Steve LeVine
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Lithium-ion battery war worth billions reaches U.S.

Bolivia's lithium riches (Luca Galuzzi/Creative Commons)

Two European industrial giants have settled one of the biggest, most arcane and potentially lucrative patent disputes in lithium-ion batteries. As a result, Belgium's Umicore — the loser — can legally export its battery formulation into the United States, but has had to buy a license and pay royalties to Germany's BASF.

Why now? By settling, the companies clear away their bitter, years-long dispute on the cusp of what many experts believe is a coming global boom in the sale of mainstream electric cars. This makes way for the formulation in dispute — known as NMC — to go to battle with the other major lithium-ion battery type racing for domination of this expected new electric car age.

This rival, used by Elon Musk's Tesla, is known as NCA, which Panasonic makes and he puts in all his cars. Most other carmakers use NMC, including GM and BMW. Many experts think one will win command over most of the coming market, with the potential for billions of dollars in profit. Most of the betting is on NMC.

BASF — which sued for patent infringement along with Argonne National Laboratory, the inventor of NMC — said that, as a result of the settlement, it is withdrawing its US federal lawsuit. Tim Weekes, a spokesman for Umicore, told me that the decision "provides clarity for our customers, and on balance a settlement was in the interests of all parties."

For battery fanatics, the case revolved around the obscure atomic-scale features of the NMC cathode, which I wrote about when the case was filed in 2015.

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Le Pen foils Macron's meeting with disgruntled factory workers

Emmanuel Macron, who leads the runoff for French president, met with union leaders today in a Whirlpool factory that is scheduled to close and move to Poland, all in an attempt to strike at his rival's political heartland in northern France. But his plans went awry and turned into a chaotic, hour-long back-and-forth with jeering workers when far-right leader Marine Le Pen got there first and promised to keep the plant open — giving hope to the 300 employees whose jobs are under threat.

Strategically speaking: Le Pen is a far more skilled campaigner than the more robotic Macron and she's showing why she remains a formidable threat to Macron in the May 7 election. While virtually all of France's establishment has now endorsed Macron, that is a similar scenario to what preceded Brexit and Donald Trump's respective triumphs. The next political polls will be important.

Why it's important: After Brexit and Trump, the French election is the third major opportunity for western voters to decide whether to maintain the post-war political and economic framework, or to bust it up. Macron favors the former, and Le Pen the latter.


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Older voters backed Brexit & Trump, but not Le Pen

Keith Srakocic / AP

Older voters are proving pivotal in the topsy-turvy age of anti-establishment politics — those over 65 years old were on the winning side in Brexit, President Trump's victory and the first round of the French presidential election.

Far-right nationalist Marine Le Pen beat centrist Emmanuel Macron 25.7% to 21.6% in the 18 to 25 age group. But Macron walloped Le Pen 26.9% to 9.7% among those 65 and older.

Bottom line: Youth unemployment has seemed to be a reliable indicator of political restiveness in the current turbulence, but it has been less reliable than senior citizen opinion.

Get smarter: The latest pre-election polls had Macron leading Le Pen by better than a 20-point margin. But if she makes a big play for senior citizens, and Macron's support among them slips, watch out.

In the Brexit vote last June, only 19% of those 18 to 24 voted to leave the European Union. But 59% of older Britons voted to leave.

In the U.S. presidential election, the age groups went the same way in terms of establishment versus shake-up-the-system — young people again wanted the status quo. But older voters prevailed: Among voters 18 to 25 Hillary Clinton beat Trump by a whopping 18 percentage points, but Trump beat Clinton by 8 percentage points among voters 65 and older.

The trend suggests that older voters will again be the bellwether in the second round of French elections on May 7 and in German elections in September.

(Emmanuel Macron's vote share in the second paragraph among those aged 18-24 has been corrected from 24.6% to 21.6% and among those aged 65 and older has been corrected from 40.6% to 26.9%.)

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Expect Putin to inject chaos into French election

Lazaro Gamio / Axios

The polls say centrist Emmanuel Macron has more or less smooth sailing to the French presidency in the second round of voting on May 7. But Kremlin-linked hackers have already attempted to infiltrate his campaign, and political observers expect further attempts to disrupt the election by Vladimir Putin, who supports far-right leader Marine Le Pen.

Quick take: With most polls showing Macron up 20 to 25 points, Le Pen stands very little apparent chance of winning. But even if Putin can't swing the election to her, he can serve his long game of encouraging divisions within NATO countries, and fomenting doubt about the integrity of their democratic institutions. Look for fake news to raise the specter of terrorism and sow distrust of Muslim migrants.

Putin favors Le Pen in part because she has said she'll vote to terminate EU sanctions against Russia. She has explicitly identified herself with the Russian leader and President Trump, describing them as "new world" politicians, and Russia has supported her party with millions of Euros in funding.

U.S. and European intelligence agencies have rung the alarm about intrusive Russian cyber and fake news attacks that appear designed to create a crisis environment in the West. Now, experts say France is next.

Daniel Baer, the former US ambassador to the Organization for Security and Co-operation in Europe, said:

"Russian disinformation won't just be about Macron. It will amp up the terrorist threat as a political hot button. It will be aimed at arousing anti-Muslim sentiment. Given that Le Pen is so far back in the polls, my hunch is that — as with the U.S. — the Russian game plan will not be primarily about making her win, but rather about sowing doubt/discord/confusion."

The ground in France — as in the U.S. and elsewhere in the west — is fertile for such action, said Pasi Eronen, a cyber expert with the Foundation for Defense of Democracies. Putin's method, he said, is to needle already-existing discontent. "We are allowing Russia to work against us by not addressing those wounds in our society," he told me.

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France appears poised to hit pause on populist wave

David Vincent / AP

With their first-round vote today, the French set up a decisive repudiation of the populist wave that has shaken the seven-decade-old political and economic order. After the stunning victories of Brexit in the U.K. and Donald Trump in the U.S., French polls suggest that centrist Emmanuel Macron will be elected president by a commanding margin over anti-European populist Marine Le Pen in the second round of voting on May 7.

Winners: if Macron does win the second round, as seems likely, winners will include the European Union, the Euro, NATO and the U.S.-led liberal world order.

Losers: President Trump, pro-Brexit Britons, and Russian President Vladimir Putin.

Simon Nixon, the Wall Street Journal's chief European commentator, remarked in a tweet: "An astonishing achievement for Macron, who not only had the courage to stand but to campaign while literally draped in the EU flag."

The French election has attracted rapt attention around the world as the first serious indicator of global political trends following Trump's election in November. Macron won about 23.7% of the first-round vote, to around 21.8% for Le Pen. In head-to-head polls, Macron leads Le Pen by at least 20 percentage points.

But if Macron had faltered, it would have been a third domino in the collapse of the U.S.-led order of free trade and open borders. It also would have signaled a collapse of Europe's steadfast rejection of Russia's destabilization of Ukraine since the 2014 invasion of Crimea, since Le Pen and the other two leading candidates are strongly pro-Putin.

It will matter what supporters of the other two leading candidates do — whom they get behind, or whether many stay home out of disgust or indifference. But the result today led Charles Lichfield, an analyst with the Eurasia Group, to raise his forecast of a Macron victory in the second round to 65%, from 60% previously. Le Pen's only hope, Lichfield told me in a phone interview from Paris, is an extremely low turnout for the second round along with a surge to her by the followers of Republican Francois Fillon and far-left leader Jean-Luc Melenchon. He found neither probable. "It will be very hard for her to win," he said.

Voters notably were not swayed by a terrorist attack in Paris three days ago in which one policeman was killed and another seriously wounded. Trump suggested that the attack would mobilize voters behind Le Pen.

In the larger picture, the result still reflects profound French unease with what the existing system delivers for ordinary people. Jeff Rathke, an analyst with the Center for International and Strategic Studies, noted that — including the vote for firebrands Le Pen and Melenchon — some 40% of France's voters supported a radical shakeup of French policy, including withdrawal from the Euro. "Perhaps the wave has crested," he told me. "But no one should heave a sign of relief that we can get back to normal politics now."

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Elon Musk's semi-truck battery could cost $70,000, weigh 3 tons

Refugio Ruiz / AP

Elon Musk's latest product — an electric Tesla semi-truck, which he has said he will introduce in September — is less outlandish than some have suggested, according to a leading battery researcher.

Why it matters: Musk threatens to upend the truck-making industry, as he has with electric cars — an analyst with Piper Jeffray this week downgraded and otherwise re-contemplated his ratings on a few makers of conventional semi-trucks in light of the coming Tesla model. In addition, semi-trucks are responsible for an estimated 20% of U.S. carbon emissions in the transportation sector.

Gerbrand Ceder, a materials scientist at Cal Berkeley, says in a back-of-the-envelope calculation that a battery capable of powering a long-haul semi-truck for 500 miles on a single charge would cost roughly $70,000 and weigh around three tons. If fast-charging standards are upgraded to account for the trucks, an hour could replenish about 300 miles of range, he said. Fuel savings could pay it off in fewer than five years.

"Math seems to work out. So not as crazy as people claim," Ceder said in an email exchange. He added, "But it really requires a serious charging network along the interstates."

Here is the breakdown: The lithium-ion battery in an electric Tesla S weighs about 1,200 pounds, a quarter of the car's 5,000-pound total. But, according to one estimate, the battery in an average 40-ton American semi-truck would have to weigh 23 tons. Consequently, Siemens has suggested powering such a vehicle with overhead wires, not batteries.

I emailed Ceder, one of the country's leading battery materials experts, asking whether Musk could really be serious.

He started with an estimate of how much lithium-ion battery capacity would be required to power a truck a single mile. He figured that at 1 mile per kWh, meaning that a 500-mile driving range would require a 500 kWh battery (a basic Tesla S has a 60 kWh battery). (Note that Ceder went high with his mileage estimate, using 10 mpg, when the average truck gets only 6.5). "At 6 kg/kWh, that comes to three thousand kg for the pack," he said. "So three tons seems a reasonable and conservative estimate for this range."

But what would it cost? At the cell level, the cost of such batteries currently is about $120 per kWh, he figured, and could drop to $100. If there are about 70 cells in a battery pack, it would cost $70,000.

As for fuel savings: If a trucker drives 100,000 miles a year and pays about $2.50 a gallon for diesel, fuel costs for a conventional truck would be $25,000. The electrical equivalent for 100,000 miles is 100,000 kWh. At a possible wholesale price of 10 cents each, that would be $10,000 in charging costs, for a potential savings of $15,000 a year.

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Exxon wants a sanctions waiver to work in Russia

Alexei Druzhinin / AP

ExxonMobil is asking the Trump administration for a waiver so it can return to work in Russia despite sanctions leveled after President Vladimir Putin invaded Ukraine in 2014.

In a scoop, the Wall Street Journal reports that the oil giant filed its waiver request with the US Treasury Department, and not the State Department, which is led by former Exxon CEO Rex Tillerson.

Why this matters: If granted, the waiver would erode one of the most powerful American levers against Russia in terms of getting it to pull back from Ukraine. Russia relies on oil and natural gas exports for a majority of its government income, but the current generation of oilfields will start to peter out in the coming decade.

The fields on which Exxon has been working—deepwater fields in the Arctic, and the Bazhenov shale in Siberia—are meant to carry the Russian economy starting in the 2020s and beyond. The waiver appears to cover work in the Black Sea, which is also a primary target of next-generation Russian interest. But it could be a wedge into a broader revival of work including the Arctic and the shale.

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Retail workers are being displaced in droves

After a steep rise following the financial crisis, U.S. retail jobs have been plummeting since the start of the year.

Why this matters: The likely irreversible plunge in these relatively low-wage jobs — $18-an-hour employment for teens, adults, immigrants and senior citizens for generations — primarily affects the working class people whose shrinking opportunities have underpinned populist politics in the U.S. and abroad. And the jobs being created in their stead, in online warehouses for companies like Amazon, are too few to soak up those displaced.

Data: Bureau of Labor Statistics; Chart: Lazaro Gamio / Axios

Our thought bubble: Until now, retail workers — unlike the car-making and coal-mining industries — have made little political splash. Look for that to change.

The numbers: U.S. retail jobs (mainly cashiers and sales people) plummeted by about 60,000 in the first three months of the year, to about 15.85 million, according to preliminary data from the Bureau of Labor Statistics.

Reality check: That decline is more than the 53,000 people employed in all aspects of coal mining, including executives and administrative staff, an industry on which President Trump has been fixated.

What they're saying: "The backdrop is that there have been significant layoffs in major retail including department stores," said Mark Muro, of the Brookings Institution. "The department store platform seems to be falling apart."

Why now? The dramatic consumer rush to online shopping. This is reflected in a rise in the number of jobs in Amazon-type jobs, which pay more — an average of about $25 an hour, according to the BLS. But Amazon and the other online merchandizers are rapidly automating, so the number of jobs rose only by 9,300 in the first three months of the year, to about 555,700.

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Experts say the U.S. could have cyber sabotaged North Korea's missile

AP Photo/Wong Maye-E

An Obama-era cyber intrusion program could have been responsible for the failure of North Korea's missile launch on Sunday, according to cyber, nuclear and North Korea experts.

The abortive outcome of the launch, disintegrating within seconds, bore uncanny resemblance to the description of an Obama-era cyber intrusion strategy described in a March 4 article in the New York Times.

The likeliest scenario: The missile was not sabotaged with the flick of a switch, experts say. If this was a cyber intrusion, the U.S., over a number of months or years, figured out the components that North Korea needed for its missile program, and where it would acquire them, and planted malware along the supply chain, according to a former cyber expert with the National Security Agency who did not want to be identified. When that malware detected "certain circumstances," such as flight or ignition, it would be coded to sabotage the operation, the former official said.

  • No one we contacted could state flatly that North Korea was the victim of cyber-sabotage.
  • In fact Jeffrey Lewis, a nuclear weapons expert at the Middlebury Institute of International Studies at Monterey, said he is "deeply skeptical" that the US was responsible. "The failures we've seen are better explained by the pains of the R&D process," he said. "There is a reason that 'rocket science' is a metaphor for something that is hard to do."
  • But other experts leaned toward US sabotage. Michael Sulmeyer, director of the Cyber Security Project at the Harvard Kennedy School: "The idea of a US military officer clicking 'hack' in the seconds before the North launched its missile–-that's just not the way this works. Rather, a scenario more consistent with recent newspaper reporting is that a series of activities over an extended period of time, including some computer and electronic manipulation, could have resulted in the failed launch."

What comes next: The former NSA official said that, if the U.S. has implanted malware in numerous missile components, it will be hard for North Korea to find all of them. Hence, its missile advancement will be erratic. But Dr. Victor Cha, an expert on North Korea at the Center for Strategic and International Studies, said, "It is also a fact that this failure will not deter the [North Koreans] from trying again."

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A chance for Putin, Tillerson diplomacy in Moscow

Rebecca Zisser / Axios

Secretary of State Rex Tillerson begins meetings today in Moscow amid grave tensions and name-calling between the U.S. and Russia, roiled by the U.S. missile strike on Syria. The ground is fertile for the start of genuine diplomatic discussions over Syria.

Why it matters: Putin knows that he has a problem in Syria — he wants to retain Russia's military presence there, but is not wedded to President Bashar al-Assad. Therefore, he will be looking for a face-saving way out of the current crisis. Aides to Putin threatened that Tillerson would get no meeting with the Russian leader, but look for at least a courtesy handshake between them — both sides know it is silly to keep barking at each other, and that they need to restore some decorum to the relationship. Ultimately, the Russian side still believes Trump is someone they can do business with.

What Tillerson wants: A joint diplomatic statement renewing the intention of seeking a political resolution of the Syrian civil war.

  • To get there, Tillerson will have to tone down his harsh accusations — in the lead-up to this visit, he openly accused Russia of interfering with the November election, setting himself apart from Trump.
What Putin wants: The lifting of western sanctions, slapped on Russia after Putin's 2013 invasion of Ukraine. That once seemed possible, especially given the shifting politics in Europe. But since Syria's deadly gassing of his people in Idlib on April 4, the politics has shifted decidedly against Russia again, and the sanctions are a lot likelier to be toughened, not eased.
  • Short of that, Putin would like to be treated as the leader of a "great power who is influencing international affairs," Georgetown University's Andrew Kuchins told me. Putin, who has much prestige banked with his people on the back of flouting and assailing the US, faces re-election next year and is determined not to be seen being maltreated by the US. Hence his shows of anger. "It's not a good moment for Putin to appear weak with Americans," Kuchins said.

"The best hope is a commitment to de-escalate the rhetoric and to work together to improve an abysmal situation," Cliff Kupchan, chairman of the Eurasia Group, who has spoken at length with Putin numerous times, told me.

Get smart: Both presidents have extremely sober-minded senior aides who understand that the harsh exchange of rhetoric between the countries could escalate out of control.