The lithium-ion battery is dead. Long live the lithium iron battery! Those words signal a revolutionary change in battery technology, one that will cause a dramatic increase in the demand for electric cars and trucks. Over the past decade, zillions of hours and billions of dollars have been invested in figuring out how to make solid-state lithium-ion batteries. Now it seems lithium iron phosphate (LFP) batteries may be about to change the conversation completely.
One of the features of LFP batteries is they don’t use cobalt. Not only is cobalt expensive, but much of it is dug out of the ground by children in the Democratic Republic of Congo, which gives anti-EV advocates that opportunity to spout off about the evils of electric cars and vent their rage on digital devices that use cobalt in their batteries.
No cobalt means less expensive batteries, which allows manufacturers to lower the price of their electric vehicles. We know we all should be driving electric cars for environmental and health reasons, but money is what makes the world go round. Cheaper EVs will lead inexorably to more EVs. It’s a simple as that.
The second feature in favor of LFP batteries is long life. There is a lot of disinformation running around loose in the world about electric cars. Many people still believe the batteries in electric cars need to be replaced every 5 years or so. The fear of getting stuck with an expensive repair is very real to many who are considering buying an EV. Taking away that fear will be an important consideration in moving the EV revolution forward.
“If you’re talking about batteries that can last twice as long for the same price, it completely changes the math for the consumer,” Wedbush Securities analyst Dan Ives tells CNBC. “Iron phosphate batteries are safer, and they can have second or third lives as electricity storage.″
Shirley Meng is a materials scientist and professor at the University of California San Diego, where she heads its Sustainable Power and Energy Center. Meng has extensive experience in battery research and has worked with several major auto companies, including Mercedes-Benz, General Motors and Nissan. She also was involved with Maxwell Technologies, the battery start-up acquired by Tesla last year.
Meng tells CNBC that to reduce battery costs, companies will have to also get rid of nickel, which is the second most expensive component of batteries. While current nickel manganese cobalt batteries — the choice of many automakers other than Tesla — could reach the magical million mile threshold, they won’t be able to do so on a cost effective basis with today’s nickel concentrations she says. With lithium iron phosphate, which eliminates both nickel and cobalt, there is a possible pathway for getting battery prices down to as low as $80/kWh.
Tesla Battery Day
The whole world is watching and waiting for Tesla Battery Day, now tentatively scheduled for September 15. CNBC reached out to Tesla and Jeff Dahn, the super scientist and battery consultant at Dalhousie University in Halifax, Nova Scotia, but both declined to comment about the upcoming event and what secrets it may reveal.
Shirley Meng says, “I truly believe Tesla is planning to bring this (LFP battery technology) back.” But if so, Tesla is hedging its bets by signing a long term supply contract with Glencore for cobalt, presumably for the batteries it will use in cars produced in Berlin and Shanghai. “It is going to be hard to get below $100 per kilowatt,” Meng says about current nickel cobalt chemistry. “Tesla realized they can’t just get rid of cobalt.”
James Frith, head of energy storage at Bloomberg New Energy Finance in London, expects battery cell prices to go below $100 per kWh by 2024 at the latest and to drop to $60 per kWh by 2030. “At that point, you have choices, either as an automaker or a consumer,” he says. “You can go for a battery that’s bigger that will take you farther (between charges). Or you can get a battery that’s optimized for a longer lifetime cycle.″
The Hyundai Scenario
Batteries with long life — like the rumored million mile battery from CATL — could really move the needle on EV sales, says Brett Smith, director of technology at the Center for Automotive Research in Ann Arbor, Michigan. “It’s going to signal beyond any doubt that the technology has arrived,” he tells CNBC. “That’s what Hyundai did.″
In 2005, Hyundai introduced its 100,000 mile factory warranty, which helped the Korean automaker to double its sales. Smith thinks the million mile battery could have a similar effect on EV sales. Then there is the issue of resale value. A car with a long-life battery will be worth more in the used car market than one with a battery that is nearing the end of its service life.
A Second Life For Batteries
Frankly, not many cars stay on the road that long, but long-life batteries could have a second life for energy storage purposes either at grid-scale or in behind-the-meter systems for homeowners or businesses. It’s hard to imagine a used battery being an asset worth significant money, but that could turn out to be exactly what happens as extended life batteries become available in a few years. Total cost of ownership calculations would suddenly have a new parameter to consider — how much an owner could sell an EV battery for when the car gets too old to drive.
Shirley Meng says it is now possible to make batteries in the laboratory that have much longer lifespans, and she envisions them being commercially available by 2025. “What I see is lots of breakthroughs and we are already a few steps ahead. We have a pathway.” But when it comes to CEOs, she says, “They believe they can do it at scale. I am not sure we are there yet. We don’t want to overpromise and disappoint, but it’s really quite realistic. I hope we get there sooner than 2025. Lithium-iron phosphate and its upgraded versions will have a major role in the future of EVs and fundamentally change large-scale energy storage.”
Laissez les bon temps electrique roulez!