(Chris Devlin) #1

GLOBAL ELECTRIC-VEHICLE SALES BATTERY-MANUFACTURING CAPACITY*


2010


14,788 6,033


2015 2018 2020


GLOBAL GRID-STORAGE CAPACITY


UNKNOWN


2017 2018 2022


0


5,000


10,000


15,000 mwh

0


2


4


6 million

0


100


200


300


400


500 gwh

2015 2020 2025


EUROPE/


MIDDLE EAST


ASIA PACIFIC


PROJECTED


PROJECTED


SOURCE: WOOD MACKENZIE


PROJECTED


* INCLUDES LITHIUM-ION BATTERIES PRIMARILY FOR ELECTRIC VEHICLES AND GRID STORAGE.


206


FORTUNE.COM // JUNE.1.19


tory, heading one of the U.S. government’s top battery-research
efforts. Now he leads a Chicago-based venture-capital fund, Volta
Energy Technologies, that takes money from nervous power, oil,
and other companies and invests it in energy-storage-technology
startups. The corporations have concluded they have to hedge their
bets, Chamberlain says, because “what renewable energy repre-
sents to these companies is massive destruction.” China, mean-
while, has declared a world-leading battery industry a strategic
national priority, doling out incentives to get the job done. “What
does that imply?” Chamberlain asks. “Are they the new Saudi Ara-
bia of batteries?”

U


NPRECEDENTED BILLIONS of dollars are pouring into battery
research and development, rendering batteries today
the sort of technological target that semiconductors
were a generation ago. A particularly fast stream is
flowing into startups, each promising more brashly than the next
to have cracked the code on the energy-storing black box. That
money is coming from multinationals scrambling for technological
fixes, from venture-capital firms looking for the next big home run,
and from sundry billionaires who say they want to save the planet.
And it’s coming from both sides of the Pacific.
Some startups will win big; many more will implode. Either way,
they are the leading edge of the battery race—the pack in which the
jostling is most cutthroat, the daring is most on display, and the
long-term breakthroughs are most likely to develop. They’re also
more talkative than the big players about what they’re doing; that
stands to reason because they’re hungrier for investment.

Today’s global battery race has two main
heats. One, already well underway, is for
batteries for electric cars, whose market
value the energy-data firm Wood Mackenzie
projects will jump to $41 billion in 2024,
from $13 billion in 2017. This is the market
that has prompted Elon Musk’s Tesla to
build a massive battery plant—what Tesla
calls a “gigafactory”—in Nevada. This is
the market that’s pushing essentially every
global automaker—embarrassed by Tesla in
the electric-car market and adamant not to
be embarrassed anymore—to lob massive
orders at SK and other major battery pro-
ducers, almost all headquartered in Asia.
It’s also inducing them to invest in startups
promising technological leaps.
The other heat, just beginning, is for
batteries for the electric grid: factory-size
devices designed to store massive amounts
of energy, potentially for days or weeks at a
time. Such technology could enable an epic
transition from fossil fuels, such as coal and
natural gas, which are altering the climate
but can be fired on or off at will, to the sun
and the wind, which are clean but don’t
always shine or blow. The market for them
remains nascent and largely dependent on

WHERE (ELECTRIC) POWER RESIDES


The electric-vehicle market has spurred investment in high-end battery manufacturing, especially in China. Grid storage, which
could make sun and wind power more reliable, also is a major technical challenge: Today, there’s not enough capacity in the entire
world to power the tiny Falkland Islands.

RENEWABLE ENERGY THE RACE TO BUILD A BETTER BATTERY