The Powerhouse: Inside the Invention of a Battery to Save the World (26 page)

T
hree weeks after the orals, a curt message circulated among Argonne’s senior managers including Crabtree and Chamberlain: assemble for a conference call with Isaacs.

The call started an hour later.

“Are you sitting down?” Isaacs asked. “Well, here is a piece of news. We won the Hub.” The long struggle was over. The Hub was Argonne’s.

Isaacs barely let the news sink in. They had to transform the proposal into working plans for execution as soon as the Department of Energy made the decision public. That could be any day. They needed to be ready. Meanwhile, they were sworn to secrecy. No one else, even other members of the proposal team, could know. Isaacs himself would pass word according to protocol—after the Department of Energy announcement.

The rest of the team was anxious. Amine said the decision was certain to come in a few days or surely early the following week.

Amine meanwhile was wheeling and dealing. His immediate goal was to get NMC 2.0 into the iPhone and other Apple electronics. He had met with the company’s battery guys in Cupertino, California. Apple products relied on workhorse lithium-cobalt-oxide batteries. They were unquestionably reliable. Still, they were not the best that Apple could do, he said. Their capacity was 140 milliampere-hours per gram, of which you could access only half because of deterioration over time. The average iPhone could run several hours while using just the telephone but much fewer if you were running Google maps. NMC 2.0, conversely, gave you 190 milliampere-hours per gram, more than 30 percent better capacity. It operated at higher voltage, which meant even greater energy. NMC 2.0 still required work, including coating and additives to protect the surface of the electrodes. But Amine said switching would be a smart strategic move for Apple. The issue was not only performance. So many electric vehicles were going on sale that they would eventually place a serious strain on the global supply of cobalt. The price of the metal was likely to soar. That was not a huge matter for the car-making industry because cobalt made up just 30 percent of the cathode in car batteries in favor at the moment. But the current Apple cathode was 100 percent cobalt oxide.

Apple dispatched a team to Argonne to examine Amine’s suggestion more deeply. “This is a big deal if Apple licenses. It is huge,” Amine said. “They told us they will need one billion batteries within the next five years. Amazing.” He laughed.

Two months passed. No Hub decision was announced. The senior team began to wonder whether someone’s mind had changed. Even those in the know said they could no longer be certain of what Isaacs had confided. Maybe they had not won after all. Or perhaps the decision had been overturned. Who knew, given Washington politics and the presidential race?

“What time is it in Washington now—two forty-five?” Mark Peters asked, standing outdoors one day with Thackeray. “It won’t happen today. It’ll be next week.”

As the weeks wore on without an announcement, apprehension deepened. Despite assurance from up high, the core group worried that somehow another team had managed in the silence to reverse the decision. All they could do was wait. “If we don’t get the Hub, it will be a major disaster,” Amine said one day.

In October, A123 declared bankruptcy. It had been on the verge of selling an 80 percent stake to a Chinese company—Wanxiang—when it decided instead to file for Chapter 11 protection. The Argonne team fretted that the bankruptcy could be a political dealbreaker—A123 had received $135 million in federal stimulus money to fund a Michigan battery factory. On the very day it filed the bankruptcy papers, it received a check for $946,830 from the Department of Energy. The Argonne team acted forcefully and told the Department of Energy that A123 had withdrawn from the Hub team. But no one could know whether that would be regarded as sufficient inoculation against political attack should an Argonne victory be announced.

Crabtree heard from someone in the Department of Energy whom he would not identify that the announcement would probably wait until after the presidential election on November 6. It was easy to infer that no one wanted to risk a scandal that might jeopardize Obama’s reelection.

Steven Chu was due in Chicago in a couple of weeks. Gallagher hoped that someone would muster the courage to ask who won. Mostly though, Gallagher said he felt naïve. He and the rest of the team had nourished grand expectations for the proposal. They had assumed that outsiders would buy into their idea. Political reality appeared to be stepping in the way. They had never contemplated that risk. “I think it is referred to as ‘drinking the Kool-Aid,’” Gallagher said.

Obama won easily. Yet there was still no word. “We are going to hear something before Thanksgiving,” Chamberlain said. But there was really no knowing. The battery community was flowing with rumors. Chamberlain said that if he plotted the various purported announcement dates on a graph, the distribution would probably be clotted around the current week—in the middle of November. But some said the announcement would not come for another four months. “I just don’t know what to believe,” he said.

At last, official word arrived. A conference call was arranged with Argonne management—the lab had
won. The announcement would be made November 30 at the University of Chicago.

That morning, Chamberlain and Crabtree pulled battery components one by one from bags they toted into the lobby of the Gleacher Center, the modern main building of the University of Chicago Booth School of Business. They were props to explain the Hub’s work to the invited dignitaries. Isaacs waited farther inside, in a staging area for the speakers. Chu arrived before long, eager and alert. Chicago mayor Rahm Emanuel was next. Their bonhomie, forged in Obama administration cabinet meetings, was instantly apparent. Isaacs tried to break in by telling Emanuel he was delighted to deliver the Hub for the city.

“You didn’t deliver it,” Emanuel shot back.
“
I
did.”

Emanuel did not appear to be joking. He seemed certain that his White House connections and not the Argonne proposal tipped the decision. Who knew—perhaps Emanuel
was
crucial in the choice. It did not matter at this point.

When the ceremony was over, Peters, Isaacs’s deputy, pulled Chamberlain aside. “This was the best moment of my career,” he said. He paused for a long moment, then pointed a finger at Chamberlain. “And it is because of you. Thank you.” Chamberlain felt terrific. He said, “Right back at you, man.”

Isaacs said an albatross had been lifted. If Argonne had lost, “it would have been everyone’s neck and guess whose fault it would have been?” he said laughing. “There were times when I sweated a lot, but this is what this is—a competition.” Isaacs would make sure that whatever lessons Chamberlain had learned would be codified so Argonne could win future big competitions with less effort—and angst.

Five days later, Isaacs stood before the whole of the Battery Department and the larger Hub team. They were gathered at the lab guesthouse for wine and hors d’oeuvres. Isaacs thanked each of the main actors by name. He told the story of how, after Argonne had lost the three big prior competitions, Bill Madia had said, “What the hell is wrong here?” Madia had not necessarily discovered what went wrong, Isaacs said, “but he did figure out how to do it right.” The group shared a big laugh over the story of Emanuel’s claiming credit for himself.

Just beforehand, Thackeray had passed Isaacs in the corridor. The director had looked at the battery genius and flashed five-five-five on each hand, one after the other, before going on and out the door. Thackeray laughed.

A
bout five hours after the ceremony at the University of Chicago, Atul Kapadia and Sujeet Kumar hosted the Envia staff at a Palo Alto restaurant for the annual holiday party. The pair had been waiting for days for General Motors to e-mail a contract, only to go home without it. The talking had gone on so long and with such uncertainty that neither man had even told the scientists that they seemed to be on the verge of their first licensing agreement. Even if they felt more confident, they could not have said anything, since such news could affect GM’s share price. But word had leaked around the Newark lab anyway. An edginess hung over the lunch.

Three months earlier, GM CEO Dan Akerson had himself described Envia’s exploits in a closed meeting of the carmaker’s employees: in just a couple of years, he said, Envia had created a breakthrough battery that was certain to power an electric car a hundred miles on a single charge. And “we’ve got better than a fifty-fifty chance to develop a car that will go
two hundred
miles on a charge,” Akerson said. That longer range could be achievable by around 2016, which, he said, “would be a game changer.”

Akerson believed GM and Envia were partners in this potentially world-beating push to the future. “These little companies come out of nowhere and they surprise you,” he said. He did not reveal the tense licensing negotiations under way. But, back at Argonne, Thackeray suspected something afoot when he read of Akerson’s remarks, which had leaked. He said, “I believe that Envia may announce a deal soon—perhaps an order?”

A month later, Hari Iyer, Kapadia’s deputy for the GM account, had begun to circulate proposed contract language among the senior Envia executives: “supplier manufactures lithium-rich layered-layered composite cathode materials and silicon-carbon anode materials for use in high-performance rechargeable electric battery cells.”

“I am okay with it,” Kumar responded to the September 27 e-mail.

The draft contract went on to be quite specific: Envia was to provide a working 350-watt-hour-per-kilogram battery that could endure one thousand charge-discharge cycles. The requirement was not 400 watt-hours per kilogram—what you achieved in a cell could never be matched when you scaled up to the battery pack that actually went into a car. But it remained a tremendous challenge, since Kumar still had to overcome the silicon expansion on the anode side, along with the old issue of DC resistance in the cathode. The deadline was October 2013. After that, adjustments could be made to optimize the performance until August 15, 2014. But that was a full-stop deadline—Kumar could make no changes to the battery after the latter date. This point was critical to GM because once the battery was known to be in place, all the other deadlines could follow, ending with the 2016 launch of an electric car with two hundred miles of range on a single charge. As with the more reasonable demand for a 350-watt-hour-per-kilogram battery, GM was aiming not at the three-hundred-mile car of which Kumar had spoken in Orlando.

“I am fine with the deliverable and time line,” Kumar wrote Iyer on October 25.

While the lawyers continued to talk, GM was becoming nervous. In addition to the two-hundred-mile electric into which the 350-watt-hour-per-kilogram material would be placed, GM had to place Envia’s other advances into production for the 2015 model year Volt. It was understandable why Envia insisted on keeping its signature ARPA-E material under wraps until the contract was signed—it was too valuable to let out. The start-up was almost obliged to allow no one direct access to the material. But GM wanted Kumar and Kapadia to brief LG, GM’s battery cell manufacturer, on the lower-level NMC cathode, the one that would go into the 2015 Volt.

It was still an unusual request: suppliers did not ordinarily open up their proprietary inventions absent a sealed contract. Much could go wrong with a deal even in advanced negotiations. But the Envia men said they had no problem with the favor, given the goodwill between the two companies. Envia disclosed the secrets behind the plug-in hybrid version of its NMC, a configuration that reduced the cost of the cathode 30 percent, to $230 or $240 per kilowatt-hour. That could allow GM to immediately reduce the price of the Volt by $3,000 or $4,000.

GM and Envia continued to haggle over how and when to announce the deal publicly. One idea was for the main players to assemble for a ceremony either outside Detroit or in Newark. That suited Kumar and Kapadia, who were eager to get the news out because the publicity could induce Honda and possibly Toyota to sign follow-on licensing agreements. GM, however, worried about the politics—Republicans still relentlessly labeled the Volt the “Obamamobile” and stigmatized electrics generally as publicly subsidized playthings of the liberal elite. The carmaker said it would delay public disclosure of the deal until after the presidential election.

As the election passed, the lawyers were still swapping sentences without closure, but a couple of weeks later, they seemed to have arrived at an acceptable version. Crucially for Envia, it would receive $2 million a quarter, adding up to $8 million a year, for at least four years. It was sufficient to pay all of its bills—its entire burn rate. On top of that would be royalties once the cars began to be manufactured. In all, the deal would run for eighteen years. Depending how many cars were sold, the deal could be worth hundreds of millions of dollars. The board was delighted. It awarded new stock options to twenty-five employees, about 45 percent of them to the three-man business team led by Kapadia, and promoted Hari Iyer to vice president.

So much time had passed, however, that there seemed no way to schedule a formal signing event. Given the stringent deadline, every day counted. So the document would be signed by GM without public fanfare at its Warren, Michigan, office, then e-mailed to Kapadia for his signature.

The Envia men waited.

Kapadia’s cell rang as he drove back from the holiday party. It was General Motors: senior management had finally signed the documents. They were on their way by e-mail. Kapadia turned off the phone.

A regular office meeting had been scheduled back at Envia. Kapadia said it would be delayed a few moments. He tried not to let on.

In the conference room, some papers lay on the table before Kapadia. It was the company’s first licensing deal, he said—with GM. “I always knew that Sujeet would build a special technology. He is a special guy,” Kapadia said. Kumar and his team had a lot more work to do if the 350-watt-hour-per-kilogram battery was to become reality and enable electric cars. But “the only company that has any chance of getting to that promised land is Envia,” he said. Only Envia could change the world. “Just to let you know, this is not my achievement. This is your achievement. And I am signing on behalf of you. I want to sign here in front of you guys.” Kapadia bent over and initialed the papers.

The room erupted. The three dozen scientists and staff catcalled and screamed. They jumped up and down. To some of those present, the tumult sounded like two hundred people.

Now Kumar spoke directly to his scientists. “The business guys have delivered. I have never seen a business team deliver like this. Now it is our time. The onus is on us,” he said. “There are no excuses. Get this done. Put the chemistry in the car. Whatever small issues are remaining need to be solved in the coming year.”

Days later, Kumar said he was “very happy” with the contract. The months ahead would be “pretty tough,” he said. “I would say the time line is aggressive.” But after all the make-work deals in which Envia was producing tiny batches of material for coin cells and enduring excruciating scrutiny, he had finally proven himself. The company was earning serious revenue. It was no longer a start-up on the come. Envia had arrived.