Battery insiders broke down the current state of the industry in a comprehensive new report.
Predicting what’s in and what’s out in any given year is next to impossible. And yet, we’re confident on this one: For 2022, batteries are in.
Battery technology is the key to electrifying transportation and transitioning to renewable energy. That means scaling up global battery manufacturing is essential for automakers to meet lofty EV targets—like becoming carbon neutral by 2050 or ending sales of new gas-powered vehicles worldwide by 2040—and to meet broader climate goals.
So where do we stand today? A new report from BatteryBits, assembled by industry professionals from Volta Foundation and Intercalation, provides a deep dive into the ecosystem, highlighting the most significant deals, breakthroughs, and challenges faced in 2021. It also outlines trends in research, policies, jobs, and offers predictions for 2022.
Big picture: The global race for battery production is well underway, and everyone is chasing China. In 2020, there was about 630 GWh of global battery production capacity, with nearly 75% of that in China.
Companies have announced plans to boost production capacity to about 2,300 GWh by 2025, according to the report, and industry experts expect that capacity could rise to about 3,400 GWh by the end of the decade. Assuming an average battery capacity of 100 kWh, that’s enough to power about 34 million EVs per year.
Governments are now competing to attract these manufacturing facilities, and OEMs with ambitious electrification goals are entering into joint ventures with experienced battery makers. Today, just three companies make up almost 70% of the EV battery manufacturing market: China’s CATL, South Korea’s LG Energy Solution, and Japan’s Panasonic.
Without a robust battery supply chain in the US, American OEMs are teaming up with these major players.
- Tesla’s EV batteries are manufactured predominantly by Panasonic, which has a long-standing relationship with the automaker and is a partner at its Gigafactory in Nevada. Tesla now sources EV batteries from CATL and LG as well and could eventually begin producing its own.
- GM is partnering with LG Energy Solution to build battery plants in the US. The two companies plan to spend more than $7 billion across three battery facilities in Ohio, Tennessee, and Michigan.
- Ford and South Korean battery maker SK Innovation have an $11.4 billion joint venture to build two battery factories in Kentucky and another in Tennessee, along with an electric truck assembly plant.
Competitive edge: Industry leaders like Tesla and BYD are focused on incremental improvements to their battery cell designs and manufacturing processes, according to the report. Meanwhile, later entrants into the EV market are betting on anode and electrolyte innovations to build next-generation batteries that will allow them to leapfrog the competition.
- Toyota is working on a solid-state battery, and VW has invested $300 million in QuantumScape, which is pursuing solid-state batteries as well.
- Ford, BMW, and Hyundai are backing Solid Power’s development of solid-state battery tech, with Ford and BMW leading a $130 million Series B round last year.
- GM has been investing in SES, which focuses on lithium-metal batteries, since 2015 through General Motors Ventures. Last year, the automaker led the company’s $139 million Series D round, and Hyundai invested $100 million.
While the hunt for next-generation battery tech continues, lithium iron phosphate (LFP) batteries—a chemistry first developed in 1996—also had a big year. Unlike other lithium-ion chemistries, LFP batteries don’t use costly materials like cobalt, making them less expensive to produce. The trade-off is that LFP batteries have lower energy density than those that use nickel and cobalt, resulting in lower ranges.
Event recap: What does EV battery recycling look like today?
A small-scale satellite-launching contest shows just how accessible space has become for private orgs
Alphabet-owned Wing makes commercial delivery number 200,000
BYD and other companies in China have been ramping up production of LFP batteries since the second half of 2020. Last year, Volkswagen and Daimler announced that their entry-level EVs would use LFP batteries beginning in 2023 and 2024, respectively. Tesla, which already sells EVs with LFP batteries in Asia and Europe, said the company would switch to LFP batteries for all standard-range EVs globally.
Global production of LFP batteries is forecast to grow to 770 GWh by 2025, according to the report, which would be about one-third of all battery capacity. Today China makes more than 90% of the world’s LFP batteries, and in 2021 the country produced about 125 GWh, according to the Chinese Association of Automobile Manufacturers.
Zoom out: The governments of 30 countries, states, or regions have set deadlines for phasing out fossil-fuel vehicles. The list includes California, Massachusetts, and New York in the US, which aim to reach the goal by 2035. Meanwhile, investment in climate tech has reached historic levels over the last year—with the vast majority of the funding going to transportation and energy ventures—and experts expect that momentum to continue in 2022.
But, but, but…In the near-term, EV makers and battery manufacturers will face price volatility due to shortages of raw materials like lithium. Growing demand has led to big investments in mining and inspired innovation in extraction techniques.
To ensure EVs really are green, battery materials suppliers need to address their own greenhouse gas emissions and use renewable energy for chemical and mining processes. And creating a sustainable battery ecosystem will require government policies that support responsible sourcing and incentivize recycling.
source : www.morningbrew.com