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The Quest to Domesticate the EV Supply Chain
98 Plays2 years ago
Welcome to the Plug In For More podcast! Mike, Tom, and Bryant are here to help you on your journey to an Electric vehicle future. Each episode we discuss current events, trends, and a specific topic of education related to EV's. We bring together a diverse experience set, and pair it with guests who are experts in the field. For even more information on EV's, check out www.EVUniverse.com.
In this episode Mike sits down with John DeMaio, the CEO of Graphex Technologies. Graphex Technologies specializes in the production of spherical graphite and graphine which is a key component in many Li-ion batteries. Their pursuit for the holy grail of renewable energy is robust. This conversation will provide insight into the coming advancements of battery technology and how its going to impact the EV space.
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Transcript
Introduction to Renewable Energy Innovations
00:00:00
Speaker
Welcome back to the plug-in for more podcast i'm tom we're here with you today with a pretty interesting episode i might have an opportunity sit down with john demand who is the ceo of graphics technologies graphics technologies is focused on the development of technologies and products that.
00:00:16
Speaker
ultimately enhance renewable energy, specifically the production of spherical graphite and graphene, which is a key component in lithium ion batteries that we find in electric vehicles as well as other electric mobility devices.
Mechanics and Future of EV Batteries
00:00:30
Speaker
This episode is a little bit different in that we were diving way more into the specifics and the mechanics of what is actually going on inside of an EV battery and the exciting developments that are in the near future that we're going to see come to fruition very soon.
00:00:46
Speaker
But first before we jump into that, I just have to talk about the Mustang Mach-E. I've been in the car for just over a month now and I want to talk a little bit about my experience with it.
Experience with Mustang Mach-E
00:00:58
Speaker
There's a lot of parts of the car that I had anticipated, that I had planned for, that I had educated myself on, and all of those things
00:01:07
Speaker
I've come as not a surprise. The car is fast. The car is quiet. I'm saving a ton of money on fuel that now is in electricity to the tune of my normal driving was about $400 a month in fuel for the vehicle I had prior to now I'm spending about $50 per month in electricity. It's significant. The one thing that I didn't anticipate though is how effortless the car was going to be to drive. And really the way to put it is that
00:01:37
Speaker
It really highlights how harsh a gas vehicle is to drive with a gas vehicle with an inconsistent power band from the gas engine to the shifting of the transmission to having to get off of the accelerator and onto the brake. All of these little things are added stressors to the driving environment that I just had never considered. I would equate it to having lived in a city environment for a period of time.
00:02:02
Speaker
And then moving out into a country setting where you have quiet around you and you had become so accustomed to the hustle and the bustle and the horn honking and engines revving of a city environment that when you're in the country and you take a deep breath and you just take it in, you didn't realize how much those other little things were causing stress to your body. Now, I kind of feel the same way driving the Mach-E.
00:02:28
Speaker
I might feel better if I wasn't always on the accelerator to 100% to testing out that zero to 60, but that's part of the fun too. So for those of you still on the fence, those of you that are anticipating your first EV, just consider that there's going to be things that you're going to experience with an EV that you didn't plan for, and it's gonna be pretty cool when you do. And it doesn't matter how much research you've done, because I've done a lot, there's something that's gonna surprise you.
00:02:58
Speaker
So here is Mike in his interview with John DeMaio.
Graphite's Role in Battery Anodes
00:03:03
Speaker
Enjoy the show. It's an interesting one.
00:03:06
Speaker
Welcome to Plug In For More, brought to you by evuniverse.com. EV Universe is your one-stop shop for all things related to the electric vehicle. Here on this podcast, our goal is to educate, inspire, and hopefully make your transition into the electric vehicle marketplace a lot less intimidating. And now, here are your hosts, Mike, Tom, and Bryant.
00:03:33
Speaker
John, welcome to the plug-in for our podcast. Today, we're gonna talk about graphite and battery technology, and that is your industry. So can you give us an overview of what your company does and what you guys have been doing for the last XWU since you've been in business? Yeah, you bet. So I appreciate that, Mike, and it's good to be with you. So let's start first with the real quick anatomy of a typical battery. Mostly we'll talk about the CMI on batteries and primarily how they're used in
00:04:02
Speaker
battery energy storage, and really primarily in electric vehicles. So in a typical battery, you have a cathode, an electrode, an electrolyte, and separator.
00:04:14
Speaker
Graphite plays the key role on the anode side of the battery, basically the negative electrode. Now, a lot of the press and interest has been around the more marquee elements, lithium, cobalt, nickel, manganese. Those are all related to the cathode side of the battery. In most configurations, the anode side is 95% to 99% graphite.
00:04:40
Speaker
The other 1% to 5% being maybe silicon or lithium titanium oxide, et cetera. So graphite as a part of a battery system makes up almost 50% of a battery cell. And when taken on hold in like a Tesla, for example,
00:05:00
Speaker
If the battery weighs 400 pounds, there's about 150 pounds of graphite in it. So graphite is the largest component by weight in these battery energy storage systems and these electric vehicle batteries.
Graphics Technologies' Global Expansion
00:05:15
Speaker
It doesn't get a lot of press. It just kind of quietly does its job. It is really the universal, you know, anode material, as I mentioned. Okay, so that kind of gives you a little bit of background on why we're even talking about graphite.
00:05:29
Speaker
What we do is process the graphite. We call it the midstream. So we do not perform the mining. And we operate in the natural graphite arena. And we may talk about synthetic as we move forward here. But in the world of natural graphite, it's mined from the ground as an ore. It is then processed into what's used as, we'll call it battery anode material.
00:05:55
Speaker
GraphX, my company, does that midstream. So we don't do mining, and we don't make batteries, but we refine the graphite from basically its raw form into its highest and best use, which in technical terms is called coded purified spherical graphite. So that's what we do. And we've been doing it for over a decade, which makes us one of the more experienced. We're in basically the top 10 in the world as far as volume producers go.
00:06:26
Speaker
of graphite processing. And we produce about 10,000 metric tons per year right now. And we are expanding that capability both in Asia, where, let's face it, the electric vehicle market is 15, 20 years ahead of the rest of the world. But we're also expanding into the US
00:06:47
Speaker
North America and then ultimately Europe and possibly the Middle East. So we are on the same kind of growth trajectory as a company as the industry is in the proliferation of electric vehicles and battery energy storage.
History and Development of Lithium-Ion Batteries
00:07:04
Speaker
Our listeners typically are people who are getting into EVs for the first time. They're newbies and they're learning about the battery technology and how that works. For me, I always like history. If we're talking about the history of these lithium-ion batteries, I go back to my experience because I've got one of the original Tesla Roadsters. I love that car.
00:07:25
Speaker
And it's been something that I've loved for a long, long time. But can you kind of walk us through, since you've been in the industry for 10 years, how has the industry, I guess, when you first got into it, how has it changed to where it is today? Yeah. So I can't claim to be the 10-year veteran. I mean, the company has been operational commercially for the last 10. I've only joined it within the last two.
00:07:51
Speaker
But I've been in the energy space for well over 25. So I've seen a lot of fits and starts around what's now called the energy transition. I was in it before they even coined that expression. So I've been in solar, I've been in energy efficiency, I've been in, you know, reduce, produce, procure, meaning, you know, onsite generation, whether it's solar or co-gen, et cetera. So I've seen a lot of trends, if you will, and a lot of efforts to
00:08:20
Speaker
move away from fossil fuels, which I personally believe in greatly. Lithium ion batteries really came into existence, I think, during the gas crunch of the 70s, right? And it's been perfected, we'll call it, or refined for the last 50 years, basically. So what we're seeing today is really the most advanced kind of configurations.
00:08:46
Speaker
And I will say that there is still a tremendous amount of R&D going on. And I'm thinking specifically about the electric vehicle arena because there are many configurations, many different chemistries of the battery technology. There's different chemical configurations, meaning different configurations of those elements I mentioned, lithium, you know, cobalt, manganese, et cetera.
00:09:12
Speaker
And there's also different configurations of physical form factors. So you've got cylindrical, the classic flashlight battery-looking thing. But then you've got prismatic, which are more or less rectangular. And then pouches, right? More of a soft-sided. So there's a lot of...
00:09:32
Speaker
like everything in life really, but with battery technology, there are trade-offs, right? And that's why certain companies pick certain configurations. The Holy Grail, which I think everyone agrees on, particularly with respect, again, to electric vehicles, is the Holy Grail is the quick charging and long lasting, right? So charge real fast, just like filling up a gas tank, and then long range, multiple cycle life, et cetera.
00:10:01
Speaker
And in pursuit of that holy grail, there's a tremendous amount of research both on material science, battery configuration, battery management systems, right, so the electronics that sit on top of the battery, etc. So there's just a tremendous amount of effort, you know, being spent, similar to what went on with internal combustion.
00:10:24
Speaker
If you think about it, over the last 100 years, there's just been refinement after refinement all about extracting, in the case of ICE, more power from the same gallon of gas to get better mileage, et cetera. Similarly, the electric vehicle technologies, including battery, are all undergoing that same kind of optimization and always seeking to be better.
Future of Battery Technology
00:10:50
Speaker
With that, from what you've seen from the
00:10:53
Speaker
you know, the early days, let's say, you know, when the EVs first came out, you know, the Nissan LEAF Tesla Roadster timeframe to today. I mean, obviously there's been improvement in that sector, right? I guess when I look at it, it's been an incremental improvement. It hasn't been this massive change. It hasn't been like solid state batteries or something like that. In fact, who are the people who are getting into EVs now? What would you say they can expect in the next three to five years as far as the improvement in battery technology? That's a great question. And I think it's, you know,
00:11:22
Speaker
There's always a personal factor because you can wait forever. I'm not saying this is a parallel per se, but I was in solar 15 years ago, let's say. If you know solar panel efficiency, I'm talking about photovoltaic now, it's always been around 19 to 23%. At the time, there was some resistance, some reluctance from our customer base, et cetera, to say, well,
00:11:51
Speaker
Do I want to get involved now? What if the next generation of panels is 50% efficient or 75% efficient because there's breakthroughs? And if you roll forward now to now, efficiencies are still 19 to 23, maybe pushing 25%. They haven't made that quantum leap. There are physical limitations. Literally, the physics can sometimes be limited.
00:12:16
Speaker
Again, not saying that's the same in battery tech, but I don't, like you said, over the last several decades, there's been incremental improvements. No radical swings, no unobtanium has come into the transparent aluminum or something radical to change what's been physically limited. What's been improved is safety,
00:12:43
Speaker
Again, range performance, et cetera. You've got the roadster. Congrats. I mean, those were hard to come by. I'm sure you're still happy with it, right? What more could you want from it? Maybe better range? I don't know. So those are the things that people are working on.
00:13:02
Speaker
But again, talking about, uh, folks pulling the trigger in the industry, you know, the concern is range anxiety, right? People like, what if it runs out of juice? I'm going to get stuck, you know, similar to running out of gas, I guess, maybe not as easy to charge right now. But point being is how do people really use their vehicles? You know, in most cases they don't drive that far. Right. Um, and if they do, they have to plan just like they would, you know, for, um, for gas station. I would say.
00:13:30
Speaker
The infrastructure side of things needs to catch up, meaning more charging stations, more service stations that are geared towards electric vehicles. That will come. But as far as the technology goes, I don't know if we'll see radical improvements that would really warrant waiting
00:13:50
Speaker
You know, because you'll wait forever. It's just a danger, I think, in that thinking.
00:14:14
Speaker
One of the other things that people get into a lot with these batteries and cars in general is how fast they're going to charge. There is the range, the range anxiety, that is a huge thing. I think for a lot of owners, myself included, once you hit that 270 to 300 mile range, that's pretty much enough. My bladder personally can't hold much past that when I'm driving.
00:14:38
Speaker
Um, or, or my family members. But when you do stop, if you have a car that can charge a lot faster and you can get back on the road quicker, that is kind of that goes back to the infrastructure piece. Um, and I think those are tied very, very closely together. What do you, what, what, what are you seeing in that regard? Um, from, you know, obviously what you guys are doing with, uh, with graphite and then also the battery technology.
Challenges in EV Infrastructure Development
00:15:04
Speaker
Yeah. So on the, on the infrastructure side.
00:15:09
Speaker
I'm not dialed into that extremely tightly, but obviously it's part of my ecosystem.
00:15:16
Speaker
So I do see more activity from companies that are proliferating installations of charging stations, for example. Part of what we're focused on is the big push for domestication of the infrastructure and the supply chain. And that's a real critical piece for the industry. It affects the cost, right? It affects the availability, supply chain interruptions that we've experienced since COVID and maybe even before.
00:15:45
Speaker
So we're focused a lot on bringing the know-how that we've accumulated over the last decade, which is substantial. And I always say that what we do in that midstream refining of graphite, it's part art and part science. We're talking about microscopic particles that are configured and produced to pretty exacting specifications.
00:16:11
Speaker
It can be done more readily in a lab setting or in a pilot size setting, but when you're trying to run continuous operations to support the demand that's reflected by these projected numbers of vehicles, now you're talking about having to produce massive quantities of not only graphite, but all the other elements so that those can be produced domestically.
00:16:40
Speaker
We're seeing a definite disparity between supply and demand of, in our case, critical minerals, but also the infrastructure required to support the proliferation. So we're doing our part to be a player, a support player in that critical mineral supply chain. And there are other companies, I think, that are stepping in to the other parts of the infrastructure, namely the charging primarily.
00:17:08
Speaker
So when you really think about it on a macro level, the way that, let's say the US is going about this domestication, we've really started with the end use,
Domesticating EV Battery Supply Chains
00:17:24
Speaker
right? So the battery gigafactories are really the things that have been announced that GM, Ford, all these other companies have announced that they're gonna move forward. That's really,
00:17:36
Speaker
short of going into the vehicle itself, that's kind of the end game, let's say, for critical minerals and whatnot. And then we're backfilling from there. So if you think about that, you got the end use. Now we're looking, in the case of graphics, we're looking at building physical plants to do the final processing before it goes into those plants. Then we're looking at building the preliminary processing
00:18:03
Speaker
And then, of course, the industry is looking at where are we going to get the raw materials to as much as we can domesticate if those minerals actually exist in the States or to be friend short or on short or near short as the terminology goes, you know, from countries that are part of the free trade agreement and basically not in areas of either geopolitical concern or geographically, you know, undesirable, etc.
00:18:32
Speaker
Does that make sense? Absolutely. I think for the uninindated people in the EV space and people who haven't learned all about the requirements for, let's say, the tax credit, and if you don't mind taking the lead on this one, walking through the Inflation Reduction Act and how that impacts your industry specifically when you talk about the massification of these batteries. Yeah. No, it's a big step forward.
00:19:01
Speaker
And if you don't mind, I'll go back. Because of my experience base, I've seen a lot of efforts to promote, again, this electrification kind of movement. When I was in solar, there were a lot of programs that were rolled out to promote, either a city going 50% solar by a certain date, et cetera. So we saw a lot of
00:19:31
Speaker
maybe aggressive, maybe overly aggressive kind of announcements about intention. And a lot of those kind of fell flat because there was not a follow through in either political movement, regulatory changes, incentives, whatever the case may be. When it comes to the electrification of mobility,
00:19:52
Speaker
And again, looking back at 25 plus years of different fits and starts of these things. And I'll preface by saying, I was in solar when the Solyndra deal went down, right? $600 million loan guarantee for a technology that anybody that was in the industry knew was kind of a non-starter at the time.
00:20:14
Speaker
We're not seeing that same kind of ready fire aim mentality. What I've seen in the electrification, particularly against mobility, the motivation or the intention became
00:20:28
Speaker
you know, legislation, right? Like things like the IRA and the bipartisan infrastructure law, et cetera. That legislation has resulted in funding, right? And the funding is making its way into the industry in terms of BIL loans and grants or DOE grants and the infrastructure, the inflation reduction act, you know, incentives that are tied to a push for domestication. Is it perfect? Never is.
00:20:58
Speaker
The intention is correct. The intended motivation is to promote industry, companies like mine, to domesticate the actual midstream production. Like I said, the battery factories are being built or planning to be built. Now we need the other pieces of that supply chain. And the Inflation Reduction Act is an effort to incentivize that.
00:21:28
Speaker
Again, is it perfect? Maybe not. And it might be overly aggressive in its time milestones. But I think there will be an adjustment perhaps to match what the industry can do. There can be some disconnect sometimes.
00:21:50
Speaker
between, again, the desire to say mine here in the US for all of the different critical minerals. But the regulatory environment has to also adjust as well. There's a reason why most of the mining in the world is done elsewhere. It takes a long time. It's highly capital intensive, et cetera. Similarly for midstream production, there's a lot of capital expenditure required.
00:22:21
Speaker
companies have to maintain a profitability level to stay in existence. So can the industry keep up with the intention of these regulations? I think will remain to be seen. But what I do see is more of a collaborative environment between, I think the legislators are actually listening to industry and industry is working
00:22:50
Speaker
with legislators and industry is working together to kind of shift the paradigm of how materials for electric vehicles or for vehicles are sourced.
00:23:05
Speaker
reduced and then procured. It's not the siloed approach of the past where automakers put out a specification, industry scrambled around to meet that specification and be selected. Now, because there are shortages of materials and the sourcing is important as to where it comes from,
00:23:29
Speaker
The automakers, processors like us, the raw material suppliers are all in multiple conversations together, which is a really good sign. So I've never seen that before. So I think all those things combined are pushing us in the right direction. So I hope I answered your question. Yeah, absolutely. I guess one of the other things that
00:23:57
Speaker
I'm very curious about is with your industry and what came out with the inflation reduction act, what kind of pivoting did you have to do along the way?
Adapting to Legislative Changes and Industry Demands
00:24:08
Speaker
Obviously, when things start, you hear whispers and legislation keeps going back and forth. How did you as the CEO of your company make the decisions to do what you did to be ready for
00:24:23
Speaker
these requirements for the domestication of these materials? Yeah, that's a great question. And I won't claim to be...
00:24:36
Speaker
be either clairvoyant or too much of a genius. But we were already in process in the domestication effort before the real momentum kicked in. So we had announced, for example, our proposed plant in Michigan back in, I think, February of 22.
00:24:58
Speaker
But for several months after that, the real kind of push to separate, if you will, as much as we could from, in particular, China, but from other geopolitically
00:25:13
Speaker
challenging areas. But we were already in process more from a just, again, to move in the same direction as the industry, right? So we had a very, you know, well established ecosystem for ourselves in in China, right? So we have operations over there. We're not a Chinese company, by the way, that's a very important distinction to make. Because that gives us the flexibility to
00:25:37
Speaker
come to the United States without restriction, without any ties to the government over there. So we have that flexibility. I call it the ability plus agility. So we have the knowledge base that was born and raised in the environment that created electric vehicle technologies and supply chain.
00:26:02
Speaker
And now we're bringing that to the US. And we thought, we continue to believe that's a very good thing, not just from a commercial perspective for us, but think about it. We're bringing technology from Asia into the US. It's not like we're bringing it back. We're bringing it here really for the first time because it wasn't proliferated here. So we're bringing technology into the US. We're bringing jobs back.
00:26:32
Speaker
and where we're moving in a direction of progress. So we had already committed to doing that before the BIL, the IRA, and all these different legislative moves.
00:26:47
Speaker
We welcome those activities because it fits right in with what we were already doing and are supportive of that. It makes perfect sense. That's great. When we're looking at, let's say, your Michigan plant, and I'm from Michigan, so that's near and dear to my heart.
New Plant and Strategic Developments in Michigan
00:27:12
Speaker
Let's talk about that. Where in Michigan is this plant? You know, I guess how many jobs do you think it, you know, you guys are people you're going to employ there. Any details you're willing to share with us? Absolutely. Yeah. So we announced it's in Warren. You know, we did some searching. We had kind of a blank canvas, right? Like a lot of companies that are, you know, moving here, let's say. And yeah, there was a lot of activity, obviously, if you read, you know, if you follow
00:27:42
Speaker
I know you do, a lot of activity down in the south, the Tennessee Valley area, the southeast, some in the southwest. Lately, you've also seen a pickup in Michigan. We looked at sites. We were drawn toward
00:28:01
Speaker
the Detroit area because birthplace of automotive, right? And the more we looked, you know, we happen to be introduced to a property in Warren that had been in the automotive industry ecosystem previously. In the 60s, I think it was like an undercoating facility that supported Chrysler, had been sitting defunct or, you know, abandoned for decades.
00:28:28
Speaker
And some local Michiganders purchased the property and started to rehab it for semi-industrial use. I think there are some cannabis operations in there. And they took the site, they did the brownfield remediation, they started to rehab the buildings and start to fill them up with tenants. And very importantly, they brought in a 15 megawatt substation.
00:28:57
Speaker
for the property specific. It took them a couple of years. They spent millions of dollars doing it. So we got introduced to the property and it fit kind of the bill, right? We had the high Bay area that we need. It has power available, which we definitely need. And it was located in automotive territory.
00:29:18
Speaker
on further investigation. It's in the city of Warren. Warren has seen a lot of exodus of automotive jobs. So it was very welcoming environment from the local government, from the economic development side, et cetera. So it felt very warm and welcoming.
00:29:34
Speaker
And, you know, it represented a relatively quick path to operation by virtue of the fact that the buildings are there, remediation has been done, power is available. So we settled on that site, you know, like I said, back in February. And as a result of working with the local group that was rehabbing the building, they became so interested in what we were doing that they became our joint venture partner.
00:30:02
Speaker
and they will be providing the capital to build that out. So we're very excited about that. Local Michiganders trying to turn part of the physical infrastructure around. We'd bring about 100 jobs to answer your question for this particular plant. And then beyond that, that plant represents about 15,000 tons of finished product. If you look at the landscape of demand for just North America,
00:30:31
Speaker
Over the next five years, it could be in a neighborhood of 500,000 tons of graphite required. So this plant at 15,000, it's good for now, but we're looking at other potential areas, including in Michigan, where we can plant, like we better term, larger facilities to support that demand. And that would result in much more economic
00:31:01
Speaker
development, more jobs, et cetera. Again, this electrification of mobility movement, and it's a movement. I mean, it's only going in one direction. What I think we all have to keep in perspective is we are trying to do two massive things at once, and I say we, society. We're trying to replace 100 plus years of internal combustion technology and infrastructure with electric. We're trying to do it very quickly.
00:31:27
Speaker
At the same time, we're trying to domesticate the entire supply chain. Huge effort, right? And where the shameless plug comes in is if you're trying to do that, I think from my engineering background, just from a practical perspective, if you're trying to do that, the best way to do it is to get experienced players in all of the different positions and have them plug and play. And that's what we represent. You know, I liken it to, if you're going to do an expansion team,
00:31:57
Speaker
And you want to compete. You can't just bring in all rookies that you're bringing up from the farm system and from college, whatever. If you're trying to compete out of the gate, you bring in experienced players that know how to play together, that know how to play against the competition, et cetera. That's what we represent. I think there's a place for new and upcoming technologies, but for the foreseeable future,
00:32:27
Speaker
You need some, we'll call it, you know, foundational players, guys and gals that are bringing the picks and shovels to this gold rush. And that's what we are. And that's what graphite is. So we're really comfortable and happy with the role that graphite plays and with the role that we play as a producer of it. And we think that more companies like us, you know, will make this electrification happen faster and be more
Public Presence of Graphics Technologies
00:32:56
Speaker
credible, if you will, to the average person that's not really, as you said, inundated with the stock. John, first off, I want to thank you for your time, number one. Number two, if people want to learn more about what you and your company are doing, where do they find you? Where is all your social media? Where is your website? Yeah, we're publicly traded. We've been traded on the Hong Kong exchange for years, but
00:33:22
Speaker
In 22, we became listed on the NYSE American, the old Amex exchange. So our symbol is GRFX. And our website is www.graphicsgroup.com. We have a Michigan phone number. People can call into that. But between GRFX and we have press releases that have gone out. I've been in a lot of
00:33:50
Speaker
different articles and whatnot. I'm on LinkedIn. So all of the kind of, and I think we're on Twitter as well, all of the typical, you know, the usual suspects I would say, but TRFX on the, on the Nici, graphicsgroup.com, LinkedIn, Michigan phone number. We're pretty easy to find. Perfect. Awesome. John, thank you for your time. Everyone. Thanks for watching.
00:34:16
Speaker
Thank you for listening to plug in for more. Make sure you subscribe so you don't miss any future episodes. In the meantime, check out the one-stop EV Marketplace, evuniverse.com. Until next time.