By Kevin See, Lux Research
The hotly anticipated arrival of battery-powered vehicles came in 2011, the first full year of sales for both the plug-in hybrid electric vehicle (PHEV) Chevy Volt and all-electric vehicle (EV) Nissan Leaf. However, early sales were disappointing with both the Leaf and the Volt falling short of expectations. Numerous factors have contributed to the hesitation of car buyers, including limited range and infrastructure, but the high upfront costs of the vehicles is the main deterrent – and that high cost is largely driven by the cost of the lithium-ion battery (LIB).
The prevailing question in the electric vehicle (EV) market is how to reduce cost fast enough to spur adoption of EVs. All agree that the cost of automotive batteries will come down, but opinions vary as to just how fast they will decline, and which innovations can have the greatest impact.
One common refrain is that increased scale will be an important factor in reducing the price of cells and packs. On the cell manufacturing side, the planned expansions are well known, with major suppliers like LG Chem and the Nissan-NEC joint venture Automotive Energy Supply Corporation (AESC) pushing towards multiple factories each with around 1 GWh of capacity. Less-publicized but just as crucial is the expansion of materials supply to feed these factories, and help drive scale and cost reductions at the material level as well. Suppliers such as Toda Kogyo in cathodes, Celgard in separators, and Chemetall in lithium carbonate are expanding material production capacity.
Since materials – and specifically cathodes – play a critical role in battery performance and cost, we’ll examine trends and innovations in cathodes that stand to affect the cost of LIBs in the future. Today, manganese spinel (LMO) is attractive for cost and safety, but lags in energy, which has led manufacturers like AESC and LG Chem to use cathodes that blend LMO with higher energy content materials like nickel manganese cobalt oxide (NMC) and lithium nickel oxide (LNO).
With tunable ratios of three elements, NMC provides a flexible framework to vary composition and properties to fit certain applications. Many developers focus on reducing the loading of expensive cobalt, while trying to preserve high energy density to decrease the overall $/kWh. Due to this flexibility, many companies have NMC R&D, with established cathode providers like Umicore and Toda Kogyo focusing efforts here, along with newer entrants such as BASF and Dow Energy Materials. NMC shows the greatest momentum towards larger adoption in transportation at present, but one pending issue may be patent conflicts over NMC: Entities including 3M and Argonne National Lab (ANL) hold patents that cover the space.
Realistic cost reduction forecasts
To determine the impact of innovation on LIB costs, Lux Research developed a cost model (see the Lux report, “Searching for Innovations to Cut Li-ion Battery Costs”) that allows for cost breakdowns today and in the future, and can measure the impact of various technology advances on the long-term costs of LIBs. As a base case, Lux analyzed how scale would affect the cost of today’s Li-ion cells without further innovation in the materials, systems, or manufacturing. We found that for a nominal 24 kWh electric vehicle pack with an NMC cathode and a graphite anode, prices will fall from $741/kWh in 2012 to $446/kWh in 2020, far short of aggressive targets like the $150/kWh target from the US Advanced Battery Consortium (USABC).
At the same time, the electric vehicle battery field is rife with press announcements touting improved performance and lower cost, such as Envia’s purported 400 Wh/kg cell. However, many proposed cathode and anode technologies still face questions about their suitability for an automotive battery. To account for realistic innovation in materials Lux assumed a likely scenario, where advanced cathode materials with intermediate improvements in nominal voltage and materials capacity will come to fruition in the 2015 timeframe. In this likely scenario, LIB prices fall all the way to $397/kWh in 2020 (see figure 1), lower but still short of the cost point that can truly drive broader vehicle adoption.
Base Case and Likely Li-Ion Cost Scenarios for an EV Battery
Of course, cathodes are not the sole factor impacting battery costs; in order to account for this, the model allows testing of innovation in other materials like anodes, as well as pack level innovations in battery management and improvement in manufacturing processes. As an example, the model shows that increasing the state of charge window (how much of the rated pack energy is useable) and reducing capacity fade (how much the capacity of the pack fades over time) add benefit by maximizing usable energy, with a simultaneous 10% increase in SOC (?) window and 10% decrease in capacity fade over the life of the battery. This will cut useable pack costs (the cost per useable amount of energy) in 2017 from $983/kWh to $789/kWh.
Disruptive innovation will drive down LIB costs
Ultimately innovation across the battery value chain – from materials to manufacturing – will have to combine to reduce battery costs and drive vehicle adoption. Indeed, with a cooperative effort across the value chain a combination of scale, improved materials and reduced thermal management costs can drive costs near $200/kWh in 2020. The message is clear – corporations throughout the value chain can make EV adoption a reality, provided corporations invest in disruptive innovation to develop the novel technologies that push past the limits of our vision today.
About the author
Kevin See is a Senior Analyst at Lux Research who leads the Electric Vehicles Intelligence practice. Prior to joining Lux, Kevin was a joint postdoctoral researcher at The Molecular Foundry at Lawrence Berkeley National Laboratory and The University of California, Berkeley, where he worked on novel nanocomposite materials for thermoelectric conversion of waste heat into electricity. Kevin obtained his Ph.D. in Materials Science and Engineering from Johns Hopkins University.
About Lux Research
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