Why is the World So Short of Computer Chips? What Will This Mean Going Forward?

Carmakers from Tokyo to Detroit are slashing production. PlayStations are getting harder to find in stores. Even aluminum producers warn of a potential downturn ahead. All have one thing in common: an abrupt and cascading global shortage of semiconductors.

Semiconductors, also known as integrated circuits or more commonly just chips, may be the tiniest yet most exacting product ever manufactured on a global scale. That level of cost and difficulty has fostered a growing worldwide dependence on two Asian powerhouses — Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. — a reliance exacerbated by the pandemic and rising U.S.-China tensions even before the current deficit. Hundreds of billions will be spent by governments and corporations in a plethora of sectors in coming years on a “chip race” with geopolitical as well as economic implications.

1. Why are there shortages of chips?

A lot, but not all, of the disruption can be tied to the pandemic. Here are some factors:

* The stay-at-home era caused by the coronavirus pushed demand beyond levels projected by chipmakers. Lockdowns spurred growth in sales of laptops to their highest in a decade, along with home networking gear and monitors, as office work moved out of the office, and of Chromebooks as school left school. Sales also jumped for home appliances from TVs to air purifiers, all of which now come with customized chips. Even webcams like the Razer Kiyo grew hard to find after video services boomed for work and entertainment.

* Uncertainties caused by the pandemic led to sharp swings in orders. TSMC executives said on its two most recent earnings calls that customers have been accumulating more inventory than normal to hedge against uncertainties. Automakers that cut back drastically in the early days of the outbreak underestimated how quickly sales would rebound. They rushed late last year to re-up orders, only to get turned away because chipmakers are stretched to the max supplying smartphone giants like Apple Inc. 

* Stockpiling: PC makers began warning about tight supply of semiconductors early in 2020. Then by mid-year, Huawei Technologies Co. — a major smartphone and networking gear maker — began hoarding components to ensure its survival from U.S. sanctions that threatened to cut it off from its primary suppliers of chips. Other Chinese companies followed suit, and the country’s imports of chips climbed to almost $380 billion in 2020 — making up almost a fifth of the country’s overall imports for the year.

2. What’s the upshot?

Some businesses are getting whacked. Chip shortages are expected to wipe out $61 billion of sales for automakers alone and delay the production of a million vehicles in the March quarter, but the fallout now threatens to hit the much larger electronics industry. Not only cars but possibly a broad spectrum of chip-heavy products from phones to gaming consoles could see shortages or price hikes. NXP Semiconductors NV and Infineon Technologies AG both indicated that supply constraints have spilled beyond Automotives.

3. Who are the big players?

Advanced logic chips grab the headlines as the most expensive and complex pieces of silicon that give computers and smartphones their intelligence. When you hear about Apple or Qualcomm or Nvidia chips, those companies are actually just the designers of the semiconductors, which are made in factories called foundries.

* TSMC leads the industry in production capabilities and everyone now beats a path to its doorstep to get the best chips made in its Taiwan facilities. The company’s share of the global foundry market is larger than its next three competitors combined.

* Samsung, overall a bigger chipmaker because of its dominance in memory chips, is trying to muscle in on that goldmine and is improving its production technology to be widely rated as the best option behind TSMC. Companies such as Qualcomm Inc. and Nvidia Corp. have increasingly turned to Samsung.

* Intel Corp., the last U.S. champion in the field, still has more revenue than any other chipmaker but its market is heavily concentrated in computer processors and production delays have made it vulnerable to rival designers that’re taking share using TSMC.

* TSMC and Samsung do face smaller competitors including Global foundries, China’s Semiconductor Manufacturing International Corp. and Taiwan’s United Microelectronics Corp. But those rivals are at least two to three generations behind TSMC’s technology.

4. What’s happening in this race?

The two Asian giants are spending heavily to cement their dominance: TSMC raised its envisioned capital expenditure for 2021 to as much as $28 billion from a record $17 billion a year prior, while Samsung is earmarking about $116 billion on a decade-long project to catch its Taiwanese arch-rival. But China is pushing hard to catch up. It’s aimed for years to reduce its reliance on US. technology, particularly in chips. The Trump administration’s efforts to curb China’s technology giants — by barring Huawei’s access to chips and and discouraging American investment in scores of players like SMIC and Xiaomi Corp. — crystallized those fears. Beijing has enshrined chipmaking among its biggest priorities in its national economic blueprints, and has pledged to spend more than $140 billion on building a world-class domestic semiconductor sector. But it has a long way to go. For instance, in the automotive sector, China has developed a large number of chip design companies in recent years but they’re still not able to make the advanced chips needed for today’s cars.

5. How about elsewhere?

Given the difficulty in developing sophisticated chipmaking capabilities, governments from Brussels to Washington are dangling incentives to anyone who will build or expand advanced facilities in their backyards. The White House is expected to sign an executive order directing a government-wide supply chain review for critical goods in the coming weeks, with the chip shortage a central concern behind the probe. The Biden administration, which is putting together a longer-term plan for chip supply, will play a key role in formulating tax incentives for a proposed $12 billion TSMC plant in Arizona and another costlier one Samsung is eyeing, possibly in Texas. And the European Union is considering building an advanced semiconductor factory in Europe with potential assistance from TSMC and Samsung. Governments including China are now considering various ways to prop up local companies.

6. Why is it so hard to compete on chips?

Chipmaking is a high-volume business that calls for incredible precision, along with making huge long-term bets in a field subject to rapid change. Famous companies such as Texas Instruments Inc., International Business Machines Corp. and Motorola have exited or given up trying to keep up with the most advanced chip manufacturing. Today most companies focus on design. With only three companies — TSMC, Samsung and Intel — still making advanced logic chips, and the American company struggling to keep up, a crucial skillset has become concentrated in the hands of just a few. Chips are made in plants that cost billions to build and equip. They have to run flat-out 24/7 to recoup their investment. But it’s not just that. Yield, or the amount of good chips per batch, determines success or failure. It takes years of knowhow and experience to get a yield of 90% out of the complex photolithographic process used to make chips. Imagine Ford being happy to throw away one car in ten. But chipmakers, who make millions of chips in a process that takes three to four months to complete, are successful if they’re hitting that mark. A foundry gobbles up enormous amounts of water and electricity and is vulnerable to even the tiniest disruptions (whether from dust particles or distant earthquakes). In 2019, TSMC shipped about 10 million advanced 12-inch wafers.

7. Who benefits from the chip wars?

Even small improvements in semiconductors can deliver substantial savings in energy and cost when multiplied across the full scale of something like Amazon Web Services. As 5G mobile networks proliferate and push up demand for data-heavy video and game streaming and more people work from home, the need for newer, more power-efficient silicon is only going to grow. One way to measure the sophistication of a chip is so-called line-widths, or the distance between circuits. The current standard in advanced chips is 5 nanometers or billionths of a meter, about a hundred-thousandth of the width of a strand of hair, although TSMC and Samsung are working on 3nm mass production by 2022. Along with 5G, the rise of artificial intelligence is another force pushing chipmakers to innovate: AI relies on massive data processing. More efficient or power-saving designs is also becoming a critical consideration given the so-called Internet of Things — a universe of smart or connected devices from the beefiest phones to the most common fridges and washing machines — is expected to swell usage of chips exponentially in coming years.

8. How does Taiwan fit into all this?

The island democracy has emerged as an industry linchpin thanks to TSMC and an entire ecosystem geared toward high-end electronics. U.S., European and Japanese automakers are lobbying their governments for help navigating the chip crunch, with Taiwan and TSMC being asked to step in. Those pleas illustrate how TSMC’s chip-making skills have handed Taiwan political and economic leverage in a world where technology is being enlisted in the great power rivalry between the U.S. and China — a standoff unlikely to ease under the Biden administration.

The Reference Shelf

• A deep dive on how the world got so dependent on Taiwan for its chips.
• More Quick Takes on the internet of things, why building an electric car is so expensive, and Taiwan’s tightrope.
• Bloomberg Opinion’s Anjani Trivedi on Toyota’s chip surplus, Alex Webb warns about a European white elephant chip plant, and Tim Culpan on Samsung’s weak spots.
• The Economist sees the geopolitical struggle over chipmaking entering a new phase.
• Biden’s team is pledging a 100-day review focused on choke points in supply chains.

Bloomberg: Debby Wu; Sohee Kim; and Ian King 

Hydrogen projects worth $300 billion are dropping green H2 prices fast

 

 

Key hydrogen projects that have been announced globally – Hydrogen Council

 

A new Hydrogen Council report sheds some light on Hydrogen’s rise as a green fuel source. More than 30 countries now have a national H2 strategy and budget in place, and there are 228 projects in the pipeline on both the production and usage sides.

Europe is leading the way, with 126 projects announced to date, followed by Asia with 46, Oceania with 24 and North America with 19. In terms of gigawatt-scale H2 production projects, there are 17 projects planned, with the largest in Europe, Australia, the Middle East and Chile.

Overall, projects seem fairly well balanced between hydrogen production and end-use applications, with a smaller number focusing on distribution.

European projects are balanced between production and usage initiatives, while Korea and Japan are developing much more on the usage side, for both transport and industrial applications. Australia and the Middle East are more active on the supply side, working to position themselves as hydrogen exporters.

The majority of these projects – some 75 percent, it should be noted – have been announced but do not yet have funding committed. This figure includes budgets committed by governments for spending, for which no project has yet been identified.

Only US$45 billion worth of projects are at the “mature” stage, having reached the feasibility study or engineering and design stage, and $38 billion are at the “realized” stage, with a final investment decision made, construction started, or already operational. 

Hydrogen production projections for 2030 have leapt up in the last year. The previous report estimated that 2.3 million tons will be produced annually by 2030, and this report revises that figure up to 6.7 million tons. To put that another way, two-thirds of the global hydrogen production expected to be operational in 2030 has been announced in the last year.

Government decarbonization initiatives are a huge driving force behind the hydrogen wave, with some $70 billion committed globally. Carbon pricing is helping, with some 80 percent of global GDP covered by some kind of CO2 pricing mechanism. 

Japan and Korea, as you’d expect, are leading the charge on fuel cell vehicles, and globally the report projects some 4.5 million FCVs on the road by 2030, with 10,500 hydrogen fuel stations targeted to meet that demand.

Green hydrogen production prices are dropping faster than previously expected, with optimal operations beginning to achieve price parity by 2030 even without carbon taxes on gray hydrogen  – Hydrogen Council

There’s good news too in terms of production costs, with prices for green, renewable hydrogen falling faster than expected. Partially, this is because electrolyzer supply chains are ramping up faster than expected, bringing the price of electrolyzers down 30-50 percent lower than anticipated.

Other factors include a declining cost of energy, with renewable energy costs revised down by 15 percent, and green hydrogen production companies figuring out their mix of renewable inputs more effectively to keep the hydrolyzers up and running longer.

So while “gray” hydrogen costs are expected to remain stable at around $1.59 per kg, green hydrogen is expected to drop from its current price around $4-5.50 per kilogram to hit an average of $1.50 by 2050, with green supply potentially becoming cheaper than gray hydrogen in optimal areas as soon as 2030. Low-carbon hydrogen production will start coming online around 2025, with prices sitting roughly between the two. Adding carbon taxes to the gray production could bring green hydrogen to price parity by 2030. 

Hydrogen transport is going to become a big deal, with major demand centers likely to look at imports. The cheapest way to do it for short to medium distances is through retrofitted pipelines, provided you’ve got a guaranteed demand to fill.

If demand fluctuates, trucks become more attractive. For longer distances, some routes have undersea pipelines that could be used, but much of the rest will have to be done using ships, which will add around $1-2 to the cost per kilogram.

Long-range overland pipelines also look like an interesting opportunity, with the report pointing out that hydrogen pipelines can transport 10 times more energy than a long-distance electricity transmission line at one eighth the cost. And existing pipelines can be retrofitted to handle hydrogen to vastly reduce the cost of pipeline projects.

The report makes further long-term projections for hydrogen vehicles, trucks, ships and aircraft. In aviation, the report projects hydrogen will become a cost-effective way to de-carbonize short and medium range flights (sub-10,000 km, or 6.200 mi) by around 2040, but there’ll need to be significant advances in storage to make it practical for longer range flights.

The report should not be taken as gospel, having been written by the H2 industry itself, but it makes for some interesting reading if you’re interested in the development of the clean energy economy.

Source: Hydrogen Council

Why all the Hydrogen Hoopla?

With so much attention focused on reducing greenhouse gas emissions across so many sectors, hydrogen has suddenly become a hot topic in energy. (Business Wire)

Go back to chemistry class. Remember hydrogen? It’s the simplest element on earth, consisting of one proton and one electron.

Well, humble hydrogen has suddenly become the hottest topic in energy circles around the globe.

That’s because hydrogen’s simplicity and versatility can be applied to reduce greenhouse gas emissions across an ever-growing number of manufacturing and power segments, while also advancing the adoption and distribution of renewable energy.

The relatively high cost of adding hydrogen into the value chain has some skeptics questioning just how extensive its role will be but supporters say economies of scale — combined with a lot of government spending — will lead to an energy system at least partially infused with hydrogen.

“It’s just starting to get the attention of people like investors and other industrial players,” said Dave Edwards, a hydrogen energy advocate who works for the U.S. arm of the French multinational Air Liquide. “The average citizen doesn’t think of hydrogen in their energy future yet, although it absolutely will be playing a role.”

What hydrogen can do

Unlike, say, natural gas or solar generation, hydrogen is not a source of energy. Rather, it is an energy carrier that can store and deliver usable energy.

When mixed with oxygen in a fuel cell, hydrogen burns clean. And, crucially, the element can be applied across a variety of sectors.

For example, manufacturing industries such as steel and cement require tremendous amounts of heat to make their products. Hydrogen can burn hot enough to run a blast furnace. The element can be injected into the natural gas that is used as a feedstock at those factories, resulting in a smaller carbon footprint.

Hydrogen can also be applied to help decarbonize the transportation sector, which accounts for more than half of California’s carbon pollution.

A hydrogen fuel cell vehicle combines hydrogen and oxygen to produce electricity, which runs a motor. To fuel the car, a driver pulls up to a pump similar to a conventional gasoline station and pumps hydrogen into the tank. It takes about three to five minutes to fill up and the only emissions are a few drops of water that come out of the tailpipe.

About 9,000 hydrogen fuel cell passenger vehicles — such as the Toyota Mirai and the Honda Clarity — are on the roads in California, and state policymakers want to go from about 40 hydrogen fueling stations currently in use across the state to 200 in the next four years.

But with the electric vehicle segment making strides, a more immediate opportunity for hydrogen may be found in larger vehicles. Buses and medium- and heavy-duty trucks powered by fuel cells don’t need the heavier battery systems required in electric vehicles and they perform well in cold weather. Hydrogen fuel cells can also be used to power forklifts and movers at sites like warehouses, shipping sites and ports, replacing gasoline and diesel.

Hydrogen is also seen as a spur to develop energy storage sites.

Solar production in California is plentiful during the day when the sun is out but disappears after the sun sets. When there is an oversupply of solar during the day, grid managers sometimes have to curtail solar generation or send the excess to neighboring states.

Energy storage systems save up the excess generation and then discharge the electricity when demand is high on the grid, such as between 4 p.m. and 9 p.m. when power is more expensive.

Is it safe?

For some, the mention of the word “hydrogen” brings to mind the Hindenburg disaster in 1937 that killed 36 people. Hydrogen is indeed highly volatile and flammable but the element’s supporters say it has an excellent safety record.

The U.S. Department of Energy says to prevent ignitions, “adequate ventilation and leak detection are important elements in the design of safe hydrogen systems.” Since hydrogen burns with a nearly invisible flame, special flame detectors are required.

In fuel cell vehicles, the hydrogen is stored in tanks with thick walls that have a liner that’s wrapped inside a carbon-fiber shell and sensors are placed around the tank to detect leaks. The pressurized tanks have passed repeated crash tests. Toyota said the fuel tanks in its Mirai even withstood being “shot at with high-velocity weapons.” BMW last fall said an uncontrolled reaction of hydrogen and oxygen while driving a fuel cell vehicle is “virtually impossible.” Edmunds.com has called hydrogen fuel as safe as gasoline.

For decades, the element has been produced, stored and transported. Oil refineries, for example, use steam methane reformers to make hydrogen so they can remove impurities like sulfur from petroleum and diesel fuels.

As for the Hindenburg, the cause of the fire above Lakehurst, N.J. is still a matter of intense debate. A recent explanation points the finger at a hydrogen gas leak ignited by an electrostatic discharge.
Others insist hydrogen did not cause the fire. Theories include everything from a coating on the airship’s exterior that proved flammable to an internal puncture to sabotage.

Battery storage helps but it is designed to be used on a short-term, hour-to-hour, basis. Hydrogen, however, can store energy for months at a time.

“If you want to store electricity for a long period of time, battery storage gets more and expensive,” Paul Browning, CEO of Mitsubishi Hitachi Power Systems Americas, told CNBC. “Whereas with hydrogen, we can store it underground in large salt domes for long periods of time at very low cost.”

That’s exactly what Mitsubishi is doing with fuel storage company Magnum Development, at a power station in Delta, Utah, that’s operated by the Los Angeles Department of Water and Power. The stored electricity will be discharged to power gas turbines at the power plant.

When the project starts in 2025, Browning said the turbines will use 30 percent hydrogen and 70 natural gas instead of coal. By 2045, the plan is to use 100 percent hydrogen, fed by renewable sources.

Hydrogen also can be applied to residential and commercial power. Work is being done to blend the element into the natural gas transmission and distribution system.

Combined Heat and Power, or CHP, systems can lead to 35 percent to 50 percent reductions in emissions by conventional means and the U.S. Department of Energy has estimated reductions of more than 80 percent if hydrogen from low- or zero-carbon sources are used in a fuel cell.

How do you make it?

Since hydrogen does not typically exist by itself, it must be produced from compounds that contain it. The element can be produced using a wide range of resources that use different production methods.

Given the emphasis policymakers have placed on clean energy, most of the attention has focused on making “blue hydrogen” and “green hydrogen.”

In blue hydrogen, natural gas — which contains hydrogen as part of natural gas’s methane compound — is commonly put into a steam methane reformer. The reformer isolates the hydrogen but leaves behind carbon dioxide, or CO2. Since CO2 is a greenhouse gas, it is then captured and stored instead of getting released into the atmosphere. It’s estimated the process could cut the amount of carbon produced in half.

In green hydrogen, the element is produced using renewable energy sources, such as wind, solar, hydropower or even biomass. One process getting substantial attention is electrolysis, in which electricity from carbon-free sources is sent into an electrolyzer and water — made up of hydrogen and oxygen, H2O — is pumped into it. Out comes hydrogen and no carbon emissions are released, hence the term “green hydrogen.”

Hurdles, promoters and skeptics

But the process used to produce hydrogen is expensive and the cleaner the version, the more costly it gets. Hydrogen now accounts for less than 5 percent of the world’s energy supply, so to build and expand its reach will be expensive.

Keen to meet its climate goal of reducing greenhouse gas emissions 55 percent by 2030, the European Union has taken the early lead in promoting hydrogen. Last summer, the EU produced a roadmap that called for spending up to $569 billion (470 billion euros) in green hydrogen investments by 2050.

President Joe Biden’s $2 trillion plan to tackle climate change includes hydrogen but no specific dollar figure was attached to it in his clean energy proposal that was released on the campaign trail.

Hydrogen’s advocates are counting on costs coming down as the hydrogen becomes more ubiquitous — similar to the economies of scale that have led to steep declines in the costs of solar, wind and batteries. There are certainly no guarantees that hydrogen can duplicate that but analysts at IHS Markit have predicted the production of green hydrogen could become cost competitive in nine years.

On the infrastructure side, there are issues with hydrogen’s compatibility with existing pipes in the natural gas system. When exposed to hydrogen over time, some types of steel pipes can become brittle and crack.

San Diego Gas & Electric and Southern California Gas have partnered with the National Fuel Cell Research Center at UC Irvine on a blending program in which hydrogen will be injected into plastic pipes to see how it performs. The initial blend level will be 1 percent and may increase to 20 percent.

“Steel pipes don’t do well; plastic does a lot better,” said Kevin Sagara, group president at Sempra Energy, the parent company of SDG&E and SoCalGas. “So we’ll start with plastic, see how that goes and then slowly scale it up to other types of pipe.”

The program is one of seven hydrogen projects Sempra companies are taking part in. Earlier this month, SoCalGas announced it will spend $1.3 million to fund the development of hydrogen refueling stations at ports and fuel cells for marine vessels and locomotives.

California recently set a mandate to derive 100 percent of its electricity from carbon-free sources by 2045 but even though Sempra touts owning the largest natural gas franchise in the Western Hemisphere, Sagara said the Fortune 500 company is “all in” on hydrogen.

“We want to lead in this area,” Sagara said. “Our grid will be the backbone for not only continuing this path of electrification but then delivering renewable electricity to make the clean molecules like hydrogen to decarbonize those other sectors” of the energy economy.

Ever versatile, hydrogen can also be liquefied, which can play into the millions of dollars Sempra has invested in liquefied natural gas, or LNG, facilities. “You could see a big hydrogen hub down in the Gulf by Texas, where there’s ample storage, lots of low-cost renewables — both solar and wind,” Sagara said. “It’s one of the best places to make hydrogen.”

Talk like that riles Matt Vespa, staff attorney of the environmental group EarthJustice, who says fossil fuel companies are latching onto hydrogen as a lifeline.

“I think there’s this broader play by the gas industry to suggest there’s some Holy Grail that will allow us to keep the gas system running as it currently does, just with a different fuel,” Vespa said.

For one, he’s very skeptical that hydrogen can be safely injected into gas pipelines to a degree where it makes a substantial environmental improvement. “There’s really not a lot you could do with existing pipeline structure without having to completely replace the pipelines and appliances that currently run on gas,” Vespa said.

Many environmentalists want resources spent on green hydrogen projects that use electrolyzers, not on blue hydrogen that uses natural gas or other fossil fuels as a feedstock.

“Let’s concentrate on that and also target the applications where (hydrogen) has the most greenhouse gas benefit,” Vespa said.

At the California Legislature, Sen. Nancy Skinner, D-Berkeley, has introduced Senate Bill 18 that would direct state agencies to designate green hydrogen as a key energy source for all renewable power uses and long-term storage to help propel investment and technology.

When she introduced the bill, Skinner called hydrogen “the only renewable energy source that has the potential to decarbonize all aspects of our economy. To put it simply: We might not get to a carbon-free world without it.”

Globally, investments in hydrogen are expected to grow to more than $700 million in the next two years and hardly a week goes by without news of another hydrogen investment, initiative or research program.

Air Liquide, which has been in the hydrogen business for 50 years, is constructing a $150 million plant near Las Vegas that will turn biogas from organic waste into hydrogen and then sell it in California to power hydrogen fuel cell vehicles, forklifts, as well as other applications.

Last month, the company announced plans to build the world’s largest electrolyzer, using hydroelectricity in Quebec to produce hydrogen.

“Does hydrogen ever fully replace gasoline, diesel and natural gas? It’ll play its part in replacing those, without a doubt,” said Edwards of Air Liquide. “You’ll see it as a transportation fuel, as a home fuel, as an industrial fuel. You’ll see it in all of these places over time and 50 years from now, I think it will be very common across all those sectors.”

By Rob Nikolewski The San Diego Union Tribune

U.S. Lawmakers “Pedal” Tax Credits For E-bikes

Have you heard the big news out of Washington, D.C., this week? No, not that news …

We’re talking about the Electric Bicycle Incentive Kickstart for the Environment Act, also known as the EBIKE Act (clever, right?), that was proposed Tuesday by U.S. House of Representatives co-sponsors Earl Blumenauer (Oregon) and Jimmy Panetta (California).

If passed, this legislation would provide a tax credit of 30 percent off (up to $1,500) a new electric bike priced at under $8,000. If you’re one of the many Americans who end up getting money back from the IRS around tax time, this could add to your refund. If you’re eyeing a new Rad model, that’s a potential average credit of $419 in your pocket.

In a statement, Panetta said that this proposal is rooted in the environmental benefits that come from more people jumping on an ebike rather than driving a car.

“Ebikes are not just a fad for a select few, they are a legitimate and practical form of transportation that can help reduce our carbon emission,” the Congressman explained. “By incentivizing the use of electric bicycles to replace car trips through a consumer tax credit, we can not only encourage more Americans to transition to greener modes of transportation, but also help fight the climate crisis.”

The legislation comes on the heels of other bicycle-friendly bills put forward by Blumenauer, the Co-Chair of the Congressional Bike Caucus, including some that would strengthen the nation’s cycling infrastructure and expand tax credits for commuters who bike to work.

“One of the few positive developments of the last year has been the surge in biking. Communities large and small are driving a bike boom,” Blumenauer said in a statement. “Notably, electric bicycles are expanding the range of people who can participate, making bike commuting even easier.”

Our mission from day one has been to revolutionize the world of mobility, and seeing concrete legislative action that’ll motivate more people to turn to ebikes is a surefire sign we’re on the right path.

But like so many bills floated in the nation’s capital, the EBIKE Act won’t pass without a few riders (some legislative humor for ya). In this case, that means Rad riders like you!

If you want to see a consumer tax credit for new e-bikes, contact your Congressional representative and politely ask them to lend their support. Find Your Rep!

And keep an eye on this issue. We’re not counting on seeing this passed by peak riding season and there’s a long road ahead, including making it to the Senate!

Lithium-ion batteries: Does the SK Innovation import ban by the USITC threaten North America’s Lithium-ion battery supply for an emerging and growing US EV Market?

Last week, the US International Trade Commission (ITC) proposed a 10-year import ban on South Korean battery producer, SK Innovation, after the conclusion of an IP lawsuit filed by fellow South Korean battery maker, LG Chem. This decision to ban imports essentially cuts material supply from two factories with a combined capacity of almost 22GWh (9.8GWh and 11.7GWh respectively), expected to commence production in 2022 and 2023. However, there is still an option of local material sourcing, though there are limited opportunities to source the required materials, such as active cathode materials domestically within the USA at the scale required.

Roskill View

Roskill’s analysis shows that in 2020, the USA accounted for 1% of the global cathode materials market, which is forecast to increase to around 5% by 2030. The legislation passed by the US ITC, however, maintains SK innovation’s ability to supply battery cells to Volkswagen’s MEB line in North America for two years and Ford’s F-150 for four years, in addition to supplying spare parts for Kia models. Considering sales/production levels of Ford and Volkswagen in USA, Roskill estimates SK Innovation’s potential market size to be 9GWh through to February 2023, falling to 3GWh until February 2025, as potential to supply VW’s requirements expires. As a result, it seems unlikely for SK Innovation to invest further capital and time developing and commissioning its two USA based factories, only to achieve production of battery cells for 2-3 years at 14% planned utilization rate.

SK Innovation announced plans for additional investment in its U.S. battery business, following approval by the SK Innovation Board of Directors to fund the start of construction of a second electric vehicle battery plant in Georgia. READ MORE: SK Innovation Increases Planned Investment in U.S. EV Battery Business to $2.5 Billion (electriccarsreport.com)

The removal of 22GWh of pipeline production capacity would represent a 10% decrease in total giga-factories capacity in North America in 2023, while EV demand in North America is expected to triple in the next five years and requires nearly 75GWh in installed battery capacity. As a result, the ITC’s decision, if not reversed or altered, would negatively impact the supply of Li-ion batteries for EV applications in the USA. The absence of SK Innovation would also place greater reliance on other battery makers in the USA, including Tesla/Panasonic, LG Chem and Envision AESC.

Roskill publishes annual Market Outlook reports for lithium-ion batteries and for a range of commodities across the lithium-ion battery supply chain, including lithium, cobalt, nickel sulphate and graphite. To see our full range of analysis, click here.

Join Roskill’s Lithium Mine to Market Conference to gain insight into the key drivers of the lithium market in 2021 and beyond. To register, click here. 

Contact the authors

This article was written by Egor Prokhodtsev and Kevin Shang. Please get in touch below if you wish to discuss further

Is Automotive Ready for Hydrogen Fuel? Battery Powered Ev’s (BEV) vs Fuel Cell Powered (FCEV) Vehicles – The ‘Green Shift’ is On

With global sustainability legislations shifting the automotive market away from combustion engines, you’ve probably heard somebody utter “my next car will be electric”. If you haven’t, it’s likely you will soon. However, one fuel source doesn’t fit all. Making the green shift in the automotive market will require other sustainable fuel sources. Here Mats W Lundberg, head of sustainability at Sandvik, maps out the road towards hydrogen fuel.

The move away from petrol, diesel and hybrid cars can seem like a shifting target. Despite deadlines for the ban on such vehicles varying by country, we can be sure that global change is happening — and soon. Automakers and drivers alike will need to adjust to a more sustainable future, but how can you decide which resource will power your vehicle?

BEVs versus FCEVs

Toyota’s FCV concept vehicle at the Tokyo Motor Show. The company plans to sell a car based on the FCV “around 2015.”Credit…Keith Tsuji/Getty Images

The automotive sector typically views battery electric vehicles (BEVs) and fuel cell electric vehicles (FCEVs) as competing technologies. While BEVs use electricity stored in a battery that powers the vehicle’s electric motor, FCEVs are powered by fuel cells. 

A fuel cell converts energy stored in molecules into electrical energy. Only oxygen and hydrogen are required to power the fuel cell — the former is readily available in the atmosphere, and the latter can be generated through electrolysis. 

FCEVs can offer better weight economy, effectively powering larger vehicles such as haulage that need to limit unnecessary weight gain. Vehicles that travel long distances or that need to refuel quickly are also more suited to hydrogen. Hydrogen is also a good choice for longer-term storage, since it is a gas that can be stored in tanks and containers, while battery lifetime can suffer if the batteries are not charged and discharged correctly.

However, hydrogen’s sustainable future relies on the production of green hydrogen — produced through electrolysis powered by renewable resources. Currently, around 96 per cent of hydrogen is generated from fossil fuels, so developments must still be made if FCEVs are going to match the feasibility of BEVs.

Despite green hydrogen’s slow development, across Europe many projects are already underway to test and deploy hydrogen buses, taxis and other large vehicles, spurring on investment in re-fueling stations and other infrastructure that will be critical to the roll-out of FCEVs.

For instance, the Joint Initiative for Hydrogen Vehicles across Europe (JIVE) project seeks to deploy 139 new zero emission fuel cell buses and associated re-fueling infrastructure across five European countries. JIVE is co-funded by a 32 million euro grant from the Fuel Cells and Hydrogen Joint Undertaking under the European Union Horizon 2020 framework program for research and innovation. Planned operating sites include the UK, Belgium, Germany, Italy and Denmark.

Elsewhere, British carmaker Jaguar Land Rover is working on a government-sponsored initiative, Project Zeus, that will develop fuel cell technologies for its larger vehicles. While the project remains in early development and the focus is on developing hydrogen powertrain technology, the first concept developed as a result of Project Zeus is likely to be an Evoque-sized SUV.

Getting Prepared

As sustainable and viable hydrogen solutions begin to take off, hydrogen infrastructure will also be key to delivering the fuel source to the automotive industry. Infrastructure doesn’t only involve producing the fuel itself, but also the pipework to transport it, and the development of the fuel cells. A key component in this infrastructure is steel.

High quality steel tubes will be an important requirement for gas companies, who will require flexible solutions to set up re-fueling stations. Sandvik is already working with leading gas and engineering company, Linde, and is supplying its portable Solution in a Container to help the company build re-fueling stations across Europe. The stainless steel alloy tubes transport hydrogen from a storage tank to a dispenser.

Linde’s hydrogen gas is transported under both low and high pressures of up to 900 bars, so Sandvik’s tubes meet strict safety guidelines. The long tubes eliminate the need for conventional fittings, such as cone and thread connections or welding, which normally connect shorter tubes. Removing these connections helps reduce the risk of leakage and station shutdowns.

In addition to hydrogen transport infrastructure, materials technology is also central to fuel cell development. The Sandvik Sanergy® product platform consists of a coated strip for a critical fuel cell stack component. The strip is ready to be pressed to bipolar fuel cell plates, eliminating the costly need for individual plate coating. Today Sandvik has a unique, large-scale production facility in Sandviken, Sweden, and is ready for fuel cell technology to take off.

As we move away from petrol and diesel, many automakers are entering new territory. While BEV technology is well underway, it’s important to recognize that other sustainable options may better suit certain automotive requirements. Hydrogen fuel cells remain a working progress, but ongoing investment and their clear potential make hydrogen a strong contender for the industry’s greener future.

Detecting single molecules and diagnosing diseases with a smartphone

Ludwig-Maximilians-Universitaet (LMU) in Munich researchers show that the light emitted by a single molecule can be detected with a low-cost optical setup. Their prototype could facilitate medical diagnostics.

Biomarkers play a central role in the diagnosis of disease and assessment of its course. Among the markers now in use are genes, proteins, hormones, lipids and other classes of molecules. Biomarkers can be found in the blood, in cerebrospinal fluid, urine and various types of tissues, but most of them have one thing in common: They occur in extremely low concentrations, and are therefore technically challenging to detect and quantify.

Many detection procedures use molecular probes, such as antibodies or short nucleic-acid sequences, which are designed to bind to specific biomarkers. When a probe recognizes and binds to its target, chemical or physical reactions give rise to fluorescence signals. Such methods work well, provided they are sensitive enough to recognize the relevant biomarker in a high percentage of all patients who carry it in their blood. In addition, before such fluorescence-based tests can be used in practice, the biomarkers themselves or their signals must be amplified. The ultimate goal is to enable medical screening to be carried out directly on patients, without having to send the samples to a distant laboratory for analysis.

Molecular antennas amplify fluorescence signals

Philip Tinnefeld, who holds a Chair in Physical Chemistry at LMU, has developed a strategy for determining levels of biomarkers present in low concentrations. He has succeeded in coupling DNA probes to tiny particles of gold or silver. Pairs of particles (‘dimers’) act as nano-antennas that amplify the fluorescence signals. The trick works as follows: Interactions between the nanoparticles and incoming light waves intensify the local electromagnetic fields, and this in turn leads to a massive increase in the amplitude of the fluorescence. In this way, bacteria that contain antibiotic resistance genes and even viruses can be specifically detected.

“DNA-based nano-antennas have been studied for the last few years,” saysKateryna Trofymchuk, joint first author of the study. “But the fabrication of these nanostructures presents challenges.” Philip Tinnefeld’s research group has now succeeded in configuring the components of their nano-antennas more precisely, and in positioning the DNA molecules that serve as capture probes at the site of signal amplification. Together, these modifications enable the fluorescence signal to be more effectively amplified. Furthermore, in the minuscule volume involved, which is on the order of zeptoliters (a zeptoliter equals 10-21of a liter), even more molecules can be captured.

The high degree of positioning control is made possible by DNA nanotechnology, which exploits the structural properties of DNA to guide the assembly of all sorts of nanoscale objects—in extremely large numbers. “In one sample, we can simultaneously produce billions of these nano-antennas, using a procedure that basically consists of pipetting a few solutions together,” says Trofymchuk.

Routine diagnostics on the smartphone

“In the future,” says Viktorija Glembockyte, also joint first author of the publication, “our technology could be utilized for diagnostic tests even in areas in which access to electricity or laboratory equipment is restricted. We have shown that we can directly detect small fragments of DNA in blood serum, using a portable, smartphone-based microscope that runs on a conventional USB power pack to monitor the assay.” Newer smartphones are usually equipped with pretty good cameras. Apart from that, all that’s needed is a laser and a lens—two readily available and cheap components. The LMU researchers used this basic recipe to construct their prototypes.

They went on to demonstrate that DNA fragments that are specific for antibiotic resistance genes in bacteria could be detected by this set-up. But the assay could be easily modified to detect a whole range of interesting target types, such as viruses. Tinnefeld is optimistic: “The past year has shown that there is always a need for new and innovative diagnostic methods, and perhaps our technology can one day contribute to the development of an inexpensive and reliable diagnostic test that can be carried out at home.”

‘Nano Origami’ – Tiny graphene microchips could make your phones and laptops thousands of times faster, say scientists

Researchers unlocked the electronic properties of graphene by folding the material like origami paper.

Graphene strips folded in similar fashion to origami paper could be used to build microchips that are up to 100 times smaller than conventional chips, found physicists – and packing phones and laptops with those tiny chips could significantly boost the performance of our devices. 

New research from the University of Sussex in the UK shows that changing the structure of nanomaterials like graphene can unlock electronic properties and effectively enable the material to act like a transistor.   

The scientists deliberately created kinks in a layer of graphene and found that the material could, as a result, be made to behave like an electronic component. Graphene, and its nano-scale dimensions, could therefore be leveraged to design the smallest microchips yet, which will be useful to build faster phones and laptops.  

Alan Dalton, professor at the school of mathematical and physics sciences at the University of Sussex, said: “We’re mechanically creating kinks in a layer of graphene. It’s a bit like nano-origami.”  

“This kind of technology – ‘straintronics’ using nanomaterials as opposed to electronics – allows space for more chips inside any device. Everything we want to do with computers – to speed them up – can be done by crinkling graphene like this.”  

Discovered in 2004, graphene is an atom-thick sheet of carbon atoms, which, due to its nano-sized width, is effectively a 2D material. Graphene is best known for its exceptional strength, but also for the material’s conductivity properties, which has already generated much interest in the electronics industry including from Samsung Electronics. 

The field of straintronics has already shown that deforming the structure of 2D nanomaterials like graphene, but also molybdenum disulfide, can unlock key electronic properties, but the exact impact of different “folds” remains poorly understood, argued the researchers.   

Yet the behavior of those materials offers huge potential for high-performance devices: for example, changing the structure of a strip of 2D material can change its doping properties, which correspond to electron density, and effectively convert the material into a superconductor.   

The researchers carried an in-depth study of the impact of structural changes on properties such as doping in strips of graphene and of molybdenum disulfide. From kinks and wrinkles to pit-holes, they observed how the materials could be twisted and turned to eventually be used to design smaller electronic components.   

Manoj Tripathi, research fellow in nano-structured materials at the University of Sussex, who led the research, said: “We’ve shown we can create structures from graphene and other 2D materials simply by adding deliberate kinks into the structure. By making this sort of corrugation we can create a smart electronic component, like a transistor, or a logic gate.”  

The findings are likely to resonate in an industry pressed conform to Moore’s law, which holds that the number of transistors on a microchip doubles every two years, in response for growing demand for faster computing services.

The problem is, engineers are struggling to find ways to fit much more processing power into tiny chips, creating a big problem for the traditional semiconducting industry.  

A tiny graphene-based transistor could significantly help overcome these hurdles. “Using these nanomaterials will make our computer chips smaller and faster. It is absolutely critical that this happens as computer manufacturers are now at the limit of what they can do with traditional semiconducting technology. Ultimately, this will make our computers and phones thousands of times faster in the future,” said Dalton.  

Since it was discovered over 15 years ago, graphene has struggled to find as many applications as was initially hoped for, and the material has often been presented as a victim of its own hype. But then, it took over a century for the first silicon chip to be created after the material was discovered in 1824. Dalton and Tripathi’s research, in that light, seems to be another step towards finding a potentially game-changing use for graphene. 

Rad Power Bikes receives $150 million investment

Rad Power Bikes announced Thursday it received a minority investment of $150 million from several companies.

The investors are Morgan Stanley Counterpoint Global; Fidelity Management & Research Company; The Rise Fund, the global impact investing platform managed by TPG; and funds and accounts advised by T. Rowe Price Associates Inc.

Existing investors Durable Capital Partners LP and Vulcan Capital also participated in this investment round. Rad Power Bikes said the investment reflects a historic commitment to the company’s vision of a world where transportation is energy efficient, enjoyable, and accessible to all.

Rad Power Bikes said it will use the funding to extend its market leadership, drive innovation, and scale retail and service offerings.

“E-bikes will play an important role in the future of mobility, extending far beyond the traditional bike market,” said Sam Chainani, managing director of Morgan Stanley Counterpoint Global. “Our partnership with Rad Power Bikes is exciting as this innovative company is rapidly changing the way the world moves. (CEO) Mike Radenbaugh and his team have already proven the economics of convenient, energy-efficient mobility solutions.”

Rad Power Bikes has played a role in expanding the e-bike market with its direct-to-consumer models. Since launching its flagship RadRover Electric Fat Tire Bike in 2015, it now offers 11 models for everything from commuting to adventuring to hauling gear.

“We are thrilled to be working with this group of prestigious investors who are known for successful, long-term investments, and share our vision for the future of mobility,” Radenbaugh said. “Demand for our products has outpaced our wildest projections every year, and this partnership is helping us accelerate in-house innovation while creating more of what our customers tell us they love. I can’t wait for everyone to see what we will deliver in 2021 and beyond.”

To meet demand, Rad Power Bikes expanded its workforce to 325 employees in 2020. With plans to expand its global footprint, the company plans to double the size of its team by the end of 2021, hiring throughout North America, Europe and Asia.

“Rad Power Bikes has built an operation with all the earmarks of a company that can be much larger over time,” said Henry Ellenbogen of Durable Capital Partners LP. “Their commitment to innovation and providing excellent customer service to their riders has resulted in a high referral rate. We recognize the opportunity that the company has and are excited about the company’s prospects.”

 

                            Rad Power Bikes receives $150 million investment

CONGRESSMAN PANETTA INTRODUCES E-BIKE ACT TO ENCOURAGE USE OF ELECTRIC BICYCLES AND REDUCE CARBON EMISSIONS

February 9, 2021

Press Release

Today, Congressman Jimmy Panetta (D-Carmel Valley) and Congressional Bike Caucus Chairman Earl Blumenauer (OR-03) introduced the Electric Bicycle Incentive Kickstart for the Environment (E-BIKE) Act to encourage the use of electric bicycles, or e-bikes, through a consumer tax credit.  Due to the distance, speed, and ease by which they can travel, e-bikes will help replace vehicle trips and commutes and reduce carbon emissions.

A recent study found that if 15 percent of car trips were made by e-bike, carbon emissions would drop by 12 percent.  46% percent of e-bike commute trips replaced automobile commute trips according to a recent North American survey, and a more thorough review of European studies showed that e-bike trips replaced car trips 47% to 76% of the time.

The E-BIKE Act creates a consumer tax credit that:

• Covers 30% of the cost of the electric bicycle, up to a $1,500 credit
• Applies to new electric bicycles that cost less than $8,000
• Is fully refundable, allowing lower-income workers to claim the credit

“E-bikes are not just a fad for a select few, they are a legitimate and practical form of transportation that can help reduce our carbon emissions,” said Congressman Panetta.  “My legislation will make it easier for more people from all socio-economic levels to own e-bikes and contribute to cutting our carbon output.  By incentivizing the use of electric bicycles to replace car trips through a consumer tax credit, we can not only encourage more Americans to transition to greener modes of transportation, but also help fight the climate crisis.”

“One of the few positive developments of the last year has been the surge in biking.  Communities large and small are driving a bike boom. Notably, electric bicycles are expanding the range of people who can participate and making bike commuting even easier,” said Rep. Earl Blumenauer, the founder and co-chair of the Congressional Bike Caucus.  “I look forward to working with Congressman Panetta on this important expansion of cycling opportunities.”

“Incentivizing electric bicycles makes them a competitive transportation option for more Americans and supports a national effort to lower carbon emissions,” said PeopleForBikes CEO Jenn Dice. “The E-BIKE Act positions rightfully electric bicycles as a critical part of a larger solution to climate change and equitable mobility.  We’re grateful to Congressman Panetta for leading the charge in Congress.”

“The League knows life is better for everyone when more people ride bikes, and we know e-bikes make biking a more accessible and easier option for more Americans,” said Bill Nesper, executive director of the League of American Bicyclists.  “We’re encouraged by congressional leadership on the E-BIKE Act, a bill that if passed will enable Americans to fight climate change and improve public health through the simple act of bicycling.”

“Bike Santa Cruz County supports Congressman Panetta’s proposed consumer tax credit for the purchase of electric bicycles (e-bikes).  E-bikes are a game changer for many people, allowing them to continue using a bicycle for recreation and fitness and opening an option for daily commuting.  Cargo-type e-bikes also encourage others to feel more confident leaving the car at home and using bicycles for daily trips, including grocery shopping and transporting children to day-care or to parks,” said Gina Cole, Director, Bike Santa Cruz County.

“Transportation is the U.S. economy’s largest contributor of carbon emissions.  But the personal budget of many Americans simply doesn’t allow them to purchase an electric car, even with tax rebates, until car prices come down.  A tax rebate for electric bicycles will allow many more Americans to afford transportation that is better for the environment—with the added benefit of improved personal and public health,” said Mari Lynch, founder of Bicycling Monterey.

“Bicycles are the cleanest, greenest, most efficient form of transportation ever invented.  And electric bikes take that a big leap further.  They are a perfect replacement for so many local car trips, and an even more powerful tool for change.  We should be doing everything possible to help more people afford e-bikes, which will lead to more bicycle commuting, fewer car trips, less congestion, less carbon emissions, and healthier lifestyles.  It’s a win all the way around,” said Ken Martin, Founder and CEO, Mike’s Bikes.

“E-bikes make any short trip easy and fun and are a great alternative to cars.  We are grateful to Rep. Panetta for recognizing the important role that bicycles can play as carbon-free transportation.  A federal tax credit for e-bikes, combined with state support that we’re working on here in California, will make e-bikes a popular options for millions of Americans.  It’s about time,” said Dave Snyder, Executive Director, California Bicycle Coalition.

“Congressman Panetta’s proposed ebike tax credit is well timed to meet the moment as ebikes offer healthy, fast, convenient, and Covid safe transportation but their purchase cost is often a barrier for low and moderate income residents.  This tax credit would make ebikes – which travel faster with less effort than regular bikes – more afford to those in need of more sustainable mobility options.  We applaud Congressman Panetta’s proposed legislation to increase equitable and affordable solutions to reducing GHG emissions,” said Piet Canin, Strategic Development Director of Ecology Action.

“E-bikes are a proven tool to cut greenhouse gas emissions by replacing car trips, but riding a bike for transportation in the U.S. is daunting. This tax credit could seriously help Americans who are interested but concerned about how a commuter e-bike could work for them decide to go ahead and make the investment,” said Ryan Schuchard, Director, Innovative Mobility, CALSTART

“America’s car-centric transportation system is wreaking havoc on our health and the health of our planet.  To transform transportation in the United States, we need to encourage people to drive less by incentivizing the adoption of cleaner, healthier and more affordable ways to get around.  The E-BIKE Act will help bring us one step closer to a pollution-free transportation network.  As we move through the COVID-19 crisis, we urge policymakers to not only accommodate e-bike adoption, but to actively encourage it,” said John Stout, U.S. PIRG Transportation Advocate.

“We are thrilled about this new bill, and how it will make owning an electric bike a possibility for more Americans. Increasing the adoption of ebikes in the US will have a positive and transformative impact on cities, quality of life, and how people relate to one another, similar to what we have seen in the Netherlands,” said Ewoud van Leeuwen, General Manager Gazelle USA, LLC.

The E-BIKE Act is supported by:

PeopleForBikes

League of American Bicyclists

California Bicycle Coalition

Bike Santa Cruz County

Bicycling Monterey

Mike’s Bikes

Ecology Action

CALSTART

U.S. PIRG

The National Resources Defense Council

Gazelle Bikes

Current eBikes