How Did China's LFP Batteries Get So Cheap?

[TaxmanHog]

How Did China's LFP Batteries Get So Cheap?

Sponsored

 

[climateguy]

I'd never heard this claim before, i.e. that China didn't have to steal IP for batteries, as it was just handed over to them

(Starting at 11:55) [When] "...key innovations in carbon coating and process technologies were invented... [that] were patented by researchers at universities and public entities in Canada and Europe.

[then, only China was given access to all this for free]

All these patents were then consolidated into a single Swiss entity managing global licensing. According to the IEA, there was a deal made in the 2000s or 2010s that allowed the Chinese battery-makers to use these LFP battery patents for free, but only for their local markets. Everyone else had to negotiate for and pay a license fee. This strange sort of "patent shield" allowed the Chinese to lean into and build up proficiency in LFP. Meanwhile, the rest of the world's EV battery makers pursued non-LFP structures - hesitating at the patent licensing issue. These patents finally expired in 2022.

On one hand, this meant that foreign battery makers can finally access and use the LFP chemistry themselves without worrying about these licensing fees. But anyone trying to do that was starting out massively behind. Because in the years leading up to 2022, the Chinese battery makers had built up immense LFP supply chain proficiency. They had the cell-to-pack innovations, massive economies of scale, materials sourcing, talent pipelines, and more."

 

[chl]

Another story about how China got a jump on implementing cutting edge battery technology.

From an NPR story about the "vanadium redox flow battery":

"...The Chinese company didn't steal this technology. It was given to them — by the U.S. Department of Energy. First in 2017, as part of a sublicense, and later, in 2021, as part of a license transfer. An investigation by NPR and the Northwest News Network found the federal agency allowed the technology and jobs to move overseas, violating its own licensing rules while failing to intervene on behalf of U.S. workers in multiple instances. .... It took six years and more than 15 million taxpayer dollars for the scientists to uncover what they believed was the perfect vanadium battery recipe. Others had made similar batteries with vanadium, but this mix was twice as powerful and did not appear to degrade the way cellphone batteries or even car batteries do. The researchers found the batteries capable of charging and recharging for as long as 30 years. ..."



Note these free licenses and transfers of technology occurred initially under the 1st Trump administration's DOE. The Biden administration sought to tighten the rules after they took office. One has to wonder if there was some kind of quid pro quo with Chinese yen and a high ranking US executive for this essentially illegal transfer of technology to China.

https://www.cascadepbs.org/news/2022/09/wa-battery-maker-faces-accusations-providing-us-tech-china

 

[chl]

I'd never heard this claim before, i.e. that China didn't have to steal IP for batteries, as it was just handed over to them

(Starting at 11:55) [When] "...key innovations in carbon coating and process technologies were invented... [that] were patented by researchers at universities and public entities in Canada and Europe.

[then, only China was given access to all this for free]

All these patents were then consolidated into a single Swiss entity managing global licensing. According to the IEA, there was a deal made in the 2000s or 2010s that allowed the Chinese battery-makers to use these LFP battery patents for free, but only for their local markets. Everyone else had to negotiate for and pay a license fee. This strange sort of "patent shield" allowed the Chinese to lean into and build up proficiency in LFP. Meanwhile, the rest of the world's EV battery makers pursued non-LFP structures - hesitating at the patent licensing issue. These patents finally expired in 2022.

On one hand, this meant that foreign battery makers can finally access and use the LFP chemistry themselves without worrying about these licensing fees. But anyone trying to do that was starting out massively behind. Because in the years leading up to 2022, the Chinese battery makers had built up immense LFP supply chain proficiency. They had the cell-to-pack innovations, massive economies of scale, materials sourcing, talent pipelines, and more."

I don't know for sure, but it could be because China has the natural resources (minerals) and supply chain to actually implement the patented technology. If the patent expires in 2022 that means it was likely issued 17 years earlier in 2005. If no US company or investor wanted to or had the ability to bring the technology to fruition in all those years, then giving it to the Chinese to do it would make sense.

The vast majority of patents never result in a product being made.

After I left the patent office and went into private practice as a patent attorney, I heard people saying that there was a big influx of patents being filed in the US from Chinese inventors.

Now China leads the rest of the world in patent filings by a lot, surpassing the US recently.

https://www.axios.com/2024/03/01/china-us-patents-science-tech

China is going to dominate the EV market everywhere in the rest of the world.

If the US was really serious and cared more about slowing down climate change we (the Biden administration) would not have kept and raised huge tariffs on Chinese solar and EVs which has effectively shut them out for US consumers to buy. Protectionist policies always backfire and end up hurting everyone.

Sponsored