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Six months ago, in early October, Doug Campbell sat down in front of a camera in Louisville, Colorado, just 20 miles outside of Denver, to deliver some big news. Dressed in a trucker cap and hooded sweatshirt, the 42-year-old chief executive officer of battery start-up Solid Power looked more Rocky Mountain-cool than materials scientist-serious, but he didn’t miss a beat as he rattled off his company’s major electrochemical achievement.
“Today, we are pleased to announce the production and delivery of the company’s first generation multi-layer, multi-amp-hour, all solid-state lithium-metal cell,” he said.
For the battery industry, all solid-state lithium-ion cells are a holy grail: they can store dramatically more energy while simultaneously being safer to charge and use. Analysts say they could unlock enormous profits as well as a host of technological leaps, including super long-range electric vehicles and battery-powered short-range aircraft.
“Solid-state cells address some of the fundamental weaknesses of lithium-ion batteries,” says Hanjiro Ambrose, a transportation researcher at the University of California, Davis. “The Achilles’ heel is the liquid electrolyte, which shuttles ions back and forth when the battery is charging and discharging. The electrolyte is often combustible and causes a lot of issues when batteries overheat.”
Although dozens of companies around the world are attempting to tweak traditional lithium-ion batteries in an effort to transform the $30 billion global industry, Campbell’s announcement represented something of a coup. The concept is simple: to dramatically improve the storage capabilities of lithium-ion batteries.
Experts say the design and technology to produce solid-state batteries is not particularly complicated. Instead, the hold up has been an engineering one: production at scale. The fact that Solid Power is now producing and shipping hundreds of prototype battery cells to its partners and customers immediately established the eight-year-old, government-backed company as an industry leader.
It also represented a potential comeback for the American battery industry.
“There’s a lot of emerging, dynamic startups like us,” Campbell tells The Wire, “but that’s pretty much it for the American battery industry. If your definition is American-practiced and American-owned, there really isn’t anyone other than emerging players such as ourselves.”
Instead, most of the lithium-ion batteries that power Americans’ electric vehicles, laptops, and mobile phones come from just a handful of Asian companies: Samsung, LG Chem, and SK Innovation in South Korea, Panasonic and Envision in Japan, and CATL and BYD in China. In terms of global market share, China not only controls key ingredients — most notably cobalt — that go into batteries, but also the manufacturing: a whopping 77 percent of the world’s production capacity is located in the country.
By contrast, “only about 20 percent of oil supplies are controlled by any single country,” says Charles Wessner, former director of the National Academy of Sciences’ technology, innovation, and entrepreneurship program. “And you can argue that lithium-ion batteries are the new oil.”

Credit: Official White House Photo by Adam Schultz
Indeed, demand for lithium-ion batteries is expected to surge every year for the next 10 years as consumer electronics, energy storage and electric vehicles become more ubiquitous. President Joe Biden recently announced plans to make sure the United States doesn’t miss out on this new oil boom. His infrastructure plan promises to incentivize consumers to buy electric vehicles, to build an extensive charging network, and to help manufacturers develop a domestic supply chain — all efforts aimed at supporting a robust American battery manufacturing sector.
“Batteries are part of a mix of new technologies that will be critical in the next century or so. That’s why the Biden administration is emphasizing the need to have more of a domestic industry,” says Ilaria Mazzocco, a senior research associate at the Paulson Institute. “When it comes to research, the U.S. is very well placed. But when it comes to manufacturing, it’s really lagging compared to China.”
These two recent developments — the advent of Solid Power’s breakthrough battery and a call for federal support of clean technologies — would seem to bode well for the U.S. battery industry. But “batteries are hard,” warns Greg Less, technical director at the University of Michigan’s Battery Lab. “If they weren’t hard, everyone would be making them. The last small company that went big time was A123.”
Less doesn’t bring up A123 lightly. Before his current role at University of Michigan, Less worked as a research scientist for A123, a Massachusetts-based battery maker whose key innovation also promised to make batteries safer and more powerful. But while the company shined brightly for several years in the early 2000s, including securing more than $160 million in government grants and contracts, it eventually burned out, and in the end, was sold to a Chinese conglomerate for a bargain basement price. As observers look around at Solid Power, which has already received considerable funding and technology from the U.S. government and stands to rake in more if Biden’s plan passes, the big question is: Will this time be any different?
“Our government tends not to have a rearview mirror,” says Wessner. “That’s what worries me. Are we going to try things that work? Or are we going to try things that failed before? We need to have policy memories that go back before 2015.”
In other words, policy memories long enough to realize that the U.S. government’s last efforts to support domestic battery manufacturing ended up indirectly helping China.
Campbell announced that Solid Power had developed and produced solid-state batteries in October 2020.
‘A GIFT FOR CHINA’
It was late spring in 2001 when Ric Fulop was wandering the hallways of the Massachusetts Institute of Technology, looking for his next startup. Then in his mid-20s, Fulop had already founded six companies and was ready to move on to a new challenge. He began knocking on professors’ doors, including one belonging to Chiang Yet-Ming, a materials scientist who had a knack for inventing new substances that could do gee-wiz things, like batteries that could make themselves — just dump some chemicals into a container and let the wonders of physics do the rest.
In addition to self-organizing batteries, Chiang had found a way to make lithium-ion batteries far more stable and powerful than before. He and a former colleague had been thinking about starting a company, but they needed a business partner. Fulop’s timing couldn’t have been better.
The three met for dinner in July 2001, and by October their company, A123 Systems, was incorporated. Soon they had $8 million in commitments from venture capitalists to fund next generation batteries. The team quickly realized that while self-assembling batteries made for an incredible pitch, they would not mesh well with existing manufacturing techniques. So, instead, they focused on Chiang’s formulas to make powerful lithium-ion batteries safer.
At the time of A123’s founding, most lithium-ion batteries still used a chemistry known as lithium cobalt oxide, or LCO, which was first discovered in 1980. The cells could store a lot of power, but they were unstable if charged or discharged too quickly, and they tended to catch fire if they got too hot.

Credit: Rick Friedman/Corbis via Getty Images
To solve that problem, Chiang turned to an overlooked chemistry for the battery’s cathode — the positive terminal of a battery — called lithium iron phosphate, or LFP, and tweaked it slightly, adding impurities that allowed it to conduct electricity better. He also changed how different compounds were distributed throughout the cathode at an atomic scale. The resulting LFP batteries were heavier than LCO cells, but they could be charged and discharged much more rapidly. They were also far less likely to explode — a sales point the A123 team emphasized as it went looking for customers.
In 2003, they met with Black & Decker, the power tool company, which had been “scouring the Earth” for a breakthrough battery technology. In the early 2000s, cordless power tool batteries were either weak or fantastically expensive. A123’s batteries were neither. Their LFP chemistry was made of cheap and abundant materials, and it could deliver gobs of power quickly. The two companies signed a deal in 2005.
“A123’s story with China started right then,” says Larry Beck, who joined as principal scientist shortly after the Black & Decker deal was signed. The power tool industry was doing most of its sourcing and manufacturing in China, so it made sense for A123 to be nearby. Plus, the country had some fledgling lithium-ion manufacturers turning out cells for laptops and handheld camcorders, and A123 bought manufacturing time in those factories.
But power tools were just the gateway product. The company’s real target was automotive manufacturers, which had been cautiously experimenting with hybrid and electric vehicles. If A123 could provide safe, powerful batteries that could be swiftly charged, the potential was enormous. Providing batteries for cars, however, required a big step up.
“To go after automotive, we needed much larger volumes,” says Beck, “and we needed to control overhead, which meant we needed to start thinking about building our own factories.”
Fortunately, A123 was starting to get government support. In late 2006, it was awarded $7.5 million from the U.S. Department of Energy to develop batteries for hybrid vehicles. And as A123 entered talks with GM and SAIC Motor, the Chinese state-owned automaker, the Bush administration gave the company nearly $15 million in grants and contracts. GM wanted A123 to supply American-made batteries for its upcoming Chevrolet Volt plug-in hybrid. And SAIC wanted to form a joint-venture to produce cells in China. A123 chose GM.
It’s impossible to know if things would have turned out differently if they had partnered with SAIC, but A123’s decision to go with GM tested the small start-up. The lack of infrastructure to support battery manufacturing in the U.S. meant that A123 had to create its own extensive supply chain — no small feat for a company that had been around for just five years.
With continued interest from the automotive industry, however, government support ramped up with the Obama administration. In August 2009, as part of the American Recovery and Reinvestment Act, A123 was awarded a $249 million grant from the federal government and $125 million in incentives from the state of Michigan to build a battery factory outside Detroit.

Credit: Rick Friedman/Corbis via Getty Images
“The focus of the Obama administration on batteries was farsighted,” says Wessner, the former National Academies director. “But the funding, which was substantial at the beginning, was ultimately short-sighted. Despite its scale, it was insufficient to take a startup firm up the learning curve and down the cost curve to be able to compete with major Korean battery producers.”
Indeed, GM ended up going with LG Chem for the Volt’s battery packs, and A123 scrambled to find customers to make up for the lost order, which was rumored to be 50,000 battery packs.
Fresh off its stimulus award, however, the company went through with an IPO on September 24, 2009 and raised $380 million. In its IPO prospectus, A123 said it was working on “design and development efforts” with 19 automotive manufacturers and suppliers. On the first day of trading, its share price surged 50 percent.
All but one of those partnerships eventually fizzled out. The deal that did go through, with startup Fisker Automotive, might have been better for A123 had it not. In 2012, one of Fisker’s curvaceous Karma plug-in hybrids died on the highway as Consumer Reports was testing it. The problem was traced to battery packs made in A123’s Michigan plant. The recall ended up costing the company more than $50 million. That quarter alone, the company lost $125 million; it hadn’t made a profit since going public
Once demand for its automotive batteries evaporated, A123 was in dire need of rescue.
In August 2012, the Chinese automotive parts giant Wanxiang offered to invest $450 million for a controlling stake in the ailing company. The deal would have given A123 a reprieve, but congressional Republicans swiftly cast doubt on it.
“Billions of U.S. taxpayer dollars have flowed to foreign companies through the Recovery Act, and we are concerned that the recent announcement could lead to even more taxpayer dollars going overseas,” Senators John Thune and Chuck Grassley wrote in a letter to Secretary of Energy Steven Chu.
Wanxiang eventually rescinded the offer.
The Department of Energy offered A123 two more stays of execution, one when it extended the timeline on its $249 million grant by two years and another when it sent an interim check from that same grant for $946,830. It arrived on October 16, 2012, the same day A123 declared bankruptcy.
The U.S. government put all this money in, but they didn’t get any benefit out of that… They basically gave China a gift.
Mike Grandinetti, a fellow at the University of California, Berkeley’s Sutardja Center for Engineering and Technology
The next day, Johnson Controls, the American conglomerate, put up a stalking horse bid. But in the final bankruptcy auction in December, Johnson Controls and its joint bidder, NEC, lost by $5 million. The winner was Wanxiang, which scooped up A123 for $256.6 million, just over half of what it had offered to invest months before.
Members of Congress again expressed concerns about the sale. They pressed the Committee on Foreign Investment in the U.S., or CFIUS, a federal inter-agency group that reviews takeovers of American firms, to block the deal. But after Wanxiang agreed to sell off A123’s government business for $2.25 million, and after it agreed to keep the two Michigan plants running, CFIUS acquiesced.
“The U.S. government put all this money in, but they didn’t get any benefit out of that,” says Mike Grandinetti, a fellow at the University of California, Berkeley’s Sutardja Center for Engineering and Technology. “They basically gave China a gift.”
In the more than eight years since, the effects of Wanxiang’s purchase of A123 have rippled through policy circles. At the time, CFIUS’s remit revolved around national security concerns, and once Wanxiang solved that problem, there was little the committee could do. In part due to the A123 case, Congress updated CFIUS’s scope in 2018, giving it the power to block transactions involving “emerging and foundational technologies” — including batteries.
Today, both of A123’s Michigan plants, which were built using $133 million from the government’s $249 million grant, have been shuttered and their equipment has been put up for sale. A123, however, is still revered for its quality cells, and with its patents and technologies, Wanxiang has thrived.
Wanxiang, for instance, sold off A123’s grid storage business to NEC of Japan for $100 million in 2014. And the LFP technology originally developed by A123 is now used by Wanxiang in powerful starter batteries for mild-hybrid vehicles and stop-start systems in gas-powered cars and trucks. Also, a Wanxiang subsidiary now supplies Formula 1 and endurance racing teams with batteries for their cars’ hybrid systems. And more recently, the Chinese company inked a deal with Volkswagen to supply the automaker’s Chinese operations with more than $1.4 billion worth of batteries.
And Wanxiang has kept an eye on potential competitors as well: In 2017, it invested in a small Colorado battery startup that had licensed a promising technology from the U.S. government: Solid Power.
‘TEN YEARS TOO EARLY’
Apart from the Rocky Mountain backdrop in the distance, Solid Power’s low-slung factory looks similar to any other battery factory. Inside, vats of chemicals are mixed into a slurry and coated onto thin sheets of metal. The chemicals are pressed to the surface by a series of rollers that resemble a miniature printing press, and toward the end of the line, the prepared sheets are cut into pieces, stacked, and pressed into a pouch-type casing.
At this point, other manufacturers would inject the pouch with a fluid known as an electrolyte, which helps ions move across the battery during use. But Solid Power’s innovation allows it to simply seal up the casing and move on to the next one.
“They’re fundamentally still a lithium-ion battery,” says Caspar Rawles, head of price assessments at Benchmark Mineral Intelligence, “but a lot of development has gone into the solid electrolyte layer — the material that goes into the battery — rather than a liquid electrolyte, which is used today. They have spent a huge amount of time developing that material. That’s really the secret sauce.”
One issue for A123 was they were ten years too early.
Logan Goldie-Scot, head of clean power research at BloombergNEF
Since its founding in 2012 by Campbell and two others — University of Colorado engineering professors Sehee Lee and Conrad Stoldt — the company has grown to a 60-person team. After years of working with the professors’ original technology, Solid Power licensed patents for a lithium-sulfur chemistry from the U.S. Department of Energy’s Oak Ridge National Laboratory in 2016. Those patents then allowed them to develop the solid electrolyte — the “secret sauce” — used in their cells today.

Credit: Solid Power
The U.S. government has also given Solid Power $31 million in grants and contracts, and the company has raised around $70 million in funding from a range of investors and partners, including major automakers Ford, BMW, and Hyundai, as well as battery makers like Samsung and A123 Systems, now part of the Chinese firm Wanxiang.
Campbell says A123’s investment came in before CFIUS regulations tightened, and although the now-Chinese owned company has rights as observers — the scope of which Solid Power was unwilling to divulge — it does not have a board seat.
That an American battery company — even one that licensed government technology — has Chinese investors is, perhaps, unsurprising. “There are political tensions at the moment between China and the U.S., but it’s hard to get away from China in the battery supply chain,” says Rawles. “China is the center of the world.”
Still, most observers say U.S. companies like Solid Power and its competitors — including QuantumScape (which is developing a semi-solid-state) and Ionic Materials (which has its own solid electrolyte) — likely won’t end up like A123. In both the geopolitical world and the battery world, things have changed.
First, demand for batteries isn’t much of an issue, says Sam Jaffe, managing director of Cairn Energy Research Advisors. “There is a spectacular shortage of batteries right now, especially in North America because we don’t have manufacturing capacity,” he says. Tesla’s Elon Musk, for example, often opines about the dearth of batteries and just recently blamed the lack of battery production for the delay of the company’s semi-truck. President Biden even stepped into a recent U.S. International Trade Council dispute between SK Innovation and LG Chem, successfully pressing the companies to settle so SK could continue building a $2.6 billion battery factory in Georgia.
The current battery shortage could intensify if the Biden administration sweetens incentives for consumers to buy electric vehicles, as it’s rumored to do. With EV sales expected to grow, strong demand will benefit startups like Solid Power in the same way weak demand hobbled A123.
“One issue for A123 was they were 10 years too early,” says Logan Goldie-Scot, head of clean power research at BloombergNEF. “Investors setting up manufacturing want long-term signals; they want sustained demand for their product.”

Credit: Solid Power
The power of clear demand signals to establish manufacturing, analysts note, is most evident in the European Union’s transformation over the past few years. When the EU tightened fuel economy standards in 2015 and again in 2020, it sent a signal to foreign companies that EV sales would follow. Since batteries are heavy and burdensome to ship, Asian companies like Samsung, LG, and CATL rushed to set up battery factories in Hungary, Poland, and Germany to supply European automakers.
“The EU has gone from zero to hero in three years,” says Rawles.
Last year, China and Europe each racked up over 40 percent of global EV sales, according to Canalys. (The U.S., for comparison, had just 2.4 percent.) And now European battery companies, like British Volt and Northvolt, stand to benefit from the supply chains that foreign companies established.
For its part, the Biden administration seems to acknowledge the challenge of creating an entire supply chain, including sourcing raw materials and making component parts. The White House says the infrastructure plan “will enable automakers to spur domestic supply chains from raw materials to parts, retool factories to compete globally, and support American workers to make batteries and EVs.”
While the details of how, exactly, the plan will do that are currently unknown, Ambrose, the transportation researcher, says the Biden administration should focus on the production of key high-value components, such as cathodes. There’s more value in that kind of manufacturing than in mining raw materials, Ambrose says, and those factories can adapt as technologies and raw materials change.
“That’s a key link in the value chain that we’d want to see domestically,” says Ambrose.
Liu Ping, who set up the ARPA-E program that gave Solid Power an early boost, suggests even more tactical approaches could bear fruit. Most battery startups fail when they have to produce hundreds of cells to send to customers for validation tests, he says.
“In Asia, this is not a problem because there is so much manufacturing capacity, so much expertise in scaling up,” says Liu. “They may or may not be good at coming up with brand new ideas, but they sure know how to make something into a real battery in no time at all.”
There’s going to be a big market for electric vehicles — we’ve been predicting that for a long time, there’s no doubt about that. The question the U.S. should be asking itself is, what is your role in that?
Ikhlaq Sidhu, faculty director of University of California, Berkeley’s Sutardja Center for Engineering and Technology
Young companies, he says, including the one he recently founded, would benefit from industry-wide pilot manufacturing plants that could be rented by various startups. Similar, he says, to the way much of the semiconductor industry outsources manufacturing to “fabs.”
“There is tremendous innovation in the academic world in the U.S.,” says Liu. “We’re still the best at coming up with innovations that will transform battery technology. But most companies don’t make it as far as Solid Power has. A lot are gone before you ever heard of them and not because of their innovation, but because they don’t have the infrastructure, the equipment.”
Creating and implementing these strategies will probably take time, though, and startups like Solid Power would prefer not to wait to see how it shakes out. The company’s strategy seems to acknowledge that the U.S. isn’t ready to support domestic, full-scale battery manufacturers yet.
“Our model really is about, in the long term, becoming a material producer, not necessarily to become a cell producer and compete head-to-head with the likes of Panasonic, CATL, et cetera,” says Campbell, the CEO. “As we get closer and closer to mass production, we’re going to be looking to partner.”
Ultimately, that might be the best way for U.S. battery manufacturers to succeed, both today and in the future. Where countries like China and South Korea have become adept at making stuff, especially things like batteries, which have relatively low margins, the U.S. has been very effective earlier in the process with things like innovation and design, says Ikhlaq Sidhu, faculty director of University of California, Berkeley’s Sutardja Center for Engineering and Technology.
“It’s not in the United States’ interest to manufacture every single thing,” he says. “There’s going to be a big market for electric vehicles — we’ve been predicting that for a long time, there’s no doubt about that. The question the U.S. should be asking itself is, what is your role in that?”
The answer, many observers say, will likely be different than it was during A123’s time — in large part because of A123’s spectacular U.S. failure.
“Many A123 veterans are now the smartest in the industry because they went through that. That’s what is different today,” says Cairn’s Jaffe. “You could make the argument that A123 failed as a company, but sprouted the seeds of the American battery industry.”

Tim De Chant is a journalist and editor and the founder of Future Proof, a publication covering climate and energy. He is a lecturer in MIT’s Graduate Program in Science Writing and has written for Wired, the Chicago Tribune, and NOVA Next, among others. @tdechant