In the race to unveil the next big thing, we often hear about technology and innovations long before they become reality. But when we look too far ahead, we often overlook the emerging technologies that will change our lives in the near term -- and that, therefore, deserve an investor’s attention.

The Future According to Now brings a fresh point of view to the innovation conversation by exploring the groundbreaking technologies that are poised to change our lives in the next few years, and those that investors should consider. Our focus on near-term innovations provided a framework to demonstrate Fidelity Investments’ subject matter expertise and smart investor insights within incredibly compelling stories.

Highlighted episode:

Charge Ahead: Battery-operated cars and homes are not far off. Scientists are already imagining how a new type of battery will change the world. We explore the potential and the challenges scientists face in creating it.

This podcast was created to appeal to Fidelity Investment’s target: adults 35-64 with a household income of $100K+ and investable assets of $100K+. It was created to lift the perception that Fidelity Investments is a company with smart investor insights and compelling points of view.

The Future According to Now was the first-ever branded podcast created by a publisher studio. More so than any other medium, podcasts are very much an “opt-in” experience. Podcast listeners have high expectations and can skip over anything they don’t like, so it was critical to our partnership that we captivate listeners right away, and keep their attention throughout each 10-15 minute episode. We were able to balance our ambitious storytelling goals, with smart, intentional brand moments that made a clear, authentic connection to “why Fidelity.”

Narrator:

You're in a helicopter, flying over the smooth dusk-colored foothills of Nevada's high desert. There's not a town in sight. Up ahead is a valley. As you pass over the mountain, you see something down below that looks like a giant sneaker sole, and it makes an enormous footprint, more than five million square feet. It's the biggest factory in the world and one of the largest buildings ever made. Tesla's Gigafactory one is not yet complete, but construction is well under way, and it's already starting to do what it was actually designed to do: build a half a million batteries per year.

Welcome to the Future According To Now, a podcast from [OMITTED] and Fidelity Investments. Technology holds so much potential. Some of it sounds really far-fetched, and some of it matters right now. This podcast explores groundbreaking innovations that hold real potential to change our lives in the foreseeable future.

Today's episode, Charge Ahead.

The batteries produced at Tesla's Gigafactory one will power a revolution in car design. The rise of the electric vehicle may seem unstoppable now, but up until today, it's been the battery technology that's made these vehicles impractical and unaffordable for most people. For that to change, scientists are working to develop a new battery.

Greg Less:

Everybody wants an energy reserve in their car, whether that's a gas tank or a battery that will let them go 300 miles before they have to fill up. When it's time to fill up, they want that to take five minutes because that's what we've grown accustomed to with the internal combustion engine. That's really difficult to do with a battery. One, the infrastructure for the charging just isn't there, and two, right now, we don't have a way to fast charge our batteries.

Narrator:

That's Greg Less. As Senior Manager of the Battery Lab at the University of Michigan Energy Institute, he works with scientists developing the next generation of batteries. Today, Tesla is pushing the limits of existing rechargeable lithium-ion battery technology, making their batteries as powerful and affordable as the materials allow, but there's one big obstacle to increasing the energy storage in lithium-ion batteries. The higher the capacity, the more likely the battery is to explode. It's because of the liquid inside that separates the positively charged anode and the negatively charged cathode. That's called the electrolyte.

Greg Less:

We're all familiar with some safety issues of lithium-ion, right? They catch on fire if they're damaged, and really, what's causing that is the electrolyte. The electrolyte is the most flammable, the most toxic, the most problematic component of the battery.

Narrator:

That really has been a problem with some cellphones and laptops. Companies spend money designing and building safety features that limit the damage if a battery does catch fire, but there's another cause factor. The liquid electrolyte in lithium-ion batteries is very expensive, so companies are trying to find ways to save by producing lithium-ion batteries more cheaply.

Greg Less:

We know, for example, that Tesla has gone to this Gigafactory, North America's largest factory, and its sole purpose is to make lithium-ion batteries, and they're relying on economy of scale. If we make many, many batteries all at once, it becomes cheaper.

Narrator:

What's happening at Tesla could have a revolutionary impact on the future of the global auto industry, pushing other companies to compete in the electric vehicle market. David Wagner is an Equities Analyst in Fidelity Investments, covering companies in the chemicals industry. As part of his research, he keeps a close eye on battery technology, given its importance to a number of chemical companies with operations all over the world. In early 2017, that meant traveling to the Atacama Desert in Chile to see how lithium is extracted from the ground.

David Wagner:

For miles, they're these gigantic pools of salt water, and they're sitting on the desert floor at high elevation, just using the sun's energy to evaporate this liquid. Eventually, after a long process of being under the sun, it leaves behind this concentrated lithium deposit, which eventually gets turned into a lithium carbonate or lithium hydroxide, which goes into a car battery or phone battery at the end of the chain.

Greg Less:

David also sees the potential impact of Tesla's new state-of-the-art battery production facility.

David Wagner:

Tesla definitely is leading the charge, and I think foreseeing a lot of other companies in the industry to stay up-to-speed because they have a real vision that this battery-driven future can be a reality. This five-billion-dollar investment, the Gigafactory, is going to supply lithium cells for 500,000 cars.

Greg Less:

David understands how changes in the industry can affect companies and consumers and also investors.

David Wagner:

I think paying attention to changes in industries and disruptions in industries always provides investment opportunities. As an analyst of Fidelity, I'm constantly looking at how technologies such as the improvement in a battery is going to make some technologies more relevant and make other technologies relics of the past. I think both of those present opportunities for us, for our shareholders.

Speaker 1:

David knows that developing better battery technology has been a top priority for battery manufacturers, technology companies and auto makers, but he understands that governments around the world are also a big force behind the electric vehicle revolution.

David Wagner:

Chine which accounted for half of the electric vehicles sold last year, they've put out mandates to see two million electric and plug-in hybrid cars on the road in 2020 and seven million within a decade. Most recently, they said that they intend on actually batting the sale of gasoline and diesel cars some time into the future. That's on top of other countries such as the UK, France, Norway, India. All of these countries have started to put out deadlines of when they expect to only pursue the sale of electric vehicles versus legacy internal combustion engines.

Narrator:

In the long term, the reliance on batteries would not only impact automakers but also companies that support existing car technology.

David Wagner:

The rise of electric vehicles will definitely be a challenge to companies who have historically supplied or been part of the value chain of internal combustion engines, so if you think about suppliers who provided parts for powertrains, transmissions, other fuel systems, a lot of these companies in the long term may be challenged if internal combustion engines get outlawed, and we're all driving electric vehicles.

Narrator:

But that future is still a long way off, and David sees improvements in battery technology as the key to faster adoption of electric vehicles.

David Wagner:

Consumers are constantly looking for an electric vehicle that can drive further on one charge. They're constantly looking for an electric vehicle that, on a cost basis, is more similar or even cheaper than an internal combustion engine.

Narrator:

The way to get there may lie in another portable power revolution that's already on the horizon. The development of a solid state battery. If scientists can find an affordable alternative to the costly liquid electrolyte, a solid material that's equally conductive but doesn't burn, it could be the holy grail for the next generation of batteries.

Mike Zimmerman:

About five years ago, being a material scientist, I was just thinking about and started studying batteries and what the leading materials, technologies and paths were and what people were doing.

Narrator:

That's Mike Zimmerman, and he thinks he's found that holy grail. He's the Founder and CEO of Ionic Materials. For years, he and his team have been working to develop a polymer or plastic that could be used as a substitute for the liquid electrolyte.

Mike Zimmerman:

I started looking at what people were doing, and I noticed people working on ceramics. There's been one polymer that's been around throughout the years, and the one polymer only conducted lithium ions at high temperature, so you had to heat the battery. Being a polymers' person, I thought if I could help invent a new polymer to replace the liquid electrolyte that would work in room temperature and a wide temperature range, that could be an innovation in batteries.

Narrator:

Mike got backing from some prominent investors like Bill Joy who founded Sun Microsystems. After working in stealth, the ionic team recently announced that they developed and tested a solid electrolyte battery. It looks like a conventional lithium-ion battery, but you can jam a screwdriver through it or cut it into pieces, and it won't catch fire. In fact, Mike's team even fired bullets through it. It didn't blow up, and it actually kept working. Now, they're beginning to partner with car companies and battery manufacturers to build a product.

Mike Zimmerman: Our batter could be the one that solves three problems. It solves the safety problem, which is so important, solves the range anxiety in cars with a higher energy density battery and also can reduce cost, so I think the unique thing about our approach is it can address all three of those axes, and I have a very dedicated team that feels like if we have a solution to a major problem that can help society and the earth.

Narrator:

Whether or not ionic materials is the company that helps bring the first solid-state battery to market, David Wagner thinks the idea has great promise.

David Wagner:

Solid state battery is a good example of the type of developments in electrical battery technology that could be an important component of technology that really does drive the accelerated adoption of electric vehicles in the future.

Narrator:

David believes that the impact of improved batteries could be even bigger, one day allowing environmentally-friendly renewable energy to be stored on the power grid.

David Wagner:

Electricity is typically being consumed immediately after it's been created, so sources of energy like solar and wind will only generate energy intermittently when the sun is shining brightly or when the wind is blowing, so if there is a demand for energy when it's being produced by these sources, this could likely go to waste. I believe that improved battery storage devices will finally give us the ability to allow this energy to be stored and gathered for later use, which will better leverage the output a lot of these alternative energy investments and lead to less waste.

Narrator:

This is happening now on a small scale though not everyone can afford the high upfront cost of existing battery and solar panel technology, but if we make that breakthrough and we're able to store solar and wind energy at an affordable cost, a battery powering your home could be as common as a furnace or hot water heater. That could transform the way we use energy all over the world.

David Wagner:

The fact that batteries can be used on the electrical grid or actually, you could have a battery pack at your own home, you can now hold some of the energy that's harnessed by solar panels on your own roof, eliminating the need to actually pull energy off of the broader grid. This battery pack could give you independence in some way from the broader power grid, or you could actually use your own electricity and sell it back to the grid at the most lucrative time of day or night. This could be really game-changing to some emerging economies where I think a lot of businesses and homes struggle to be tied into an often insufficient and unreliable power grid.

Narrator:

The lithium-ion battery, originally developed for video camera, ended up transforming the way we live our lives. It opened the door for cellphones, making landlines almost obsolete. It sparked the widespread adoption of portable internet-connected electronics that define life in the 21st century. Now, the next generation of battery technology is being powered by the advent of the electric vehicle, and that's a revolution you can hear coming down the road.

The Future According To Now is a podcast from Fidelity Investments. Listen on Apple podcasts or Spotify. Thank you for listening.

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