The demand for this essential component is greater than the supply, leading to a global race to develop technology and build factories in order to produce millions of electric cars. Batteries, once considered mundane, are now a key focus of innovation in the auto industry. While car manufacturing has remained largely unchanged and unprofitable for decades, the battery industry offers significant potential for growth and advancement. The rapid evolution of technology in this sector has the potential to create the next major industry innovator, similar to the impact of personal computers, mobile phones, or automobiles. Wood Mackenzie predicts that electric vehicles will account for 18 percent of new car sales by 2030. The demand for batteries is expected to increase by approximately eight times more than current factory production capacity. This estimate is considered conservative, as some analysts predict even faster growth in electric vehicle sales. Car manufacturers are competing to develop the most efficient and cost-effective battery technology. GM's recent announcement to transition to all electric vehicles by 2035 was seen as a significant milestone by policymakers and environmentalists. Many people in the battery industry saw the company's announcement as an obvious indication of the growing presence of electric vehicles. According to Venkat Viswanathan, an associate professor at Carnegie Mellon University, battery manufacturing is primarily controlled by companies like Tesla, Panasonic, LG Chem, BYD China, and SK Innovation, most of which are located in China, Japan, or South Korea. However, there are also numerous new players entering the market, and investors are eagerly investing in startups that they believe are on the verge of major advancements due to the potential for significant profits. Andy Palmer, former CEO of Aston Martin and current nonexecutive vice chairman of InoBat Auto, believes the electric vehicle industry is still in its early stages with abundant funding but limited innovative ideas. QuantumScape, a startup backed by Volkswagen and Bill Gates, is developing battery technology that promises cost-effectiveness, reliability, and faster charging. Despite lacking significant sales, the company's valuation surpasses that of Renault. Both China and the European Union are investing government funds in battery technology. China views batteries as essential for its goal of dominating the electric vehicle industry, and the Chinese government has assisted Contemporary Amperex Technology, a partially state-owned company, in rapidly becoming one of the world's largest battery suppliers. In a similar vein, the European Union is providing subsidies for battery production in order to prevent reliance on Asian suppliers and protect jobs in the auto industry. Recently, the European Commission announced a 2.9 billion euro fund to support battery manufacturing and research, in addition to the significant financial commitments already made by European governments and automakers towards electric vehicles and batteries, as reported by Accenture. A portion of government funding will be allocated to Tesla as a form of appreciation for the company's choice to establish a factory near Berlin. The United States is also anticipated to support the industry in line with President Joe Biden's emphasis on climate change and his advocacy for electric vehicles. In a campaign advertisement last year, Biden, who owns a 1967 Chevrolet Corvette, expressed his excitement about driving an electric version of the sports car if GM decides to produce one. Numerous battery factories are currently in the planning or construction stages in the United States, such as a facility GM is constructing in Ohio with LG. However, analysts believe that federal incentives for electric car and battery production will be vital in fostering a prosperous industry in the United States. Additionally, advancements in technology by government-funded researchers and domestic companies like QuantumScape and Tesla will also play a significant role in reducing costs and enhancing the performance of batteries. Margaret Mann, a group manager at the National Renewable Energy Laboratory, acknowledged China's strong support for manufacturing and new development. She remains hopeful about the United States' potential to advance in battery production, although she believes that there are still unresolved issues. Entrepreneurs working in this field believe that American companies have the opportunity to surpass Asian producers in the industry despite the current lack of competitiveness in batteries. Jagdeep Singh, CEO of QuantumScape, emphasized the importance of improving batteries for a renewable energy economy. Overall, the significant investment in battery technology is seen as a positive development. It harnesses capitalism to address a global issue, but the transformation of the automobile industry will also have negative consequences for some, such as companies that manufacture parts for traditional vehicles and investors who back the wrong technologies. According to Venkat Srinivasan, director of the Argonne National Laboratory’s Collaborative Centre for Energy Storage Science, advancements in battery technology take time and unforeseen challenges can arise. Many believe that the increasing demand for batteries will benefit China, as the country is a major producer of battery metals and cells. China's dominance in battery production is expected to only slightly decrease in the next decade, despite efforts to increase production in Europe and the United States, according to Roland Berger. Tom Einar Jensen, the CEO of Freyr, emphasized the geopolitical significance of battery production and the European auto industry's desire to reduce reliance on imports from Asia, especially China. Freyr is planning to raise $850 million through a merger with Alussa Energy Acquisition Corp., which would result in a listing on the New York Stock Exchange. The company intends to manufacture batteries utilizing technology created by 24M Technologies in Cambridge, Massachusetts. The primary goal for the industry is to lower the cost of batteries. According to Srinivasan, electric car batteries for a midsize vehicle currently cost around $15,000, which is approximately double what they should be in order for electric cars to become widely accepted. To achieve these cost reductions, numerous small improvements can be made, such as producing batteries in close proximity to car factories to avoid shipping expenses, and minimizing waste, as noted by Roland Berger. Inefficient production methods currently result in approximately 10 percent of materials being wasted in the battery manufacturing process. However, a recent study by Roland Berger has cautioned that the increasing demand for raw materials such as lithium, cobalt, and nickel could result in higher prices, potentially offsetting some of the efficiency gains. The automotive industry is facing competition from electric utilities and other energy companies for batteries needed to store intermittent wind and solar power, leading to a further increase in demand. Jason Burwen, interim chief executive of the United States Energy Storage Association, has expressed concerns about a possible supply shortage this year. To address this issue, a new category of companies has emerged to develop alternative materials that are more affordable and readily available to replace costly minerals used in batteries. One example is OneD Material, a company based in San Jose, California, which produces a substance resembling used coffee grounds for use in anodes, the electrodes that transmit power from batteries during vehicle operation. The material is created using silicon, which is readily available and cost-effective, in order to lessen the reliance on graphite, which is rarer and more costly. In the future, the ultimate goal for the industry is solid state batteries, which would replace the liquid lithium solution in current batteries with solid layers of a lithium compound. Solid state batteries are expected to be more stable, less likely to overheat, and allow for quicker charging times. Additionally, they would be lighter in weight. Toyota Motor Co. and other companies have made significant investments in this technology and have already achieved success in developing solid state batteries. The challenge lies in producing a large quantity of batteries at an affordable price. QuantumScape has generated much excitement by claiming to have discovered a material that addresses a key obstacle to mass production of solid state batteries - their tendency to short circuit due to imperfections. Despite this, it is generally believed that solid state batteries will not be extensively accessible until approximately 2030. Elon Musk, CEO of Tesla, stated that mass producing batteries is extremely difficult during a recent conference call with analysts, noting that creating prototypes is a much simpler task. Scaling up production is extremely challenging. Having a degree in electrochemistry is currently very advantageous, as those who possess knowledge of materials such as lithium, nickel, and cobalt are crucial to the development of batteries. Jakub Reiter, who has had a passion for battery chemistry since his teenage years, was recruited by BMW in 2011 while conducting graduate research in Germany. Last year, he was hired by InoBat to assist in establishing a factory in Slovakia, where major car manufacturers like Volkswagen, Kia, Peugeot, and Jaguar Land Rover are located. Reiter currently serves as the head of science at InoBat, a company that offers technology enabling customers to efficiently create batteries for various purposes, such as a cost-effective option for a commuter vehicle or a high-performance model for a roadster. Reiter noted that two decades ago, batteries were not a major focus, but now there is fierce competition and significant challenges in the industry.