Transcript:
Todd Schoenberger: On behalf of Cross Media and Bis Talk Today TV, welcome everyone to Power Hour. I am your host, Todd Schoenberger, and joining me for the very first time is Steve Christensen. He is the executive director of the Responsible Battery Coalition. Steve, welcome to the show. For those in the audience who may be unfamiliar with the RBC, could you explain a little bit about it and why it got started?
Steve Christensen: Absolutely. Thanks for having me on, Todd. The Responsible Battery Coalition started almost exactly 10 years ago, and it's a coalition unlike any other. We didn't want to be a typical industry coalition. We started on the idea that every battery, regardless of its chemistry, should be responsibly managed throughout its life cycle, and that life cycle should be a closed-loop, circular economy.
Our membership actually represents that. We're a very small membership, only nine members, and we represent the entire life cycle of the battery. So in a room you actually have battery manufacturers talking to retailers, talking to original equipment manufacturers, meaning car manufacturers, as well as recyclers and large fleet users. That's very unique. Advanced Auto Parts doesn't talk to FedEx quite a bit about those types of issues, but they do in our coalition.
We function in three ways. We're a bit like a typical industry organization, where we work for the good of the industry and to advance its priorities. We also make significant investments in academic research with our academic partners, the University of Michigan, Clemson, and Harvard's School of Public Health, and we work with government labs like Argonne National Laboratory and others. When our members need research on things like cost of ownership or the environmental impact of a supply chain, we take that on. And then we're very aggressive communicators. We operate a bit like a PR agency for the work we're doing. Being a Washington, DC-based organization, we're a 501(c)(4), so we actually do lobby. We get directly involved in things like Project Vault and the One Big Beautiful Bill and other activities in Congress, and we're very active on the Hill and in the executive branch on policy issues.
Todd Schoenberger: That's great. We'll talk about Project Vault in a second, but one thing I noticed is that up to 99% of a car battery is recyclable, and I know most Americans do not know this. The battery you buy at, say, AutoZone is going to be a recycled battery that's been reformatted into a new battery. So are you just focused on those batteries, or all batteries, like the ones you'd put in a remote control?
Steve Christensen: The small consumer batteries aren't much of our focus. There's already a great organization called Call2Recycle that has really made the model for recovery and management of those materials. We're more concerned with vehicle batteries and larger formats. Think of the lead-acid starter battery in your car, which is an amazing story: the most recyclable consumer product on the planet. About 99% of them are recycled in North America and in Europe. There's only a small percentage outside that loop at any given moment, about 2 million batteries in North America. We're actually working in Alaska to try to close that loop even further, but that's for another conversation.
Then you go up to the large formats, like what's used at large power facilities and now data centers, those large stationary applications. Those are part of our portfolio as well.
Todd Schoenberger: Data centers are such a hot-button topic right now, coast to coast. You see all these community groups getting together, and they don't want data centers around. We've had data centers around for 50 years, so suddenly it's become an issue. But regardless, when you talk about energy and these batteries, there's got to be a shortage of them. I would assume that, even with recycling and everything here in America, we can't supply them all. If that's the case, where are we going to find these batteries to supply energy?
Steve Christensen: Unfortunately, a lot of them come from overseas, and the majority of them are touched by Chinese manufacturing in some way. Many of the components, if not all, come from China. In the United States, we are right now racing to close about a 30-year gap with China in our capabilities for sourcing, processing, and refining materials and manufacturing batteries.
Beyond the lead-acid chemistry, that starter battery in your car is most likely made in North America, in Mexico, Canada, or the US. That's low-voltage lead-acid technology. The ones we're talking about for data centers are lithium-ion, and there's nickel metal hydride, the other battery chemistries in electric vehicles. Those are most likely coming from overseas, or if they're being manufactured here, it's through a joint venture with a foreign company. That may be Chinese, it may be adjacent to the Chinese. Those JVs have not been without their problems either.
I don't pretend to be the CEO of Ford or any of the OEMs. They make decisions based on other factors, and I don't fault them for that at all. That's the nature of what's going on right now. We're working to change that so manufacturers have a domestic supply chain to choose from and aren't forced into unstable markets that cause other problems for them later.
Todd Schoenberger: Right. I would imagine there's quite a supply shortage with the batteries, and it's only going to get worse as time goes on. Which leads me to this new initiative, Project Vault. I know the Responsible Battery Coalition is a big supporter of it. Can you tell people about Project Vault? In the last 24 to 48 hours it seems to have gone from a concept to an actual buildout, where we will have a universal spot for the minerals we need for these batteries. But you could probably explain it a lot better than I can.
Steve Christensen: Absolutely. It's a public-private partnership, and the goal is to store raw materials in the US or within proximity to the US so we have access to them when we need them. It's a little different from a lot of other programs where the government builds reserves of materials. It's demand-led instead of surplus-driven. The way the government usually stockpiles a material, it essentially hoards it, and if and when we need it, they start providing access. Vault works differently. There's a list of about 60 materials deemed critical. Manufacturers identify from those 60 what they need, and Vault goes out and secures them with its partners.
It's not free. This isn't corporate welfare. This isn't the taxpayer handing out money to rich corporations so they can make cool things and sell them back to us. Some critics also mistake it as similar to agriculture subsidies. It's not like that at all. I was at the Department of Agriculture for eight years in the Bush administration, and I can tell you I've seen subsidies firsthand. We're not buying massive amounts of raspberries and then trying to figure out what to do with them later.
It's not free to participate. Participants make long-term commitments and then pay a commitment fee to access the materials. What you just saw yesterday with Glencore and Mercuria and Project Vault is that they're cumulatively putting in about a billion dollars and saying, "We're part of this." It allows them to participate and be suppliers into the vault. It creates stability and more predictability in the supply chain. It also protects against what we saw in 2024, when China restricted the export of antimony. The price of antimony jumped about 40% overnight, and I think it ended up going up 2,700%.
Todd Schoenberger: Wow.
Steve Christensen: Yeah. We need to insulate our battery marketplace from that. Think about an economic adversary like China and its ability to restrict other materials. They refine about 70% of the lithium on the planet, so they could do the same thing with other materials. We need to prevent that, and that's what Vault does.
Todd Schoenberger: The timing of the announcement is a little peculiar, because President Xi is in Washington right now. Was it designed that way, or is it purely coincidental?
Steve Christensen: I don't have any firsthand knowledge of it, but having worked in DC as long as I have, these things don't seem to happen by coincidence. I think there were very savvy folks planning this out, and I think it's great. It's the way it should have been done. If it had been announced two weeks ago, or later, it wouldn't have had the same effect. Announcing it yesterday was much better.
Todd Schoenberger: It's got everyone's attention, that's for sure. I have some basic questions for you. Where in the country are we going to have this vault?
Steve Christensen: It's right next to the Fortress of Solitude. No, next door. [laughs] They're going to store the materials in different places throughout the country, really to manage access and costs and so forth. I don't know the exact locations. I'm sure they'll be near refining and processing areas, where the materials can be easily shipped to where they need to go.
Todd Schoenberger: The conversation about our occupation, if you will, of Greenland, and I know that's a fortified area. Is that part of this entire project?
Steve Christensen: I don't know. I suppose it could be. One other thing about Vault is that it's an America-led initiative, but it's not only for American companies. Glencore and Mercuria are both Swiss-based companies, but they have important capabilities that we need. Unfortunately, the US sorely lacks processing and refining capabilities for critical minerals. When I said we're trying to close a 30-year gap, in those 30 years we used to have all that IP here in the United States, or a lot of it, I should say. A lot of it was sold off to the Chinese. We just don't own it here. So we have to go to our friends like Glencore and the others and ask, "Can you help us secure these supply chains and help us with the processing?"
Todd Schoenberger: Not to bring politics into the equation, but you mentioned 30 years ago. Was there a political reason for us to sell that IP?
Steve Christensen: I think it was more financial. These weren't government-owned. Certain manufacturers sold them off. I think they were business decisions. The few that I have more knowledge of were basically businesses saying, "This isn't something in our portfolio that we see needing in the next 10 years. It's not making us any money, we're just sitting on it, and we have a buyer, so let's sell it." I couldn't imagine being that CEO, sitting on something of value, and your board's going, "Last quarter your numbers weren't there. What are you doing sitting on this company? Someone in Beijing is offering you this many millions of dollars for it. What are you doing?" I can imagine being that CEO with your board doing that to you. You get rid of it.
Todd Schoenberger: Yeah. You're making that decision because you're not thinking down the line. Electric vehicles, iPhones, I mean, 30 years ago, think about the evolution of technology and where we are now. When you speak of automobiles, suppose China limits the exports of these minerals for auto production and there's no Project Vault in place. There would have to be a slowdown in automobile manufacturing, correct?
Steve Christensen: Yeah. We can't reshore the mineral supply overnight. That's just not going to happen. Project Vault is a great start, but we need to shore this up by friendship. I think we would have a pretty stable transition, because I don't think we're going to jump very quickly to other technologies or other supply chains. It's not like you can flip a switch and say, "Okay, we're all on this side now." I think it's going to be a gradual progression. One of the brilliant parts of Project Vault is that it's more market-driven, based on need and capabilities. It's not something that's going to force shortages.
And thankfully, right now China seems to be behaving itself for the most part. At least on the surface, the meetings going on right now seem to be going quite well. Secretary Rubio is doing a very good job. He's been very critical to Project Vault.
Todd Schoenberger: Why is that?
Steve Christensen: Just because there's such an international component to it. Bessent said something last year, a great quote if I can remember it, something like: either we have to be self-sufficient or we have to be sufficient with allies. He was quickly identifying that we can't just flip a switch and have no China. We have to build our friendships and build a network of friends to be able to do it, and Rubio has been key in making that happen.
Todd Schoenberger: Let's jump to a scenario, then. Rubio was just announced as national security advisor. He's the first person since Henry Kissinger to hold the role of secretary of state as well as national security advisor. If you had to play the cards here, he's probably the front-runner to get the nomination in '28. If he does become president of the United States, could he possibly block Project Vault and put it to a halt?
Steve Christensen: I think he supports it. He does support it.
Todd Schoenberger: Oh, absolutely. I'm sorry, I misunderstood. Okay.
Steve Christensen: No, he's been a key supporter of it. He's been incredibly important to its success. I'm sorry if that wasn't clear. He's been incredibly supportive, and I think the State Department and its diplomacy have been essential in basically keeping China in check. Like I said, China has the capability of going down the list of minerals and restricting or manipulating them.
They're a tough competitor, and maybe for somebody with my political background it might sound weird, but we need more help from the government. We need more participation, because our competitor doesn't play by the same rules as the free market. Our competitor doesn't care if they lose money. They're all about market share. When they restricted the export of antimony, you couldn't buy processed antimony or raw antimony. Raw antimony had to be processed in China. So they took away all the market share of anyone processing antimony. They could do the same thing with any mineral they want. Or what they'll do is dump it in the marketplace at a cheap price, because again, they don't mind losing money. This happens every day in the battery industry. They go to American buyers and underbid American suppliers just because they can. When you're the CEO of a company at the top of the supply chain looking to cut costs, and a supplier comes in and gives you something you need for less money, you tend to go in that direction. And they'll bankrupt an American company just to do it, just to get the market share.
Todd Schoenberger: Wow, that's a scary thought. You brought up your political background. You have a very strong résumé. You worked for President Reagan after he left office, and you also worked for Bush 43. Clearly you have the connections in Washington. So when you look at Project Vault, we're looking at $10 billion in financing. How far does $10 billion get you in global mineral markets? I would venture to guess that you need something coming from the federal government to help supplement this, right?
Steve Christensen: Yeah, absolutely. And we need more. I lean on the idea of tax incentives. The One Big Beautiful Bill had a great incentive in it, affectionately called 45X by our industry. It's an incentive to keep battery materials that meet certain purity standards here in the US. Not to get too technical, but there's a practice in the industry where, when you recycle a battery here, you get it down to what's called black mass, which is basically a fancy term for waste. It has good stuff in it, but it costs money to get to that good stuff. So it's really easy to pack it up and ship it as black mass to a foreign country and have it fully refined there. Most of it is not refined here. The incentive in 45X is to keep the materials pure and keep them here in the United States, and you'll get a tax break for it. Our members that produce more pure materials all benefit from that, and it benefits everyone all the way to the American consumer.
Those are the types of incentives we like to see more of. We'd also like to see more anti-dumping measures that prevent what I described, China putting cheap materials into a supply chain because they know it undercuts everyone else. I think we need strong protections against that as well.
Todd Schoenberger: So the—oh, go ahead.
Steve Christensen: No, I just want to add that we also need incentives to build our processing capacity in the United States. We can mine all we want, and I'm so glad we're doing it. But it takes years to get new mines online or to restart mines that have been dormant for so long. And as long as China has most of the refining IP, the material still has to go to China. So we need to see what we can do to keep it here.
Todd Schoenberger: From a national security standpoint, that's a massive thing, right? We're beholden to this relationship with China. If I'm the president, I'm thinking I have to be best friends with President Xi. I have to make sure we are fully connected here. It sounds like they have more leverage than we do, and that's a scary thought.
Steve Christensen: They do in a lot of ways, and it's no accident that inside the RBC we created the Critical Materials Leadership Working Group, which is chaired by a former general and a former admiral. We did that on purpose because there's such a national security component to this. I keep harping on antimony, but as an example, antimony is more than batteries. It's in bullets. It's in all sorts of weapons. It's in optics, night vision goggles, things like that. The fact that we're essentially depending on an adversary is a problem. Russia also has the majority of the antimony refining and extracting. So really Russia and China are our two main suppliers of a mineral that our military needs to fight wars and for our defense. And that's just one mineral. We can go into lithium and other things like that.
What's great is that lead-acid batteries, which again are mostly made in North America, play a key role in our military as well. They're key to defense. A howitzer, for example, has about three or four starter batteries hooked in series that power the systems on the gun. It's pretty cool. There's such a reliance on batteries for vehicles and other sorts of defense that for them not to be made in America, or by very strong allies, is ridiculous. The fact that we have to go to China for these items is absurd.
Todd Schoenberger: I completely agree with you on the antimony. Okay, we're not extracting it. Russia's not exporting antimony to the United States, I assume. Correct?
Steve Christensen: Not directly. Not that I know of, no.
Todd Schoenberger: Okay. But China is.
Steve Christensen: Yes, but they banned it. China will not sell raw antimony on the open market right now. You have to buy it from them processed.
Todd Schoenenberger: Really? Okay. And without it, we've already been hearing stories about weapons or rockets. We're at a shortage because of what's taking place in the Middle East, and now I'd imagine we're in even more demand of this mineral.
Steve Christensen: Absolutely. Since China locked it up in fall 2024, the price has gone up 2,900%. So it's incredibly expensive, and you have limited suppliers that will sell it to you. Or you can just buy the finished product from China. That's really the only two ways to get it.
Todd Schoenberger: This makes sense, because then you start thinking about the control of oil coming through the Strait of Hormuz, a lot of which makes its way to China. If that's shut down or we disrupt it, that prevents them from getting oil. I guess that's our only leverage point in any negotiation with China, to say, "Look, we want the antimony, and we'll give you oil. We'll make sure it gets through." Which leads to the best question: what happens in the Middle East? What if Iran says, "We're just going to keep this blocked, and screw everyone"? We would be at a giant disadvantage, because China would say, "We have reserves of antimony, but you don't." Where does that lead us?
Steve Christensen: It's a huge problem. Luckily, antimony is in lead-acid batteries, and just real quick, if someone's curious, the way it functions is that it preserves the lead. A lead-acid battery often dies because the lead degrades. It gets scale on it and can't store electrons the way it's supposed to. Antimony helps preserve the lead, which is why the batteries last much longer. So it plays a very key role in batteries. From battery recycling we do get antimony, and we have a very good North American system that's fully circular. This is why circular economies, in batteries or really in anything, are so important, especially in national security. We're able to recover all the antimony that we use. So even if we're importing it, we can still use it again. That's why we didn't feel what China did as much in the battery industry as we would in other areas.
But think about the fact that they have 70% of the lithium, almost 80% of the cobalt, and about 90% of the graphite, which are all materials in lithium-ion batteries. That's the new, progressive technology, so it's going to be incredibly hard to find those materials outside of China. Your Strait of Hormuz scenario applies even more to next-generation technologies, like the ones going into data centers and other stationary applications. They're highly reliant on a supply that comes out of China.
Todd Schoenberger: My goodness, what a mess this is right now. Good golly. All right, with China, we obviously have President Xi here. I think this is his last day in Washington. Is the Responsible Battery Coalition, I'm sure you're making calls and talking to people on the Hill, if they're even there now, but are you involved in trying to lobby to make sure something gets done before he goes back to China?
Steve Christensen: Not directly before he leaves. Timing in DC is everything, right? We're not directly pushing on the administration. We want them to be able to do their thing. Like I said, we're very grateful for the president's leadership on this, and for Secretary Rubio and Chairman Jovanovic of the Export-Import Bank, who have been doing great. We just want more of it. That's the general description of our strategy. But yes, we'll start conversations about how we put these into practice and make policy out of them. That's when we'll start engaging more on how to make policy based on what's going on in China, essentially holding China to what they're promising. Xi's going around saying what a great relationship they have now, how they respect each other, and everything's great. Okay, but your track record says otherwise.
Todd Schoenberger: Right.
Steve Christensen: Let's put some policies in place. Like my old boss used to say, trust but verify.
Todd Schoenberger: No, you're absolutely correct. When we talk about AI and the AI arms race, we're always talking about our competition with China. It sounds like we've lost the race when it comes to minerals, because China seems to hold all the cards. Let me ask you this: does this impact AI infrastructure buildout, data centers, chips, semiconductors? Will it cause a ripple if there's any strain with China, because they have all these minerals?
Steve Christensen: It certainly could. Most of the suppliers to the data centers, the US-based ones, are many of them JVs with a foreign country, and I think a couple of the major ones are JVs with Chinese companies. Sure, they're operating in the United States and building finished products here or nearby, but for the most part there's a Chinese company involved somewhere. Because China occupies so much of that material, they're making a huge amount of money off all this, so they're pretty happy about it.
If I wanted to play the adversary and really mess with the United States, I'd wait until they were completely dependent on me. I'd wait until they built more of these data centers and needed more of my batteries and created more demand. Then I'd cut them off, and we'd start seeing problems once we got to a larger volume. That said, as much as data centers are in the news, they're not shifting the market. I wouldn't mistake the number of headlines and the number of data centers for the number of batteries. I don't think data centers are right now creating a battery shortage in the supply chain, where we can't supply all the data centers because there are so many of them. There actually aren't that many of them compared to the battery supply. The supply is there, and the supply will meet the demand.
Todd Schoenberger: Okay, so supply meets the demand on the data centers. But that's the first time I've heard that narrative, where China could say, "Just keep building the data centers, because eventually demand is going to exceed supply, and then I can really mess with you." I would think it would be the other way around, that China doesn't want us to build that many data centers because that means we'll continue with the AI race. But that leads to the whole thing: there really has to be collaboration between both countries when it comes to AI development. I wonder if constituents have the stomach for that, to think, "Yeah, we need to work together hand in hand with a communist country." That's a complicated story to tell, I would think, especially in a midterm election year, which leads to the next question. With midterms coming up on November 3rd, we're only 40-something days away. It looks like we're going to have a shift in parties in the House, perhaps even the Senate. If that's the case, do you anticipate any disruption with the current administration, to the point where we might not be able to work with China on things like antimony that are very important to us?
Steve Christensen: I hope not. I truly hope not. We've approached this as an organization, and we're obviously nonpartisan, but the issue of batteries shouldn't be a partisan issue. It shouldn't be, though a lot of things in DC shouldn't be and end up being partisan. The only thing that concerns me with a switch in either chamber or both is what their priorities become. Obviously when there's a shift in parties, the priorities change, and so does their ability to function. My concern personally is, let's say the parties do switch: are they going to be completely preoccupied with hearings and impeachments and everything else, and not focus on actually legislating and approving budgets and keeping things moving forward? If that's the case, we're going to end up with a lot of executive orders that hopefully the next president will not undo.
Fortunately, I think for our industry, we do have a president who is not afraid to sign executive orders that advance American industry, and he truly believes in American industry. Hopefully that will sustain, and the other party will at least see that these are important things and just let them happen. Don't give him credit for it, but at least identify that these are important. That would be my hope.
Todd Schoenberger: Yeah, I agree. President Trump is a big proponent of American manufacturing. I don't think anyone can argue that he is not. We'll see what happens once the new Congress takes over in January. I do agree that if they're focused on these ridiculous impeachment hearings and that kind of stuff, it's just going to disrupt progress. But we'll see. Steve, I'm going to leave it there. Amazing conversation. I find this fascinating. Responsible Battery Coalition, everyone, go check it out. Support if you can, and get involved. It's a truly remarkable group. Plus, take a look at the partners. It's not a long list, but it's a very high-powered list of partners involved with the RBC, so I welcome the audience to go investigate and check them all out. They're definitely a great group. Steve, I appreciate you taking the time to join me today.
Steve Christensen: Excellent. Thank you, Todd. Appreciate it.
Todd Schoenberger: Absolutely. On behalf of Steve Christensen, I'm Todd Schoenberger. Thank you once again for joining us on Power Hour. Coming up at 1:00 live, I have a sit-down with Zanetta Burgerer of the private equity firm Giant Partners. You'll definitely want to hear what she has to say about AI. It goes back into everything we were just talking about, and you'll want to see where there's AI advancement and some potential investments as well. That's 1 o'clock live on BTT. Until then, take care.
