Sep 4, 2020

Axios Navigate

By Joann Muller
Joann Muller

Happy Friday! Hope you enjoy a great Labor Day weekend. I'm off next week, so look for me in your inbox on Sept. 18.

  • If you've got tips or comments, send me an email: joann@axios.com.
  • Today's Smart Brevity count: 1,257 words, a 5-minute read.
1 big thing: The great battery race

Illustration: Sarah Grillo/Axios

The promise of a new generation of low-cost, long-lasting batteries is catalyzing a long-awaited shift to electric vehicles.

Why it matters: Two big obstacles stand in the way of widespread EV adoption: cost and driving range. But steady advancements in battery technology are already helping to mitigate both issues, and could make electric cars more affordable and desirable to consumers within just a few years.

  • The target: batteries that cost less than $100 per kilowatt-hour to produce, putting the cost of owning an EV on par with a conventional vehicle.
  • The industry might not hit the $100 target until 2030, predicts Boston Consulting Group. But by 2022 or 2023, cheaper batteries will cause EV sales to take off, growing to one-third of the global market by 2025 and one-half by 2030, says BCG.

What's happening: The most anticipated battery news could come Sept. 22 from Tesla, the global leader in electric vehicles. It plans to share its latest innovations at a special "Battery Day" tied to its annual shareholder meeting.

  • CEO Elon Musk hinted in a Tweet this week that big leaps in energy density are close, and suggested these vastly improved batteries could be mass-produced within three to four years.

We've already seen a barrage of EV battery milestones in 2020, with more news expected in the coming weeks:

  • General Motors in March introduced its new lower-cost Ultium batteries, packaged in a modular EV platform, that will enable GM to sell a new crop of EVs profitably from Day One.
  • Newcomer Lucid Motors says its Lucid Air luxury sedan, arriving Sept. 9, will set a new benchmark with a 517-mile driving range. CEO Peter Rawlinson is considering licensing Lucid's super-efficient electric drivetrain to accelerate demand for mass-market EVs.
  • Volkswagen's ID4, debuting Sept. 23, is an affordable, compact SUV built on a new electric vehicle platform that will underpin 75 new VW models by 2029.

The big picture: Steady advancements in battery innovation — rather than a single breakthrough — have brought the industry to the cusp of widespread EV adoption.

  • Batteries require a series of tradeoffs: a fast-charging battery could be too expensive, for example, and a long-range battery might take up too much space. Getting the balance right is the trick.
  • The ultimate goal: the "million-mile battery" — one that can last 30 years and enjoy second, or even third, lives powering the electric grid.

What to watch: The next wave of innovation could come from the use of new materials like silicon and graphene to replace nickel and cobalt.

  • A handful of Asian companies including CATL, LG Chem, Samsung, Panasonic and SK Innovation are likely to continue to dominate the race.
  • But a few U.S. startups are working on promising alternatives, including Sila Nanotechnologies, NanoGraf and Enevate.

The bottom line: With battery prices falling fast, the EV tipping point is almost here, says BCG's managing director Aakash Arora.

  • "Three years from now, there will be no debate that buying a gasoline car is an economically worse decision than buying an electric car."
2. Battery firm taps public markets

Illustration: Aïda Amer/Axios

Yet another transportation startup plans to take the shortcut to an IPO and this time, it's a battery company.

What's happening: QuantumScape, a battery startup backed by Volkswagen and Bill Gates, said on Thursday it plans to go public through a reverse merger with Kensington Capital Acquisition Corp.

Why it matters: The deal gives $700 million to QuantumScape to commercialize its promising solid-state batteries for electric vehicles.

  • The deal values the company at $3.3 billion.
  • It's the latest in a string of transactions in which venture-backed transportation startups merge with a publicly-traded shell entity called a special purpose acquisition company (SPAC).
  • EV companies Nikola, Canoo, Fisker and Lordstown Motors have gone public (or will soon) in this manner. Lidar manufacturers Velodyne and Luminar have, too.

The intrigue: QuantumScape's lithium-metal battery claims a much higher energy density than today's technology and uses a solid ceramic electrolyte that the company says is more stable than a conventional liquid electrolyte.

  • Instead of the conventional graphite/silicon anode, the battery uses a lithium-metal anode that translates to a much faster charging time.
  • My former Axios colleague Steve LeVine explains the significance of the breakthrough here.

What to watch: QuantumScape, a 10-year-old spinout from Stanford University, said it will form a joint venture with VW to produce solid-state battery cells, starting in 2024, for the German automaker's electric vehicles, and eventually for other carmakers, per Reuters.

  • A VW spokesman said the timeline is more likely five to 10 years.
3. GM and Honda look to cuddle up closer

GM and Honda collaborated on the design of the Cruise Origin, a robotaxi prototype in San Francisco. Photo: Cruise

It's a sign of the times: GM and Honda said this week they're looking to develop more vehicles together, sharing platforms and propulsion systems across their product lineups in North America.

Why it matters: Automakers have already been forming strategic alliances to collaborate on expensive technologies like connected, self-driving electric cars. But the pandemic has taken a heavy toll on the industry, heightening the need for cost savings on core products, too.

Details: For now, it's just an agreement to explore a strategic alliance, but the two companies have been partners for 20 years, so a broader deal is likely.

  • In recent years they have collaborated on futuristic projects like fuel cells and the Cruise Origin robotaxi, unveiled in January.
  • In April, Honda announced it would develop two electric vehicles on GM's new Ultium battery platform and embed them with GM's OnStar connected services technology.
  • Now, they're talking about pooling resources on everything from vehicle engineering to purchasing parts and manufacturing.

What they're saying: "This alliance will help both companies accelerate investment in future mobility innovation by freeing up additional resources. Given our strong track record of collaboration, the companies would realize significant synergies in the development of today's vehicle portfolio," GM president Mark Reuss said in a statement.

4. Driving the conversation

Jeep Grand Wagoneer makes a comeback. Photo: Jeep

Jeep Grand Wagoneer returning as $100,000 luxury plug-in hybrid (Emme Hall — Road Show by CNET)

  • My thought bubble:: The price tag is more than that of a Land Rover Ranger Rover. But SUVs are hot — especially luxury ones — so if people will pay that price, more power to Jeep.

Want an Uber? You may have to send a masked selfie first (Sara Ashley O'Brien — CNN Business)

  • Why it matters: Since the pandemic began, drivers have had to prove to nervous riders that they are wearing a mask. Now the riders have to prove it, too. Airlines are cracking down on mask-wearing, too, to help slow the spread of the coronavirus.

NHTSA to give automakers more time to comply with EV sound requirements (Audrey LaForest — Automotive News)

  • Why it matters: The rule requires hybrid and electric vehicles — which are virtually silent when they're in operation — to emit alert sounds to warn pedestrians of their approach.
5. What I'm driving

Ford Edge ST. Photo: Ford

This week I'm driving the 2020 Ford Edge ST, a V6-powered, all-wheel-drive, performance version of the mid-size crossover utility, which boasts 335 horsepower and goes from 0-60 in under six seconds.

My thought bubble: I've never really understood the concept of a performance utility vehicle.

  • If I want an SUV, it's not to go fast; it's because I need to carry people, cargo or dogs.
  • And if I want a thrilling drive, I can think of dozens of performance cars I'd choose before the Ford Edge ST.

Yes, but: Whether you're drag racing or not, the Edge comes with a lot of useful technology like Ford's Co-Pilot360 assisted-driving system, which is standard on all trim levels.

  • It includes automatic emergency braking with pedestrian detection, blind spot detection, lane-keeping system, rear backup camera and automatic high beam lighting.
  • More driver-assistance technologies like adaptive cruise control, lane-centering technology and parking assistance are folded into add-on tech packages available on upper-trim levels like the ST.
  • I liked the gentle nudge of Ford's lane-centering system rather than the shove some systems provide. And the 180° front camera was helpful when parking in a tight spot, too.

The bottom line: The Ford Edge ST starts at $43,265, about $5,200 more than the premium Edge Titanium, with Ford's 250-horsepower, 2.0-liter Ecoboost engine, which is plenty of oomph for me.

Joann Muller