Plugged In, Plated Up: Can Lessons From Electric Vehicles Accelerate the Food Technology Boom?

How historical investment in electric vehicles can provide a blueprint for alternative proteins

Using historical disruptions to understand and inform future ones is vital. I have written on many historical food related disruptions through my career, from ice, to citric acid, and insulin. However, there is no perfect analogy for how a future disruption will happen. The timing of the technology improvement, government policies, regulations and politics, the investment fever, and the consumer all play a role in the timing of disruption. But, history does provide a blueprint, and valuable lessons and questions to approach the key challenges and opportunities in the future.

Back in October 2023 I presented at the Good Food Institute’s conference on behalf of Synthesis Capital. My talk was entitled “Beyond the Consumer: What can investment in electric vehicles teach the alternative protein industry” and you can view the whole thing on YouTube here. In this I went through some of the lessons that investment in electric vehicles can teach the nascent food technology industry.

Comparing the disruptive promise of electric vehicles to alternative proteins is attractive: the switch to electric vehicles (EVs) is in full swing and has hit the “tipping point” by any metric. The fact that we are currently living through the EV disruption, gives us as consumers a tangible comparison of what a technology led disruption looks and feels like and gives the industry an indication of potential challenges and bottlenecks. And even though electric vehicles have come a long way the sector still has tremendous growth ahead of it.

Similarities move beyond these facts, both incumbent industries are entrenched and well-established representing significant global manufacturing, political and financial strength. Both the production of combustion engines and particularly some aspects of meat and dairy production are amongst the largest contributors to GHG emissions and are coming under increasing pressure from regulators and consumers as the potential of disruption is not lost on anyone.??

There are differences too. The supply chains look different, for electric vehicles – or batteries you need to consider charging during their lifetime and the end of use case. Meanwhile, consumers make decisions around food everyday – there is a high trialability, and a lower entry cost than the decision around buying an electric vehicle. Emotions are often heightening around food as we link it to our own experiences and cultures. In addition, there is the health aspect of nutrition which we are only just starting to understand.?

The adoption of electric vehicles has reached the tipping point

Current estimates expect EVs in the US to have anywhere between 10-20% market share in the next 1-3 years and 70% of new car sales and 50% share of fleet by 2035. In 2020, Tesla became the most valuable car company by market capital in the world[i], and in 2023 the Tesla Model Y was the best-selling vehicle, of any kind, globally[ii].

Meanwhile adoption of food technologies is still nascent, with plant-based meat and dairy having less than 1% market share in the US[iii]. It is likely alternative proteins and food tech is at least 15-20 years behind electric vehicles in terms of adoption. The question is can we speed this up?

History can teach us lessons

History can be revealing. Only twenty years ago in the US in 2004 there was momentum building from legislators, the governments and even some car companies to move cars away from gasoline and diesel and towards a greener environmental strategy.

At the time the solutions proposed were focused on conservation of energy (essentially asking consumers to use less), alternative fuels (mainly hydrogen and biofuels), and fuel efficiency (using plug-in hybrids to reduce the GHG impact).

It is notable that just 20 years ago, fully electric vehicles were simply not seen as a viable long-term solution to the energy crisis – the expectation was that the closest we would get would be plug-in hybrids – because the battery technology at the time just simply wasn’t good enough. The rapid exponential improvements going on in greener energy production and storage technology were just not taken into account or fully understood.[iv]

Jump forward two decades and we are at the tipping point[v] for electric vehicle adoption. On top of that, the US alone has seen hundreds of billions of dollars of investment across the whole electric vehicle supply chain, with more than $85 billion of announced investment since the Inflation Reduction Act (IRA) was passed in 2022, creating more than 200,000 jobs.[vi]

So if we forecast that food technology is 15-20 years behind electric vehicles, what lessons should the alternative protein and food technology industry take and use from electric vehicles to accelerate the adoption of alternative proteins?

1.??? Technology advancement is vital for the disruption of transportation and food

The electrification of transportation and alternative methods of food production are, in my view, predominantly technology led transformations. Both are enabled by rapidly improving technology, from a cost and capability perspective.

The exponential decline in the cost of batteries has been vital in enabling electric vehicles to come to market. Since the 1990s the price of lithium-ion batteries has fallen by 97%[vii].? For food, the technologies needed to produce meat and proteins outside the animal such as precision fermentation and cultivated meat production are also seeing huge cost declines in just a few years.

However, it is not simply about cost, but also how good the products – enabled by the technology – can become. The range of the average electric car on the market has increased from 73 miles in 2011 to 276 in 2023[viii] - and the choice of models has also increased several fold. For food, understanding how technology has enabled “better” food is less intuitive, despite many innovative products, manufacturing and farming techniques being introduced over the years. While some of these have hit the headlines under a shadow (GMO, high fructose corn syrup and margarine to name a few), most are still part of the food system today. Who knew that the stomach-churning Brussels sprouts I had to choke down in my youth, have had the bitter taste bred out of them.[ix]

If we take a simple vegetarian burger, we can see how innovation has resulted in step changes in the ability to mimic meat. From the first vegeburgers of the 1980s to today’s Beyond and Impossible burgers – these offer a distinctly different consumer experience. However, I still argue the products on the market today are still not good enough (or cheap enough) for the “rational” (meat-eating) consumer to switch. Unlocking new technologies, like cultivated meat, will unlock further improvements in functionality and taste.

Something I argue that may be unpopular is that the food products on the market today are simply not yet good enough for the “rational” consumer? (a rational consumer defined in economic terms as a mass market consumer i.e. one who eats meat) to switch.

2.??? Technology advancement doesn’t happen in sector silos

We are in the midst of a multi-sector disruption across not just food and transportation, but information, energy and materials. These disruptions are driven by number of underlying technology innovations which are not limited to just one sector. Better and cheaper battery technology has enabled consumer technology like smartphones and has also been vital in storing renewable sources of energy like solar and wind. Indeed disruptive products, businesses and services in one sector feedback to create new possibilities in other sectors.

Improvements in electric vehicles were underpinned by these sector crossing technologies like renewable energy and battery technology. The growth of consumer products have been instrumental in improving battery technology for example. ?

The takeaway of this is that barriers today may not be so tomorrow. For example, energy cost is often talked about as a key barrier – but if we are in a world with abundant and cheap energy (from solar, wind and batteries for example), this is less of an issue. Understanding the implications of coming disruptions in other sectors on the current and future food industry remains important.[x] Tony Seba and Jamie Arbib have talked about this idea extensively in their book Rethinking Humanity.

3.??? There will be winners and losers

Twenty years ago, there was momentum from a number of different stakeholders; from government organisations like the Department of Energy (DoE), to car companies like Ford, GM and VW; all backing to the tune of billions of dollars, a variety of options for a clean transportation future.

Not all of these companies were successful. Even those companies who were founded on the principal of electric vehicles underpinning the transportation of the future were not necessarily winners. This is because the subtleties of the winning technology is not always clear, and there are winners and losers.

One of these companies that stood out was Better Place, a battery swapping company founded in 2007. Its unique business model was founded on the fact that battery technology at the time meant short distances and long charging times, and so their solution was based on the idea of battery swapping – driving into a “station” and physically swapping the battery – allowing for much faster “charging” times. By 2012 they had raised through venture capital more than $700 million – and were bankrupt a year later. Better battery and charging technology (and a consumer preference for charging) made the business model obsolete. New food technology will be the same – there will be winners and losers, some because of technology improving, and some for other reasons. ?

Another facet of this is for companies who have incredible technology but the timing is off. This is especially true for deep tech companies, where there may not actually yet be an ecosystem for the new technology to be sold into, this can lead to the technology being discarded too early.? In 2005 A123 Systems was formed based on a new, faster charging Li-on battery system out of University of Texas. They were awarded a number of grants from the DoE and the United States Advanced Battery Consortium (USABC) and other contracts totaling over $1 billion. ?But, it was too early, the demand just wasn’t there. In 2013, China’s then-biggest auto parts company?purchased A123 out of bankruptcy. That year the Chinese government also began implementing its plan to build a domestic EV market at a breathtaking pace. A decade later, China accounts for 58% of the world’s EV sales and 83% of all lithium-ion battery manufacturing, and the US is scrambling to build its own battery supply chain.

4.??? What will food technology’s Tesla moment be?

Tesla’s impact on the EV market is understood. There is no doubt that Tesla releasing their first electric sportscar, the model S, was a pivotal moment. Tesla showed the market, consumers and importantly the existing car companies (who had tried and abandoned full EVs) that the technology could be de-risked, and mass produced, and attracted billions of investment in doing so. Like the Ford Motor Company before them, Tesla wasn’t the first to market, but it was the first to market scale.

For new food technologies like cultivated meat production and precision fermentation we are still waiting for that Tesla moment. Will it be a company that can figure out large scale cultivated meat production ?and the economies of scale that come with it?

5.??? Government investment catalyses industry buy-in and industry growth

In the United States, government funding to the tune of billions of dollars was and continues to be a key driver for investment in clean energy, batteries and the EV supply chain. This has come from two key periods in history. First, in 2009? with Obama’s American Recovery and Reinvestment Act (ARRA) and then in 2021 with Biden’s Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA).

While the ARRA focused more on grants, the IRA and IIJA has funded the electric vehicle supply chain through loans, incentives and grants. This has been extensive through the whole supply chain from mining key materials, to battery recycling and charging networks. According to the US EV Supply Chain website[vi], announced investments across the EV supply chain total $85 billion (and counting) since the IRA was announced in 2021. The government support has catalysed industry investment, and once that industry buy-in comes it comes fast.

A great example of this is General Motors (GM). Back in 2009, GM was bailed out by the US government. As part of this, they had a clear remit to move towards electric vehicles. As a result of this push, GM are now active through investments, or strategic partnerships across every area of the supply chain in North America, from raw materials, to processing, to cell components and full battery cell production.

GM has invested $650m through an equity investment and supply agreement in the Lithium Americas Thacker Pass project. In addition, GM led the Series B round for EnergyX – a novel lithium extraction and refining technology company. GM has also entered charging agreements with EvGo and Tesla, and invested in the Series A for Lithion – a lithium recycling company. In total, GM have announced spending of? $35Bn on scaling up and out their EV capability just up to 2025.[xi] Why? GM expects to double their revenues to ~$300Bn by 2030. Many of these are also supported by the IRA.

For alternative proteins and food technologies we are nowhere near this kind of government or industry buy in – yet. In some ways this is good news – the $10 billion of investment we have seen so far is just the start – and similar to the investment we saw in EVs twenty years ago.[xii] ?One conclusion is that alternative proteins are twenty years behind electric vehicle adoption. It also highlights that government and industry support for new food technologies needs to be bigger, better and faster. We need more partnerships across the whole supply chain. The good news is that the capital is there. If GM is investing $35Bn between 2020-25 a back of the envelope calculation means that both JBS and Tyson could each invest between $10-15 billion in new food technologies over a five year period. For a company like Nestle it could be even more.

6.??? The supply chain presents additional investment opportunities

GM’s strategy to invest across the EV supply chain, highlights that great investment opportunities exist across all parts of the S?curve[xiii] especially in an industry at the start of its growth. Of the $85 billion post-IRA investment in the US EV supply chain, more than 75% is going to battery manufacturing, not simply the cars themselves. Indeed, as a new industry grows, new business opportunities are born – supply chains are built up, secondary industries spring up. This in turn means even more companies to invest in.

For food technology, this move from proof of concept to proof of scale is something we are at the start of. Investment is starting to slightly shift from full stack and end product formulation, into specific areas of the supply chain, with companies looking to improve the manufacturing technology or identifying areas where efficiency gains? can be made.

Conclusion

As with anything, a global perspective is important. The US are not actually leading in the adoption of EVs – indeed they are lagging China, Europe and the world.[xiv] But this has not stopped investment coming into the US. With food technology the US are ideally positioned to be a world leader. But this relies on government and industry investment, continued tech de?risking and commercial growth. ?

Something I haven’t mentioned is the role of legislation, policy and regulation for electric vehicles. This has likely helped accelerate adoption of EVs particularly in Europe – something the IEA explores in their EV policy data explorer.

In conclusion, we are just at the start of investment in alternative food production technologies – the equivalent of where we were for EVs twenty years ago. So as far as we believe we have come, there is still a long way to go!

For more on disruption and technologies and how the history can teach us about the future, please see my substack Hindsight's Foresight.

[i][i] How did Tesla become the most valuable car company in the world? Forbes. June 14, 2020

[ii] Q4 2023 Shareholder Deck (PDF). Tesla, Inc. January 24, 2024.

[iii] Alternative-Protein Market to Reach at Least $290 Billion by 2035. BCG. March 2021. Accessed April 14th 2024.

[iv] It is also worth commenting that in the early 1900s electric vehicles had 40% of the market in the US. Battery cars were quieter, quicker to start and less dangerous. However, as the ICE continued to improve allowing people to drive long distances, battery technology stagnated.

[v] The tipping point is when a technology enters the mainstream, or the point when a rational consumer switches.

[vi] This regularly updated website shows the investment by supply chain, both pre and post-IRA, as well as jobs created. A bigger discussion can be found with the book Charged the Book. Data pulled on April 11th 2024. James Morton Turner, Charged:? A History? of Batteries and Lessons for a Clean Energy Future (University of Washington Press, 2022).?

[vii] The price of batteries has declined by 97% in the last three decades. Our World in Data. June 2021. https://ourworldindata.org/battery-price-decline

[viii] The end of range anxiety: how has the range of electric cars changed over time? Sustainability in Numbers, February 2023.

[ix] Brussels Sprouts Used To Taste A Lot Different. Here's Why. Mashed. Retrieved April 12th 2024

[x] Rethinking Energy 2020 – 2030: 100% Solar, Wind, and Batteries is Just the Beginning. RethinkX. A Dorr and T Seba.

[xi] GM boosts spending on electric vehicles to $35 billion by 2025. CNN Business. June 16, 2021. Accessed April 14th 2024.

[xii] “Beyond the Consumer: What can investment in electric vehicles teach the alternative protein industry” and you can view the whole thing on YouTube here.

[xiii] S-Curve Adoption: Our House View on Alternative Protein Market Growth. Synthesis Capital, October 2022