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MS. OSAKA: Hi, everyone, and welcome to Washington Post Live. I’m Shannon Osaka, and I’m a climate reporter at The Washington Post. And today we’re going to be talking about the transition to a greener economy through things like renewable energy and electric vehicle technologies. Later on in the show, we’re going to talk to Gene Berdichevsky, who is the co-founder and CEO of Sila Nanotechnologies, but first, we’re going to be joined here by Mark Widmar, who is the CEO of First Solar.
Mark, thank you for joining us.
MR. WIDMAR: All right. Thank you, Shannon, for having me here today.
MS. OSAKA: So, Mark, First Solar is one of the world’s ten largest solar manufacturers but the only of those companies that is headquartered in the United States. Why is that?
MR. WIDMAR: You know, we started the company almost 25 years ago, and it was really founded here in northwest Ohio, mainly because it’s the glass supply chain of the world, basically, for the automotive industry. And at the time, the technology was looked upon as not only thinking through the evolution of where energy could go over time but what are alternative uses of glass, and so there was a view of a next-generation, disruptive, thin film technology that was going to be innovated and invested in here in the U.S. And that’s how we started the company, and we stayed true to that through the 25 years that we’ve been a public company.
MS. OSAKA: I want to come back to explaining to our viewers exactly what that thin film technology is, but first, can we just talk about–I mean, First Solar is making huge investments in the U.S. Can you just talk about the magnitude of those investments and what they look like?
MR. WIDMAR: Yeah. So if you think about the most recent announcements that we’ve made, this in 2022, we announced about another $1.5 billion of investments. One would be for a little over a billion dollars for a new factory that we’re putting in Alabama, which would be our first factory in the U.S. outside of Ohio. There’s another couple hundred-million dollars that we were investing in, expanding the throughput capacity of our existing Ohio facilities, and then there was about $300 million which was kind of its first of a kind R&D innovation center, which would allow us to invest and further accelerate our technology roadmap, not only technology for thin film, semiconductor, single junction, evolving that to next-generation technology of new thin films and even into multijunction technology as well.
So just since August of last year, we’ve made an announcement for $1.5 billion of new investments, and if you look at our cumulative investment that we’ve made here in the U.S., factory-related and R&D-related, that number is over $4 billion over the last several years.
MS. OSAKA: Wow. That’s huge.
So you talked about the thin film technology, and most solar companies are using crystalline silicon. Can you talk about what the difference is and what makes your technology unique?
MR. WIDMAR: Yeah. So if you think about it just from a technology perspective, crystalline silicon has been a technology that’s been well studied for, you know, 50, 60, 70 years. But it’s capex intensive. It’s energy intensive. It’s doesn’t enable the cost profile that you’d want to have in order to innovate a technology that can enable the lowest cost of energy, which is the vision that we’ve had since we formed this company is to make solar the lowest-cost form of new generation. And largely, I think we’ve accomplished a significant component of that. In a lot of markets where there’s a good solar resource, what you generally are going to see is that solar is the lowest-cost form of new generation.
Thin film is disruptive in the standpoint that it’s a vertically integrated technology. It’s inherently lower cost. So within the four walls of a factory, we’ve vertically integrated the entire production process, and largely, we localize our supply chain to be very close to where we manufacture. And within a matter of a few hours, you know, you will generate a completed module, so a semiconductor that is encapsulated between two sheets of glass with a frame and a junction box and then ships within a matter of hours, fully vertically integrated within a factory.
The thin film enables a different energy profile, too. So our technology performs better when exposed to temperature. It performs better when exposed to humidity. Generally, it will have a much better long-term degradation rate. So if you look at our semiconductor, the degradation rate of our next-generation technology will be about 0.1 percent a year. So when you think about a technology that’s going to last up to 35 or 40 years, you want to make sure that through that entire life cycle that’s generating its optimal output and given such a low degradation rate, you’ll see a much more higher energy profile over the life of our technology.
So there’s multiple points of differentiation–is what we refer to them, and it’s the evolution of where this technology should have gone and should be further along than where it has been but for the dominance of one particular country that has largely, unfortunately, stifled cycles of innovation, you know. And we’re fortunate as a company because of our unique position, ability to get to scale and a differentiation of our technology, that we’ve been able to compete on our own merits and compete not only to stand on a level playing field but in a number of cases to excel and to achieve, you know, results that most people never could have envisioned when this industry was started, you know, 20, 30 years ago.
MS. OSAKA: You’re making a really strong case for the thin film technology, and, you know, one of the things that I’m curious about is, why haven’t more companies switched over to this?
MR. WIDMAR: Solar largely has been over the last 10 years-plus un-investible because of–most countries were not willing to enable a level playing field. So if you’re trying to invest in a next-generation technology, it’s a very long road from the starting point of having a technology that could be initially in a small coupon cell to the point of getting that ultimately to manufacturing and then to get it to a point of scale and become bankable.
Because of the challenging environment that we’ve been in this industry, because of Chinese decision to dominate a particular industry, which they have chosen to do this here with solar, most people have decided not to invest in solar. It’s really destroyed the cycles of innovation. I think it’s put us behind from where we could be as an industry around our capabilities, but all we needed was an opportunity to create a level playing field that would allow for those cycles of innovation and those natural investments to happen and not just from a trade but from an industrial policy perspective. And that’s largely what we’ve been able to get now with the IRA here in the U.S.
But we also have other programs. For example, we’re putting a new factory in India that has done the same type of strategic, you know, thought process around long-term energy independence and security and climate change goals and not to be over-reliant on any one particular country and, in this case, an adversarial country between India and China. And so they put in industrial and trade policies that have enabled the domestic industry.
So if you are strategic around this, it can happen. It can happen very quickly, and so I’m very optimistic now with what we’ll see with–here in the U.S. and even in India with the policies that have been put in place, that you’ll see those cycles of innovation coming back. You’ll see more evolution around thin film technologies, not only today’s technology but next- generation technology, which is really exciting for us as a company, and it should be for–as an industry as well.
MS. OSAKA: Absolutely. And you’re talking about, you know, that China has really dominated the solar industry, and obviously, President Biden has made this, you know, a point of emphasis that he wants to move away from that reliance on China.
You mentioned the Inflation Reduction Act. I mean, is the Inflation Reduction Act doing enough? Is that bill enough to get us to where we need to be in terms of independence from China on solar?
MR. WIDMAR: You know, I think the architecture of that bill probably couldn’t have been done much better, and the reason I say that is because it gave something to everyone. Where we’ve been challenged or disconnected in the past is certain policies have been put in place, whether it’s a trade policy that is misaligned with a manufacturer that could be counter to the objective of a developer or a utility or to an independent power producer, and so that misalignment has generally resulted in some effort to undermine whatever policy was being put in place.
What we have with IRA is that it’s really a whole-of-industry approach, that there’s a little bit for everyone, and not just today as you think about today’s form of generation or today’s technology or the evolution of where we’re going around the world of electrification, and on the front end of the world of electrification, you need somebody who can take photons and make electrons. And we think we do that better than everyone else.
But the enablement now through IRA as it relates to the world of electrification with EVs and with hydrogen and so on, now you’ve got this really unique opportunity for us as an industry that everyone has an opportunity. Everyone will benefit from what has been put in place with the IRA if we stay true to its intent. So I’m very excited about how it was originally architected.
Where I’m a little concerned is that will it stay true to the spirit of what was envisioned, and I think at times we can wander, and for example, there’s–as part of IRA, there’s the extension of the investment tax credit and the production tax credit. And actually, solar now will benefit from the production tax credit, which is actually an incremental value-add. It also extends–before, the ITC for solar was going to step down to 26 percent. Now it goes back to 30 percent, and it actually creates a very long runway through the end of this decade.
Now, there’s actually, on top of that, an opportunity for a bonus, and I think we should just step back and reflect on that word. It’s a bonus. It’s not an entitlement. And the bonus is there for domestic content, because as we think through the horizon of IRS, the strategic intent is we need domestic manufacturing that can enable that long-term energy independence, security, and climate change goals.
If the bonus is only in the very last step of the production process for crystalline silicon–because crystalline silicon is a very complicated production process. It first starts with the production of polysilicon, and then it’s ingot and wafer, and then there’s cells, and then there’s final module assembly. If the domestic content value is carried across an entire value chain, then you get to a point where there’s an enablement of a domestic supply chain that’s enduring.
If we just put the domestic content bonus–and again, I’ll keep going back to the word “bonus.” It’s not an entitlement. It’s a bonus that’s there to enable strategic intent of an industry, right, and its self-sustaining capabilities. If the bonus is only on manufacturing a module assembly–excuse me–the very last step of the production process, we destroyed the entire front end of the value chain, and it’s so simple to put module assembly into the U.S. and to back away from it.
So there’s a company here in Arizona that made an announcement for a facility that would do about two gigawatts–a Chinese company–two gigawatts of module assembly. Well, they’ve chosen to enter into a lease of existing facility. They haven’t even made a capital investment, and they’ve largely imported the equipment and the tools from China. And so that’s very easy to unwind. So they could be looking at this. We’ll play the–we’ll play this game. We’ll ride the course of IRS, get the domestic content bonus, be here for 10 years. IRA goes away. They walk away from their lease. They basically scrap the tools, and they move on. And then we’ve destroyed the opportunity of what we set out strategically to try to accomplish. So that’s where I get a little concerned. I think it’s well intended. I’m really worried about how it ultimately gets interpreted and finally implemented.
MS. OSAKA: What are the changes that you would like to see in terms of ensuring that it isn’t just, you know, that sort of add-on domestic bonus, but it is really robust across all, you know, vertical parts of the supply chain?
MR. WIDMAR: You know, at a minimum, I think it has to be tied to–again, for us, we’re vertically integrated. So across the entire value chain, we do everything within the four walls of our factory. At a minimum for crystalline silicon, I think it has to be the module assembly plus the cell. I’d love it to go all the way back to the wafer because the wafer is another component of the supply chain that I think we’re gapping on in terms of our capabilities, and I think the domestic content incentive would help establish that portion of the supply chain.
We have polysilicon manufacturing today in the U.S. So that’s obviously check that box, and we can continue to grow. So, ideally, I’d love to go back to the wafer to meet the domestic content, but at a minimum, it needs to go to the cell.
And then I think there has to be some view in a lens of the supply chain around that, so the glass manufacturing, the steel or the aluminum or the other components, the inner layers that go into the production of the module. If I had to say my ultimate goal state, would I like to see that being incorporated too, sure. That’s a final goal state that I think that we should all aspire to, but I think if you acquire the cell and the wafer, then I think the other parts of the supply chain will evolve with it. It’s very expensive to ship glass internationally, especially with some of the challenges we’re all dealing with, with ocean freight at this point in time. And we’ve got great domestic capabilities around steel and aluminum, so I think they’ll evolve over time.
So again, my view is let’s go back to the wafer, a minimum at the cell. Then I think what will happen, a supply chain beyond that to build the material evolves, and we’ve then accomplished what we said we wanted to accomplish through IRA. We now have our own capabilities, domestic supply chain here in the U.S. that can enable long-term energy independence, security, and our climate change objectives.
MS. OSAKA: Yeah, absolutely. That makes sense.
I want to switch gears and return to China just a little bit. You know, we’ve seen that the global solar supply was constrained by the Uyghur Forest Labor Prevention Act, which stopped the imported material that could have come from a forced labor camp, and I’m curious, I mean, what impact did this have on First Solar? I mean, did you see a big increase in demand?
MR. WIDMAR: Yeah. We have seen an increase in demand, but the thing also to remember, we’re adding a lot of capacity here in the U.S. And we’ve got such strong trusted partnerships with most of our customers and the commitment to our technology, and having certainty of delivering against contractual obligations and delivering the technology that we’ve committed to, that we–it’s been sold out of our production usually at least 18 months, if not 24 months, in advance. So while there’s been disruption in 2022 and now into 2023 because of the forced labor, the Uyghur Act that was put in place, it really didn’t accelerate any demand to us in ’22 or ’23 because we had sold through that capacity.
Now, what it does do for us, is across the horizon, when our partners look around, how much risk do they want to take, they want to de-risk as much as possible. And they know First Solar, with our protocols, we’re the only manufacturer in the industry that holds ourself to the highest standard. We use a third party, which is called the “Responsible Buyers Association,” to do audits of our factory, all the way to the lowest level, not only of what we buy directly but what we buy from our supply chain and making sure that they have the same protocol and standards that First Solar does, to ensure that there’s not forced labor or any other challenges that exist within our supply chain. And our factories–you know, our factories in Ohio, as an example, the very first time they conducted the audit, we were the gold standard. We hit the highest criteria of their evaluation out of the gate, which is outstanding, and our international factories have done very well as well. So we hold ourself to a high standard.
We have a strategy around responsible solar. We have zero tolerance for things like forced labor. We have a strategy around circular economy and recycling of our technology, where the–since the inception of the company, we’ve had an end-of-life program, which we recycle and recover the vast majority of the materials. Over 90 percent of the materials from the module are recovered and reused. The semiconductor actually can be reused over 40 times. So that same semiconductor that’s going into a solar panel today effectively can generate energy through recycling for 1,200 years, which is phenomenal, and nobody else can do that.
So we differentiate ourself from many different ways. We create strong relationships and strong partnerships. So, yes, did the forced labor and the Uyghur Act have some impact to First Solar? It was, but it was–we’re so far ahead of the game in terms of how we lead and what we do in this industry from a responsible standpoint, and our customers are looking across the horizon that they see demand, hundreds of gigawatts of demand for the next several years and decades to come. And they want a strong partner that can stand behind them with great technology, and that’s what First Solar tries to do.
MS. OSAKA: We are running low on time, but I want to ask you, as a final question, I mean, we’ve talked about these labor concerns with China. Do you see a point on the horizon when the U.S. power industry and sort of U.S. Solar can be independent of the Chinese solar industry?
MR. WIDMAR: Absolutely. I don’t see that as a constraint at all, and I think what’s happening now with IRA, if anything, there’s catalyst now to accelerate that.
If you just think about what’s happened short term–so First Solar has made factory announcements here, another 3.5 gigawatts, and you include the expansion in what we’ve done, and Perrysburg is about 4.4 gigawatts, and we made that in about the last six months. Another manufacturer here in the U.S., Hanwha Q CELLS, has made a commitment to where, you know, vertically integrated back into wafer and ingot and then bringing their capacity up to around 9-or-so gigawatts, right, and we’ve got about 10 gigawatts here in the U.S. So just between two companies, we have over 20 gigawatts of capacities to support the U.S. market in a relatively short period of time.
So I have no doubt that the ability for the U.S. to be self-sustaining with our own domestic supply chain to support the demand that’s going to grow up to 50, 60, 70 gigawatts over the next several years, we’ll have those capabilities. If we stay true to what the IRA was intended to do, the future is ours. The potential is ours. It’s what we choose to do with it.
MS. OSAKA: Well, thanks so much for that, Mark, and we’re going to continue to follow the solar industry and the story of your company. Thanks for joining us today.
MR. WIDMAR: All right. Thank you, Shannon. Really appreciate it.
MS. OSAKA: And thanks to all of you for joining, and please stay with us for the next segment of this conversation.
MS. KELLY: Hi there. I’m Suzanne Kelly, CEO and publisher of The Cipher Brief, a national security-focused media organization. Today we’re talking about climate and the clean energy economy, specifically the evolution of electrification and really innovating in order to build resilience.
Joining me to talk about this is Terry Collier. Terry is vice president of Research and Development in the Electrical Markets Division at 3M. Hi, Terry.
MR. COLLIER: Hi, Suzanne. Great to be here. Thanks for having me.
MS. KELLY: Thank you for being here. You know, electrification is really kind of a layered process. It’s not like flipping a switch. I thought we might start with the basics. Can you explain a little bit about what electrification means, and then talk about some of the challenges that are associated with it?
MR. COLLIER: Sure. Electrification is the use of electricity for more of our energy needs. One place we see this happening rapidly is in transportation, in cars and buses and delivery vehicles. And a few benefits of this transition is one in distribution, in the distribution of electricity that happens through the electricity grid. So we have none of the traditional fuel processing or distribution system. That also leads to the second, which is safety. Without having to transport chemicals, this becomes a much safer approach to transmit energy. And then lastly, with an electric vehicle compared to an internal combustion engine, there is no exhaust or emission that occurs at the point of use, which is a third real benefit.
However, there are also some real challenges, and the first challenge exists of really understanding we have an aged electrical grid, and this aged electrical grid consists of billions of miles of cables and equipment that all is required to send power from a power distribution site all the way to the plug in our factories, offices, and our homes that we use today. It was designed for a one-way flow of electricity.
Adding distributed generation into the grid now adds a two-way flow of power onto that electric electricity grid, causing it to work in a brand-new way.
And finally, due to some of the demand and the environmental conditions, what we see is that there have been increased outages, and really as we’ve become more dependent on electricity, some of the challenges that represents.
MS. KELLY: Yeah. Terry, I have to ask you, I mean, what do you see as some of the steps that are really going to help both our communities and our economies transition away from fossil fuels?
MR. COLLIER: You know, this has to be a comprehensive approach as we transition, and that’s going to consist of efforts from governments of businesses and individuals. And so from governments, it’s all about setting policies and really helping support the integration of renewables onto the grid, and we’re seeing that happening around the world and not just for sustainability, but also in order to have–to deliver affordable power.
In many areas, traditional fuels are becoming very difficult to get, and electrification and being able to generate through renewable sources is a real way to deliver that power.
The second is businesses, really investing into these spaces and installing that solar, installing that wind in energy storage, but also government stepping in and helping with the safety studies and the permitting in order to get that power in the grid. And then lastly, it’s about individuals. It’s about individuals understanding, one, the importance of sustainability but also understanding consumption and understanding how do I make some of the purchases to make sure I’m as efficient as possible in my home, whether that be choosing the right appliance or also making decisions on when and how to use my power.
MS. KELLY: Yeah, that makes sense.
Terry, as vice president of Research and Development, I really want to know what you think are the most exciting developments on your radar, particularly when it comes to the electrification of our energy consumption.
MR. COLLIER: You know, this is so hard because there’s so many exciting things happening in this space, but maybe two I’ll highlight, and the first is electric vehicles. There is so much incredible technology work happening to enable the front of electric vehicles, and two areas that we’re working in for electric vehicles is, one, really optimizing the performance of electric batteries. The second is improving both the manufacturing and the performance of electric motor. So we’re leveraging our core capabilities here at 3M in electrical insulation, in our tapes and some of our adhesives, to really create some unique solutions that we are helping our customer meet their goals. And I’m excited about seeing some of the products that are going to be launched with some of the capabilities.
The second area is the smart grid, which is really revolutionizing the way that we create power, generate power. We distribute it, and we use it. The smart grid is made up of sensors of communications and data analytics. Integrating all of that together can really help how we optimize, how we use our energy and reduce waste. It can also be used to help integrate more renewables onto the grid.
One area that we’re working on that we’re very excited about is our solutions help expand the capability of new systems and extend the life of some of your existing systems by integrating easy-to-install sensors into the system that give you data. This data can then be used in both from the sensors as well as the systems we’re creating in order to anticipate or to know or predict when a failure is going to happen.
And we really want to go after and help our customers not have unplanned outages. We call the space “asset health.”
MS. KELLY: Terry, I really think understanding a little bit of the technology behind these smart systems is incredibly helpful. I really want to thank you for joining us to talk about this. Terry Collier, vice president of Research and Development in the Electrical Markets Division at 3M. Thanks, Terry.
MS. KELLY: Now back to my colleagues at The Washington Post.
MS. OSAKA: Welcome back, and for those of us just joining us, this is Washington Post Live, and I’m Shannon Osaka, climate reporter at The Washington Post.
I’m joined now by Gene Berdichevsky, the co-founder and CEO of Sila Nanotechnologies. Gene, thanks so much for joining us.
MR. BERDICHEVSKY: Thanks for having me, Shannon.
MS. OSAKA: I want to start a little bit talking about your personal story. So you were born in Ukraine, raised in Russia, and your family emigrated to the United States when you turned nine, I believe. How did those early years shape you?
MR. BERDICHEVSKY: You know, being an immigrant, you’re always looking at the world through a different lens, asking kind of why things are the way they are and how they could be, how they could be different. And so I became an engineer, and I continued to do that. I continued to look at the world and asking why it was the way it is, and that really led me to fall in love with energy where you could see that electric vehicles in the early 2000s, kind of even before Tesla, were something that could exist, that maybe should exist, but didn’t exist. And, you know, I got eventually obsessed with that question of why didn’t they exist and why weren’t they better, and so I think in many ways that journey led me here.
MS. OSAKA: Absolutely. And I’m glad that you brought up Tesla briefly because, if I understand correctly, you were the number seven employee at Tesla. What was the most important lesson you learned during your time there?
MR. BERDICHEVSKY: There’s a lot to learn. You know, I saw what it takes to build a great company in the early days and how hard it is, how much work is required, but probably, you know, the thing that I took away the most is this–if you’re building something really new, something really innovative, you have to be willing to do most of it, if not all of it, yourself. You have to have what I would call a “radical self-reliance” in how you build the company, and we took that, and we’ve carried that over here at Sila, because as you’re inventing something new, you can’t rely on the existing supply chains. You can’t rely on the existing partners. You have to invent and innovate every component a lot of times or at least be willing to do that if you want to achieve success.
MS. OSAKA: So you founded Sila about a decade ago, and in recent years, we’ve seen just huge investment from the federal government going into electric vehicles, going into batteries. Can you talk a little bit about how Sila seeks to help answer that demand?
MR. BERDICHEVSKY: Yeah. So we started the company in 2011, you know, back when maybe there was a couple thousand electric vehicles on the road, and I firmly believed that all ground transportation would go electric, and that the big limiting factor in that was the chemistry and the performance of the lithium-ion battery.
What we had seen in the prior 15 years and what led to Tesla’s founding was a huge improvement in energy density of the lithium-ion battery, and that correlated to a huge reduction in cost. And even in the time that I was at Tesla from ’04 to ’08, we saw those trends really slow down, and what we wanted to achieve was a breakthrough chemistry that would enable much higher energy densities, which would drive to a much lower costs, enabling kind of mass adoption.
You know, starting in 2011, I would say the first eight or nine years, nobody really cared about electric vehicles. Investments were very, very scarce. But in the last few years, they’ve really hit a tipping point, and now it’s pretty obvious to the entire world within–and, you know, even more recently with the U.S. government support that all ground transportation will go electric. And it’s a question of, how do we deliver on that promise now?
MS. OSAKA: Yeah, absolutely. And, you know, there’s all this emphasis on the materials that are going into the batteries and how we secure them, how we secure them with, you know, humanitarian supply chains. Is there more that you think the Biden administration could be doing to secure those supply chains for critical minerals?
MR. BERDICHEVSKY: Look, I’ll echo what Mark said about the IRA. I think the IRA is a really well-structured piece of legislation that really does have the intent to address the most important pieces needed for us to get a domestic supply chain for it to come from, you know, the right places in the world under the right environmental standards.
And I think that the key now is how do we implement that law. The details really matter. Do we structure it? Do we do we structure the rules of that law to make sure that new technologies are included?
You know, I think if there’s one more thing that could be done to push, push the electric revolution further faster, it would have to do with the permitting requirements and how can we sort of make it easier and faster to permit new plants, new mines. I think it’s sort of naive to think that just because we’re not going to, you know, mine here in the United States, that mining isn’t going to happen somewhere else in the world.
And frankly, we have some of the best regulations in the world for some of the highest environmental standards, and so if we could simply make the regulatory process faster and more transparent and more seamless–we don’t need to necessarily lower the standards under which we do this. But by making it more transparent, more seamless, moving faster, we could enable that domestic production of the critical minerals that are needed even more.
But that being said, I think the IRA does almost everything we need to get to this transformation that we’re all after.
MS. OSAKA: Yeah. Permitting reform is just sort of one of those discussion points that never dies. So I’m sure we’ll hear a lot more about that in the future.
What do you make of the complaints from some U.S. allies–you know, Britain, France, Germany, Japan–that say that, you know, the IRA is negatively impacting them and their competitiveness?
MR. BERDICHEVSKY: Look, I think the IRA’s intent is to make sure that the U.S. has its energy independence in the 21st century. I think about the sort of what we went through in the 20th century when the world’s energy supply was fossil fuels and what happened when we didn’t have that energy independence. I think it led to a lot of conflict. It led to a lot of challenges, and it’s really clear that the energy of the 21st century is going to be renewables, and it’s going to be electric vehicles and batteries. And so the IRA is really going to put the U.S.–it’s about putting the U.S. in position to have continued energy independence so we don’t have to fight for 20, 30 years to dig ourselves out of the hole that we were in with fossil fuels.
And so, you know, I can sort of see the challenges it poses to other countries that maybe thought they were in a leading position, but this isn’t about them. It’s about the U.S. putting itself in a position to have the energy independence it needs and, frankly, every nation deserves.
MS. OSAKA: Right. And we’re talking about this issue of energy independence, and obviously China is a dominant supplier of many of the minerals and components that are going into electric vehicle batteries. Can you talk about how your battery chemistry could be sourced differently?
MR. BERDICHEVSKY: Absolutely. So in the lithium-ion battery, there are two really critical components. One is the anode material, which stores lithium when the battery’s charged, and the other is the cathode, which stores lithium when the battery is discharged. And so what Sila does is we make a next-generation anode material.
For the last 30 years, every lithium-ion battery in the world uses graphite as its predominant anode material. What we do is we replace that graphite, which today comes 90 percent either from or through China, either processed or mined out of China globally. You know, we replace that with a silicon material that is able to replace the graphite entirely and be manufactured on any continent really with wherever there’s low cost of energy.
And so not only are we displacing this graphite material with a domestically produced anode material, but our anode material increases the performance of lithium-ion batteries today by about 20 percent. So you can think 20 percent longer range instantly in your vehicle.
We also reduce the charge times for electric vehicles pretty dramatically. We think we’ll be able to, in the long run, achieve close to 10-minute recharge times, and so you could sort of have the same experiences as you have today of going to a gas station. And those are just the initial performance improvements. The technology has a lot of room to run, and so we’re going to continue to improve that year-over-year while manufacturing it where it’s needed.
MS. OSAKA: Absolutely. And there’s sort of the energy independence question, and then there’s the humanitarian question, which is, you know, often certain critical minerals are extracted in areas that don’t have great labor practices. We were just talking about this in the permitting reform discussion. But, you know, how do you make sure when it comes to Sila that your materials aren’t coming from places that are using slave labor or that have, you know, poor humanitarian records?
MR. BERDICHEVSKY: Yeah. So all of our materials are sourced from democratic countries. We do audits on our suppliers. You know, we have a code of ethics that we work with our suppliers on as well, and so–but predominantly our technology requires sand and energy. That’s really the key inputs for us, and so those can be sourced in quite a lot of places, and we have a lot more choice as, again, opposed to graphite where 90 percent of it is coming either from or through China where the transparency may not be there, even if in many of those cases, the labor practices may be okay.
MS. OSAKA: Absolutely. And I want to quote your website. I want to make sure I get it right, but you say, you know, “We dedicated our first 10 years to bringing a revolutionary lithium-ion chemistry to market. We’ll spend our next 10 scaling it to power billions of phones and millions of EVs.” How do you plan on doing that? What is the roadmap for you going forward?
MR. BERDICHEVSKY: Yeah. So that’s the key, right? So the U.S. has always been the forefront of innovation. I mean, we made the first modern electric cars that sparked the whole revolution around the world. But the U.S. hasn’t always been a leader in manufacturing those same innovations, right? The microchip, we were the leaders for so, so long, and now you can make the case that TSMC is the world leader in manufacturing semiconductors.
And so, you know, I think it’s really important for us to have the right domestic policy, which the IRA helps. The bipartisan infrastructure law also helped.
So we’re now in the process of building our first automotive-scale factory. We’re building that in Moses Lake, Washington. It will ultimately be a–likely be a multi-billion-dollar investment. We sort of have a first phase of that, that’s closer to 3- to $400 million investment.
We’ve been very fortunate with also the support from the Department of Energy. We recently were awarded $100 million grant from the bipartisan infrastructure law to support that first phase of the buildout of our automotive plant, and that first phase is really going to build, you know, enough material for 1- to 200,000 electric cars per year, which is not that much. And then we need to focus on key precursors, commodities, inputs that allow us to scale to millions and millions of vehicles.
But like anything, you do this one step at a time. We’ve had two scale-up phases in our company’s history now from lab. We went up a 100x in throughput to a pilot line. Then we went up another 100x to our current commercial line that’s based in Alameda, California, and now we’re taking that last a 100x step up to this automotive production line.
MS. OSAKA: Yeah. I mean, you mentioned that automotive shift in, you know, Mercedes-Benz with its announcement that it will be using your technology in its electric cars in 2025. I mean, can you just talk about the significance for that deal moving forward for you guys?
MR. BERDICHEVSKY: Yeah. So there are a couple things that differentiate Sila from a lot of next-generation battery technologies. You know, the world has wanted better batteries for a really long time, but it’s insanely hard. We’ve literally used the same chemistry for 30 years now, and last year–actually in 2021, over 18 months ago, Sila became the first to ship commercially in consumer devices, this next-generation chemistry. So we ship in a fitness tracker called the “Whoop” that I’m wearing here. And then last year, we became the first and still the only next-generation battery technology company with a supply agreement announced, where Mercedes announced that they’ll put us in their vehicles, like you said, starting with the G-Wagon. And so that really puts us on the map. This is no longer a dream. This is no longer a hope. This product works, and so we are laser-focused on doing the one thing left, which is making a lot more of it and doing so domestically.
And so, you know, at some point, the rubber meets the road, so to speak, and we can’t wait to get the first cars on the road in just a couple years.
MS. OSAKA: I’m always interested in this idea of sort of what kind of slows down technological progress once it started. I mean, you mentioned that we’ve kind of been stuck with the same battery chemistry for quite a while. I mean, what do you attribute that to?
MR. BERDICHEVSKY: You know, I think for a long time, people didn’t really see this as a challenge, right? We were using batteries for consumer devices, and they were getting better, and they were getting good enough. And, you know, I was sort of at the front–forefront of using those same batteries for electric vehicles, and so I saw the writing on the wall that they weren’t going to be good enough, you know, and so that was part of what spurred me to start Sila and find my co-founders who had some of the innovative technology and ideas.
You know, I think today everybody knows you need a better battery, but sometimes I think it’s actually really seeing the problem more than anything else and understanding deeply what the problem is. And then you also need to make those investments. So the venture community had a really hard time investing in battery technologies over the last decade. You know, after kind of Clean Tech 1.0 very, there was very, very little money to go around and in part because people didn’t know how big the markets were going to be, how profitable you could build companies in this space. And there are some survivors from kind of that first wave of clean tech, First Solar being one of the–one of the, you know, best American companies in energy kind of ever built. And so we look to that.
One of the key things was to make differentiated technology just like First Solar did relative to, you know, crystalline silicon solar cells, which China was dominating. And this is where it’s also so important as you think about the IRA and then the implementation of that is what you need–what we need to do as a country isn’t do a bunch of work to catch up. That’s not how America wins. What we need to do is we need to really capture the next generation and lead in that, and so, in this case, China is going to continue to produce most of the world’s graphite. That’s okay. But the world is going to move on from graphite to silicon anodes, and what we want to do is produce most of the world’s silicon anodes. And so as we write the implementation rules for the IRA, as we think about government policy, it’s very easy for lawmakers to forget about the innovative thing or because they simply maybe don’t know–and, you know, out of sort of no malice, but sometimes rules are written that actually help the incumbents. And that slows down innovation. And so we’re–you know, we’re very optimistic that the way the regulations will come together won’t do that here, but that requires work.
MS. OSAKA: Absolutely. And I want to ask, you know, we’re in this very kind of unique geopolitical moment with Russia’s war in Ukraine and how that has kind of upended European energy security. I’m just curious, do you feel that this gives sort of added impetus to really needing to push forward EVs?
MR. BERDICHEVSKY: I mean, I hope it does. You know, I see it clear as day. You know, 20th century was based on fossil fuels. The 21st will be based on storage and renewables, and so we can’t–you know, pushing EVs faster today isn’t going to solve the conflict in Ukraine, and that’s unfortunate, you know, but pushing EVs faster today might solve the next Ukrainian–Ukraine-like conflict where we will have less dependencies on adversarial countries.
And again, it’s not just the U.S. I think every nation deserves that, deserves to have that energy independence and so that they can make decisions that are, you know, not intertwined with, you know, potentially hurting their entire economy or not being able to have heat for their citizens, right?
So energy independence is critical, and I think, if anything, the conflict in Ukraine, the war in Ukraine is showing us just how important it is for 21st century to not be a repeat of the 20th.
MS. OSAKA: Absolutely. We’re running low on time, but I just want to ask. I mean, you’re more than a decade in. What are you most excited about for Sila’s future, looking forward?
MR. BERDICHEVSKY: You know, this is really the beginning of the second inning. I mean, this is just–that we’re just getting started. You know, the first decade was cracking the scientific code. I think if things go to plan here, we’re going to be deploying billions and billions of dollars of capital to build factories in the U.S., eventually in Europe, eventually in Asia over time. But we’re certainly going to start here. And then we’re an innovation company, and so we’ve got next-generation products in the pipeline, things that are even better than what we’re shipping today, and I just–I see this opportunity for the next 10, 20 years. This is going to be one of the most dynamic, innovative fields, and we’re actually going to be able to have the impact that I was dreaming about when I dropped out of Stanford and joined Tesla back in 2004. So I think it’s all coming to fruition. It’s just taking a good two to three times longer than I think my 20-year-old self expected.
MS. OSAKA: That seems like a typical timeline adjustment that someone has to make, but yeah, it seems like lately everyone’s thinking deploy, deploy, deploy.
Well, it’s been great having you, Gene. Thank you so much for taking the time.
MR. BERDICHEVSKY: Absolutely. Thanks for having me, Shannon.
MS. OSAKA: And thanks to all of you for joining us. If you want to check out our future content, please go to WashingtonPostLive.com.
Once again, I’m Shannon Osaka, climate reporter for The Washington Post, and thanks so much for joining us.