Zach Dell

The truth...

is, though, that the Chinese and the Koreans have been on the bleeding edge of battery chemistry for a long time.

Interestingly, for a long time, it was really just NMC chemistries that were getting built at production scale.

And the Chinese made a bet on LFP much quicker than the Koreans did.

And so now companies like Samsung and SK and LG are trying to catch up with regards to LFP capacity.

And the Chinese companies like Cattle and BYD and Goshen are far ahead in LFP production capacity.

So if you want to buy an LFP battery today, you basically can't do it outside of China.

Now that's changing.

A bunch of companies have gotten started in the US over the last decade to spin up LFP capacity.

And basically all of them have run out of money before getting to production scale.

Obviously, the Northvolt Unraveling has been well-documented now that that's not a US-based company.

Other companies, Arnex Energy, Core, American Battery Factory, there's kind of a graveyard of businesses that have tried to get this kind of manufacturing capacity off the ground.

The reality is building an LFP factory, and I've been to many of them at this point, they're not quite semiconductor complexity, but they're pretty darn close.

So they take billions of dollars and many years to get up to production scale.

And the Chinese are really, really far ahead.

There's some really incredible engineering at the Korean companies, and they're working fast and they're making good progress.

And you're seeing a bunch of JVs with the auto OEMs that are plowing CapEx into the supply chain.

So that's a trend that we benefit really strongly from, which is that all the auto OEMs are investing super heavily in the battery value chain.

That's driving the cost of these cells down.

If you look at the cost curves of LFP cells and NMC cells, they've come down extremely dramatically over the last decade.