In the Energy News Beat – Conversation in Energy with Stuart Turley talks with John Kem, President of American Battery Factory, discuss the growing demand for energy storage to stabilize the grid amidst increasing renewable energy and electrification. They explore the challenges with the current grid, the advantages of lithium iron phosphate battery technology, and the importance of U.S.-based manufacturing for battery storage. Kem highlights the need for safe, reliable battery systems for homes and businesses, and emphasizes the long-term environmental impact and recycling of batteries, with a focus on sustainable and fiscally responsible solutions for the future of energy security.
Thank you John for your service to our country, and we are looking forward to seeing how this cool factory rolls out. Please let me know so we can get updates out to our investing, financial, and energy followers. – Stu
Check out American Battery Factory HERE: https://americanbatteryfactory.com/about
Highlights of the Podcast
00:00 – Intro
01:23 – Energy Grid Problems and Texas Example
02:37 – The Growing Demand for Electricity
03:14 – American Battery Factory’s Role in Grid Solutions
04:20 – Lithium Iron Phosphate Battery Cells
05:47 – John Kem on Personal Backup Systems
06:36 – Target Market for Battery Cells
07:28 – Potential Impact on Homes and the Grid
08:44 – Long-term Environmental Impact of Battery Storage
10:00 – The Importance of U.S. Manufacturing
12:12 – Battery Recycling and Future Innovation
14:48 – Challenges in the Energy Sector
16:03 – Global and Domestic Challenges in Energy
17:54 – Importance of Bipartisan Support for Energy Grid Solutions
18:35 – Tax Incentives for Battery Storage
19:50 – Final Remarks and Future Outlook
Automated transcript. We disavow any errors unless they make us better looking for sound smarter.
Stuart Turley [00:00:07] Hello, everybody. Whether you like it or not, the energy world is changing. The grid has got problems coming around the corner because of the administration’s rolling out of bad energy policies. We need energy storage like you would not believe. I’ll tell you what. I’ve got a guest today that I’m excited to visit with. He is with He’s the president of American Battery Factory. And I mean, John Kem is absolutely a major general, retired. And I am so excited to visit with you. How are you.
John Kem [00:00:44] Today? It’s great to be on. Thanks for having me on. We’re excited. The American Battery Factory is a growing place and we’re excited just to explain what we do. And the grid, as you mentioned, is a serious challenge and we’re part of the solution.
Stuart Turley [00:00:56] You know, it’s kind of funny. We talk about the grid A before we get anywhere. Thank you for your service. Holy smokes. A major general. Thank you. When did you go in this end of your service?
John Kem [00:01:08] I went to West Point and I started in 1981. And I graduated in 1985. And then I spent 35 years in the Army, which means I must have liked it. Right, Because you don’t do something long unless you like it, right? So I did. I love to do it and I serve and I wouldn’t change a thing.
Stuart Turley [00:01:22] Yeah, my my dad retired and he was a he he was a fighter pilot, bomber, pilot and retired out there. So I love, love the military and love all of our great veterans. So thank you for your service. But now that you’re in the business world, the grid and the energy policies, we have got to have storage. Because if you’re putting this much renewable energy out there, it’s the grid is becoming unstable. Like let’s take Texas just as an example, Ercot, and God bless them, they’re doing the best they can. They’ve got more wind and solar than just about everybody else, and they’re trying to keep it out. But they say they have to grow the grid and double it in less than five years. This is a huge undertaking.
John Kem [00:02:13] No, absolutely. And towards your comment, it’s a combination not just of the electrification goals, which a little bit transcends administrations, but it’s obviously more with the current administration. But the electrification that everybody is interested in. Right. And more redundant power and day and night time cycling to get better pricing. But then throw in just the sheer volume, I’ll call it the invidious effect, but the data center part, right?
Stuart Turley [00:02:37] Yeah, the AI right. There is no net zero, right?
John Kem [00:02:40] And I read somewhere that I think that they were 2.5% of our electricity use a couple of years ago. And in 2030 it will be more than 12.5. So just all that alone is a such a demand that our environmental permitting, our grid production, our power lines cannot keep up right now. And so the real the only solution is to have safe, reliable storage so we can have a smarter grid while we’re waiting to expand it all, because at least there is enough power most of the time. The question is when you have a problem moment or in a disaster, how can you take advantage of storage?
Stuart Turley [00:03:14] You know, we’re sitting here and we’re and we’re kind of in this up for a business case for American Battery Factory. What are you guys doing to solve that? Because this is a big problem coming around the corner.
John Kem [00:03:27] Well, you know, we all have seen if you walk into a Costco or Wal-Mart or other places, you see battery storage systems for homes. There’s a number of small businesses and a larger kind of grid storage applications. But the problem is the battery storage companies, those who build those systems, right? Most of the parts don’t come from the US. So exactly. The the battery cells are probably the cell itself is 55 to 60% of that going to be storage system. And I would argue that you need the electronics. But the important part is you got nothing without the battery storage cells. And so almost none are made to us. More than about 85% or more is made in China. So our effort is to bring battery storage cells, liquid lithium ion phosphate, the type bringing those to the United States. Right. Because we need more grid storage and we need home storage. And the way to do that is with U.S. made battery cells.
Stuart Turley [00:04:19] You know, I’ll tell you by looking at your your your website, you take a look at the lithium ion cells, it would be safer than just lithium batteries, correct?
John Kem [00:04:31] Well, so just to differentiate. So they are lithium ion. That’s the thing that kind of, you know, the flow of electricity requires. There’s lithium ions, but ours is based on lithium ion and phosphates, what’s called it from the old chemistry. Think of the chemistry tables as ions. So let P that’s very different than NMC, where you have the nickel and the manganese and and some of the other materials, right? So ours are different than your typical car is. There’s a couple of big differences, but two main ones are ours are much more longer lasting. You get more than twice the life. So. We’re talking 15 to 20 years instead of the 7 or 8 years. And we all think about if you do a home improvement and you put a storage system in by your house, in your garage, who wants one? That’s going to have to be replaced in six, 7 or 8 years like a car does. 15 or 20. Well, that’s getting up there to it’s time to renovate the house or do something after a while. So a timeline is valuable. But then more importantly, is the safety reliability. Okay. Lithium ion phosphate doesn’t catch fire the same way. Doesn’t mean there’s no risk of anything there is in any system. Sure. It doesn’t produce oxygen when it burns. It’s a totally different model, totally different chemistry, and so far more reliable safety. If you’re going to attach stuff in your house, that’s what you want. Something doesn’t catch fire easily.
Stuart Turley [00:05:47] Yes. Because of unfortunately, because of the folks that I’ve interviewed, I realize we get some grid problems coming up. And so I’ve personally put a microgrid for my a several buildings that I’ve got and I’ve got wind, solar, I’ve got twin propane generators and I’ve got battery storage. So all I need to do is fire up my my propane generators to charge my batteries. And I’m doing okay. Not a bad system, but it seems like we have a despaired system going on in our grid where we’re going to need these kind of affordable backups for homes. Are you looking also at selling these to manufacturers like the manufacturers that sell the products or cars? Who’s your target market?
John Kem [00:06:36] Well, our main remain focused. We’re mainly focused on a battery storage system side, not directly to cars, because cars most up to this point are the NMC because they want the peak power and they use a cylinder that doesn’t give you quite that doesn’t give you the length and lifetime. We’re doing prismatic cells, which is a special folding. It’ll last much longer. It’s very reliable. So our main product is a 310 amp power, kind of the size of funny shaped shoebox. Yep. And you can stack those together into those battery storage systems for home or grids that you’re talking about. So we’re we have you know, already our factory is just now getting underway in terms of building it this winter. So we will have cells for about 18 months. But the reality is, if we had them today, we could sell all of them because everybody the demand is so high to have us as long as we produce at a good price. It’d be great, you know, price competitive.
Stuart Turley [00:07:28] A if it’s American made and if it is for like RV’s or off grid living, I mean, that’s would be huge. That’s a huge market.
John Kem [00:07:37] But still, I would say the, the real I think the real long term market is if you had 25 to 30% of the homes in the United States and so business had 4 to 8 hours of storage. Yes, that would solve that. That’s obviously takes money and over time, But that would make such a big dent in our grid peak problem. You can think about people in Texas, California in particular, where it’s certain times of the year the price during the heat of the day is is really high.
Stuart Turley [00:08:06] Right.
John Kem [00:08:07] You could potentially have yours fully stored and buying your power at that peak. Right. Night and day, you can run off of your storage for a couple of hours. And then when it gets if it gets tight, you can put it back on. But before the grid system, you now, they could theoretically turn off my house for two hours because they have a problem with peak loading like you were talking about at the beginning. Yes, I wouldn’t even notice. Right.
Stuart Turley [00:08:30] We just had a tornado two weeks ago here and all my neighbors were without power. And I’m skipping around on the systems working. Yeah. So, I mean, it’s a whole different mindset. Absolutely. Prepared ahead of time.
John Kem [00:08:44] Absolutely. And bringing safe, reliable battery cells is that is a cure a serious part of that solution? Right. We need lots of things. We need more grid. We need more ability to move it, need more power lines. We need more solar, wind, you know, natural gas need all that. Right.
Stuart Turley [00:09:01] We need it all. And, you know, I am not a renewable fan from the standpoint that word renewable means it is renewable and sustainable is also fiscally responsible. I’m all in on, hey, let’s use wind and solar. But they’re not recycling those products like they should. That whole thing is not done. Just like the oil and gas industry has had 100 years to get there. They’re now trying to figure out and plug the orphan wells. They’re doing better on that. And so we’ve got to get the same recycling and environmentally good impact on the wind and solar. Like not let’s not kill whales or eagles or. Got to figure all that out. I mean, I’m an ecological kind of guy on that. And it’s got to be fiscally responsible. And it sounds like your battery is in that category of fiscally responsible.
John Kem [00:09:59] Absolutely. I mean, we’re doing you know, our first factory is just south of Tucson Airport. We picked that location because land is reliable. Not super expensive. The power is reliable. We’re not a big water user. We’re not a big polluter. So it’s a it’s a great place to build our very first factory. But towards your your earlier comment, I mean, the reality is being how you have to be able to manufacture at a reasonable price and you have to be a good environmental steward and you got to be a safe place to work. Or how can you stay in business? Right. You couldn’t afford insurance, first of all, you know, but just in principle. So we’re trying to do all those things. And I tell you that I agree with you on the solar and wind, because they’re only now, after 15, 20 years of some of these things. And if they use those, how do you upgrade? How do you do that? Mid-Cycle change. And so those learning lessons are hard that that. And and so the interesting thing I’ll give an example. People talk to us about how our battery cells be recycled. Well, we we’re thinking through that. We’re working with some battery storage system companies on how could you make it so it could pull apart easier. Is that term potentially Right. A battery cell. Because right now what people do is you throw all the utilities battery cells with all the metal, all the plastic into a big giant machine. It grinds it all up. And then you use chemistry, heat, vibration and energy to pull it apart. Right. How can you do that better? But the funny part is we’re hoping it won’t have to be recycled for 15 or 20 years. So we’re trying to think how will somebody want to recycle this in 2040? Because if we build it right, you won’t have to before that.
Stuart Turley [00:11:28] That’s a great thought. But I also like your thought of recycling ahead of time. I interviewed the CEO of Freyr Battery, who’s building a big plant in, I believe, North Carolina. They’ve got one coming in there out of Norway, and they have their technology that is recyclable as well. So I love battery technology that is planned for obsolescence through recyclable. I give you a hug right now, but I don’t think a two star general would appreciate a a man hug as.
John Kem [00:12:02] Long as we keep it short.
Stuart Turley [00:12:03] It’s okay. But that’s one of my biggest hot buttons. I mean, it is a huge hot button for me. I think it’s fantastic.
John Kem [00:12:11] Well, it’s interesting and it’s also fascinating working with some of the battery storage system, companies like Lion Energy and others who are trying to think through that because, you know, they’re the ones who are really putting in all the electronics, all the computer, all the compute and all those other parts, the really high end parts. So they’re thinking through how could they make it so you could replace some parts if you needed some minor changes, some things always something that goes back a little bit. How can you do that in a very efficient way? And then if whatever comes out can be recycled easily, they got to rethink how they put them together.
Stuart Turley [00:12:42] You know, as a business model, Jackery is a excellent company. I have a lot of those. I, in fact, I’ve got for each of my cars, I’ve got a jackery, which is a small portable thing with a solar that I travel with. I also have a travel satellite kit from Elon Musk’s StarLink, so I can be in contact. I have power. I got travel kit so I can go anywhere and not worry about the grid. I think that would be a great model for you as well as to build those components because that is a strong market for affordable not only the house, but the it seems like the grid is going to get to a point where disproportionately impacted communities won’t be able to afford what you and I would really want everyone to have in those smaller $500 to $1000 generators, if you would, that are solar power. Be a great kit for you guys to just snap on and add a couple components and that would be a great add on to your your product line.
John Kem [00:13:47] Now you really you really actually see that in the storage community now right there. They’re doing those things. And some of the stuff you have where they’re compatible, you can use your phone to talk to them, but in the end, they all they all need battery cell. So we’re trying to stay kind of pure, right? We’re not trying to be up and down the supply chain. We’re trying to get us based raw materials, making 310 amp our battery cells. We have some specialty ones also. And I do that fast and efficiently. And then one thing I would add is we do have a adjacent building of a foundry line next door, an innovative foundry line, because we all read in the newspapers and magazines and podcasts about the newest electrochemistry that’s going to solve all energy problems right there in lab. But if you talk to most of those people, getting it from the lab to be able to manufacture at scale is almost impossible. Like one out of 20 might be scalable, right? So we’re going to have a place where you can do both of those things together, bring the chemistry, and then work on scaling so that we can be ready, you know, so people not just for us or other people can come use it and go, Hey, can we can this turn into something bigger.
Stuart Turley [00:14:48] In that Great. And if your cells are of a standard size, then you can turn around and go after the Jack Rees of the world and see if they can get extra bonus points for using American components. Did I hear that correctly?
John Kem [00:15:04] Exactly. Stu That’s exactly right.
Stuart Turley [00:15:05] I like that. So then that way you can say, Hey, we are used in these components and everything else.
John Kem [00:15:12] Absolutely.
Stuart Turley [00:15:13] I don’t know that we’ll see solar powered tanks anytime soon, though.
John Kem [00:15:17] You know, the army side of things. One of the challenges in the forward compute is you you need very high peak power sometimes when you’re off grid for a while. And so how do you have enough How do you get that power forward? You can’t store enough or you can’t. I would say this way you can even with really, really the fastest charging, you can’t fully charge fast enough. Right. It does take a few minutes to fill a tank with water and all the other weird fuels. Right. But you can’t do that batteries fast enough right now. But they do have a lot of but there’s a lot of value to them because you want to be quiet. You want some remote sensing. You want robotic things that don’t make a lot of noise. So that’s the long term part of how you use battery storage and forward compute. Right. The future of the battlefield. And so you kind of need all.
Stuart Turley [00:16:02] I’ll tell you what. Getting off topic for just half say the battlefield is change. Drones scare me to death. Speaking of batteries, have you seen some of the Ukraine fights going on with the Russian drones coming in? That is a whole new warfare.
John Kem [00:16:18] No, I mean, it’s no hard challenge that one of the things that is unique about that place is they’re they’re both very I would call somewhat stagnant armies. They’re not moving and doing a lot. They try to move, but they’re pretty there’s a lot part it’s very we’re we’re want to show you’re bringing drones into areas you know where things are running you see them. But the biggest challenge nowadays in the battlefield there’s this against a good enemy you can no longer hide. Right. You can’t really hide. Therefore, you have to be ready to move quickly. You’ve got to be able to adjust. You got to be able to reach deeper. Right. So you can impact your drones can only be manipulated from so far. And you have to be able to you want to talk to them or they’re free or they’re free drones. But how do you impact where the drones are taking off from or where the electronics are talking to? So it’s a very complicated electromagnetic world out there.
Stuart Turley [00:17:05] And it’s getting crazier. I you know, I is absolutely home. And I think that I love the idea of net zero. Hey, let’s let’s end pollution. And I think net zero should be renamed something else because CO2 is arguably a plant food. You know, I think we ought to get rid of pollution. Let’s go to net zero pollution. And like Chris Wright, a CEO at Liberty Energy is phenomenal. I like the way he says it and say, let’s get rid of energy poverty. Let’s go to net energy poverty zero. That, to me is absolutely the way to do it. And the only way we’re going to get there is nuclear, natural gas and storage. I mean, it’s right because we’re not going to get there with solar and wind. It’s not going to happen.
John Kem [00:17:54] Well, the other part is and you know this because you do you deal the space a lot. The incentive structures are all kind of wacky. Right. Depending on how we do a tax code. I work on Capitol Hill. There is lots of good people up there. Right. Incentives in how things play out in the long run. The reality is if you’re really anti CO2, then the only way to do that is with some kind of carbon taxing. So the incentives are right. I’m not I’m not advocating all those things, but it’s the only way where you’re actually going to make a true impact on CO2 is if the incentive structure is out there. Right. To make the right decisions. Because if you give tax credits for something but you don’t, you can’t count all the CO2 and else then you end up with a very arbitrary system that doesn’t really get you, you know, doesn’t get you where you want to be.
Stuart Turley [00:18:34] Do you see that if there’s a with your working with Capitol Hill, do you see storage tax incentives for the homeowners? Do you think?
John Kem [00:18:44] That would be a question? I haven’t really thought about that very much. I think that.
Stuart Turley [00:18:47] To me seems be a incentive worth talking about, because if we have the Inflation Reduction Act, which has added so much inflation to, you know, you take a look at the the way the printing of money has gone on, it would make sense as a battery company to see about getting some of that money and look at tax deductions because the solar industry in California is going through some serious heartburn right now because of all that. You can get the solar panels, but they need storage for the houses.
John Kem [00:19:25] Absolutely. You see and you do see this. The battery storage companies are. That’s why I said we could sell every battery cell if we were making them today. They’re all needed in order to qualify for some of those credits and other things. They need us content and it’s really hard to get the right percentage if you don’t have us made battery cells. So we’re in the right market, so it’s going to grow exponentially. Wow. It’s not just us. I mean, the reality is we need as much as we can make in the near term.
Stuart Turley [00:19:50] So that you’re going to be able to open next month.
John Kem [00:19:52] Yeah, I wish.
Stuart Turley [00:19:53] I know your stockholders would love to have that. Your shareholders. How do people find you?
John Kem [00:19:59] You can find ABF American Battery factory on the on the Internet. You can find us. But I mean, obviously we’re not producing shows yet, so you can read about us and. And do things, but we’re not going to be cranking out books as for about 18 months. But we have an affiliation with Lion Energy and some other people that are you know, you can find articles about us. A big one is in the supply chain. One of the ones we haven’t talked about is trying to get us content for our materials right. We need about 16 or 18 main materials from foils to certain chemistries to the tin cans that go around the things. So how do you find us made materials for that? A great example would be lithium ion phosphate. Well, you need a very high quality. Up to now, almost none of that’s been made in the US. So how do you find a US maker we’re working on? We work with 2 or 3 different groups in the US or North America. I’ll give you for us, for example, we need about 7000 tonnes of lithium ion phosphate just for our very first line. Well, that’s not a tiny amount. No. And when you talk to people that are in that business, they’re going, Well, we’re going to start having them.
Stuart Turley [00:20:57] I don’t have it by.
John Kem [00:20:58] 27 or 28, we’re going to have 5 or 6000 tons. Right. Will they be on time? Will they not be on time? So it’s a very complicated effort to make sure we get all these materials and bulk materials over time.
Stuart Turley [00:21:10] By the sea. Now, as an American, I’m tired of our money going to and I’m going to be honest, illegals. I’m tired of our money going to Ukraine and Israel and everywhere else. I would rather give money to you guys and say, Let’s build our grid. I’m all in. So where do we where do we how do we help get that story out there?
John Kem [00:21:34] Right. Well, I think the one positive thing is, regardless of the election, I think there’s a clear recognition on both of the main political parties that our grid and things need major effort. Right. It’s it’s affecting enough people that they both have to pay attention.
Stuart Turley [00:21:48] Yeah the the in the the infrastructure bill though unfortunately did not do anything for the infrastructure.
John Kem [00:21:57] Right now I recognize that the incentives of what they focused on weren’t in that they didn’t target some of the right areas.
Stuart Turley [00:22:03] Exactly.
John Kem [00:22:04] But if you look at the the current campaigns going on, there’s enough people who have energy bill problems, right? There’s enough cities that are struggling and municipalities that are saying, hey, it doesn’t matter whether you’re a Republican governor or a Democrat governor, you’re saying, I have a problem with the grid certain times of the year. So I think the recognition that that a different approach is needed, a very bipartisan approach is needed.
Stuart Turley [00:22:27] This is not a Republican or Democrat problem. This is an American problem. And we need American solutions for this. Because I have a saying in the saying is pretty much the grid is not racist from the standpoint is it takes physics and fiscal responsibility or blackouts will occur. It’s pretty simple. I mean, electricity is big. It does not care about your opinion. So but I’ll tell you what’s coming around the corner and how soon can you get anything, any news announcements or when’s your next big target date?
John Kem [00:23:04] Well, we’re going to be at the Detroit Battery Show. That’s coming up in in early October. And we’ll be meeting with what’s your folks there and do some announcements related for us. The big thing is to start the earth moving the earth moving at our at the land we have in Pima County is we’ll start just after after Christmas, I’ll call it January. Nice. And so and then about 18 months to construction and it takes a lot of machining. They just give an example this our initial line building is about 1500 feet long and 200ft wide. So this is not a tiny effort.
Stuart Turley [00:23:34] Wow. No, this is huge. And sir, thank you so much for your time. I just appreciate you. I appreciate your service and what you guys are doing at ABF. We need energy security as Americans. And so again, like I said, this is not a Democrat issue. This is not a Republican issue. It is an American issue that we need American batteries like now.
John Kem [00:24:00] No, I agree with Steve. I mean, that’s just what I swore my oath of allegiance to support and defend the Constitution. United States. Right. That’s that’s for everybody. And so the grid is the same way.
Stuart Turley [00:24:10] Absolutely. Thank you so much for stopping by. The podcast will have all your LinkedIn information and how to get in touch with you. So thank you very much.
John Kem [00:24:17] Thanks to thanks for you time
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