The urgent need to cut carbon emissions drives the transformation of the automotive industry. Even though battery-electric vehicles (BEVs) have been available for a while, automakers and battery producers are focusing on developing future-proof batteries to make BEVs truly mass-market and affordable enough for mainstream buyers. A tight supply of raw materials, however, has led companies to invest in innovation within the chemistry and design of batteries.
Global demand for BEVs is strong and expected to increase in the coming years, prompting intense competition among companies for cost and technology leadership. Improving battery cells and packs, which account for 35 to 50 percent of the total vehicle cost, could significantly increase profits, while making BEVs a mainstream reality globally, according to McKinsey.
The first step toward learning the areas of opportunity in battery production is to understand how batteries work. A battery converts chemical into electrical energy. Most batteries are made of three major active components: an anode, a cathode and an electrolyte. Chemical reactions between these materials generate energy when the battery is plugged into the vehicle. The reactions cause electrons and ions to build up at the anode. Electrons flow toward the cathode through the external circuit, providing electrical power on the way to the car. Ions flow toward the cathode, too, but through the electrolyte that separates the anode and the cathode. The ions and electrons recombine at the cathode to complete the circuit and keep the reactions running.
Battery architecture plays an important role within BEV manufacturing in terms of size and weight. The anode, cathode and electrolyte make up one cell, along with other components like the binder, which holds particles of the active material together. Batteries can be made up of one or more cells that are connected to increase the voltage and total capacity of the assembly. Cells are assembled into a module and modules are then placed in a pack to be inserted into the vehicle. Other auxiliary components, which do not directly take part in chemical reactions, such as cooling equipment, are crucial for the overall battery system.
Designing Future-Proof Batteries
Improving the performance of batteries is crucial to meet future BEVs needs, according to McKinsey. While batteries were a simple technology initially, their development has been slow compared to other areas of electronics, according to the European Commission: “The main research hurdle lies in finding suitable materials for electrodes and electrolytes that actually work well together without undue compromise to other aspects of a battery’s design. There is much trial and error in selecting the best combination of design parameters.”
Battery competitiveness relies on an affordable final price. BEVs require high power and high-energy density (the amount of energy they store per gram of weight), long autonomy, long life, low cost and high levels of safety, while reducing their negative environmental impact through a re-use or recycle plan for batteries.
Although traditional lithium-ion batteries continue to improve, limitations persist, according to the MIT Energy Initiative. One problem of current battery designs is that under certain voltages and temperatures, the liquid electrolyte can become volatile and catch fire. In addition, lithium-ion batteries are “not well-suited” for use in vehicles due to their size and weight, which increase the vehicle’s overall weight and reduce its efficiency. The difficulty is in making batteries smaller and lighter while maintaining their energy density, according to the MIT Energy Initiative.
To solve those two problems, researchers are changing certain characteristics of the lithium-ion battery. One of the solutions is to replace the liquid electrolyte with a thin, solid electrolyte, which remains stable at a wide range of voltages and temperatures. This allows to shrink the battery size while maintaining its energy-storage capacity. “Enhanced safety and greater energy density are probably the two most-often-touted advantages of a potential solid-state battery,” said Kevin Huang, Research Scientist, MIT. These changes have not been fulfilled, however, and researchers are working on finding materials and designs to deliver on that promise, he added.
While developing technologies for grid-based storage at a large scale is critical, the automotive sector “is focusing on adapting today’s lithium-ion battery to make safer, smaller versions, that can store more energy for their size and weight,” says Elsa Olivetti, Associate Professor in Materials Science and Engineering, MIT. Thinking beyond the lab is essential to improve batteries, agree Olivetti and Huang. Researchers use metrics such as energy-storage capacity or charge/discharge rate to evaluate batteries. While these metrics remain necessary, the aim is implementation. “We suggest adding a few metrics that specifically address the potential for rapid scaling,” says Olivetti. Scalability, in the end, depends directly on the availability of raw materials and the production cost.
The Chinese BEV Market
The Chinese BEV market has been growing by around 80 percent annually since 2014, according to McKinsey. China remains the world’s largest market for these vehicles, accounting for 2.9 million units sold in 2021, compared with 1.2 million in the EU, according to Statista. China is expected to remain the leader in BEV sales, with an estimated 9 million units sold in 2030, compared with around 5.5 million in the EU, according to McKinsey’s Electrification Model.
China is not only the global sales leader but also self-sufficient when it comes to BEV production. The country’s local supply chain comprises all Tier-1 and Tier-2 parts and components, such as battery cells, battery-pack components and drivetrain modules.
Chinese BEVs offer “very competitive cost-to-range ratios compared with their international counterparts,” states McKinsey. In 2017, Chinese OEMs started using lithium iron phosphate (LFP) technology for low-performing vehicles and nickel, manganese and cobalt (NMC)-based cells for high-performing ones. Meanwhile, Western OEMs were still experimenting with first generation NMC-based cells and lithium manganese oxide-based cells, according to McKinsey.
While NMC-based battery cells are the most used globally nowadays, China remains at the forefront of battery innovation. In 2019, two Chinese OEMs introduced to the domestic market nickel-rich layered oxide (NMC811), which remains the latest-generation technology and is a promising future cathode material for lithium-ion batteries due to its high specific energy density. However, it exhibits fast voltage and capacity fading. NMC811 arrived in the Western market two years after its debut in the Chinese market.
China-based CATL was the leading lithium-ion battery maker in 2021 with a market share of 32.5 percent, followed by Korea’s LG Chem with 21.5 percent and Panasonic with a market share of 14.7 percent, according to Statista. Cell-to-pack technology, which directly integrates cells into the battery pack without battery modules, was introduced jointly by CATL and automaker BAIC in late 2019.
Recently, in March 2022, CATL announced the third generation of its cell-to-pack (CTP) battery technology, which is ready for mass production. While Chinese OEMs are expected to hold their position as battery-technology leaders, the next leap involves cell-to-chassis technology, in which battery cells are directly integrated into the chassis, without battery packs, according to McKinsey.
CTP technology has significantly increased the volumetric utilization efficiency of the battery pack, going from 55 percent for the first-generation CTP battery to 67 percent for the third generation (Qilin), claims CATL. The energy density of the latest NMC Qilin battery can reach 250Wh/kg, compared with LFP’s 160Wh/kg.
Regarding the raw material challenge to truly mass-market BEVs, manganese could become the solution to make both batteries and BEVs affordable enough. Tesla and Volkswagen are among the automakers that reportedly see manganese as an alternative.
With the industry requiring all possible batteries, high-manganese batteries could represent a solution. In 2021, the total global reserves of manganese were estimated at around 1.5 billion metric tons, a three-fold increase compared to 2010, according to Statista.
Currently, cobalt and nickel remain the main materials sought out to produce batteries, making it difficult to massively scale BEV production. “We need tens, maybe hundreds of millions of tons, ultimately. The materials used to produce these batteries need to be common materials, or you cannot scale,” said Elon Musk, CEO, Tesla Motors, who assured that “there is an interesting potential for manganese.”