This article was originally written by Rho Motion for the Fast Markets Battery Materials blog ahead of the Battery Raw Materials event in Shangai, April 2019.
News of the electric vehicle (EV) revolution is everywhere, with government targets being set to reduce the number of new internal combustion engine (ICE) vehicles on the road over the coming decades, and pledged investment in electrification by major automakers amounting to US$300Bn to date.
As it stands, however, only 2% of new vehicles sold in 2018 were Battery Electric Vehicles (BEV) or Plug-in Hybrid Electric Vehicles (PHEV). This amounts to just over 2 million units, with China accounting for half the market, see first chart.
What are the obstacles to mass EV adoption that need to be addressed?
The two main obstacles to mass adoption of EVs to date have been concerns over vehicle range and cost. The primary solution to both is increasing effective energy density in the vehicle battery. EV batteries are composed of individual battery cells, housed in a battery module, which are combined and managed in a battery pack, and all of these components play a role in achieving this aim.
In the second chart we show weighted average battery pack sizes and vehicle ranges for BEVs. Due to the proliferation of smaller EVs in China average pack sizes globally are lower than those in Europe and the US. As can be seen, there is a clear relationship between pack size expressed in kWh and KM range, with a ratio of 5-7 Km per kWh depending on the battery chemistry and pack management.
Increasing energy density is crucial to extending vehicle range, and by extension the growth of the EV market. Auto and battery manufacturers cannot simply add more battery cell and modules to the battery pack, due to constraints on space, weight and cost, it is vital to get more from these components.
The second, and more important, issue is vehicle cost. At present the purchase price for BEVs is typically around a third more than an equivalent ICE vehicle, and the battery is significant part of that additional cost. It is our view that in the consumer driven passenger car segment, purchase costs are a more important factor than total cost of ownership – which accounts for running costs -, and will be the main determinant of the technology’s success over time.
How do we move to a world with 30% EV sales penetration by 2030, as proposed by many government targets, and to 70% by 2040 as forecast by Rho Motion?
We assert that increasing the energy density of EVs batteries is the key to overcoming both the range and cost issues, and that this will come from improvements in both the battery cell, and from vehicle design and battery pack management.
Looking at battery cells first. Outside of North America, major OEMs and battery makers have in large part settled on the use of the Lithium-Nickel-Cobalt-Manganese (NCM) cathode formulation, owing to its high energy density relative to its cost. The current iteration of that formulation, NCM 622, has facilitated the development of larger pack sizes and has reduced battery costs significantly over its predecessors. The next generation, NCM 811, will see both further gains in energy density and lower costs, due to its increasing nickel content with its high specific energy, and the thrifting of relatively expensive cobalt, see third chart. NCM 811 is likely to be available for commercial adoption from 2022 given the current rate of progress in R&D, and this will be a major boost for the market.
There are also anode technology developments that are helping to increase energy density in the cell. At present these focus on the inclusion of silicon, which helps boost the energy density in the anode. At present anodes in commercial EV batteries are composed of a blend of synthetic and natural graphite, and increasingly feature an average of 4-6% of silicon additives. There are a number of firms at R&D stage working on a silicon dominant anode, which could boost energy density in the cell by 20%. This is an early stage technology however, and commercialisation is still several years away. Similarly, R&D work is ongoing for solid state batteries, which offer a theoretical improvement in energy density of 70% over current lithium-ion technology, and faster charging times. Again this is an early stage technology with commercialisation from 2030 onwards a realistic timeline.
There are equally important developments underway in the vehicle which will improve battery performance and lower costs. Firstly, the increasing sophistication of battery pack management systems (BMS). The BMS governs the way in which the vehicle interacts with the cells and modules in the battery pack, including thermal management and charge and discharge rates, and can have a large impact on final vehicle performance.
The second is the development of pure EV platforms by automakers. To date there have been very few vehicles specifically designed for a fully electric powertrain, however major automakers are now making solid plans for the rollout of dedicated EV platforms. A key announcement by VW is indicative of this, it is developing its Modular Electric Drive Construction Kit (MEB), from which it is planning to develop 50 EV models on the same platform. This will offer greater homogeneity of battery pack and component configurations, and major cost savings a result. The first of these vehicles will be rolling off the production line from 2020.
Taken together, battery cell and battery pack management improvements, as well as the mass roll-out of dedicated EV platforms mean that we should see parity in cost and range in EVs relative to ICE vehicles by the mid-2020’s, with significant increases in adoption rates as a result. Then there will be further issues to consider, including the development of charging infrastructure, and the impact of all these EVs on the grid.
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