The Powerhouse: Inside the Invention of a Battery to Save the World (8 page)

It was a gutsy call for Chamberlain. What if the market simply ignored him?

Chamberlain had the advantage of Thackeray’s and Amine’s prestige. Over the years, the senior managers of virtually all the main manufacturers around the world had passed through and met with either or both of these battery stars. The pair introduced Chamberlain to the industry and he launched a global tour of companies. Two companies bit—the German chemical giant BASF and the Japanese chemical maker Toda. In separate 2008 ceremonies, Chamberlain signed them to agreements, among the largest in terms of cash in the lab’s history. Now there was a world market price for Argonne’s NMC, and the lab was earning money on a portfolio for which previously there had been none. If you wanted the NMC, and were normally averse to risk, you had to pay for it. That new fact had a measurable impact on the NMC’s desirability—Chamberlain’s phone began to ring. It was the same companies that had declined his NMC pitch. They had assumed he was bluffing. “How much did you say a license costs?” they would say. But he wasn’t bluffing—the two sole global manufacturing licenses were taken. There would be no more. Now they were upset. Chamberlain’s artificial shortage had turned into a genuine one.

As for the United States—no one was transgressing the Argonne patent for the simple reason that the United States had almost no lithium-ion industry. Virtually all the lithium-ion batteries sold in the United States were Asian. But Chamberlain wasn’t bothered by the thought of American violators—he
wanted
the NMC to be used in the United States. He wanted Argonne to be noticed at home, and if any companies did decide to slip some of the NMC into their products—such as the new electrified cars under development by Detroit—he would easily sign them up to licenses. No American company would openly flout such a clear-cut, government-funded patent.

So he began talking to American companies that were in the battery game. He pushed them to shift to the NMC. Johnson Controls and Procter & Gamble both said they could in principle manufacture batteries installed with the NMC. But they would have to give it a long think. Configuring factories anew for a different battery would take five years. That was too slow for Chamberlain. He wanted Argonne technology inside American-made devices
now
.

That is when he recalled Khal Amine’s electrolyte advance. Amine’s additive required the alteration of no machinery. He returned to Johnson Controls and Procter & Gamble. Both companies agreed that an electrolyte modification would be simple. Chamberlain had his first American customers.

Chamberlain noticed other changes. For the first time, he was receiving eager calls of general interest from American companies. They had heard about the NMC and the electrolyte additive. What else did Chamberlain have on the shelf? “We started getting visitors,” he said. Company managers wanted to see Argonne for themselves. The lab was becoming a player.

Chamberlain started to work up model licensing agreements covering all of Argonne’s battery portfolio. Companies had a choice: They could make an advance payment for rights to Amine’s additive, the NMC, or any other invention, then pay regular fees under a ten-year licensing plan. Or they could opt for the equivalent of success fees based on sales. Chamberlain treated it all as part of his evolving, big-picture strategy. “Portfolio management is part of the economic war,” he said.

B
efore long, word reached Chamberlain that the lithium-ion battery destined for GM’s new Volt plug-in hybrid-electric—the car-making giant’s attempt to take the early lead in electrified cars—would be supplied by LG Chemical, a South Korean company. Chamberlain also heard that the LG batteries relied on the NMC. He was not prepared to be seen as a sucker. He flew to Seoul.

Chamberlain was not going to sue LG—he doubted the U.S. government would approve a protracted patent battle, at least at the moment. For one thing, there was a strain of thinking that South Korea was not a direct competitor in the battery race. The argument was that the United States’ best hope might be an alliance, and if that was the case, it was an easy decision with whom: China, with its own geostrategic ambitions, was an illogical choice; Japan had established a record of working alone and not sharing its advances. That left South Korea, which itself perceived the advantages of an arrangement with the United States. In 2010, the Obama administration singled out LG for a huge, $160 million slice of a $2.4 billion stimulus fund created to launch the United States into the global race to dominate advanced batteries. LG joined a core group of companies that, by building federally backed battery factories in the United States, would give American industry a reasonable hope of winning the race.

Republican critics assailed the fund. Their gripe wasn’t what you might think—that the second-highest sum from the stimulus was going to a South Korean company. Instead, they complained that Obama was “picking winners.” He was ordaining that batteries and electric cars would undergird the next great economic boom without any credible way of knowing that was the case.

They had a point—no one could be certain that the foreseen industries would materialize. But the counterfactuals swamped such misgivings, including that the race itself was indisputably under way—battery makers were working to improve lithium-ion, carmakers were designing and planning the launch of electric cars, and governments around the world were awarding grants and subsidies to support their given teams.

Around Argonne, there was particular affinity for the South Koreans. When South Korean scientists and companies toured the lab, they behaved so collaboratively that after some years, they were treated as honorary Americans. They simply did not seem to pose the same threat as the Chinese.

Still, Chamberlain himself believed that, while the United States aggressively pursued its place in the battery age, it also had to nail down what was rightly its own. That was why, even though the South Koreans might be commercial allies, he was now going after them. He wanted Argonne to be paid.

So, in Seoul, he informed LG that it was about to infringe on Argonne patents. When the South Koreans took the stimulus money from the Obama administration, they accepted fine print in which they pledged to respect American patents. Even though LG was not itself necessarily bound by the Argonne patent outside the United States, it was in effect inducing GM—an American company that
was
bound by the patent—to infringe, which would be a contractual violation. This astute bit of legalistic arm-twisting persuaded the South Koreans—LG had to license, and it did.

Now there was GM. Because LG already possessed a license to the NMC, GM was not technically obliged to pay for one as well. But the carmaker was intrigued with Chamberlain’s talk of a higher-performance NMC 2.0. It specifically was captivated by work outside San Francisco by a small start-up called Envia Systems that, collaborating with Argonne, had itself licensed the NMC and already begun carving out new ground for it. Envia had improved upon the capabilities of the Thackeray and Johnson cathode, an indicator that NMC 2.0 could soon break out of the lab and become a commercial reality. GM wanted to be the first to have it. The cost of its Volt hybrid electric cars could be slashed and its sales trajectory elevated. Moreover, it could also power a future pure electric car that, unlike the Volt, would have no gasoline-fueled backup engine. So GM paid for an NMC license. Attached to the agreement was a clause—if Argonne succeeded in creating the advanced version of the NMC, and GM could deploy it in its future electric cars, the lab would receive a substantial bonus payment.

Chamberlain, Thackeray, Johnson, and Amine were elated. The patent-free environment in which the Asian juggernaut was operating had been breached. These companies could not simply decide they were going to use Argonne technology with impunity. They had to pay for the intellectual property. That precedent captured the attention of nonprofit labs around the country, research centers that had been victim to the same offense, especially universities. Chamberlain felt he had arrived when an MIT intellectual property lawyer pulled him aside at a conference. “We wish
we
could cut these kind of deals,” meaning the LG contract, the MIT man said. “With us, it’s all about start-ups. But
you
license start-ups
and
the big companies. If it’s a big company, you know the material is going to be manufactured.”

Now Argonne was being noticed by the big guys. It was licensing not only to the garage outfits, the ones that might or might not even exist next year, but also to the GMs of the world, those that could actually use the licenses in products.

 • • • 

Chamberlain strolled through the Battery Department with numbers scribbled on mini Post-it notes. “You’re going to have this added to your next paycheck,” he told Chris Johnson, who, in protective glasses, was working at the bench. Johnson looked in disbelief.

“It’s for the licenses,” Chamberlain said.

The scientists were divvying up about $1.8 million. Chamberlain informed Thackeray, then Amine, and so on. Everywhere there was a stunned reaction. Chamberlain enjoyed it. As for the men, they held new respect for him. One day, Thackeray said, “You’re a battery guy now.”

 • • • 

In the summer of 2010, Argonne management assigned Chamberlain added duties—while retaining his IP licensing responsibilities, he was to lead the Battery Department. Thackeray intended no offense to Chamberlain’s predecessor, but from a leadership standpoint, he thought the lab now changed for the better. He called Chamberlain “a real superstar.” He might be expected to say that since it was his patent that was finally moving into automobiles, which is a big deal if that’s been your life’s work. But he meant to refer to Chamberlain’s attention to the commercial cachet of the lab as a whole. The average government functionary was a wimp when it came to patent enforcement—federal labs were not commercial enterprises, after all. But not Chamberlain. As he left the lab in his $63,000 BMW one day, Amine said, “This car is bought from the licensing money.” He credited Chamberlain. After a string of licensing deals, Xiaoping had new expectations. Amine would return home from the lab and she would ask, “Did you license again?”

The respect of peers is considerable juice for a scientist, but for Thackeray and Amine, commercialization was equivalent validation—and perhaps even greater. They would be eternally grateful to Chamberlain.

Thackeray saw the achievement from a highly personal perspective. In his thinking, these licenses meant that the “dominoes in the technology are beginning to fall.” Science was shifting from the lab to the factory. Now, the sixty-two-year-old Thackeray was looking for NMC 2.0 to close out his career. “I just keep plugging away,” he said. “I feel as though I got into a wave in South Africa and I am surfing. I am waiting to be dumped on a beach,” but so far the latter had not happened. Thackeray felt good about his career. Chamberlain made him believe he could leave proudly once NMC 2.0 was out the door. “Now there are so many people, and very good people coming up,” Thackeray said.

The prospects looked good for NMC 2.0—the United States was well positioned in the battery war—but Chamberlain knew that ultimately that was not good enough. It left electric cars as an iffy proposition—car buyers visiting a showroom would still not assess an electric car agnostically, not without a fairly large government subsidy. And even then, the electric car was likely to remain a “social purchase”—a product for the niche market of buyers wishing association with the green movement. The battery guys had further to go.

I
n October 2009, Andrew Grove, the former chairman of Intel and a father of Silicon Valley, asked Chamberlain to bring his Argonne team to his house in California. When they were before him, Grove surveyed the battery race and said that when he looked at lithium-ion, he saw silicon chips. The American chip industry blossomed in the 1950s when the first integrated circuits were made on microchips. By the 1980s, though, Japan had swallowed up much of what by then had evolved into a commodity business, along with its jobs. Grove managed to salvage Intel and give it a renaissance by rejiggering the equation—he transformed it into a microprocessor company, producing computers on a chip, and not just the chips themselves. With batteries, he said, there was also a brutal, dual competition under way—for who would finally make them more powerful, last longer, and be safer, and who would manufacture the discovery once it was made.

But Grove thought that the stakes were far higher than when the Japanese were capturing the chip market. He saw a “clear and present danger” that if the United States could not account for its own energy requirements, it would later be at the political and economic mercy of those who could. The United States had to create a battery-driven fleet of private vehicles to replace much of the current gasoline-powered ones. As passionate as he had ever been about anything, he had telephoned his successors at Intel and urged them to take on this new fight—to get into the advanced battery business. They more or less brushed him off—for one thing, unlike the fixed physics of silicon, batteries were based on electrochemistry, which changed constantly. Batteries were too complicated. Which is what led Grove to Chamberlain.

The Argonne scientists arrived with a three-phase plan to test on Grove, who perhaps could do for them what he had accomplished for Silicon Valley. To make it easy to digest, they compressed it into bullet points on a single page: Current lithium-ion—the NMC and what was going into the first new electric cars—was phase one. Phase two was the next three to five years, in which they would push out “advanced lithium-ion,” meaning NMC 2.0, a bridging technology that would possess twice to three times the longevity of current lithium-ion batteries. That would be sufficient to carry hybrid and electric cars for a decade or two, a space of time in which to develop phase three—“the brass ring,” as Chamberlain called it. This final phase involved a technology named lithium-air. It was ultimately where Argonne would go.

Chamberlain imagined that Wan Gang and his team were strategizing similarly. Walking the Argonne men to the door, Grove urged them to remember one thing: “Winning a manufacturing game is nine rounds. It’s a boxing match. You will lose the first round, and probably the first two rounds. But always remember—the game is nine rounds.”