Trek, capable of creating any material from a vast database—just digitally. This kind of theorizing backed by powerful computing has accelerated innovation across the physical sciences.
The computer research narrowed the list of materials that QuantumScape had to actually make, though round-the-clock lab teams still made many dozens of different materials. Singh wouldn’t give examples, but the company’s patent portfolio is littered with exotic-sounding substances such as lithium lanthanum zirconium oxide.
From 2010 to 2015, Holme says, the company ran “millions of tests” on these materials. None worked. The nanoscale hairs haunted each one. “After you see every flavor of material you’ve tried still form dendrites, it kind of affects you,” Singh says. “Honestly, there was a time when I was getting depressed. I was like, ‘Dendrites may be just one of those problems that you cannot solve.’ ”
The lab eventually got lucky. It found not one but two materials that seemed resistant to dendrites. Two teams fast-tracked work on their respective materials, and friendly competition ensued to test and refine. By 2015, QuantumScape had settled on the winner.
Singh won’t give much detail about the material apart from saying it’s a dendrite-resistant ceramic that lets lithium ions pass through “like it’s a highway.” He’s also willing to reveal that some liquid remains in the cathode, meaning his prototype is actually more of a semi-solid-state battery. Doing away with liquid altogether, if possible, would be a goal of a future iteration that might boost storage capacity even further.
Finding a material is only half the job. QuantumScape spent the next five years, from 2015 to 2020, trying to perfect it. “That may seem like a long time,” says Venkat Viswanathan, an associate professor in the department of mechanical engineering at Carnegie Mellon University, who serves as an adviser, “but it’s how long it takes to solve the ‘and’ problem.”
The solid electrolyte QuantumScape found needed to meet several “and” criteria: It had to allow lithium ions to flow and stop the dendrites; it also had to be flexible enough that it wouldn’t break inside a battery and be easy enough to produce at scale. Singh puts it another way: “You cannot have a wing of an airplane tested to the exact stress it’s going to see in real flying conditions. You’ve got to test it to much more strenuous conditions.” If you want the EV battery to be charged in 15 minutes, there better be headroom for the material to handle even faster charging without failure.
With the scientific hurdles potentially cleared, there’s still no evidence QuantumScape has figured out the challenge of manufacturing a new type of material at the scale required by Volkswagen—a company that sold more than 6 million cars in 2019—while keeping all those additional qualities. QuantumScape says it’s nearly three years away from putting its battery in test cars. Don’t expect to see it at your local VW dealership until 2026, if everything goes right.
Even in manufacturing, QuantumScape is taking on a challenge few others have dared. No U.S. startup in the past decade has built its own gigafactory, a term popularized by Musk for a plant that produces gigawatt-hours’ worth of batteries each year, at least enough for 200,000 cars. All existing large battery factories in the U.S. are either owned by Asian companies, such as LG Chem Ltd. or SK Innovation Co., or were built in partnership with those overseas giants, like the original Tesla-Panasonic gigafactory outside Reno, Nev. Prior battery startups haven’t been able to raise the billions of dollars needed to build gigafactories, says BNEF’s Frith, and instead license technology to existing producers.
But that’s not the end goal for QuantumScape now that it’s sitting on almost $1.5 billion, after having raised $450 million in March. By 2023 it plans to build a pilot manufacturing plant in San Jose, where test cells can be made for other automakers. The facility will also develop applications to reflect what Singh describes as growing interest from consumer-electronics companies and the nascent industry of flying cars. By 2024 the company plans to build a large-scale factory at an undecided location as a joint venture with Volkswagen, to start supplying batteries to some of VW’s brands, including Audi and Porsche.
“That’s what one company can do with a lot of money,” Frith says. “With the money pouring across the industry, imagine what all the other companies, whether startups or giants, will be able to achieve.”
That competition is starting to creep up. In March, General Motors Co. announced that it’s working with Massachusetts-based SolidEnergy Systems Corp. to build a solid-state battery. The same month, European battery maker Northvolt AB acquired California-based startup Cuberg Inc. Previously, Ford and BMW AG invested in Colorado-based startup Solid Power Inc. Daimler AG is working with Blue Solutions SA on solid-state tech.
And some of these rivals are making next-generation batteries without having to face the challenge QuantumScape set for itself. Cuberg, for example, has built a lithium-metal battery that may have overcome the dendrite problem for its liquid electrolyte.
There’s pressure, too, in being the largest publicly traded U.S. battery company. Secrecy becomes harder to maintain when you have to report progress every quarter and offer investors a modicum of transparency—if only about the wait until revenue materializes. After a Sanford C. Bernstein analyst warned in December that QuantumScape’s manufacturing risk is high, the company’s share price fell 24%. In February, when it announced a technical triumph earlier than expected, the price jumped 17%.
“We do not set expectations that we can’t meet,” Singh says. “Because as a public company if you miss expectations, the reaction is swift and merciless.”
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Easing the car chip conundrum - btbirkett@gmail.com - Gmail
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Supply Chain Challenge
Carmakers including Volkswagen, Stellantis, Daimler and Renault have had to idle European factories because of the global semiconductor shortage costing the industry billions of dollars in lost sales. We're now starting to get a sense of how the continent's auto industry will claw its way out of the predicament.
VW has a chip task force comprised of dozens of executives that's met this week on trying to contain the damage. Continental, the region’s second-largest car-parts supplier, has dispatched 800 of its staff to help counter the crunch, according to CEO Nikolai Setzer. The German company has stepped up freight operations and is working “24 hours, seven days a week” to solve the situation, he said recently.
Larger components maker Robert Bosch is setting up a $1.2 billion automotive chip factory in Dresden, Germany, and plans to start full-scale manufacturing there before the year is over. Bosch agreed to cooperate with Globalfoundries — an Abu Dhabi-owned chip manufacturer with plants in the U.S., Singapore and Germany — to develop automotive radar semiconductors that should hit the market in the second half of this year.
So after some serious finger-pointing, companies are starting to meet the bottleneck head-on. But will their efforts be enough to avert major damage to earnings? Of the $61 billion in sales AlixPartners expects automakers to lose to the chip shortage this year, the consultancy anticipates more than $13 billion to go up in smoke in Europe. Roland Berger has predicted it will affect automakers into 2022.
The crisis has played out like a perfect storm: near-sighted planning, supply-chain complexities and natural disasters combined to do the damage. The seeds were sown about a year ago, when the pandemic caused car demand to plunge. That prompted auto suppliers to slash orders for chips and other parts. As buyers returned to showrooms faster than expected, the industry tried to increase purchases.
Securing more chips was a challenge. Dominant manufacturer TSMC was busy servicing a stay-at-home-fueled boom in demand for tablets, computers and game consoles. Early this year, the power outages in Texas and fire at a chip plant in Japan have exacerbated the problem.
Demand for auto chips won’t let up anytime soon. A car from a premium brand can require more than 3,000 chips; if even just one is missing, the vehicle is incomplete. The industry is electrifying, and battery-powered cars tend to pack significantly more expensive chip content than those with combustion engines. Add to that a rising share of entertainment and autonomous-driving features, and it becomes obvious that carmakers will have to up their game sourcing semiconductors in the future.
TSMC is spending some $30 billion on new plants and equipment this year. It’s unclear how much of the capacity will go to European carmakers, as technology giants including Intel, Apple and Samsung typically get the bulk of the output. TSMC CEO C.C. Wei delivered a somewhat reassuring message Thursday, saying the company's auto customers can expect the shortage to be “greatly reduced” by next quarter. There will still be an overall supply deficit throughout this year, though, and potentially into 2022, he said.
U.S. carmakers have secured assurances from President Joe Biden that he has bipartisan support for government funding that will help address a shortage. European politicians also have called for building up a domestic chipmaking industry, an effort that could end up looking much like Germany and France's battery push that's spurred multibillion-euro projects. But in addition to a lot of money, expanding Europe’s chipmaking industry will take some time.
Bosch’s deal with Globalfoundries could be both a key near-term fix and a sign of how relationships between the automotive and the semiconductor industries will change. Carmakers until now have let several tiers of suppliers handle the sourcing of chips and may need to take more direct control over the tiny but vital electronic components.
Bosch is bypassing other chip designers like Infineon Technologies and NXP Semiconductors by working directly with a contract manufacturer to secure the best technology and, maybe more importantly, seize enough supply. Globalfoundries is getting visibility on how much it needs to produce and at what cost — a win for both sides and a concept that’s increasingly catching on, said Mike Hogan, who heads Globalfoundries' auto business unit.
“We’ve been engaged in a growing number of discussions with automakers and car-parts suppliers recently,” Hogan said. “The auto industry is realizing how vital semiconductor technology is to their future.”
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