by Dr John Warner, Chairman NAATBatt International and Chief Customer Officer, American Battery Solutions Inc.
Have battery-powered vehicles reached the tipping point – and what does that mean for the rest of the industry?
The electric vehicle and lithium-ion battery industry have been known for having fits and starts over the years, with periods of major interest and investment followed by periods of consolidation and bankruptcy. In fact, in the late 1800s in both Europe and the United States, there was a virtual flood of electric vehicle manufacturers across all types of applications, ranging from bicycles to automobiles to trains. But with the change from the 19th to the 20th century and the introduction of interstate highway systems in the US and the growing availability of liquid fuels, the electric car had virtually disappeared by 1920.
Nearly 100 years later, we appear to be on the verge of a major shift in vehicle transportation, driven by the rapid advancements in energy storage, vehicle autonomy, vehicle electrification and artificial intelligence. We are nearing a tipping point both in transportation and energy storage. While electric power will not entirely replace liquid fuels, it will become a major portion of the market in the years to come.
It is energy storage that has proven to be the real enabler for this coming transition. From the time they were first introduced in 1991, lithium-ion chemistries have increased in specific energy by over 300 per cent, while at the same time costs have been cut by about 90 per cent going from over $2,000/kWh to about $200/kWh today, with direct line-of-sight to costs well below $100/kWh. At the same time there is massive capacity being added across the world, with some estimates indicating that we will have more than 500GWh installed by 2025 and between 1TWh and 2TWh installed by 2030. And this growth is being matched by the raw material suppliers, who have new capacities coming online over the next five years to meet this growing demand. We also saw perhaps the largest battery IPO when Contemporary Amperex Technology Limited (CATL) raised $2billion in their spring of 2018 IPO on the Chinese exchange which is helping to fund their next round of capacity growth.
And we keep innovating and pushing the technology forwards. Energy density is improving as new chemistries and all-new cell types such as the solid-state battery are introduced. Today investors are placing major bets on the future of solid-state batteries, as they would enable the 500-mile range electric vehicle and improve safety by eliminating the liquid electrolyte, while still cutting costs enough to make EVs virtually substitutable with internal combustion engine (ICE) vehicles.
Safety is also improving as companies invest in non-flammable electrolytes and solid-state batteries which have no liquid electrolytes at all. Many companies are looking at the other cell components, such as the separators and metal foils, as areas in which to improve safety. Some are actively working to find fundamental engineering methods to improve safety, such as using nanoscale materials to coat the larger active particles to prevent internal short circuits.
But even with the new technologies, there are some challenges to be faced. The energy storage industry has already gone through one consolidation in the early 2010s and may be in the midst of another, as companies such as Cummins begin to snap up smaller system integrators to help them build their skill sets and fix their supply chains. But we may also be in a unique short-term period, with some of the capacity being constrained while the new supply chains and manufacturing are still being installed. There have been recent issues where some smaller industries or customers have not been able to obtain product, or are being asked to wait for significant lead times before they can do so. With the majority of the industry focused on the automotive and bus markets, the grid, stationary and other markets appear to be having trouble getting access to some of the higher-energy-density chemistries. While the new capacity that is due to come online by 2020 may alleviate this issue, this may also be a chance for some of the non-lithium-based chemistries to grow into these markets.
The industry trade group NAATBatt International, with more than 115 global members, has many member companies that are working on innovative, new and promising next-generation and beyond lithium chemistries and technologies such as solid-state, lithium-sulphur, lithium-air, aluminum-air, zinc-air, nickel-iron and many others. At NATTBatt’s 10th Annual Meeting in March 2019, the New Technology Showcase portion of the event allows companies to introduce their technology.
We have already reached the tipping point where energy storage technology is now a ubiquitous aspect of our lives, it will soon pass the tipping point for transportation as well.
You can learn more about these topics and more in my new book, Lithium-Ion Chemistries: A Primer, published by Elsevier on May 1 2019, or in my first book The Handbook of Lithium-Ion Battery Pack Design also from Elsevier.