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Posted on May 23, 2016 by Dr Victoria Adesanya-Aworinde

2015 - A great year for large-sized lithium-ion batteries

Autonomous Vehicles Land, Water, Air 2017-2037
The electric bus is one of the major addressable markets for large-sized lithium-ion (Li-ion) batteries. On a sales volume per year basis, electric buses grew by 54.6% from 2014 to 2015 with a significant proportion of production and sales of electric buses taking place in China. This rapid growth is a game changer for the Li-ion battery market as electric buses require large-sized batteries ranging from 74 kWh (fast charging e-bus) to over 300 kWh (slow charging e-bus). Indeed, the IDTechEx Research report Lithium-ion Batteries for Electric Buses 2016-2026 predicts a large e-bus battery market that will grow to $30 billion by 2026, potentially making it the largest segment of the overall battery market.
Driven by strict government emission standards and the desire to curtail air pollution, electric buses are displacing fossil fuel buses that are major sources of CO2, NOx, SOx and particulate matter (PM) emissions in cities. Indeed, pure electric buses are overtaking the hybrid ones in terms of sales in China as policies favour pure electric powertrains. In addition, the Chinese government reduced and will eventually stop subsidies for hybrid buses that do not plug-in because these cannot operate with long electric range in city centres to reduce local emissions sharply.
Electric Vehicle Energy Harvesting/Regeneration 20
Besides government policies triggering the growth of electric buses, advancement in battery technology in terms of cost, driving range, safety, energy and power density has also contributed to the adoption of transport electrification. Indeed, we believe battery-powered electric vehicles (BEV) will dominate the clean vehicle market in the coming years. There is ongoing research effort and investments which is supporting the improvement of Li-ion batteries for EV applications. For instance, BYD and Lishen have obtained strong subsidy supports from the Chinese government for the research and manufacturing of advanced batteries and electric vehicles. The U.S. government has also been supporting R&D activities in advanced batteries through the Department of Energy (DOE) while the European Commission and governmental organizations in Europe as well as Japanese Ministry of Economy, Trade and Industry (METI) have also been continuously supporting the R&D activities in advanced batteries.
Currently, the best selling BYD electric bus (K9) has a battery capacity of 324 kWh providing an electric range of 150 miles (250 km) per charge. Range anxiety would be a thing of the past as driving range of 300 miles is promised soon with improvement in not only battery technology but other factors such as light weighting, aerodynamics and powertrain efficiency. Ideally, EVs are aiming to compete with conventional ICE powered vehicles that have a driving range of 300 - 400 miles.
Solid-State and Polymer Batteries 2017-2027
Battery technology - battle of the dominant Li-ion variant
Electric buses in China are predominantly powered using lithium iron phosphate (LFP) cathode variant, the same chemistry produced by BYD and used in their electric buses. The story is different in the marine industry where majority of the electric and hybrid vessel are powered using the nickel manganese cobalt oxide (NMC) cathode variant assembled into packs by Corvus Energy, thanks to their deployment in commercial and industrial watercraft. The LFP chemistry produced by companies such as Saft and Valence is also used in marine EVs.
China is seeking to dominate the battery market by retaining the entire value chain of electric vehicles and batteries within the country. Indeed, there has been recent news about the Chinese government intervention with regards to subsidy removal of the NMC lithium-ion variant, which is produced exclusively outside the country.
This smells of short-term protectionism since LFP variant is the most common chemistry manufactured in China and used in Chinese e-buses. It is uncertain whether this intervention by the Chinese government will ultimately be upheld but what is certain is that it at least acts as a short-term break on the market of non-LFP batteries.
This policy will naturally favour domestic battery manufacturers such as BYD and Lishen who largely supply the LFP battery technology to electric bus manufacturers. Battery giants in Japan and Korea who manufacture the NMC battery chemistry for electric buses such as Toshiba, LG Chem and Samsung are most likely to be adversely affected by this intervention.
Lithium-ion battery famine and cost reduction
With over 200 Li-ion battery manufacturers, one would expect a continuous supply of Li-ion batteries for all electric vehicles - land, sea and air. However, this is not going to be the case even in the wake of gigafactories. We are now seeing electric vehicles demanding large-sized Li-ion batteries like electric buses using as much as 324 kWh and electric ships which use battery capacity of 1 MWh and even reaching as high as 5 MWh. Electric aircraft like the Boeing Dreamliner has them as a new addition to aircraft electrics, not to mention the significant market growth of hybrid, plug-in hybrid and pure electric cars which feature large Li-ion batteries. We see a real risk of shortage of large Li-ion batteries, which few can make satisfactorily, in the coming years aggravated by new applications for grid and residential energy storage systems.
Indeed, the expensive cost of lithium carbonate has prompted Chinese battery giant BYD to take actions in securing lithium reserves to guard against the price hikes. Although many countries have large lithium reserves such as Chile, China, Argentina and Australia with approximately 7.7 million tons, 3.5million tons, 2.0 million tons, and 1.5 million tons respectively, in the short term, there is limited mining and production capability to meet the demand of Li-ion batteries for all the aforementioned applications. Increase in mining capacity and production of lithium carbonate is important to meet the growing demand of Li-ion battery market as well as driving the cost of raw materials down which currently constitute about 70% of the entire cost of battery packs used in EVs.
Dr Victoria Adesanya-Aworinde

Authored By: Dr Victoria Adesanya-Aworinde

Technology Analyst

Posted on: May 23rd 2016