Cobalt-free batteries reign in Chinese EVs. Why not the US?

And yet, last week, in a factory in Louisville, Kentucky, Ford made a big announcement. It was about its future electric vehicle plans and cobalt was absent.

This is the indicator from Planet Money. I'm Darian Woods.

On journalist Henry Sanderson's visit to the Democratic Republic of the Congo, he met a former child miner who had seen other children die as cobalt mines roofs imploded. Henry learned about entire road tunnels that would collapse from all the mining that had happened around it.

Iron phosphate batteries were an alternative. They had cheaper chemicals, but they had one major flaw. Less capacity.

So in the horse race between cobalt and iron phosphate batteries, BYD was betting on the iron phosphate horse. Then in 2017, the Chinese government changed the way its subsidies worked. And Chinese EV manufacturers would get more subsidies, the denser the energy capacity of their batteries. So this really favoured the high capacity cobalt batteries. Around then, 80% of Chinese EVs used cobalt.

What BYD and CATL did was build batteries without unnecessary packaging. BYD even started building directly into the car's floor with a battery pack integrated into the very frame of the car. That reduced the amount of casing and hardware needed so more battery could be squeezed in.

China's use of iron phosphate batteries skyrocketed. There are now about 80% of new EVs there. Cobalt cars in China are now far less common.

I came to the conclusion, especially at the start of the pandemic, that I needed to really start acting upon a vision that we bring North American battery manufacturing with sustainable materials into being.

Mujeeb founded the battery company our next energy or one in 2020. Mujeeb says that his company's iron phosphate batteries have demonstrated more than 400 miles of range. Mujeep says this is innovation that is built off all the findings coming from China.

You know, it's no different than the entire philosophy of patenting ideas and then you publish your ideas and then people think about what you did and Then they try to do something a little better. I think actually that's human progress. That's actually the way in which technologies have always, always evolved is that we've seen how a step leads to a second step, it leads to a third step.

I'm so excited about today. We've been waiting three years for this, for this moment. So that big announcement by Ford CEO Jim Farley last week in that Kentucky factory was about constructing electric vehicles from the battery up, building off the techniques that BYD and CATL pioneered and taking it a step further. Jim also announced a refit of that Louisville factory to build cars that would use iron phosphate battery cells. We will spend $2 billion here in Louisville modernizing this plant.

Yeah, there was a lot of self congratulations for building batteries in America. But it's worth noting that Ford's iron phosphate battery factory licenses technology from catl, the Chinese battery company, not American startups like Mujeebs. Charles Poon is the head of high voltage propulsion engineering at Ford.

Is there an argument for, I guess, seeding and supporting younger companies? That may not be quite there yet, but maybe in five to 10 years they could grow to be the next CATL.

Ford's announcement shows the US is taking steps towards reducing its cobalt demand. But there is an open question about whether the technology to enable that will be American or Chinese.

And you know what? Waylon BMW has a track record here in the early 2000 and tens. It took a gamble on a young battery company that was thinking of switching to make EV batteries. That company was catl, now the world's largest EV battery maker.

This episode was produced by Cooper Katz McKim with engineering by Kwesi Lee and Gilly Moon. It was fact checked by Cyril Juarez. Kate and Cannon edits the show and the indicator is a production of npr.