The Battery Series
Part 3: Explaining the Surging Demand for Lithium-Ion Batteries
The Battery Series is a five-part infographic series that explores what investors need to know about modern battery technology, including raw material supply, demand, and future applications.
Explaining the Surging Demand for Lithium-Ion Batteries
In Parts 1 and 2, we examined the evolution of battery technology as well as what batteries can and cannot do. In this part, we will tackle demand in the rechargeable battery market, with a major focus on the rapidly growing lithium-ion segment.
For many decades, lead-acid batteries have been the most important rechargeable batteries in our lives.
Even in 2014, about 64.5% of all revenues in the rechargeable battery market were from lead-acid sales, mainly to be used for automotive starters.
Despite not being the most energy dense batteries, lead-acids are proven and can supply high surge currents. They are also extremely cheap to manufacture, costing around $150 per kWh of energy capacity.
The first lithium-ions were not cheap. In fact, early batteries produced commercially in the mid-90s typically costed upwards of $3,000 per kWh of energy.
Luckily, the cost of lithium-ion batteries has come down dramatically, making it the battery of choice for consumer electronics throughout the 2000s. And recently, scientists have made even more progress, opening the lithium-ion to many more applications, namely in electric vehicles.
In 2008, analysts estimated that lithium-ion battery packs costed $600-$1,200 per kWh, but this range would drop to $500-800 per kWh over the following four years. Tesla now claims that a Tesla Model S battery cost is $240 per kWh and that the expected cost for a Model 3 is $190 per kWh.
At $240 kWh, lithium-ions become competitive with $3/gallon gas. At $150, they are even competitive with $2 gas.
Giant megafactories such as Tesla’s Gigafactory 1 will also help bring economies of scale to lithium-ion production, making them even less cost-prohibitive. Soon battery packs will cost closer to $100 per kWh, which will make them essentially cheaper than all gas-powered vehicles.
Demand for Lithium-Ion Batteries
Major advancements in lithium-ion battery technology have been a game-changer. Cheaper, more-effective lithium-ions are now taking over the battery market.
In 2014, lithium-ions made up 33.4% of the rechargeable battery market worldwide, worth $49 billion. By 2025, it is estimated by Bernstein that the rechargeable battery market will more than double in size to $112 billion, while lithium-ion’s market share will more than double to 70.0%.
The key driver? The automotive segment.
In 2010, the automotive sector was a drop in the bucket for lithium-ion battery sales. Five years later, automotive made up more than $5 billion of sales in a sector worth nearly $16 billion.
The EV Goes Mainstream
In 2015, almost half a million cars were sold in the US with an electric drive component.
14% of these sales were battery electric vehicles (BEVs):
- 71,000 Battery EVs (14%)
- 43,000 plug-in hybrids (9%)
- 384,000 hybrids (77%)
= 498,000 electric drive vehicles
But as a part of total US auto sales, BEVs still made up less than 1% of sales:
- 71,000 battery EVs (0.4%)
- 43,000 plug-in hybrids (0.3%)
- 384,000 hybrids (2.3%)
- 16,900,000 gas/diesel sales (97%)
However, in the near future, this is expected to change fast. By 2040, approximately 35% of all global sales will be BEVs.
This will put electric vehicle sales at close to 40 million per year globally, meaning a lot of energy will need to be stored by batteries. Bloomberg New Energy Finance expects that at this point, that electric vehicles will be pulling more than 1,900 TWh from the grid each year.
How much is 1,900 TWh? It’s enough to power the entire United States for 160 days.
And to meet this demand for lithium-ion powered vehicles, a massive amount of battery packs will need to be manufactured.
Part 4 of The Battery Series looks at which materials will be needed to make this possible.
Tesla is Now the World’s Most Valuable Automaker
Thanks to a surging stock price, Tesla is now the world’s most valuable automaker – surpassing industry giants Toyota and Volkswagen.
Tesla is Now the World’s Most Valuable Automaker
Even in the midst of a pandemic, Tesla continues to reach new heights.
The company, which began as a problem-plagued upstart a little over 15 years ago, has now become the world’s most valuable automaker – surpassing industry giants such as Toyota and Volkswagen.
This milestone comes after a year of steady growth, which only hit a speed bump earlier this year due to COVID-19’s negative impact on new car sales. Despite these headwinds, Tesla’s valuation has jumped by an impressive 375% since this time last year.
How does Tesla’s value continue to balloon, despite repeated cries that the company is overvalued? Will shortsellers declare a long-awaited victory, or is there still open road ahead?
Tesla’s Race to the Top
Earlier this year, Tesla hit an impressive milestone, surpassing the value of GM and Ford combined. Since then, the automaker’s stock has continued it’s upward trajectory.
Thanks to the popularity of the Model 3, Tesla sold more cars in 2019 than it did in the previous two years combined:
As well, the company is taking big steps to up its production capacity.
Austin, Texas and Tulsa, Oklahoma are currently rolling out the incentives to attract Tesla’s new U.S.-based factory. The company is also increasing its global presence with the construction of Giga Berlin, it’s first European production facility, as well as completing the ongoing expansion of its Giga Shanghai facility in China.
Battle of the Namesakes
Tesla’s most recent price bump was fueled in part by a leaked internal memo from Tesla’s CEO, Elon Musk, urging the company’s staff to go “all out” on bringing electric semi trucks to the global market at scale.
It’s time to go all out and bring the Tesla Semi to volume production.
– Elon Musk
Of course, Musk’s enthusiasm for semi trucks isn’t coming from nowhere. Another company, Nikola (also named after famed inventor Nikola Tesla), is focused on electrifying the two million or so semi trucks in operation in the U.S. market.
Although Nikola has yet to produce a vehicle, its market cap has surged to $24 billion – which puts its valuation nearly on par with Ford. Much like Tesla, the company already has preorders from major companies looking to add electric-powered trucks to their delivery fleets.
For major brands looking to hit ESG targets, zero-emission heavy-duty trucks is an easy solution, particularly if the vehicles also live up to claims of being cheaper over the vehicle’s lifecycle. The big question is which automaker will capitalize on this mega market first?
6 Ways Hydrogen and Fuel Cells Can Help Transition to Clean Energy
Here are six reasons why hydrogen and fuel cells can be a fit for helping with the transition to a lower-emission energy mix.
While fossil fuels offer an easily transportable, affordable, and energy-dense fuel for everyday use, the burning of this fuel creates pollutants, which can concentrate in city centers degrading the quality of air and life for residents.
The world is looking for alternative ways to ensure the mobility of people and goods with different power sources, and electric vehicles have high potential to fill this need.
But did you know that not all electric vehicles produce their electricity in the same way?
Hydrogen: An Alternative Vision for the EV
The world obsesses over battery technology and manufacturers such as Tesla, but there is an alternative fuel that powers rocket ships and is road-ready. Hydrogen is set to become an important fuel in the clean energy mix of the future.
Today’s infographic comes from the Canadian Hydrogen and Fuel Cell Association (CHFCA) and it outlines the case for hydrogen.
Hydrogen Supply and Demand
Some scientists have made the argument that it was not hydrogen that caused the infamous Hindenburg to burst into flames. Instead, the powdered aluminum coating of the zeppelin, which provided its silver look, was the culprit. Essentially, the chemical compound coating the dirigibles was a crude form of rocket fuel.
Industry and business have safely used, stored, and transported hydrogen for 50 years, while hydrogen-powered electric vehicles have a proven safety record with over 10 million miles of operation. In fact, hydrogen has several properties that make it safer than fossil fuels:
- 14 times lighter than air and disperses quickly
- Flames have low radiant heat
- Less combustible
Since hydrogen is the most abundant chemical element in the universe, it can be produced almost anywhere with a variety of methods, including from fuels such as natural gas, oil, or coal, and through electrolysis. Fossil fuels can be treated with extreme temperatures to break their hydrocarbon bonds, releasing hydrogen as a byproduct. The latter method uses electricity to split water into hydrogen and oxygen.
Both methods produce hydrogen for storage, and later consumption in an electric fuel cell.
Fuel Cell or Battery?
Battery and hydrogen-powered vehicles have the same goal: to reduce the environmental impact from oil consumption. There are two ways to measure the environmental impact of vehicles, from “Well to Wheels” and from “Cradle to Grave”.
Well to wheels refers to the total emissions from the production of fuel to its use in everyday life. Meanwhile, cradle to grave includes the vehicle’s production, operation, and eventual destruction.
According to one study, both of these measurements show that hydrogen-powered fuel cells significantly reduce greenhouse gas emissions and air pollutants. For every kilometer a hydrogen-powered vehicle drives it produces only 2.7 grams per kilometer (g/km) of carbon dioxide while a battery electric vehicle produces 20 g/km.
During everyday use, both options offer zero emissions, high efficiency, an electric drive, and low noise, but hydrogen offers weight-saving advantages that battery-powered vehicles do not.
In one comparison, Toyota’s Mirai had a maximum driving range of 312 miles, 41% further than Tesla’s Model 3 220-mile range. The Mirai can refuel in minutes, while the Model 3 has to recharge in 8.5 hours for only a 45% charge at a specially configured quick charge station not widely available.
However, the world still lacks the significant infrastructure to make this hydrogen-fueled future possible.
Large scale production delivers economic amounts of hydrogen. In order to achieve this scale, an extensive infrastructure of pipelines and fueling stations are required. However to build this, the world needs global coordination and action.
Countries around the world are laying the foundations for a hydrogen future. In 2017, CEOs from around the word formed the Hydrogen Council with the mission to accelerate the investment in hydrogen.
Globally, countries have announced plans to build 2,800 hydrogen refueling stations by 2025. German pipeline operators presented a plan to create a 1,200-kilometer grid by 2030 to transport hydrogen across the country, which would be the world’s largest in planning.
Fuel cell technology is road-ready with hydrogen infrastructure rapidly catching up. Hydrogen can deliver the power for a new clear energy era.
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