Electric vehicles cost up to 50 per cent more than internal-combustion cars and the lithium-ion battery is the most expensive component, accounting for about 40 per cent of the cost. To make electric vehicles more competitive, the solution is simple – reduce the cost of the battery.

Countries around the globe are setting tougher emission targets for new passenger cars. Pure electric vehicles are emission-free but if this year’s lower oil prices continues their running costs will become less attractive compared with petrol vehicles. However, we estimate that a 4 per cent cut in electric cars’ selling prices can offset a 20 per cent decline in fuel cost.

As China is both the world’s largest producer and biggest buyer of electric vehicles it is leading the race to cut the cost of the lithium-ion batteries (LIB) by 20 per cent-30 per cent by 2025.

We believe cost reductions can be achieved through economies of scale – global LIB capacity could rise from 368GWh to 836GWh by 2022 – and by adopting new technologies.

Currently, lithium-ion phosphate (LFP) batteries cost around USD125/kWh and nickel cobalt manganese (NCM) batteries are about USD165/kWh – both far too high for electric-vehicle makers but new technologies such as cell-to-pack, supercapacitors, and a dry-electrode method may cut prices to USD100/kWh.

At present, battery cells are installed in modules that make up a pack. Cell-to-pack allows cells to be directly formed into packs, increasing the energy density by 10 per cent-15 per cent and volume efficiency by 15 per cent-20 per cent. Cutting out the modules allows bigger cells and this improves the energy intensity of LFP batteries more than NCM batteries.

Meanwhile supercapacitors – which store and release electricity – may speed up charging times and lengthen battery lives. They have lower energy density than lithium-ion batteries, however, so are less good for energy storage.

This make supercapacitors an ideal complement for LIB, especially for start-stop and regenerative braking power storage. They are likely to replace lead acid batteries as the major start-stop power source because they are free of toxic chemicals, low maintenance, have high power output, and a long life.

Graphite is currently the dominant anode material for LIBs. Adding silicon can theoretically lift capacity but it can swell three-fold during charging, damaging the battery structure. Applying Teflon can inhibit the swelling – though there may be patent issues.

Cobalt’s price is high and volatile – and with 60 per cent produced in the Democratic Republic of the Congo there is also a supply risk. NCM batteries are 20 per cent cobalt but changing the mix or adding aluminium can halve that: however, the industry is aiming for a cobalt-free LFP battery.

The energy density of LFP batteries is 15-30 per cent lower than NCM but they are 20 per cent-30 per cent cheaper and cell-to-pack could widen the cost gap to 30 per cent-45 per cent with mass production cutting costs further because fixed costs and wages are greater. LFP also has a longer life span, quicker charging, and is safer than NCM.

Indeed, outside the motor industry, lithium-ion phosphate could also be used for utility-scale power storage and 5G communication base stations.

First published 21 April 2020.

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