How Cling Systems is Transforming Battery Supply Chains with William Bergh

Revolutionizing Battery Recycling: The Future of Sustainable Energy Management

As the world embraces the electric vehicle (EV) revolution, with 1.3 million EVs sold in 2023 alone—a 40% increase from the previous year—the issue of battery disposal and recycling is becoming increasingly critical. The demand for lithium-ion batteries, essential for EVs and other electronics, has skyrocketed, yet the challenge of managing these batteries at the end of their life remains largely unaddressed.

The Circular Economy and Battery Recycling

The concept of a circular economy, where products are reused, recycled, and remade into new products, is gaining traction as a sustainable solution to the growing battery waste problem. Traditional fossil fuels are consumed and discarded, but batteries, composed of valuable materials such as lithium, nickel, and cobalt, present an opportunity for continuous reuse. This shift from a linear to a circular model could significantly reduce the environmental impact of battery disposal.

Cling Systems: Pioneering Circularity

William Bergh, the Founder and CEO of Cling Systems, is at the forefront of this transformation. Cling Systems aims to revolutionize the battery supply chain through closed-loop recycling, ensuring that used batteries are efficiently reclaimed and repurposed. This approach not only reduces landfill waste but also conserves valuable raw materials, contributing to a more sustainable energy future.

Bergh's vision extends beyond recycling. He advocates for urban mining, a process where waste batteries are harvested for their raw materials, effectively replacing traditional mining. This method capitalizes on the fact that batteries, unlike fossil fuels, are not consumed but stored, making their materials available for repeated use.

Challenges and Innovations in Battery Recycling

Despite its potential, the battery recycling industry faces significant hurdles. One major challenge is the lack of standardization in battery design, which complicates the recycling process. Unlike lead-acid batteries, which are standardized and widely recycled, lithium-ion batteries vary greatly in their composition and design. This variability makes it difficult to develop efficient recycling processes that can handle the diverse range of batteries in use today.

Additionally, the supply of end-of-life batteries is highly fragmented. Batteries reach the end of their life in various locations, often ending up in drawers or being exported to different countries. This dispersed supply chain complicates the logistics of collecting and recycling batteries. Cling Systems addresses this challenge by creating a comprehensive database of battery types and conditions, enabling more efficient tracking and management of used batteries.

The Future of Battery Recycling

Looking ahead, the future of battery recycling hinges on continued innovation and collaboration. The industry must scale up recycling processes, standardize battery designs, and develop more efficient logistics systems. As urban mining becomes more prevalent, the reliance on traditional mining for battery materials could diminish, leading to a more sustainable and self-sufficient supply chain.

Bergh envisions a world where the environmental and commercial value of batteries is maximized through seamless recycling and repurposing processes. By removing the costs and complexities of circulating batteries, companies like Cling Systems are paving the way for a greener, more sustainable future. The shift towards a circular economy in battery management not only addresses the immediate waste problem but also suppo

Transcript

Jed Tabernero: 0:00

The growth of electric vehicles has gotten a lot of people excited. But it's gotten environmentalist. Torn. Think about it. Batteries in your phones, laptops, and more importantly, your future electric car. Are typically composed of valuable materials, such as lithium nickel. And even cobalt. And what do you do when they come to their end of life when you don't use it anymore?

0:30

most people throw it away. in today's episode. We're going to talk to somebody. who's taking battery recycling to a whole new level.

Jed Tabernero: 0:38

William Berg is the founder and CEO of Cling systems. A company dedicated to cleaning up the battery supply chain and promoting a circular economy. Through closed loop recycling.

William Bergh: 0:53

it's not about avoiding landfills. It's about getting control of the next oil. Batteries is quickly and slowly, replacing fossil fuels. Batteries are not consumed, but they end up in your drawer. And at some point the volumes are large enough to feed the production of new batteries.

Jed Tabernero: 1:15

In this system products are used recycled. And then potentially remade into new products. Significantly reducing landfill waste. In today's episode, we're going to explore the critical issues surrounding the battery supply chain. That powers, the electric vehicle revolution.

William Bergh: 1:35

How do you make a supply of used batteries available to both reusers and repurposers and recyclers? So that they can bid or purchase that supply.

Jed Tabernero: 1:46

We're also going to discuss how innovative entrepreneurs like William are developing solutions to recycle these batteries effectively.

William Bergh: 1:54

Hi everyone. I'm William Bergh, founder and CEO of Cling Systems. And if you're interested to explore the market of batteries and circularity, make sure to tune into this episode.

2:08

This is things have changed podcast.

Jed Tabernero: 2:12

I don't know about you guys, but in my house itself, right? All of my phones, since I was, since 2011, since I came to this country, I still have, every time I get renewed, I have dude, I have a stack of these phones at home, right? Number one, I don't know actually where to bring them. Actually. It's not very common knowledge, right? Where to bring these phones at the end of the life, but I don't know what to do with them What actually do we do with these phones at the end, so that's one major question that I think today we'll be diving into we've had a couple episodes just on the battery life cycle itself. And it's been super interesting learning about this stuff, but one of the trends that we're seeing in the market is of these ex Tesla execs, right? Starting Their own battery recycling companies. You have Redwood materials, right? XCTO. I think of Tesla, you have American battery technology company, right? Another XCEO person. And then you have Northfold where you William have spent some time in as well. Also was started by two X Tesla execs. Why are these Tesla execs going into battery recycling, man? Why do you think it's so important?

William Bergh: 3:26

it's not about avoiding landfills. It's about getting control of the next oil. Like batteries is quickly and slowly, depending on how you see it is replacing fossil fuels. Batteries are not consumed, but they end up in your drawer. They end up wherever they end up. And at some point the volumes are large enough to feed the production of new batteries. The original vision, like why Cling is that what I saw at Northolt, I was actually at the recycling side.

Jed Tabernero: 3:57

Makes sense.

William Bergh: 3:58

North will focus on developing green batteries, like the world's most sustainable batteries. They have a very high emphasis on recycling and circularity and like ethical sourcing and so on. But it became very clear that. Like it's an obvious statement, but batteries are not consumed, right? They're not burnt. They are only used and they degrade raw materials. They're there. They're still there. You have to extract the raw material once, and then you have them, which is in contrast to oil or gas is that you extract it once, but then you never have it longer for one, it's a single use. So the potential of batteries is that you mine it once. And then you have at some point enough to power circular economy where you have pretty much abundance of raw materials that are used and then reused and reused and reused, because these raw materials, mostly metals that can be. If done right, and if recycling scales and is good enough then you really have a pretty much limitless resource of stuff that can carry energy. And it's the recyclers that is going to replace the miners. So you see mining companies, they're also moving into recycling. And it's actually the mining companies today that are feeding in recycled or used batteries to kind of feed into their already existing mining operations. So, so the next generation of mining is very much urban mining or very much like circular use of raw materials and multiple reasons for why going into batteries or recycling. One is obviously the fact that. There's a sustainability aspect to it. The battery supply chain is terrible in many ways. It's also a rather narrow supply chain of who controls it. So there's the diversification of the supply chain where, you know, at the end of life, the batteries are everywhere. There's not like one player or one country controlling everything.

Shikher Bhandary: 5:52

Specifically, you made a point which is so interesting about the difference between fuel being spent versus batteries where the materials, the degradation is not one and done. When did we learn or how did we learn that same battery can then be repurposed again and again? Has this always been common knowledge?

William Bergh: 6:12

We have to clear some things out around circularity which is always needed, which is what's the definition. of recycling. Is recycling breaking down a material and using it In another application, like downcycling to some degree, or is it actually reusing the same raw material for the exact same application? And some also mix up reuse versus recycling and repurposing. So my definition is that recycling is getting back to raw materials that can be reused for producing. The exact same application. So if you would take a battery, you recycle it, you get raw materials that you can put into the production line and you get new batteries out. Repurposing is in, in, in my world, it is taking a battery and you re like you re manufacture it or you kind of do something with it and giving it another purpose. And that purpose is typically defined as a second life. So the first life could be an electric vehicle battery, which you take out of the vehicle and you repurpose it into a second life battery that can store energy for something else.

Shikher Bhandary: 7:30

We're seeing that with like lawnmowers and stuff. The Tesla batteries are coming in and then you can repurpose it as lawnmowers.

William Bergh: 7:37

And that's the cool thing with batteries is that it's a very versatile thing. Like it's energy, right. And it's, it has a plus and a minus. And depending on how, what you want, you can use it to so many different things. So there's a really interesting aspect about repurposing. you can use batteries for so many different things. We're probably going to go into the challenges around that. But just to kind of, your question was around phones. And we still haven't really seen much reuse or repurposing of phones. Because they're so small. You need so many different, like so many phones. in a second life system for it to be any like any useful. So the just costs of repurposing and taking out the batteries, you would kind of have to weld them together, have a battery management system and so on. So the, it doesn't really make sense. And most of them are still in people's drawers.

Jed Tabernero: 8:30

If you look at an icy, right, internal combustion engine car, right today, a lot of that can be recycled, right? Just talking to my friends in the sustainability space, a lot of an ice car can actually be recycled. Even the battery itself, although it's very toxic, right? Those batteries that we have in our gas powered cars, those can also be recycled

William Bergh: 8:55

did you know that they not only can be recycled, but it's the most recycled product on the planet?

Jed Tabernero: 9:00

That is actually insane.

William Bergh: 9:03

Do you know why? It's a highly valuable material lead and it's a very standardized product and there's an abundance. And so there's a the value of the raw materials coming out of a recycling facility is higher than the cost of recycling. So it's just a proper business model. And if not, it's covered by producer, like responsibility fees for any costs that are not covered by the raw materials. There's a, like a proper like incentive or like a cost for producers to cover that cost. So if you would put out your lead acid, if you would put out your lead acid battery on the street, there's. There's a value for someone picking it up and handing it in. Cause you can sell it even for recycling.

Jed Tabernero: 9:44

Interesting. Yeah. Cause I was looking at like EVs and how much we recycle of EVs. And I just wasn't finding a very satisfactory percentage of EVs getting recycled, but then I looked

William Bergh: 9:59

No, but that's entirely a different thing. Like

Jed Tabernero: 10:02

exactly. Yeah,

William Bergh: 10:03

ion batteries is worlds apart.

Jed Tabernero: 10:04

And I think that's the point that I want to hone in on here is like the difference of, We've developed this industry of the internal combustion engine cars. Right. So we have all sorts of supply chain efficiencies that we've been able to achieve there. What we want to explain to our listeners is like, why is it so difficult to do the same thing for EVs today? Now understood it's a nascent market, right? We're only starting to mass produce, having gigafactories of electric car batteries and whatnot. But Can you just give us like a simple explanation of why EVs are so difficult to recycle?

William Bergh: 10:42

I'll see if I can use the analogy to the lead acid battery as a as a polarity. So lead acid batteries are standardized regardless of what brand or type of model they have pretty much the same size. And it's pretty much the same materials in lithium ion batteries or electric vehicle batteries. They're all different and they're all different on so many different ways and they're changing from month to month. And so what happens is that lead acid batteries has read some, reached some kind of like constant state where, they're all the same, but the lithium ion battery industry and the electric vehicle battery industry are growing and developing and evolving so fast that the design changes between not only the years, but like months is quite significant. And it's from all levels of the battery. When you take a lead acid battery, it's one battery. It might have some different cells inside, but it's typically one battery. If you have a, an electric vehicle battery, you have a cell which sits inside, like many cells sits inside a module and many modules sits in a pack. And if you go on just the first cell level, there's so many different ways of so different chemicals and materials and metals that are used inside the cell. And there's so many different types of just combinations of raw materials. Some have cobalt and some don't. Some have nickel and some some don't, and now soon some have lithium and some don't it's what are the raw materials inside?

Shikher Bhandary: 12:32

There's no real standardization. Yeah.

William Bergh: 12:34

no. And why should there be, I mean, you should develop something like industry needs to be developed. Like the cars needs to go longer. They need to charge faster. They need to be lighter. So, we cannot be like we cannot halt developments. So we need that kind of, it's just a natural thing of an emerging market.

Jed Tabernero: 12:53

I was just gonna say before you ask your question, man, I just want to point out a really cool thing that we basically just learned. Right. So regulation is one of the reasons maybe that recycling isn't as streamlined. But at the same time, we don't want to have super stringent regulations, because we're still finding the perfect chemistry combination to be able to produce sustainable materials,

William Bergh: 13:13

Yeah, no, you're completely right. And there's an incentive for building more and more sustainable batteries. And so there's this new emerging, like really good battery that's called the LFP, some lithium ion phosphate battery that now goes into most cars in China and it's spreading across the world now being the most common lithium ion battery. The challenge with that is that it's, Like the good thing is that it doesn't really hold any cobalt, which removes that kind of ethical issue of the cobalt mining. And it doesn't have like nickel, which is also a big challenge with getting nickel as Russia used to be the biggest exporter in the world. Now. No, it's not, and it's moving elsewhere. But the good thing there is that you get rid of challenging metals. The problem though, is that you're left with very abundant and like cheap materials. And so there's no economics in recycling those batteries.

Shikher Bhandary: 14:11

it. Yeah.

William Bergh: 14:12

Because why recycle? Because there's no value in them. And so the reasons, yeah, so the recyclability of those batteries is much lower. We

Jed Tabernero: 14:23

Most of this recycling probably happens in China. Yeah, 2023, more than half of the electric vehicles sold were in China. So we have this massive market of batteries that are being formed in China, and possibly a closed loop system is probably being developed there as well. Because not only did they emphasize that they wanna be leaders in the EV space, they also emphasize they wanna be leaders in the recycling space

William Bergh: 14:48

must realize the fact that they are many years ahead in both production, or like mining, refining, production. recycling. And we typically like West gives them a lot of shit. For, we say like China controls the supply chain and that's horrible to some degree. It is it's not good for any supply chain specifically especially for this important supply chain to be controlled by any country. I don't think it would be very good if the entire world was dependent on a completely a U. S. controlled supply chain either. So there's a, like a, just a natural, like intrinsic reason for why there's a good thing to just diversify the supply chain. What they should get some credit for or some kind of kudos for is that the electric revolutions wouldn't be here without them pushing it so hard and getting the prices down in production. So there's a two edged sword there as well,

Jed Tabernero: 15:46

as it

William Bergh: 15:46

like everything, that's everything.

Shikher Bhandary: 15:50

So William, you mentioned about standardization, right? As being one of the big challenges of recycling end of life batteries. So can you touch on that as what within this whole battery logistic space that led you to create Cling?

William Bergh: 16:08

It's first that the supply of what we see supply is that we talk about end of life batteries, like waste batteries. It's very heterogeneous because the development of batteries is so rapid that there are so many models, just different types of batteries out there. And then they also degrade differently. They're all used differently. So that the each used battery is pretty much unique. And that's a very hard thing to build a scalable repurposing business on. The second thing is the fragmented supply. The fact that batteries are everywhere. They reach end of life wherever they reach end of life. And in many cases, that's in people's drawers. That's the best example. It's no one knows that your battery or your batteries in your old phones is in your drawer. And it's the same thing for electric vehicle batteries. They go, they reach end of life wherever the car is when it reaches end of life. And that's typically not in the same country. It's typically been exported. If you follow the same trend as ICE vehicles, they're used, sold, exported, used, sold, exported, and then somewhere for many other flows of vehicles, it's ends up in in parts of Africa, Middle East, I'm not really sure exactly how it works in the U S but the biggest import of the biggest source of vehicles in Africa is used vehicles from Europe. So there's a natural migration of products, self, and this just makes sense, like you want to sell your car and it's cheaper and people, your neighbor wants a new car. So where do you sell it? That's just how it goes. And people might want to control that. But. It's a funny statistic that for cars in Europe you can build very simple models for how many cars should reach end of life every year. And based on that you can simply calculate that only like we lose out on almost 40 percent of all cars are classified as having unknown whereabouts. It means that they are either destructed and no one knows about it or exported and no one knows about it, or they're in someone's like backyard and just stays there. So if we cannot even know like where large cars go in and out, then, and those are like owned single unit things that people own,

Shikher Bhandary: 18:39

With pretty good documentation

William Bergh: 18:41

exactly. And people kind of

Shikher Bhandary: 18:42

we still don't

William Bergh: 18:43

Knowing about the battery or about the car, like a battery is just a component of something else. Controlling those kinds of flows is, I mean, it's, it, we, it that's hard. And at the same time, like, why not? Why shouldn't they go there? If they can, utilize more of that resource, then it isn't a good thing. So there should be a natural like diffusion of goods and products. But what it leads to is that end of life markets are very fragmented. So that's the second one. And then the third one is more on the timing and the fact that, batteries reach end of life whenever they reach end of life. There's no control. They they it's a very stochastic. Environment. So the batteries are all different. They're all unique. They reach end of life wherever they reach end of life and whenever they reach end of life. And that's a really hard thing to control if you want to be if you're a recycler and you say, hey, I want all the batteries out there. Or I'm a repurposer. I want all the batteries out there. Like what batteries where and when. And that's kind of where we're trying. That's kind of what we're trying to solve.

Shikher Bhandary: 20:00

That's fascinating. You could have an Audi EV, you could have a Tesla, you can have different properties, different compositions of the batteries that run those two cars. Which is the first challenge. It's all varying compositions and, the industry is going so growing and changing so quickly that there's no standardized process there. But also not only that, the fact that these cars can end up in different parts of the world. And you don't know where they are and when they become end of life or end of second life and stuff. So, wow, that's a tough problem.

William Bergh: 20:39

That's a really hard problem.

Shikher Bhandary: 20:41

Yeah.

Jed Tabernero: 20:42

How does Cling systems. Help solve these problems. You mentioned three of the most difficult problems in a supply chain process in general.

William Bergh: 20:52

Circularity is not a circular supply chain. I think it's an ecosystem. I think that needs many players that together extract the value from the batteries or from the resources. And it the batteries should go wherever most resources can be like extracted and then. It's important to enable that ecosystem. How do you make a supply of used batteries available to both reusers and repurposers and recyclers? So that they can bid or purchase that supply. And at first, this might sound like a typical marketplace, B2B marketplace, but because there is no control of supply and there's, it's a very stochastic fragmented and heterogeneous supply. It's It's hard for buyers to go into a marketplace and say, I want to buy that battery. I want to buy that battery. So what we have to do is helping the buyers, like we becoming a procurement partner for them, where we sit down with them and they say, Hey, we want, we're building this kind of system. And, or we recycling, we're producing this kind of black mass. So we want NMC batteries that are coming in pouch cells. And maybe that's enough. And what we do then is that we go out on the supply side and check like what's out there. And the way to look at what's out there is two things. It's giving the supply side a user interface. that gives them incentives to actually list something. And that can be firstly done by inventory management. So what batteries do they have in their fleet or in their warehouse or elsewhere? The second one is building what seems to be a more like pure play marketplace. The list of battery or a supply of batteries and it's being uploaded into a marketplace and that's shown to the world. And so it's it's like a multi sided marketplace where we are currently very hands on. And then over time, we'll we're trying to automate as much as possible, but the challenge with that, we don't know what comes when or where it's it's still a very hard hard problem. And so what we what we try to do to solve that is, is to becoming like a buffer in the system. Like how can we aggregate supply and put that into a consolidated warehouse where we build up volumes and that volumes is then becoming like large enough to be interesting to buyers. So we also acting as a. As a procurement company for ourselves, we're putting into our warehouse we're then running all the logistics because moving batteries is really hard. It's dangerous goods going over country borders. And it's becoming more and more of a critical strategic resource for countries and regions and being able to move those things efficiently. With the right safety certifications, but also the right reporting is is probably where we can be most competitive by just moving a lot of different batteries all over the world all the time. And yeah, so, so what we're doing is setting up a network of logistic companies and warehousing companies and testing companies that can test the batteries. And then running pretty much a tech enabled commodity trading business on top of that. Yeah.

Jed Tabernero: 24:24

No, first of all, this is brilliant stuff. Setting up this marketplace is setting up the market period.

William Bergh: 24:31

Yeah. Yeah.

Shikher Bhandary: 24:32

Yeah. You were the world's first B2B platform for spent TV batteries. So that's a big deal because you're not just creating a marketplace, like a trading platform for batteries. You're actually housing it in your warehouses to do that. You need to test it. To ensure that this is the right product and has value to you or has, there is value to recycle this. So there are so many key features of this platform. Can you detail some of that and how you've thought about how your team is thinking about some of those features, which distinguishes y'all from, all the different battery startups that we're seeing.

William Bergh: 25:14

One of the first challenges we ran into when we started trading batteries and building it in 2021 and 2022 was the fact it was. No information on the batteries, the sellers, when we started with car dismantlers and what they had was the brand, the model, the year, so you could have a Tesla model as 2017. And that's it. And that's still the case. Like they don't know, even now we've started to source and help car manufacturers and battery producers. And because of the supply chain, like battery, the car manufacturers buy in batteries from battery producers, the car manufacturers don't always know what batteries they have. And so what we've been forced to do, which is now a very kind of fortunate thing to have, is to build this just the battery database. And. So for most like electric vehicle batteries out there, we hold probably the most than comprehensive battery database for just understanding what's the voltage of this battery. What's the weight? What's the size? How many modules is this in the pack? And in the batteries themselves is it an MMC battery? Or is it an LFP? That's very important to understand what's the actual value of this battery. And so if you understand the content of each cell and you have the mass, you can quite easily at least estimate the value in terms of raw materials of that battery. And that gives you an understanding of the floor price. The recycling price or the waste price. And from there, it's about finding where can those batteries go and those batteries can go typically to many applications and back to the ecosystem. It's about having as many players as possible, like enabling as many companies as possible to do something with us, with those batteries. So what we've been very focused on. over the last couple of years is building this like relational battery database, which explains which battery packs are in which cars and what modules are in those packs and which cells are in those modules and what raw materials are in those cells. So you have this massive tree of

Shikher Bhandary: 27:40

Like five levels of detail that you need.

William Bergh: 27:43

Yes. And in those levels, it's okay, but what's the voltage of the module? What's the cell configuration of the module? What's the, dimensions and the C rate and like how much power can you draw from it? And that's on each level.

Jed Tabernero: 27:55

Yeah,

William Bergh: 27:55

this like this database is, we had to rebuild it several times and now it's more like a node database and it's starting to be pretty cool for like how you can walk between Oh, this cell is actually also in this car. It's did you know he wanted this cell? You could also like just buy this at the car battery because it's exact same cell. It just goes like via different modules and so on. Yeah.

Jed Tabernero: 28:19

Me and Shikhar, both, just to give you some background, we have a little bit of experience in the manufacturing space, so we have an appreciation for the bill of materials. And what this sounds like to me is a relational database filled with a bunch of bill of materials for each of these, even from the batteries to the cars themselves. That's super interesting, man.

William Bergh: 28:40

The challenge though, is that as a company building energy systems from use batteries is that battery is just one component out of many. You have inverters, you have, battery management systems, you have EMSs, you have just the mechanical components. And yeah, we're still trying to figure out how we can kind of help on the other aspects as well, because currently we're only covering the batteries, but. But interesting to see yeah. Cause we're now owning two batteries. And there's some ideas on should we expand currently? No. But there's also companies are like very like focused on like just part number, like management and just going into one place to look at. What does this part number represent? And I don't know if we want to go there either. So for us, this database is just to make. It easier for batteries to being bought and sold and move. So yeah, we're just, we typically talking about like, how do we remove friction, like how do we remove friction? How do we remove friction? And this database is just one way to remove the friction because it gives all the buyers the information they need and to give the sellers the information they need to list the battery because all they know is this is brand model and year.

Shikher Bhandary: 30:00

The database is so helpful. I mean, it's driving so much efficiencies. William, basically we go on LinkedIn, just search for logistics and just read posts all day because that's basically what we do anyway. So we love that stuff.

William Bergh: 30:13

That, that will be my new hobby.

Shikher Bhandary: 30:16

So who are your key partners? Because I know you're now talking about the testing. You're talking about the warehouse. You're talking about logistics company. So shipping it and the buyers, right? That is already so many different parties that you're working with. So how are you thinking through the stakeholders that make cling systems, the platform that it is?

William Bergh: 30:40

It's a really good question. The interesting way companies come to us, like even large incumbents in the logistics space and in the even traceability space, like digital products, passports, companies coming and testing companies is that there is no central space where the battery world exists. So like the battery industry is at this place. And I believe in, in, in that ecosystem and I think we're pretty good at cultivating it and growing it. And it has its own value and people can call it network effects can be called whatever, but there's really a value of like bringing the industry together and we're doing that online. We were doing it offline for our own events. Of just bringing the people together in a quite casual way, talking about, the, like the battery industry, I think, but it's so early and it's so scattered, like just bringing people and companies together. is I think just the best way. And we could say that we have a partner with this logistic company. What we've seen is that from like transporting batteries and logistic industry, that's also kind of a new industry to me is that it's it's kind of funny because it's so obvious, but trucks are real. There has to be a truck in the proximity of what you're picking up to to use that truck. And sometimes that truck is not there. And so logistic companies, they are sometimes really great at making a shipment because they had a truck in the proximity at site a, and they can take it all the way to side B because that's within their kind of, their and sometimes their truck is not there. And then another company might be much better that last week was a terrible option. So having the ability to have a, like a proper RFQ process for the logistics. is is very important. And then you have to have a structured way of structuring that data and sending it to many logistic companies. And they kind of bid on that shipment is it's an important way because it's, it differs like five X between company A and B and it was reversed last week because the truck was in, the truck was there. So that's, it's It really requires a lot of companies to to just taking care of the used batteries.

Shikher Bhandary: 33:05

Got it. And so what you're saying is obviously working with these different partners, those are the costs associated to streamlining the data and getting the right data to then on board to then allow buyers to make informed decisions to buy the products from your warehouse. Is the revenue more on that trade, for all the work that you're doing, which is really substantial, you're able to charge a certain fee to the buyers and they are okay because they have verified products, which checks they are due diligence to.

William Bergh: 33:47

Yeah. The biggest thing is that there, it's a fragmented supply that needs consolidation. And so it's easy just to come to one player and that does all the sourcing on the other side. So that's the big thing. And so there's value in just at one point of contact, there's also a kind of a market timing that can be. Let's say used. So what we do is both buying and selling batteries. And so that's just a typical arbitrage. But we also, when necessary like also just do brokering. And moving into having more of a transaction fee on the platform, like the platform as it grows, kind of more hands off of us. So we're still kind of exploring which is the scalable business model. Is it a pure commodity trading routes where buying and selling and working capital is the name of the game? Or is it more a. An online kind of marketplace where network effects is the name of the game. And we're going back and forth. And as you said, somewhere in the beginning that we're, a market maker we kind of have to bounce back and forth and see what's actually the best way to bring value to to the ecosystem is our kind of North star metric, or, what we. What we want to do is just remove all the friction, like that's our kind of value to the industry, enable the ecosystem to extract value from the batteries. So bringing as much data available to as many companies as possible and removing all the friction in terms of logistics and warehousing and testing.

Jed Tabernero: 35:22

I can see where you would have the challenge though. is IP and the protection of data, actually, because you have to, that's a delicate balance, right? You're trying to reduce friction by giving access to more data so that they can make certain decisions, right? But at the same time, maybe there are manufacturers who don't want to share certain types of data points. Do you experience that a lot actually in the battery industry where people are kind of protective, or are they more like, the folks that we've talked to in Volta who are quite open about talking about these things and are just doing everything to grow the industry, are you seeing that in that space? People like protective about their data.

William Bergh: 36:01

Volta is very needed. They're doing a very important job. What we see three things the first one is what we call static data is data that doesn't change over the lifetime of the battery. So it's production year doesn't change size, weight cell configuration. Some of these things have never changed that we put a lot of effort into aggregating and structuring. We're quite protective of that data and we use it to, to facilitate trades. And when we get that from car manufacturers and battery producers we're now realizing that user based. A data access is a bigger challenge that we that we thought. So what we're now trying to kind of work out is that there's, it's like a three dimension matrix here. So which users in a company should be able to access what data it's like. There's, is it the data sheets? Is it the material safety data sheets? Is it like other data sheets? that should be like accessed by which type of company and which type of user in that company. So how can we distribute our battery producers? Data sheets. Is that just, do we just make that public? No. So who then can actually access it? And so the height, what's the KYC process of that buyer and how do we like stage them, like maybe they start getting just a little data and then more and more as they kind of go through the KYC process. And then the third axle, which makes it even more complicated it's not up to us who decides who should have access to what data it should be the sellers. Right. So how do you build that user interface for them? To decide who can see what. So, that's also something where currently it's actually quite funny. Like you have a big, like workshop on that next week to kind of structure that data, because we're starting now to get more and more requests from car manufacturers directly. And then kind of data compliance is ever more important.

Jed Tabernero: 38:13

Our next point here is kind of just on the future on how you see this industry kind of growing. Shaping itself. And I think we have a little bit of an insight into how that looks like for markets who, market makers like yourself who have created the first marketplace for these, you know, folks to do business. Give us, can you give us a little bit of an insight into what you think the future will be five to 10 years from now? What do you think the platform will have? Who are your major partners? Yeah. How does that look like to you?

William Bergh: 38:46

I think the world of batteries is going to be even more obviously more developed, but so many more different type of batteries. It's going to be so many batteries that are actually reaching end of life. And there's going to be so many more players. There's new battery companies every day. And so it's just a much, much larger market. And our place in that is growing the network where enabling them to access as much data as possible and removing all the friction. And I think that's really the way to, to maximize the, like both the environmental and the commercial value of the batteries. And I think that really goes hand in hand. The reason for why lead acid batteries are so recycled is the fact that there's a commercial value in them. So what we want to do is. Remove the costs of circulating batteries and that's procurement and it's selling. And that doesn't have to be necessarily only in the end of life stage. But how do you start transacting batteries, throughout their life, in the beginning of their life, and how can we start tagging what batteries have been moved where, and how can we start actually giving proof that those batteries were recycled at one point, and that raw material is now going back to new batteries. Today, there's no proof of anything going anywhere really on a unit level. What we're now starting to kind of distribute on our batteries is, this is just as like dumb QR code, but what it leads to is like the some people call it a passport. It can be called. Whatever, but what we're developing is one like data warehouse or per battery, it doesn't necessarily need to hold. The information about the technical aspects of the battery that we're adding is who is the owner, where has it been where has it been sold to, who has been the owners and that's one thing. And then it's also about like, how do you like you test the batteries at different stages. It's like also the updated kind of. Battery health data, as well as what I think is actually more important is how do you access the right logistic documents for how to transport this battery, like, how can we make it easy for a warehouse worker who is in the, in a transit warehouse at a port somewhere being able to know like how, what's, what is this in this box? Like what's this battery and understanding what's the raw materials? Where's it been? Where's it going? And that's one way to get. It's a really good understanding of what materials goes where. So just being a kind of facilitator enabler of batteries being moving around the world, which takes us to the vision that I don't, I think we have really talked about it very much, but in the beginning we talked about recyclers replacing miners,

Shikher Bhandary: 41:46

Yep. Yep.

William Bergh: 41:46

but then what replaces the mines, it's the waste batteries. And so what we've what do you say? Trademarked is the online mine. Which is what replaces the mines. It's about knowing what raw materials are where, which feeds into recyclers. Which is the next generation of minds

Shikher Bhandary: 42:08

As a true logistics company, you're also doing the testing. You're doing the warehousing. There are so many,

William Bergh: 42:13

Important to

Shikher Bhandary: 42:15

Yeah. So now partnerships and that trust is so key. So how do you go about it? Because I'm assuming, you're, I'm just thinking as a process engineer, you're looking at, and as a mechanical engineer that you are. You're probably looking at variance at every step, variance in the testing, variance in the logistics company that you just mentioned with the trucks being wildly different in their capabilities to even the buyer behavior and that side of things. So how's trust playing a role? Because it feels like you are the trusted party, but you need several key evangelists at each step hour at each. Vertical of what you deal with.

William Bergh: 42:57

our current best practice is to make right what we've made wrong.

Shikher Bhandary: 43:02

Okay.

William Bergh: 43:03

Batteries are all different. And so it happens that we send batteries that aren't according to spec, it's about resolving those challenges and the companies that we've sent batteries that are not good to, and that we kind of replace them and just had a proper claims process and just doing the right thing. And then getting the new batteries is the ones that are, that we're closest to now. And what I mean with that is that it's a very personal. industry. I think it's about knowing the people showing that you actually do the right thing and care. It's

Shikher Bhandary: 43:36

Relationships are

William Bergh: 43:37

yeah it's, yeah, I think it's still at least today, quite a relational based industry. And if you talk about, the falling numbers of Battery prices, like they're very low now, like the rapid decrease of battery price in the last couple of months. It's insane. But when we talk to to like industry players, it's all about who access that supply. It's not that those battery prices are available to anyone. Like you have to know the people selling those batteries at those prices. So it's still kind of a relationship driven industry. But maybe going more on the tech side, it's about carrying the data in a reliable way. So there is no today standardized way of testing batteries. If there is a way of testing batteries at all, every testing company that we talk to claim their process is the best. And then while their processes are not very good or accurate. So it's about being very honest with how was this battery tested? Showing the test method and the test results. And that is what's like laying ground for the buyers to kind of benchmark against, and that's how the batteries are priced. Pricing the batteries in a in relation to what data is available is It's like the most probably the most important thing.

Jed Tabernero: 44:53

Really enjoy this episode. Enjoyed

William Bergh: 44:55

Yeah. Same.

Jed Tabernero: 44:57

about. The space, because for us, like this is, you are the fourth founder. I think we've had on in, in the battery industry. So we're really getting like a clear picture of how it's evolving. Partnerships.

Shikher Bhandary: 45:09

before we close any call William, we like to ask we like to give the founder the stage to talk through like Jed mentioned, if you're looking for funding in the next few months or hiring or Where people can reach you, because I know your website has a great breakdown of things that you do and your blogs and the content and stuff.

William Bergh: 45:31

Yeah. But I'm going to start with the last thing. So I'm always looking to expand my network of people out there. So don't hesitate to reach out either to my email that you might be interested in. Linked to in the show notes. Otherwise through LinkedIn. I'm quite active there. But what I, if I want to leave the audience with the one takeaway is that circularity is an ecosystem. It lives and thrives through diversity and many companies doing different things. What we're trying to do is to bring it all together so that. Everyone can kind of benefit from working together to extract more value from each and every battery. So if you are in the supply chain, it doesn't really have to be at the end of life or actually. Like building batteries from second life, we're very interested to talk because I think there is value in bringing together the industry in this, in the supply chain. So, do reach out. I think there is, there's a way we can connect even, companies that aren't directly linked to our core business. We like to do connections of companies that we believe can just benefit the. The battery industry and the larger transition to a more sustainable world.

Jed Tabernero: 46:49

Great. That's awesome, man. Thanks for coming on the show.

William Bergh: 46:55

Hi everyone. I'm William Bergh, founder and CEO of Cling Systems. And if you're interested to explore the market of batteries and circularity, make sure to tune into this episode.

Jed Tabernero: 47:07

The information and opinions expressed in this episode are for informational purposes only. And are not intended as financial investment or professional advice. Always consult with a qualified professional before making any decisions based on the concept provided. Neither the podcast, nor is creators are responsible for any actions taken as a result of listening to this episode.