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The Great Battery Race

The Great Battery Race thumbnail

he coming of cheap and effective lithium-based batteries will cause the greatest changes in the energy and automobile sector since Henry Ford built the model T, writes Gerard Reid, founding partner of Alexa Capital, financial analyst and co-founder of the Energy and Carbon blog. But European countries like Germany and France have no significant production, in contrast to China, which views batteries and their raw materials as key factors in the global competitive energy and transport race.

Batteries have been around for more than one hundred years but thanks to the smart phone they have become important enablers of our modern lives. As battery technology improves they will become critical components for powering our automobiles as well as become vital assets for our power system.

The Chinese government has a clear strategy and technology roadmap for all EVs to have a minimum range of 300km in 2020 and 500km in 2030

In fact, the coming of cheap and effective lithium based batteries will cause the greatest changes in the automobile and energy industies since Henry Ford first built the Model T. This is an opportunity for many new startups but it is also a threat to not only incumbent automobile manufacturers but to whole nations, many of whom are deeply dependent on value chains that may not exist in the future. Positioning in this great battery race is thus critical for all companies and countries involved in the value chains of energy and transport.

Tesla and BYD

The global automobile industry with over 50 global brands is dominated by 14 manufactures, household names such as GM, Toyota and Ford, not to mention a similar number of major parts suppliers such as Bosch and Delphi.  None of these companies, however, have any battery manufacturing experience and all have been slow to embrace the electrification of the automobile which is today led by a US company in Tesla and a Chinese company in BYD both of whom not only manufacture cars but also batteries.

At a national level, there are three countries: China, South Korea and Japan which dominate over 90% of global lithium ion battery production, which is the chosen technology for electric and hybrid automobile manufacturers.

In stark contrast, Germany the home of the world’s largest car manufacturer VW as well as BMW and Mercedes has no significant production. Instead these companies are buying their batteries from Samsung and LG Chem in South Korea and Panasonic in Japan. But it is not just Germany; France, the home of Peugeot and Renault and Italy the home of Fiat-Chrysler also have no battery production.

For the countries that produce key raw materials, such as Chile and Australia, there is a real opportunity  to become the next Saudi Arabia

China, on the other hand sees the electrification of the automobile and batteries as a clear way for the country to gain a competitive advantage in the global automobile industry.  As it stands its batteries are not as good as those coming out of Japan or South Korea but the government is clearly focussed on reducing this technology gap. The Chinese government has a clear strategy and technology roadmap for all EVs to have a minimum range of 300km in 2020 and 500km in 2030. But it is not just in battery production where China is focussed; they are also focussed on gaining access to key raw materials such as cobalt and lithium.

Meanwhile in Japan and South Korea the focus is on getting to scale quicker and on keeping a technological advantage over the Chinese particularly around so-called ternary batteries chemistries such as NCM (LG Chem) and NCA (Panasonic and Tesla), which are the best technologies currently available for automobiles. 

Transformation

But it is not just battery production which is interesting. Gaining access to key raw materials such as cobalt and lithium will become critical competitive advantages and for the countries that produce them, such as Chile and Australia, there is a real opportunity for them to become the next Saudi Arabia. For the oil producing countries, batteries and the electrification of the automobile all mean that global demand for oil will peak at some point over the next decade leaving oil exporters with some interesting investment decisions to be made in the years ahead.

There are very exciting possibilities coming our way, one of which is lithium-air batteries which have a theoretical specific energy of 10,000Wh/kg compared to today’s 250Wh/kg for a Tesla S battery! This is similar energy density to gasoline

The great battery race will also cause a transformation of our power system as we currently know it. Through new charging strategies and electric vehicle swarm aggregation, EVs will transform the operative management and structure of the power grid, as we have never seen before. Not only will the demand for electricity and stresses across the power grid increase but we will also likely see automobile manufacturers control the power flows in and out of those batteries through energy services agreements with the car owner. Then we have all those batteries which will need to come out of the cars. Some will be immediately recycled but others will be reused in less stressful applications in so called second life applications.

Finally, as batteries are so critical to so many businesses and countries we are probably going to see technical developments happen faster than we have ever seen before. And there are very exciting possibilities coming our way, one of which is lithium-air batteries which have a theoretical specific energy of 10,000Wh/kg compared to today’s 250Wh/kg for a Tesla S battery! And to put that into context this is similar energy density to gasoline, and if we achieve these goals not only will cars be battery powered but also ships and planes….Exciting times ahead!

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31 Comments on "The Great Battery Race"

  1. Boat on Mon, 20th Mar 2017 4:24 pm 

    All the chatter is about range for passenger cars. What is also needed are vans and pickups that can pull a trailer. The range for those types of widgets need to be around 75 miles at min. A small truck with power to pull large trailers would be ideal.

  2. penury on Mon, 20th Mar 2017 4:30 pm 

    Really, more tech which is already not able to perform the miracles required. Batteries will save BAU no walking will save BAU no we need bigger batteries so we can go further and haul more. Bau cannot be saved. Save what you can and say good bue to the rest, times and conditions change and batteries will not help.

  3. Bob on Mon, 20th Mar 2017 4:58 pm 

    Even with a perfect car our lifestyle still will not work. We need roads made from oil, bridges that don’t fall down. Getting roads, bridges and other structures to a safe, functioning level would cost $4.59 trillion over the next decade, American Society of Civil Engineers says. We are now $20 Trillion in debt. No money is available to fix what we currently have. So, even with a perfect car our current system will fail. Get used to it. Don’t dream impossible dreams!

  4. dave thompson on Mon, 20th Mar 2017 5:36 pm 

    The battery tech dreams is along the line of energy from fusion reactors. Always just around the corner ready in a few more years.

  5. Hawkcreek on Mon, 20th Mar 2017 6:08 pm 

    I’ve seen batteries progress a long way, just since I went off grid. PV panels are cheaper, and KW hour storage is cheaper and better.
    Haven’t seen much progress in fusion reactors yet, though.
    Kinda looks like different outcomes to me.

  6. dave thompson on Mon, 20th Mar 2017 7:11 pm 

    Battery improvement to the point of being useful on a daily basis, replacing FF is a long way off and most likely not going to happen. Oh sure batteries might last a little longer depending on the application. They are still bulky and heavy. They still have a limited life cycle. They are still very expensive and more so then living on grid and driving a FF vehicle. Replacing what we have come to expect from FF with batteries, is not only a long way off, the laws of physics will not most likely will not allow it.

    From this article; “There is no Moore’s Law for batteries. The reason there is a Moore’s Law for computer processors is that electrons are small and they do not take up space on a chip. Chip performance is limited by the lithography technology used to fabricate the chips; as lithography improves ever smaller features can be made on processors. Batteries are not like this. Ions, which transfer charge in batteries are large, and they take up space, as do anodes, cathodes, and electrolytes. A D-cell battery stores more energy than an AA-cell. Potentials in a battery are dictated by the relevant chemical reactions, thus limiting eventual battery performance. Significant improvement in battery capacity can only be made by changing to a different chemistry.” https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=15&cad=rja&uact=8&ved=0ahUKEwi-9ODtpubSAhWr6oMKHeHfDIYQFghgMA4&url=https%3A%2F%2Fblogs.scientificamerican.com%2Fthe-curious-wavefunction%2Fmoores-law-and-battery-technology-no-dice%2F&usg=AFQjCNE6M0K4sR_VWiVHpWfRLT9rc0cg1w&bvm=bv.149760088,d.amc

  7. makati1 on Mon, 20th Mar 2017 7:28 pm 

    Denial is strong on those with the most to lose. The techie religion is beginning to crack as the tech god has run out of miracles. All he can do is put a different cover on hie I-junk and sell it too the fools.

    Those who have invested the most in BAU will have the most pain as the systems decline and collapse. Who could that be, I wonder? Read the comments above and it will be obvious. LOL

  8. JuanP on Mon, 20th Mar 2017 7:43 pm 

    People who think that more advanced technologies will solve our predicament don’t understand its nature. The better our technologies become the bigger our power to destroy the biosphere. Technologies have been improving since man exists. Where have all those improvements led us? Overpopulation, desertification, soil erosion, Climate Change, deforestation, ocean acidification, resource depletion, polar melting, sea level rise, etc.

    People who believe in technology as a solution simply don’t understand human nature.

  9. onlooker on Mon, 20th Mar 2017 8:18 pm 

    Juan welcome back and I totally second what your saying. It always was a question of could we progress as human beings to be kinder to each other, too be more far sighted and to be less restless and more at peace within ourselves. In this context technology could be useful, otherwise its a dangerous double-edged sword

  10. Sissyfuss on Mon, 20th Mar 2017 8:21 pm 

    The lag time of GHG emissions true and horrific effects renders our renewable dreams adorably useless.

  11. Apneaman on Mon, 20th Mar 2017 8:41 pm 

    “Humans cannot live without illusions. For the men and women of today, an irrational faith in progress may be the only antidote to nihilism. Without the hope that the future will be better than the past, they could not go on.”
    ― John N. Gray, Straw Dogs: Thoughts on Humans and Other Animals

  12. Jef on Mon, 20th Mar 2017 8:44 pm 

    Too Meat to Cheater!

  13. Cloggie on Mon, 20th Mar 2017 10:13 pm 

    “The battery tech dreams is along the line of energy from fusion reactors. Always just around the corner ready in a few more years.”

    You are wrong. Progress made with batteries has been breathtaking in recent years.

    https://deepresource.wordpress.com/2017/03/17/storage-breakthrough-100kwh-has-been-achieved/

  14. dave thompson on Mon, 20th Mar 2017 10:26 pm 

    “The battery is intended for use at the scale of the power grid. This would make widespread use of solar and wind power possible.” https://www.sciencedaily.com/releases/2017/03/170303091411.htm This does not sound like it is going in your house or car anytime soon.

  15. dave thompson on Mon, 20th Mar 2017 10:33 pm 

    “The creators claim that the new battery could become an inexpensive, ecologically-sound alternative for storing energy from renewable sources and a high-density solution for storing excess energy from the power grid.” Another example of something that “could become”. http://newatlas.com/rechargeable-zinc-manganese-battery-pnnl/42930/

  16. dave thompson on Mon, 20th Mar 2017 10:37 pm 

    Cloggie, if you are right then where can we find these batteries in use? If they are not in use now when will they be available?

  17. makati1 on Mon, 20th Mar 2017 10:51 pm 

    Batteries … breathtaking … 100kw. LMAO.

    When I see them in “profitable” production by the thousands or millions, THEN I will believe something new has been discovered.

    Until then they are techie dreams of a George Jetson future like flying cars and vacations on the moon. LOl

  18. Cloggie on Tue, 21st Mar 2017 4:01 am 

    Cloggie, if you are right then where can we find these batteries in use? If they are not in use now when will they be available?

    This particular $100/kWh battery is still in development stage. There are enough batteries in operations though for private households. The issue is the price but that will be solved in a matter of a few years:

    https://en.wikipedia.org/wiki/Tesla_Powerwall

    https://en.wikipedia.org/wiki/Chevrolet_Bolt
    (range up to 520 km)

  19. dave thompson on Tue, 21st Mar 2017 8:38 am 

    Cloggie,”This particular $100/kWh battery is still in development stage. There are enough batteries in operations though for private households. The issue is the price but that will be solved in a matter of a few years” So my initial statement you now agree with? “The battery tech dreams is along the line of energy from fusion reactors. Always just around the corner ready in a few more years.”

  20. Hawkcreek on Tue, 21st Mar 2017 9:52 am 

    Like I said, I live off grid. My battery costs come to about $200 a year – prorated over the life of the batteries. The lead in my batteries is also completely recyclable.
    My friends that live in the same area average about $100 a month in utility costs. Batteries are practical right now for off-grid use on a household basis. With a solar carport, or larger home array, anyone could have an EV that is also off-grid.
    Yes, some FF will still be required, but most will not.
    All of this is practical, and available, right now.

  21. dave thompson on Tue, 21st Mar 2017 10:18 am 

    Hawkcreek, I find it hard to believe that a battery array for home use costing $200 per year is available. At $200 per year say you get 7 years from your batteries? That means you paid $1400 for the batteries? It must not be a very large system. Yes off grid could be a way to go. Solar panels, wind turbines, battery array, inverter the whole lot still needs replacement parts and FF fed industrial civilization. Small scale OK go for it.At scale? Not going to happen.

  22. Ghung on Tue, 21st Mar 2017 10:34 am 

    Dave, for comparison, our current battery set consists of twelve 2200 amp hour 2 volt (forklift) cells in series for 24 volts. They were manufactured and installed in October 2007 and cost $5820 plus my costs to drive about 100 miles to pick them up. I, of course, did the install.

    They are still performing well, and we have a fund for their replacement that is now at about $6500. We budget about $600 per year for battery replacement. These cells are well maintained and are on an automatic watering system. They have been cycled gently, mainly due to the set’s 52 kWh size. Not sure how much longer they will last, but I am quite satisfied with their performance so far.

  23. Hawkcreek on Tue, 21st Mar 2017 10:49 am 

    Dave,
    My first set of batteries was eight Trojan L16’s (approx 420 amp hours each at 6 volts),which weighed 130 pounds apiece and cost $310 each (about $2500 total). They lasted 12 years. My new ones were not much more expensive, and I received $330 back from the recycling company for the old ones.
    This is not an extremely large system, but I sized it to fit my needs, which it does nicely. A thousand pounds of batteries can do more than you think.
    I do all my own work, which does cut down on costs a lot. I realize that most people don’t wish to put in the effort (both educational and physical) to do the same, so my costs are probably not representative of a larger population.

  24. dave thompson on Tue, 21st Mar 2017 10:57 am 

    Ghung That sounds great and about right. I have heard of deep cycle batteries lasting up to 8 years. Taking into account replacement costs $1500 per year is not far off and most likely on the low side depending on the use. If you keep on top of the Charge/Discharge cycling being aware that discharging below %50 on a regular basis can shorten the life of deep cycle batteries.

  25. Hawkcreek on Tue, 21st Mar 2017 11:26 am 

    Dave, I also just changed the two batteries in a 2004 Dodge diesel pickup that have lasted for over twelve years, even considering starting in cold winters.
    I know quite a few people living off grid, and none of them would consider $1500 a year a reasonable cost for battery replacement.

  26. Davy on Tue, 21st Mar 2017 11:26 am 

    My 12 Trojans are going on 4 years with zero issues. I am in the process of buying an Iron Edison package for my cabin. The Trojans are for the farm Barn. I also have grid power. I have both because they both are useful and serve different purposes. I have back up power if the grid goes down and if my solar system goes down the grid backs me up. I have a large welder that is also a generator. I have a throw switch on my transformer to hook it up as needed. I would use this for my well power source. I am about resilience not proving an off the grid point. I have a big farm and the cost of taking this farm all the way off the grid is not a good choice for me at this point. Yet, having resilience is important.

  27. dave thompson on Tue, 21st Mar 2017 11:30 am 

    Hawkcreek, the $1500 figure includes the original cost of the battery array.

  28. Hawkcreek on Tue, 21st Mar 2017 11:46 am 

    Well, in my case, the $2500 original cost of the batteries averaged over twelve years is still only a couple of hundred bucks a year.
    The $330 back from recycling more than covered inflation for the new set (although the new set was actually cheaper).
    Anyone, with reasonable effort and research, can size a battery bank for off-grid use that will average less than $500 a year.

  29. BobInget on Tue, 21st Mar 2017 2:06 pm 

    Those iron Edison batteries seem to last forever.
    Bot a PU truck load several years back for scrap price.

    I keep them charged with solar and plug-in maintainer.

    What to do with older PV panels?

    If you wind up with unmatched PV panels, try this; disconnect AC power LOWER heating element in your electric water heater from top element.
    Feed the Lower thermostat controlled heating element
    with direct current from your older, used PV panels.
    Use correct gauge wire and fuse. I’m using a 24 V set-up connected to the smallest heating element for tank heaters available. Needless to say, no rusted storage tanks, winter shut-downs or draining.

    I also hooked up several used panels to pump water
    up-hill into storage for irrigation and emergency home use.

    A person can make use of world’s oldest battery,
    Gravity. Pumping water up-hill, all-be-it slowly , can fill
    ponds in a few weeks to grow tilapia all summer months. Come fall, drain ponds using a bit of hydro to charge batteries and run 12/24 V fish, and produce filled freezer. (throw into pond a few drain tiles or 4″ pipes to keep birds from eating your fish)

    Speaking of solar freezers, buy one with a DOUBLE
    door gasket. (thick insulation) Test running on solar power alone in late spring and summer. Disconnect batteries, see how little energy it takes to power up a good top loading solar freezer. Unless you keep freezer indoors, you will need an AC powered ‘Garage
    Adapter’ to keep the condenser warm in winter. Most solar powered freezer makers think everyone lives in Florida or Southern CA .

  30. Antius on Wed, 22nd Mar 2017 8:04 am 

    How about swappable batteries? Stop at a service station and change them over for fresh batteries that slot into the car. This would appear to remove the need for a technological revolution. It would work with battery technology of today.

    If possible, then a cheaper and more environmentally friendly battery may be a better choice than a higher performance battery based on rare elements.

  31. BobInget on Wed, 22nd Mar 2017 12:55 pm 

    Sapping batteries has been tried in a tiny country, Israel. The idea failed.

    Five or six minute recharging in experimental stages as we read. Moore’s law is working on several levels.

    A few years ago if a person needed tires and asked for low rolling resistance, most tire ‘guys’ would have no idea what the customer needed. I personally had this experience with two of the biggest retailers in my city.
    (of course LR tires first arrived on VW diesels and Toyota hybrids)

    Tesla founder Elon Musk offered to ‘solve’ Australia’s
    electric grid problems nationwide… for free, if the solution, batteries, didn’t work as promised.

    Aftermarket used EV batteries are being repurposed for home and business use. EV, LI battery cells don’t all go ‘bad’ at once.
    (this takes care of recycling).

    I predict uses for used solar panels and ‘last years’ battery tech will create their own markets.

    Remember your first computers? Most didn’t die before you buried them in your junk pile or donated them to someone less fortunate.

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