Warnings ahead for lithium batteries as cost reductions taper off, supply risks rise

Warnings ahead for lithium batteries as cost reductions taper off, supply risks rise

Warnings ahead for lithium batteries as cost reductions taper off, supply risks rise 150 150 Energy Storage Journal

September 30, 2021: The spectacular growth of the lithium-ion battery market in the past 20 years is set to continue in the years ahead, but further huge cost savings per kWh are unlikely, according to Christopher Pillot, a director of Avicenne Energy research house, speaking to the annual ICBR convention in Geneva on September 22.

Lead batteries, he said, would enjoy steady growth in the future, although it would be far less spectacular than their lithium counterparts. He predicted that the lead market in 2030 would have increased to 495,000MWh annually as opposed to 415,000MWh in 2020.

Pillot, who has a reputation for realistic and conservative forecasting of the rechargeable battery market, said that reductions in scale manufacturing now meant that the cost of the raw materials would dominate lithium battery production.  Raw materials account for some 60% of a lithium battery, he said.

Instead he reckoned that the variability of prices in cobalt and nickel in particular could even push the price per kilowatt hour up if supply shortages were to occur.

He foresaw a compound annual growth rate for lithium batteries between 2020 to 2030 of around 20%, but warned that the demand for cobalt, nickel and lithium would soar — cobalt, for example, would leap from just over 30% of world production in 2020 to 70% by 2030. Similar huge lurches in production would have to be seen for nickel and lithium.

Pillot said that the huge growth in lithium battery demand, in particular for EVs and which was creating a network of gigafactories across Europe, had created an urgent need for the ability to recycle the spent batteries at the end of their lives. The ability to recycle the more expensive materials would act as a form of buffer against price hikes.

Although he predicted that recycling of the more valuable metals would continue to be profitable, as yet he didn’t foresee that recycling LiFePO4 was commercially viable. He also said that the gradual replacement of cobalt with nickel in some lithium battery types would make recycling these batteries less attractive.