Ultimate Resource On Small And Mega-Battery Innovations And Facilities
US Is Losing The Battery Race Despite Having The Right Stuff. Ultimate Resource On Small And Mega-Battery Innovations And Facilities
Raw materials? Yes. Demand? Yes. So what’s the problem?
The U.S. isn’t just losing the battery race—it’s barely in the running. But it doesn’t have to be that way.
China dominates lithium-ion battery production and is building factories at breakneck speed. Europe, too, is adding battery plants as its power grid and car companies shift away from fossil fuels. Although a few factories are planned in the U.S., including Tesla Inc.’s Texas plant, BloombergNEF currently expects the country’s share of worldwide battery production to fall from 8% today to 6% in 2025.
Yet the U.S. has most of the ingredients it needs for a battery-building industry. It has the raw materials, with three companies developing facilities to extract lithium from subsurface brine in the Southern California desert, while similar projects are under way in Arkansas and Nevada. It also has the demand. Utilities are plugging big batteries into the electric grid to store renewable power and protect against blackouts. And U.S. automakers are ramping up production of EVs.
The government pushed for domestic battery factories once before, under President Obama. But demand for the devices wasn’t high enough to support the factories, leading to embarrassing failures such as the 2012 bankruptcy of manufacturer A123 Systems after it received a $249 million federal grant. That’s changed.
“If we want to have a domestic supply chain for batteries in North America, now is the time you have to press the accelerator,” says Sam Jaffe, managing director of Cairn Energy Research Advisors, a consulting company in Boulder, Colo. “The conversation should be ‘mine to car,’ not just ‘battery to car.’ ”
It’s not a question of national bragging rights. Lithium-ion batteries have become a foundational technology of 21st century life, so critical that the federal government in 2018 put lithium on a list of 35 minerals essential to national security.
“It seems insane that the largest economy in the world should not be a participant in this,” says Danny Kennedy, chief energy officer of New Energy Nexus, a cleantech nonprofit that recently issued a report on the possibility of creating a domestic battery industry. “We could be the champion of that future if we engage in it now and don’t give it away.”
For U.S. automakers, there’s good reason to want batteries built here. In an era of trade turmoil, relying on imported batteries could be problematic, even if President Biden abandons his predecessor’s use of tariffs. And with car companies worldwide shifting to electrics, Detroit will need an ample supply to keep car prices low.
Plus, EV battery packs are big and heavy, making them expensive to ship. The pack for a compact Chevrolet Bolt, for example, weighs about 950 pounds. U.S. battery factories feeding U.S. auto plants could reduce those costs. “Think about shipping a couple million battery packs from Asia—it’s a nightmare,” says Brett Smith, director of technology for the Center for Automotive Research. “It just becomes more logistically reasonable to build it here.”
In addition to a General Motors-LG Chem battery plant under construction in Ohio and SK Innovation’s two upcoming Georgia factories, the U.S. has plenty of startups nearing production. Solid Power Inc., a battery manufacturer in Colorado, expects to support vehicle production as early as late 2025. Chief Executive Officer Doug Campbell says the country has a demonstrated ability to innovate. “The risk, though, that we face is: Can we keep those innovations at home?” he asks. “Is it going to go the way that the solar cell went?”
Battery-Free, Energy-Harvesting Perpetual Machines: The Weird Future of Computing
A new breed of computers could run forever—or at least until long after we’re gone.
In the not-too-distant future, technologists say, most computers will be tiny, ubiquitous, and won’t ever need new batteries—because they won’t have any. Their latest proof is a highly unusual Nintendo Game Boy.
Custom designed to run entirely without batteries, the hand-held gaming device is powered by small solar panels as well as the button presses of the person playing it. That’s right: Even after the apocalypse, survivors will at least have “Tetris.”
The implications of this demonstration are potentially huge, and not just for videogame junkies. In our battery-free future, carbon, moisture and light sensors that last for decades could be scattered by drones across farms; smart cities might be inundated with all-seeing, all-hearing surveillance devices; vehicles and buildings will use artificial intelligence to anticipate needs and perform simple tasks; and “implantables” in our bodies will more tightly integrate humans with everything else connected to the internet.
Nvidia Corp. Chief Executive Jensen Huang has predicted this future of computing will eventually include trillions of devices. “I hope for God’s sake they’re not all powered by batteries,” says Josiah Hester, an assistant professor of computer engineering at Northwestern University, and a co-lead on the Game Boy project.
There are many practical and environmental reasons to hope for battery-less sensors, in everything from bridges (to monitor their safety) to human bodies (to monitor our health). But battery or no, a key concern is what happens to a sensor’s data when it runs out of power.
To address this problem, the Game Boy research team upended a fundamental rule of computers: If you turn it off, you lose unsaved work. Their system, by contrast, can lose power completely, even many times a second, and the instant it gets enough power again—say, from a player impatiently mashing buttons—it picks up right where it left off.
Known as “intermittent computing,” this system relies on a still-exotic kind of memory chip. Almost every computer in history has had two separate forms of memory: volatile RAM and more permanent, but harder to access nonvolatile storage, which includes anything from punch cards and magnetic tape to hard drives and flash memory.
But these researchers are using a new type of RAM—ferroelectric RAM or F-RAM—that erases the distinction. It’s as quickly and easily accessible as typical RAM, but as persistent as any permanent storage medium. It also takes only a minuscule amount of electricity to make it work, and it doesn’t degrade over time, like flash memory does.
Jasper de Winkel, a Ph.D. candidate at Delft University of Technology in the Netherlands, and the technical lead on the batteryless Game Boy project, married this power-sipping, nonvolatile memory to a power-sipping processor from Ambiq, a 10-year-old Austin-based company that specializes in processors for smartwatches, industrial sensors and other ultralow power devices.
The total package—including the memory, processor and display—draws on average 11.5 milliwatts of power. This makes it, according to the researcher’s calculations, about 20 times more power efficient than the original Game Boy from 1989. By comparison, a typical smartphone draws 1 to 3 watts of power from its battery when in use, or around a hundred times more power.
It’s this combination of traits—never needing to reboot, using very little power, and harvesting energy from the environment—that yields a system that could be a “perpetual” computer, says Dr. Hester. The goal of perpetual computing is tiny sensors, radios and other devices that gather, process and transmit data until at last they physically break down.
Not to be confused with a mythical “perpetual motion machine,” these could be very real additions to our environment, scattered across earth and sea, providing an infrastructure of data collection that could outlive its creators.
Energy harvesting hasn’t improved dramatically in the past few decades, but “what has changed is what you can do with these very tiny amounts of energy,” says Joshua R. Smith, a professor at the University of Washington, where he heads up the Sensor Systems research group. (He wasn’t involved with the Game Boy project.)
Dr. Smith and his collaborators have demonstrated it’s possible to use the radio waves already coursing through our environment to power tiny sensors and computers. In 2005, his group was the first to show off a small microcontroller powered by radio waves beamed over a considerable distance. In one of the lab’s latest projects, the team wirelessly powered a small, batteryless video camera. In early 2021, Jeeva Wireless, a startup founded in order to commercialize the underlying technology, will release its first chip.
As enticing as this technology sounds, it will always be limited, especially compared with the ever more powerful computers we’ve grown accustomed to carrying around. It’s just physics: Tiny systems that use very little power might someday become clever in the way the genius of the invertebrate world, the fringed jumping spider, has managed to cram an impressive amount of smarts into a small body, but it’s not about to build a spider civilization and put other spiders on the moon.
“Something like your phone is probably always going to have a battery,” says Dr. Smith. “But maybe when that battery runs out, it will still be usable in a reduced-functionality mode, using energy harvesting.”
Still, with a growing array of processors and sensors that can sustain themselves on as little as a few hundred microwatts of power—less than half of the power generated by a house fly in flight—the number of possible ambient energy sources multiplies significantly.
In addition to existing ways to harvest energy, from radio waves, solar power and vibration, there are some in development that sound more sci-fi. For example, researchers at Northwestern recently demonstrated a novel thread that can turn body heat, or any thermal energy, into electricity.
The result could be, for example, a hat that powers health sensors, or a ski jacket that trickle-charges your phone. Other researchers at a variety of institutions are working on ways to produce electricity from the microbes that live in soil.
And when you combine multiple energy sources, you get a package that could go places few computers have before—like inside construction material. Researchers have previously proposed putting wireless sensors into freshly poured concrete, where they could monitor strain more or less indefinitely.
“A bridge is supposed to have a lifetime of 50 years, and in the U.S. we’ll leave it up for 200 years, because that’s how we do infrastructure,” says Dr. Hester. “Imagine getting stress and strain data at high resolution across a bridge for that entire time.”
In other words, someday we might know it’s time for a repair when the bridge itself cries out for help.
Battery Startups Work On New Ways To Power EVs, With Less Hassle
One day you may be able to charge your car while cruising down the highway.
Because of Brexit, the U.K.’s auto industry has little time to localize production of batteries. The deal reached late in 2020 requires 30% of the content of battery packs for U.K.-built cars to be sourced domestically; the regulation gets tougher in 2024. Britishvolt Ltd. is the only company so far to announce plans to start battery production in the country. —Dimitra Kessenides
● Form Energy Inc.
The company is developing what it calls “long duration” batteries, storage that could last for weeks at a time. That could enable 100% carbon-free grids, ending the need for coal and gas. —Brian Eckhouse
This startup promises a wireless charging system that will allow you to park your car atop a “site” and watch the battery level rise. Founder Wang Zhe also imagines installing the equipment on highways so cars can charge while in motion. The company is also planning an initial public offering in Shanghai. —Tian Ying
● QuantumScape Corp.
QuantumScape has a 50-50 joint venture with Volkswagen, its largest shareholder, to start producing cells in 2024. A darling of the EV industry SPAC-boom, it’s become a target of short sellers skeptical of its market value, which reached almost $50 billion in December. It’s since tumbled by more than half. —Gabrielle Coppola
● Sila Nanotechnologies
Of battery startups operating today, experts say, this one in California is the likeliest to succeed. The maker of materials for car and device batteries has a supply agreement with Daimler AG. —David R. Baker
● Solid Power
Spun out of the University of Colorado in 2014, this solid-state battery maker intends to use existing battery- or carmaking plants to produce its cells and to begin testing its auto batteries by early 2022. Investors include Ford Motor Co. and the venture arm of Hyundai Motor Co. —G.C.
The Israeli company, backed by BP and Daimler, says it has designed a system that cuts EV charging times to five minutes. In December the company said it’s on track to launch samples of its EV batteries by the end of 2021.—Eddie Spence
Batteries Hidden Across New York Give The City A Backup Boost
Stashed in empty lots and installed on rooftops, microgrids in otherwise overlooked locations are the future of Big Apple power.
As a coastal city that’s seen several devastating weather events cripple its power grid, New York needs more reliable energy sources. MicroGrid Networks LLC, a clean-energy system developer, is building the infrastructure for a more resilient grid. To start, the company will bring eight projects in three boroughs online by the end of 2021, representing a $96 million investment. That covers all costs, from identifying and securing land in Brooklyn, Queens, and Staten Island, permits, and equipment for construction to operating the system and providing services. Chief Executive Officer Montgomery Bannerman says the project will deliver environmental and energy cost benefits and lots of jobs.
MicroGrid Networks, backed by SER Capital Partners, will repurpose unused spaces, including rooftops in residential neighborhoods and empty lots in industrial areas.
“Large batteries will become as ubiquitous in our buildings and businesses and neighborhoods as they currently are in our pockets.” —MicroGrid Networks CEO Bannerman
Shift To Electric Vehicles Spurs Bid To Make More Batteries In U.S.
Sila Nanotechnologies, a Silicon Valley startup, is among the latest to attract Wall Street backing.
The auto industry’s quickening shift to electric cars is spurring investment in another emerging industry in the U.S.: manufacturing lithium-ion batteries for those vehicles.
China currently dominates the market for producing electric-vehicle batteries. But as auto makers spend billions to build more plug-in models in the U.S., investors are increasing their bets on companies looking to expand the supply chain for batteries and related materials in North America—a region that has long relied on imports for such components.
Sila Nanotechnologies Inc., a Silicon Valley startup that makes silicon anode materials used in batteries, is among the latest to attract Wall Street backing. The company said Tuesday that it has raised $590 million in new funding.
Much of that money will be used to build a factory in the U.S. for making battery materials, Chief Executive Gene Berdichevsky told The Wall Street Journal. The location hasn’t yet been selected.
Other battery-focused startups, such as California-based Romeo Power Inc. and Canadian mining firm Lithium Americas Corp. , which has U.S. operations, have also recently tapped public markets. Romeo went public late last year, while Lithium Americas said Friday that it sold $400 million of stock in a public offering intended to finance a lithium project in Nevada.
Industry executives and lawmakers say the U.S. needs to reduce its reliance on China if it wants to lower costs and remain competitive in making electric vehicles and their batteries domestically. President Biden also has made securing more of this supply chain in the U.S. a priority, as part of a broader effort to accelerate the auto industry’s shift away from gasoline.
U.S. battery-making capacity is expected to increase sharply over the next decade, rising more than sixfold from roughly 60 gigawatt hours of annualized production last year to about 383 gigawatt hours in 2030, according to Benchmark Mineral Intelligence.
Battery-manufacturing giants such as South Korea’s LG Chem Ltd. and SK Innovation Co. are building big factories in the U.S. to expand American production of electric-car batteries. LG Chem is building its factory in Ohio as part of a joint venture with General Motors Co.
Tesla Inc. is also expanding its battery-making capabilities, seeking to cut costs and shorten its supply chain by making some materials in-house.
And yet, there is currently little production in the U.S. for critical battery materials such as lithium and graphite. Those materials are needed for the anodes and cathodes that circulate ions to generate the battery’s current.
“You have a lot of stuff lining up that’s a real demand signal into the supply chains of ‘we need more, we need it local, and we need it cheaper,’ ” said John McClure, a managing director at investment bank Nomura Greentech Capital Advisors LLC.
Right now, much of the supply chain is concentrated in China, which makes more than 70% of the world’s lithium-ion batteries, according to Benchmark. The country also refines and manufactures the majority of minerals and materials needed for those batteries.
Analysts are bullish that electric-vehicle sales will take off in the coming years. While today they account for about 2% of the U.S. auto market, that share is expected to grow to 10% by 2025, according to investment bank Morgan Stanley.
There are risks if consumer demand doesn’t materialize as expected. An attempt to expand U.S. battery production—mostly through government funding under then-President Barack Obama —stumbled early last decade when car companies failed to see demand for electric vehicles materialize as anticipated.
Moving more battery production to the U.S. will help car companies and their suppliers bring down costs, a step that is important for consumers to adopt electric vehicles more widely, auto executives say.
Sila, a company co-founded by Mr. Berdichevsky, who helped design Tesla’s first battery packs, is specifically looking to increase anode manufacturing in the U.S.
The decade-old company, which in 2019 received backing by German auto maker Daimler AG , has focused its research on developing silicon-based anodes. Its executives say its anodes are capable of storing more energy than the graphite ones used in today’s batteries.
This latest investment round, led by Coatue Management and T. Rowe Price Associates Inc., values the company at $3.3 billion, Mr. Berdichevsky said.
“Billions of dollars of capital really needs to go into the ground to bring a new technology like this to scale,” he said.
Sila, which is already supplying some consumer-electronics companies, is looking to build a new factory to get its anode into vehicles by 2025, Mr. Berdichevsky said. The factory, when finished, is expected to make enough materials to supply batteries in more than one million cars annually, he said.
Other anode producers are also scaling up in the U.S.
Novonix Ltd. , an Australian-listed company, has a contract to sell 500 tons of synthetic graphite, produced at its factory in Chattanooga, Tenn., to battery maker Samsung SDI Co. starting this year, the company said.
By 2025, the company hopes to increase output to 25,000 tons annually, said Chris Burns, the company’s chief executive. “We have to move faster,” he said. “People are going to need it.”
America’s Battery-Powered Car Hopes Ride On Lithium. One Producer Paves The Way
The U.S. is racing to catch up to China in mining and refining the metal, and Piedmont Lithium is at the leading edge.
The rolling hills of North Carolina’s Piedmont region are an unlikely setting for a next-generation technology transformation that has become a national priority.
Lamont Leatherman, a 55-year-old geologist who grew up here, is its unlikely instigator. A decade ago, he combed the woods near his childhood home in search of lithium, a soft, white metal he believed would be crucial to the burgeoning industry of electric vehicles.
Now, the company he helped found five years ago to explore the region, Piedmont Lithium Ltd., has deployed drilling rigs throughout the 2,300 acres it owns or controls to map out deposits. The company is preparing to launch one of the first big new lithium mines in the U.S. in decades.
Lithium is an increasingly crucial material, central to the rechargeable batteries that power cellphones and electric cars. These batteries are becoming a disruptive force in the energy sector as well. Demand, especially from vehicles, is expected to surge, and controlling the resources that power them is the 21st-century version of oil security.
For now, the U.S. remains largely reliant on China and other countries for lithium, having fallen far behind in mining and refining it. Piedmont is at the leading edge of efforts to build an American supply chain for the highly conductive, ultralight metal—and its fate will be a sign of whether the U.S. can succeed.
The modern lithium-mining industry started in this North Carolina region in the 1950s, when the metal was used to make components for nuclear bombs. One of the world’s biggest lithium miners by production, Albemarle Corp. , is based in nearby Charlotte. Nearly all of its lithium today, however, is extracted in Australia and Chile, which have large, accessible deposits of the metal.
Only about 1% of global lithium output is both mined and processed in the U.S. China, with a huge chemical industry and low costs, unearths about 10% and processes about two-thirds of what’s dug up.
Scientists say switching from fossil fuels to batteries will be crucial to reducing carbon-dioxide emissions, a key contributor to climate change. Although it’s a messy process, increasing domestic production of lithium is vital for the U.S. to support its auto industry and meet its climate goals, analysts say.
President Biden signed an executive order in late February calling for a review of supply chains for critical materials, including those needed for electric cars, such as lithium. The government has said that relying on overseas sources for these materials creates a “strategic vulnerability” to the U.S. economy.
Piedmont is still about two years away from pulling lithium out of the ground in North Carolina. Last September, it announced a deal to supply lithium to Tesla Inc. once its mine comes into operation. The company plans to spend more than $500 million to build a pair of plants to extract lithium.
“We’re going to build a big business here,” said Chief Executive Keith Phillips, a former mining banker for firms such as JPMorgan Chase & Co.
Piedmont’s U.S.-listed shares recently hit $80, up from $11 before the company unveiled the Tesla deal. The surge briefly gave the company a market value above $1 billion.
Exploration is well under way. In January, a small team of workers bored tubes hundreds of feet into the earth to map the deposits of lithium several miles north of the original mine that produced lithium for bombs. Spodumene, the mineral that contains lithium, is abundant in what’s known as the Carolina Tin-Spodumene Belt.
While Piedmont is one of the farthest along, exploration efforts by others are under way in Nevada, California and Arkansas.
Although lithium deposits can be found all over the world, it’s difficult to turn them into the chemicals that power batteries.
Refining the metal involves large amounts of equipment and intricate chemical processes that can cause water and soil pollution without proper controls. It can take five or more years for a new lithium-mining operation to produce battery-grade materials, experts say.
Australia was the biggest lithium producer last year, with nearly 140,000 metric tons, according to Benchmark Mineral Intelligence, which tracks products in the lithium-ion battery supply chain. Chile was the second-biggest, with almost 100,000 tons, followed by China at about 35,000.
The U.S. produced roughly 3,000 tons, but it has among the largest resources in the world, according to the U.S. Geological Survey. The trouble is that at today’s prices, much of that American lithium is too expensive to pull out of the ground.
Much of the lithium mined in the world today comes from two sources: a salty brine that’s pumped out of the ground, in countries such as Chile, and spodumene, the mineral contained in hard rocks found in places such as Australia and North Carolina. Chemical processes are then used to make the compounds that go into batteries.
Processing plants, which can cost several hundred million dollars, are about half as expensive when they’re built inside China.
The country also has looser environmental regulations for mining and chemical processing than in much of the Western world.
Piedmont is betting government support, demand from electric-car makers and a solid supply of raw materials close at hand can make its processing plants profitable. It and other lithium companies are wagering that soaring demand will push up lithium prices.
While China powers many of its plants with coal, Piedmont plans to use solar and natural gas. Like most startup exploration companies, it will likely need a deep-pocketed partner or lender to help develop the mine site itself.
Piedmont might be one of the few new sources of lithium world-wide with enough investment to come to market in the next two to three years, analysts say. That constraint is a major reason Benchmark sees supply only doubling from this year to 2025, even as demand rises more quickly.
Once it’s operational, Piedmont expects to produce 160,000 tons a year of concentrated spodumene, yielding 22,700 tons of refined material. That could represent several times more output than current U.S. production, but still not nearly enough to meet expected demand.
Piedmont got its start more than a decade ago, when Mr. Leatherman heard about a boom in lithium prices at a conference in Toronto. Prices for gold, one of his specialties, were plunging due to the global financial crisis.
Mr. Leatherman thought back to the green-striped rocks in the yard of his childhood home in North Carolina. The rocks contained rich veins of lithium. “I had no idea they were going to be special,” he said.
He obtained decades-old U.S. Geological Survey maps that detailed lithium deposits in the region. Braving ticks and snakes in the forests and hills nearby, Mr. Leatherman cracked open rocks with his hammer to expose the lithium inside.
Lithium’s boom-and-bust cycles have made it an unforgiving commodity to produce. The price soon fell, and Mr. Leatherman set aside his maps and eventually turned to blueberry farming on Vancouver Island, off Canada’s west coast. He also pursued a gold project in South Carolina.
Prices had begun to rise again when Taso Arima, an Australian with a background in coal-mining finance, contacted him in 2016. Mr. Arima had moved to the U.S. a year earlier to develop a coal project in Kentucky, but he was worried the fossil fuel faced a long-term decline.
“The writing was on the wall for coal,” said Mr. Arima, 36.
Looking to transition toward clean-energy materials such as lithium, he came upon a news article about Mr. Leatherman’s earlier prospecting work. Soon Mr. Leatherman was leading him on a tour of the area that he’d surveyed years before. Lithium-bearing rocks were just laying on the ground, Mr. Arima said.
Mr. Arima helped arrange investments through an Australian shell company, which raised several million dollars in seed capital to launch the firm.
Mr. Leatherman began meeting with nearby landowners to negotiate agreements to explore on their property. Being a local helped, he said. Now the company’s chief geologist, he splits his time between Vancouver Island and North Carolina.
In 2017, Piedmont hired Mr. Phillips as CEO, giving the company a direct line to financiers on Wall Street.
Lithium prices grew. Benchmark’s price index that tracks prices of several different lithium chemicals used in batteries peaked in early 2018. Then came the inevitable bust, as producers, lured by high prices, flooded the market.
By the end of last year, prices were down by about two-thirds. Industry analysts say that of the roughly 200 companies in the lithium business when prices peaked, nearly all of them have failed.
Few are predicting another bust. Analysts expect the growth of electric cars will cause lithium demand to triple in the next five years, far outpacing current supply. Lithium prices this year notched their two biggest monthly increases ever, rising about 33% from the end of 2020, according to Benchmark’s index.
Average prices for one battery chemical, lithium carbonate, have risen to around $9,000 per metric ton, from $6,000 at the end of last year, buoyed by Chinese demand. They peaked at $17,500 in 2018.
Years of low prices and weak investment in new mining projects have now set the stage for a possible scarcity, executives say.
“What we have today is this really dangerous place for the growth forecasts of the EV industry,” said Paul Graves, CEO of Philadelphia-based Livent Corp. , one of the largest producers in the world, with operations in North Carolina, Argentina and China. “There will be a massive shortage of lithium at some point.” Livent is a supplier to Tesla and recently announced a supply agreement with BMW AG .
For the auto industry, plentiful lithium is crucial to the shift to electric cars. Electric vehicles are expected to account for about 50% of all vehicles produced in the world by 2030, according to UBS Global Research, up from about 3% to 4% today.
Batteries account for between 30% and 40% of the cost of most electric cars, and a surge in lithium prices could slow the decline in prices necessary to make them attractive to a swath of consumers.
To keep supply coming, Tesla Chief Executive Elon Musk last year announced an unprecedented move by an auto maker into commodities markets, including lithium. The auto maker has pledged to produce its own lithium in the Nevada desert.
Lithium Americas Corp. , a Canadian mining company, in January raised $400 million, part of which it said will help fund a Nevada project to extract lithium from clay deposits.
Albemarle said it’s considering reopening some long-mothballed lithium mining assets in Kings Mountain, N.C., but it doesn’t currently have firm plans to do so. Eric Norris, president of Albemarle’s lithium business, said the company has spent more than $30 million over the past few years to assess the area. It is investing between $30 million and $50 million to expand production at a lithium project in Nevada.
Investors including Warren Buffett’s Berkshire Hathaway Inc. and a fund run by Bill Gates are also backing companies seeking new ways to extract lithium as part of a global rush of firms trying to break into the sector.
There is no public market to bet on higher lithium prices in the future like there is for commodities like oil and gold, so investors have bet on the stocks of lithium miners. Shares have been volatile lately as investors retreat from hot stocks tied to electric cars, but Albemarle has still gained about 60% since the end of September. Shares of Livent have added 80%. The market value of Lithium Americas, which is also trying to produce in Argentina, approached $3 billion in January before a recent retreat.
To meet expected demand, said Robert Mintak, CEO of Standard Lithium Ltd., “you’re going to need not just one success story.” The company is working with a German company to produce lithium chemicals in Arkansas, where it has a test plant already in place.
Mr. Mintak recently counted 140 lithium-ion batteries in his home from his family’s current and old electronics. He used to run a lithium firm trying to produce in Nevada that reached a supply agreement with Tesla in 2015. The company still hasn’t finished its project.
One risk to lithium miners is that demand doesn’t materialize, or a new battery technology reduces the amount of lithium needed.
“You can still paint a lot of scenarios in both directions,” said Mathew Lazarus, managing member at New York-based hedge fund Red Hook Asset Management LLC, who invests in lithium companies.
Mr. Arima of Piedmont Lithium said he isn’t concerned. As competition among nations for control of the lithium-ion battery supply chain ramps up, he expects more resources, and investors, to pour in.
“We need to do it here in America,” he said. “It’s part of our future. We can’t rely on overseas supply chains.”
California To Test Whether Big Batteries Can Stop Summer Blackouts
The state is set to become a global test case in using batteries to back up wind and solar power.
With summer’s heat approaching, California’s plan for avoiding a repeat of last year’s blackouts hinges on a humble savior – the battery.
Giant versions of the same technology that powers smart phones and cars are being plugged into the state’s electrical grid at breakneck speed, with California set to add more battery capacity this year than all of China, according to BloombergNEF.
It will be the biggest test yet of whether batteries are reliable enough to sustain a grid largely powered by renewables. Last year, when the worst heat wave in a generation taxed California’s power system and plunged millions into darkness in the first rolling blackouts since the Enron crisis, many blamed the state’s aggressive clean-energy push and its reliance on solar power. Should a heat wave strike again this summer, it will be up to batteries save the day.
Their success or failure may even have implications for President Joe Biden’s ambitious plan to achieve a carbon-free electricity system by 2035 – which would require massive battery deployment and the expansion of renewable energy systems across the nation.
Biden’s long-awaited infrastructure plan, unveiled this week, includes a tax credit for grid-scale batteries, according to U.S. Energy Storage Association. They’re part of his larger effort not just to shift to renewable power but to make the aging electric grid more reliable.
“This is going to be the preview summer for batteries in California, and we want to make sure this initial chapter is as successful as possible,’’ said Elliot Mainzer, chief executive officer of the California Independent System Operator, which runs the grid across most of the state.
By this August, the state will have 1,700 megawatts of new battery capacity — enough to power 1.3 million homes and, in theory, avert a grid emergency on the scale of last year’s.
Other countries are also doubling down on batteries, with China on track to increase capacity to 222 gigawatts by the middle of the century from 1.4 gigawatts in 2019. Australia has a pipeline of grid-scale battery projects totaling more than 11 gigawatts, according to BNEF.
But batteries do have two major limitations – time and cost. Most of the battery packs now available are designed to run for just four hours at a stretch.
While that makes them a good fit for California, where electricity supplies can be strained in early summer evenings after solar power shuts down, batteries would not have prevented the multi-day outage that paralyzed Texas in February. A battery can only operate for so long before it needs to recharge.
“If batteries last four hours, then that’s not really going to do the job,” said Kit Konolige, senior analyst with Bloomberg Intelligence. “It’s still somewhat unproven, using batteries for a large portion of capacity.”
Utility-scale batteries are also more expensive than “peaker” gas plants, commonly used as back-up generation when demand is high. Following last year’s blackouts, critics lambasted the state for retiring so much inexpensive, gas-fired power under its environmental regulations.
Including construction and financing, batteries cost about $125 a megawatt-hour versus $109 for gas, according to BloombergNEF data.
Still, California sees batteries as a way to replace those peaker plants. Not only are they a lot faster to permit and build, batteries can generate income by letting owners arbitrage power prices, charging when electricity is cheap and discharging when it’s expensive. They also offer other grid services like stabilizing voltage throughout the day.
“A peaker runs for a few hours in the evening hours, and then it shuts off, and that’s all it can do,’’ said Kiran Kumaraswamy, vice president of market applications at Fluence, an energy storage joint venture of Siemens and AES Corp. “You’ve got to be able to provide that peak capacity but also optimize around how much money you can make at other times.’’
While more battery projects are coming online as the price of lithium-ion cells drops, the rollout has not always been smooth. Sporadic fires have struck grid-scale batteries, particularly in South Korea, one of the first countries to invest heavily in energy storage. But those incidents have become rare as electric utilities and power companies gain experience with the technology.
“There’s been enough deployment around the world and operating history that utilities seem to be comfortable with it,’’ said energy consultant Mike Florio, a former member of the California Public Utilities Commission. “It seems like the performance has been as expected, if not better.’’
But will batteries prevent blackouts? So far, they’ve been credited with helping prevent outages elsewhere, most notably in Australia where Tesla and France’s Neoen SA have built a 150-megawatt lithium-ion installation. That bodes well for California, where the buildout in combination with other measures should give the state enough of a cushion to prevent blackouts this summer, according to Konolige.
Just in case, the state has also delayed the planned closure of some gas plants and beefed up “demand response’’ programs that cut power when needed to some customers in exchange for a lower rate or other compensation. Public officials — including Governor Gavin Newsom, facing a likely recall election — have a powerful incentive not to get caught short two years in a row.
“It would be an ugly situation to run into something similar to last summer,” Konolige said. “To me, that’s a strong indicator that it’s unlikely to happen this year.”
Global EV Battery Sales Surge As Demand For Clean Cars Booms
Global electric-vehicle battery sales more than doubled in the first four months of the year as the switch to environmentally-friendly cars gathers pace.
Sales of EV batteries rose to 65.9 gigawatt-hours in the January-April period, from 26.8 gigawatt-hours a year earlier, SNE Research said Tuesday.
Contemporary Amperex Technology Co.’s sales almost quadrupled to 21.4 GWh, cementing the Chinese company’s position as the world’s biggest EV battery maker with 32.5% of the global market.
“Despite the hit of Covid-19 pandemic in 2020, the company’s performance has rapidly resumed,” CATL said in a statement. The firm is focused on building “long-term cooperation with international automakers,” it said. CATL won about 16% of revenue from overseas sales last year up from 4% in 2019, according to BloombergNEF.
Demand for electric vehicles is increasing as countries work to reduce carbon emissions, consumers embrace cleaner automobiles and costs tumble. Automakers such as Volkswagen AG and Ford Motor Co. are plowing billions of dollars into adding more EV models to their lineups, while industry pioneer Telsa Inc. posted estimate-smashing deliveries in the first quarter.
“CATL, BYD and other Chinese makers led the market growth,” SNE said in the statement. “With the Chinese market expected to continue expanding, growth for most of the Chinese makers is expected to exceed the market average.”
EV sales in China may climb more than 50% this year alone, research firm Canalys estimates.
South Korean companies also posted strong growth, helped by rising EV demand in Europe. Sales at LG Energy Solution Co. and SK Innovation Co. more than doubled in the first four months, while Samsung SDI Co. posted 88% growth.
Proterra Eyes US Battery-Cell Facility Within Next Few Years
Proterra Inc., the electric-bus and battery maker that joined the Nasdaq Global Select Market, is planning a domestic battery-cell manufacturing facility within the next few years.
“It’s an imperative initiative for Proterra for our future growth,” Jack Allen, the company’s chief executive officer and chairman, said in an interview Tuesday at the company’s factory in the Los Angeles area. “We are committed to working with our partners to be able to bring cell manufacturing to the U.S.”
For electric-vehicle makers, success hinges in part on securing the most critical and expensive component: battery cells. A handful of companies based in China, Japan and South Korea make automotive-grade battery cells, which are key to manufacturers’ goals of bringing dozens of new electric powered vehicles to U.S. roadways.
But strained logistics, production delays and a scramble for long-term contracts have put pressure on companies to lock up a steady supplier amid a new battery arms race. The Institute for Defense Analyses, a nonprofit that examines national-security issues, said battery manufacturers have taken on an “outsized importance” and warned the U.S. hasn’t coordinated domestic supplies on the scale that Europe has.
Proterra, which has a supply agreement with LG Energy Solution through 2022, wants domestic cell production to shorten the supply chain, create jobs and help meet expected volume growth, Allen said.
“This industry is at an incredible inflection point,” he said. “We think it’s imperative to be able to accelerate that growth to have supply here.”
Proterra said in April that it projects investing $100 million to $120 million on domestic cell capacity.
The Burlingame, California-based company makes electric-transit buses and battery packs at its plant in the City of Industry in Southern California. It invested $20 million to build the battery facility within the existing bus factory, a project that was completed last year and is capable of producing 675 megawatt-hours annually, Allen said.
Now, the company, which also has a bus factory in South Carolina and does research and development in the Bay Area, is looking to replicate that facility elsewhere in the U.S.
Proterra agreed to go public in January through a merger with special purpose acquisition company ArcLight Clean Transition Corp. The company raised more than $640 million in cash from the merger.
It has delivered more than 600 electric-transit buses and produced more than 300 megawatt-hours of battery systems and installed 46 megawatts of charging systems. On Tuesday, it said Florida’s Miami-Dade County had agreed to buy 42 additional buses and install 75 chargers at three depots.
A California Startup Now Offers A Full EV Battery In Just 10 Minutes
Ample offers a replaceable battery pack made for swapping out, rather than plugging in.
On a Wednesday afternoon in May, an Uber driver in San Francisco was about to run out of charge on his Nissan Leaf. Normally this would mean finding a place to plug in and wait for a half hour, at least. But this Leaf was different.
Instead of plugging in, the driver pulled into a swapping station near Mission Bay, where a set of robot arms lifted the car off of the ground, unloaded the depleted batteries and replaced them with a fully charged set. Twelve minutes later the Leaf pulled away with 32 kilowatt hours of energy, enough to drive about 130 miles, for a cost of $13.
A swap like this is a rare event in the U.S. The Leaf’s replaceable battery is made by Ample, one of the only companies offering a service that’s more popular in markets in Asia. In March, Ample announced that it had deployed five stations around the Bay Area.
Nearly 100 Uber drivers are using them, the company says, making an average of 1.3 swaps per day. Ample’s operation is tiny compared to the 100,000 public EV chargers in the U.S.—not to mention the 150,000 gas stations running more than a million nozzles.
Yet Ample’s founders Khaled Hassounah and John de Souza are convinced that it’s only a matter of time before the U.S. discovers that swapping is a necessary part of the transition to electric vehicles.
China, which is home to roughly half of the 7 million passenger EVs on the road as of last year, has more than 600 swapping stations and is on pace to have 1,000 by year’s end, according to a tally by clean-energy research group BloombergNEF.
“They’ve already made the determination that swapping has to be a significant part of the solution,” says Hassounah, “We don’t have enough deployment yet to realize that we need this in the U.S.” Even in China, however, where the swapping industry dwarfs that of the U.S., the technology is still only a small piece of the charging infrastructure.
In the U.S. most investment so far has gone into building faster plug-in stations and batteries that can accept power quickly without overheating. President Biden has proposed a target of 500,000 public chargers by 2030. His plan, which calls for scaling and improving fast-charging networks, makes no mention of battery swapping.
Yet plug-in chargers come with limits that can’t be overcome simply by adding more. They are a burden on the power grid, expensive to build, and, even at their fastest, agonizingly slow compared to gas pumps.
Hassounah and De Souza founded Ample in 2014 and have raised about $70 million to date from investors including the venture arms of oil and gas giants Royal Dutch Shell plc and Repsol SA.
They’ve spent the last seven years studying how to swap batteries in a cheap, vehicle-agnostic way and believe they’ve finally cracked it. For now they are focusing on ride-hailing fleets, as professional drivers have the most need for fast charging.
Late last year, Ample entered a partnership with Uber to help coordinate with the the fleet management services that provide drivers with cars, insurance, and other services.
On June 10, Ample announced a separate partnership with the fleet management service Sally, which specializes in making EVs available to ride-hailing and delivery drivers. The two plan to work to together to deploy EVs and swapping stations in San Francisco, New York, Los Angeles and Chicago. Sally aims to have hundreds of Ample-ready Kia Niro EVs running in the Bay Area by the end of this summer and to begin offering swapping to drivers in New York by the fall.
Sally co-founders Nicholas Williams and Adriel Gonzalez say the company chose to work with Ample because plug-in fast-charging options degrade batteries, come with high energy costs during peak use, and are too slow. “We had a supercharging concept that would probably do it in 30 minutes, but that was really too long for us,” says Williams.
Drivers in San Francisco rent Ample-ready EVs from fleet management services, just as they would for a combustion engine car, and pay the fleet manager for their swaps at the end of each week. The fleets then pay Ample by the mile for the energy, with no upfront fees for installing stations.
The energy cost for fleets, according to Ample, is typically 10 to 20 percent cheaper than gas. “All the drivers that have used it have come over from gas vehicles,” says De Souza. “This is the first time they’re driving an electric vehicle.”
Most EV charging in the U.S. happens at private chargers in driveways and garages, where drivers can use vehicle downtime to refill batteries slowly. But convincing Americans to ditch combustions engines and go electric means competing with the convenience of gas stations. The average fill-up, according to the NACS, a trade group for convenience stores and gas stations, takes 4.5 minutes, including the time it takes to pay.
With a typical fill-up of about 12 gallons, a car that gets 25 miles per gallon can add 300 miles of range in less than five minutes. Doing the same in 40 minutes counts as ultra-fast for an electric charger. Ten such chargers on the side of a highway would need at least a megawatt connection, enough to power hundreds of homes.
Swapping, at least in theory, offers an elegant solution to the problem of re-charging EVs quickly without taxing the grid. Where an ultra-fast charger acts as a firehose, delivering a rush of energy on demand, Ample’s system works like a garden hose, constantly filling small buckets and handing them over a few at a time. So far, however, attempts at swapping in the U.S. have come to nothing.
Tesla experimented with the technology in 2013 but soon abandoned it, opting instead to build its network of “Superchargers.” The startup Better Place, which planned to sell swappable batteries in its EVs, went bankrupt that same year, after raising nearly $1 billion.
There are two basic reasons that the electric vehicle industry in the U.S. has so far opted to plug-in rather than swap out. The first is weight. Batteries are heavy. Every mile of range adds a few pounds to the weigh of an EV battery, so a car with 250 miles of range might be carrying a a pack that weighs as much 1,000 pounds.
Replacing a pack of that size is not as simple as swapping out a few D cells from a flashlight. Building a station that can handle these loads, says De Souza, typically costs around $1 million.
Ample tackles the weight problem by breaking the battery pack into pieces. The company uses a modular system of lithium-ion packs, each about the size of shoe box, and arranges them on trays. Each module holds about three kilowatt hours of power and weighs around 30 lb. Most cars take 16 to 32 modules, depending on the size and desired range.
The modules are stacked on trays four or five at a time, with a typical car holding three to five trays. The robotic arms in Ample’s stations move the trays one at a time so that they never have to carry more than about 150 pounds. The average swap takes ten minutes. Ample’s goal is to get it down to five minutes by the end of this year.
Each stations holds about ten car’s worth of batteries, all steadily re-charging as cars come and go. This allows them to deliver energy at a rate between 500 kilowatts and 1.5 megawatts per hour with a connection of only 60 to 100 kilowatts.
Ample says it can build and deploy one of its swapping stations in a footprint the size of two parking spots for tens of thousands of dollars. No digging is required because power can be taken from an overhang connection. “Give us six weeks. We can set up a whole city,” says Hassounah.
If Ample can deliver on this promise, it would undercut not only the existing swapping options, but most fast chargers as well. According to a BloombergNEF survey last year, installation costs for ultra-fast chargers, which require digging in the ground, ranged from $111,000 to $333,000 per megawatt, with hardware starting at about $30,000 per connector and running as high as $125,000.
While dealing with heavy batteries is a chore, the biggest challenge for swapping is getting automakers to change the way they build EVs. “Compatibility is a massive problem,” says Ryan Fisher, an analyst for electrified transport at BloombergNEF. “When you talk about doing it across multiple manufacturers, that becomes pretty complicated quite quickly.”
Plus, there are other ways of smoothing the peaks and valleys in energy demand that don’t require making alterations to EVs already on the road. The startup Freewire, for instance, stores power in batteries inside of its chargers, allowing them to sip power from the grid and deliver to cars quickly.
When Tesla flirted with swapping, it built a proprietary system with its own swappable packs. Swapping stations in China have largely followed the same model, with carmakers building their own networks. NIO, the industry leader, has done more than 2 million swaps at 192 stations.
BloombergNEF analysis shows that NIO’s stations are exceptionally efficient at delivering power, with an average of 1,543 kilowatt hours per day per station—33 times the rate of China’s average public plug-in connectors.
But building multiple proprietary swapping networks in the U.S. makes little sense. “It’s almost like every car company has to build their own gas stations all around the country,” says De Souza. And creating a standard battery pack for every EV is also a non-starter. Automakers are not about to forfeit control over the most expensive part of an electric vehicle and one of the main ways they differentiate themselves from the competition.
Instead of asking automakers to adapt, Ample has created a flexible system that adapts to automakers.“We’ve built an adapter plate that has the same shape as the original battery,” says Hassounah. “So for one vehicle, it’s a one adapter plate, for another, it’s a slightly different plate.”
Each plate is designed to interface with the car in exactly the same way as the original battery, with the same bolts, the same electrical connection, and same software—and meeting the same safety standards. The plate, which holds the battery trays, never leaves the car. “You just put this thing in and it works,” says Hassounah, “kind of like replacing a tire.”
Ample says it is working with five manufacturers and has so far built plates for ten models. Non-disclosure agreements prohibit them from saying which automakers, but models seen in their promotional materials include the Nissan Leaf, Kia Niro and Mercedes-Benz EQC.
The idea is for automakers to be able to offer swappable battery packs as an option in their EVs. The biggest hurdle at the moment is getting the car companies, who already struggling with supply chain disruptions, to integrate Ample into their manufacturing.
For now, Sally and Ample plan to retrofit Kia Niro’s with swappable battery packs. The hope is that if Sally and other fleet managers say they want to place orders for hundreds of thousands of Ample-ready cars, that will help push manufacturers to build them.
“It’s very much in the early stages of the industry,” says Fisher. “So the proof is in the pudding.”
A Million-Mile Battery From China Could Power Your Electric Car
The Chinese behemoth that makes electric-car batteries for Tesla Inc. and Volkswagen AG developed a power pack that lasts more than a million miles — an industry landmark and a potential boon for automakers trying to sway drivers to their EV models.
Contemporary Amperex Technology Co. Ltd. is ready to produce a battery that lasts 16 years and 2 million kilometers (1.24 million miles), Chairman Zeng Yuqun said in an interview at company headquarters in Ningde, southeastern China. Warranties on batteries currently used in electric cars cover about 150,000 miles or eight years, according to BloombergNEF.
Extending that lifespan is viewed as a key advance because the pack could be reused in a second vehicle. That would lower the expense of owning an electric vehicle, a positive for an industry that’s seeking to recover sales momentum lost to the coronavirus outbreak and the slumping oil prices that made gas guzzlers more competitive.
“If someone places an order, we are ready to produce,” said Zeng, 52, without disclosing if contracts for the long-distance product have been signed. It would cost about 10% more than the batteries now inside EVs, said Zeng, whose company is the world’s largest maker of the batteries.
Concerns about batteries losing strength and having to be replaced after a few years is one factor holding back consumer adoption of EVs. Tesla last year flagged it expected to bring into production a battery capable of a million miles of operation, and General Motors Co. last month said it is nearing the milestone. That distance is equivalent to circling the planet 50 times.
Anticipating a rapid return to growth for the EV industry, CATL is plowing research-and-development dollars into advances in battery technology. While the coronavirus outbreak will drag down sales throughout this year, EV demand will pick up in early 2021, said Zeng, who founded CATL a decade ago.
Car buyers holding back during the pandemic is creating pent-up demand that will be unleashed starting next year, led by premium models, he said. CATL’s customers include BMW AG and Toyota Motor Corp.
Zeng’s comments strengthen views that electric vehicles are set to weather the economic slowdown caused by the outbreak better than gas guzzlers. Battery-powered cars will swell to 8.1% of all sales next year in China, which accounts for the largest share of global EV sales, and to 5% in Europe, BNEF predicts.
“The pandemic may have a lasting effect throughout 2020, but won’t be a major factor next year,” Zeng said. “We have great confidence for the long run.”
CATL struck a two-year contract in February to supply batteries to Tesla, a major boon for the Chinese company as the U.S. electric-car leader has thus far mainly worked with Japan’s Panasonic Corp. and South Korea’s LG Chem Ltd. The deal followed months of negotiations, with Tesla Chief Executive Officer Elon Musk traveling to Shanghai to meet with Zeng.
The CATL batteries are set to go into Model 3 sedans produced at Tesla’s massive new factory near Shanghai, which started deliveries around the beginning of this year. Batteries are the costliest part of an EV, meaning suppliers of those components have a chance to reap a lion’s share of the industry’s profits.
Bloomberg Opinion Column On Battery Costs
Zeng said he often shares insights with Musk, with the two exchanging text messages about developments in technology and business. CATL is strengthening its relationship with Tesla, with matters such as cobalt-free batteries on their agenda, Zeng said.
“We’re getting along well and he’s a fun guy,” Zeng said of Musk. “He’s talking about cost all day long, and I’m making sure we have the solutions.”
Zeng said Musk also requested his help in obtaining ventilators for coronavirus patients. The U.S. billionaire delivered more than 1,000 of the breathing machines from China to officials in Los Angeles in March.
Shares of CATL have advanced about six-fold in Shenzhen since its initial public offering in 2018, giving the company a market value of about $47 billion. Tesla, by far the most valuable EV maker, has a market capitalization of about $160 billion.
A “trigger point” for electric cars will occur once they overtake gasoline-powered vehicles around 2030-2035, Zeng said. That view is more ambitious than that of researchers such as BNEF, which expects the shift to take place a few years later.
CATL, which is adding a production facility in Germany, is set to make more than 70% of batteries required by BMW, an early customer, Zeng said. CATL also works with Volkswagen’s Audi unit and is cooperating with Porsche, he said.
Zeng didn’t rule out building a plant in the U.S., though he said the company has no specific plans for now.
“Our team has made achievements in competing with our global rivals in overseas markets,” Zeng said.
Startup Claims Breakthrough In Long-Duration Batteries
Form Energy’s iron-air batteries could have big ramifications for storing electricity on the power grid.
A four-year-old startup says it has built an inexpensive battery that can discharge power for days using one of the most common elements on Earth: iron.
Form Energy Inc.’s batteries are far too heavy for electric cars. But it says they will be capable of solving one of the most elusive problems facing renewable energy: cheaply storing large amounts of electricity to power grids when the sun isn’t shining and wind isn’t blowing.
The work of the Somerville, Mass., company has long been shrouded in secrecy and nondisclosure agreements. It recently shared its progress with The Wall Street Journal, saying it wants to make regulators and utilities aware that if all continues to go according to plan, its iron-air batteries will be capable of affordable, long-duration power storage by 2025.
Its backers include Breakthrough Energy Ventures, a climate investment fund whose investors include Microsoft Corp. co-founder Bill Gates and Amazon.com Inc. founder Jeff Bezos. Form recently initiated a $200 million funding round, led by a strategic investment from steelmaking giant ArcelorMittal SA, MT 0.95% one of the world’s leading iron-ore producers.
Form is preparing to soon be in production of the “kind of battery you need to fully retire thermal assets like coal and natural gas” power plants, said the company’s chief executive, Mateo Jaramillo, who developed Tesla Inc.’s Powerwall battery and worked on some of its earliest automotive powertrains.
On a recent tour of Form’s windowless laboratory, Mr. Jaramillo gestured to barrels filled with low-cost iron pellets as its key advantage in the rapidly evolving battery space. Its prototype battery, nicknamed Big Jim, is filled with 18,000 pebble-size gray pieces of iron, an abundant, nontoxic and nonflammable mineral.
For a lithium-ion battery cell, the workhorse of electric vehicles and today’s grid-scale batteries, the nickel, cobalt, lithium and manganese minerals used currently cost between $50 and $80 per kilowatt-hour of storage, according to analysts.
Using iron, Form believes it will spend less than $6 per kilowatt-hour of storage on materials for each cell. Packaging the cells together into a full battery system will raise the price to less than $20 per kilowatt-hour, a level at which academics have said renewables plus storage could fully replace traditional fossil-fuel-burning power plants.
A battery capable of cheaply discharging power for days has been a holy grail in the energy industry, due to the problem that it solves and the potential market it creates.
Regulators and power companies are under growing pressure to deliver affordable, reliable and carbon-free electricity, as countries world-wide seek to reduce the greenhouse-gas emissions linked to climate change. Most electricity generation delivers two out of three. A long-duration battery could enable renewable energy—wind and solar—to deliver all three.
The Biden administration is pushing for a carbon-free power grid in the U.S. by 2035, and several states and electric utilities have similar pledges. There is widespread agreement that a combination of wind, solar, geothermal and nuclear power mixed with short-duration lithium-ion batteries can generate 80% of electricity. The final 20% will require some type of multiday storage.
“That first 80% we know the technology pathway, and it is already cost competitive,” said Jeremiah Baumann, deputy chief of staff at the Energy Department. “We have a good sense of the technology for the final piece. The real question is which technology is going to get its cost down and get into the marketplace.”
Form’s battery will compete with numerous other approaches in what is becoming a crowded space, as an array of startups race to develop more advanced, cost-effective energy-storage techniques.
Several companies are heading to market with different battery configurations, such as solid-state designs. Some think pumped water storage or compressed air can be used more widely to bank energy. The European Union is pushing the use of hydrogen to store and generate power.
Others, meanwhile, are focusing on carbon-capture technology to make gas- and coal-fired power plants emission-free, which would reduce the need for storing energy.
Form Energy’s iron-air battery breathes in oxygen and converts iron to rust, then turns the rust back into iron and breathes out oxygen, discharging and charging the battery in the process.
“There is a Cambrian explosion of new storage technologies and in a Darwinian sense, they are not all going to survive. But the prize is huge both for investors and for society,” says Ramez Naam, a clean-energy investor who isn’t involved with Form Energy.
Previous high-profile efforts to develop better batteries have arced from hope and hype to bankruptcy. But since Form was created in 2017, it has attracted speculation and intrigue within the industry due to the track records of its founders. They include Mr. Jaramillo and Yet-Ming Chiang, a professor at the Massachusetts Institute of Technology who co-founded A123 Systems Inc., a lithium-battery pioneer.
Mr. Jaramillo earned degrees in economics and a master’s degree from the Yale Divinity School before switching to a career developing new batteries. After more than seven years at Tesla, he left in 2016 to pursue what he called “The Next Thing” on his LinkedIn page. He didn’t provide any details, but he wanted to build an inexpensive battery for the grid. He was close to signing a funding sheet for a new company when Mr. Chiang called him.
Mr. Chiang arrived at MIT as an undergraduate and joined the faculty less than a decade later. He started working on a long-duration battery in 2012 as part of a Energy Department collaboration. In 2017, he was also working on long-duration batteries and he and Mr. Jaramillo decided to together create Form Energy.
They recruited other battery-industry veterans. “The founding team has 100 years of battery experience,” says Mr. Chiang.
“We’re the alumni of a generation of failed battery companies who all came back for more.”
In early 2018, they began small-scale tests, the Ph.D. material scientist’s version of a middle-school science fair’s potato battery, using small pieces of metal wrapped in hardware-store hose clamps at the bottom of translucent measuring cups. Form tested different configurations: sulfur-iron, sulfur-air, sulfur-manganese and iron-air. By the end of the year, iron-air looked the most promising.
In 2020, as work was moving quickly, Form caught a break. It needed a critical battery component called a cathode that was impermeable to water but breathed oxygen, like a Gore-Tex jacket. An Arizona battery company, NantEnergy Inc., had spent a decade building such a membrane for a zinc-air battery. Owner Patrick Soon-Shiong, a billionaire biotechnology entrepreneur who owns the Los Angeles Times, wound down operations last year to focus on other investments.
Form bought its patents as well as its inventory of thousands of cathodes, which sit in cardboard boxes in a corner of the company’s building. “Having this piece nailed down allowed us to hit the accelerator,” said Mr. Jaramillo.
Late last summer, Form built a one-meter-tall (roughly 3.3-foot-tall) battery it called Slim Jim because it had the dimensions of a trash can of the same name. Earlier this year, it built Big Jim, a full-scale one-meter-by-one-meter battery cell.
If it works as expected, 20 of these cells will be grouped in a battery. Thousands of these batteries will be strung together, filling entire warehouses and storing weeks’ worth of electricity. It could take days to fully charge these battery systems, but the batteries can discharge electricity for 150 hours at a stretch.
In 2023, Form plans to deploy a one-megawatt battery capable of discharging continuously for more than six days and says it is in talks with several utilities about battery deployments.
Mr. Chiang, who is the company’s chief science officer, said the challenge was to figure out how to make a battery using iron, air and a water-based electrolyte.
“Chefs will tell you it is harder to make an excellent dish with common ingredients,” he said.
Top EV Battery Maker Adds Sodium To Its Recipe Book
China’s CATL, a Tesla supplier, says cheaper element could lower vehicle cost.
Contemporary Amperex Technology Co., the world’s biggest maker of electric-vehicle batteries and a Tesla Inc. supplier, said it was looking to make batteries using sodium ions, a technology that could reduce costs and lift performance.
CATL is the first battery maker in the top global tier to adopt sodium-based battery technology, which offers promise because sodium is relatively plentiful and cheap. Other major players in the automotive business such as Panasonic Corp. and LG Chem Ltd. have focused on improving battery recipes that rely on less easily mined elements such as lithium, cobalt and nickel.
Commercializing sodium-based batteries still faces challenges. CATL said the energy density of its new battery—the amount of energy it stores per unit of volume—is lower than that of an EV battery widely used in China known as lithium ferrophosphate.
Companies are racing to bring down the cost of making an electric vehicle so that it matches traditional gasoline-powered vehicles. UBS Group AG has calculated that electric-vehicle battery packs and motors cost $4,000 more to manufacture than a comparable gasoline-burning midsize sedan engine, a difference it believes will disappear by mid-decade.
CATL’s market capitalization has climbed sharply this year and stands at about $200 billion, according to FactSet, making it one of China’s most valuable companies. Investors have bought the battery maker on optimism over the EV wave. It supplies EV makers such as Tesla, Daimler AG’s Mercedes-Benz unit and Chinese car makers.
CATL, in an online briefing, said sodium-based batteries have other uses beyond EVs such as storing power on an electricity grid. It said it was in talks with potential customers and planned to put a supply chain in place by 2023.
It didn’t name the customers. Tesla Chief Executive Elon Musk has said the car maker is working on technologies to significantly lower the cost of batteries.
Lithium-ion batteries are widely used in smartphones, laptop computers and EVs despite challenges including fire risk and the cost of mining lithium in remote locations.
The cost of sodium could be a fraction of lithium and EVs could charge more quickly, said Dennis Chien, a senior analyst at Hong Kong-based investment company HSZ Group. “I think there’s a great potential that sodium-ion batteries will play an important role” in EVs, he said.
CATL and other sodium-ion battery makers still need to show they can manufacture in large quantities. “The manufacturing cost could remain high and it would lose its advantage in competition if the industrialization process isn’t moving as smoothly as expected,” Chinese securities firm Everbright Securities wrote in a recent report.
CATL researcher Qisen Huang said the company’s sodium-ion batteries charge quickly and perform well in cold weather.
Sodium ions are charged particles of the element sodium that travel back and forth between the battery’s electrodes as it stores and discharges energy.
CATL also showed images of a proposed battery pack that combines sodium-ion and lithium-ion batteries. That would be a way of maintaining good range on a single charge while ensuring the vehicle doesn’t break down in cold weather.
Berkshire’s Battery Bet Wasn’t Flashy, But It’s Working
BYD’s electric vehicles don’t have the coolness factor. Their battery technology, however, is turning heads and boosting shares.
Warren Buffett Calls It Right on EV Batteries — Anjani Trivedi
Warren Buffett gets lots of investments right with his patient and deliberate buy-and-hold strategy. And it’s becoming apparent that he’s doing it again with electric vehicles. For investors pouring money into the technology, it would be wise to consider how the Sage of Omaha has looked into the future of the sector.
The value of Berkshire Hathaway Inc.’s holdings in BYD Co. Ltd., one of China’s oldest makers of cars and automotive batteries, has skyrocketed this year: BYD’s share price is up almost 30%. Buffett has backed BYD for over a decade, holding around 22% in the Hong Kong-listed company, which now sits on a market capitalization of over HK$915.6 billion ($117.6 billion). That’s more than investor darling Nio Inc., the new-generation Chinese automaker listed in New York.
So how is that different from the rest of the EV universe, which just keeps on surging?
Toyota To Spend $9 Billion On Electric-Car Battery Plants
Japanese car maker, late to the electric-vehicle race, accelerates plans as sales grow.
Toyota Motor Corp. said it would spend $9 billion over the next decade to build factories for electric-car batteries as it gears up to sell two million electric cars annually by the end of the decade.
The world’s largest car maker by vehicle sales has been relatively late in joining the global race to produce and sell battery-powered cars. For years, Toyota said it didn’t think battery-powered cars were a good solution to climate- and pollution-related concerns because the batteries were too expensive and took too long to charge. The company viewed hybrid gas-electric vehicles, which it pioneered, as the better option.
More recently, Toyota has ramped up spending on electric cars as countries began implementing stricter emissions regulations and sales of EVs grow.
The company declined to say how many battery factories would be built but said it planned 10 production lines by 2025 and eventually around 70. A single factory can contain several production lines.
The factories will be built around the world, said Masamichi Okada, Toyota’s chief production officer. “We want to localize production as a general principle,” he said.
Toyota has said it wants about 80% of its cars to include some battery power by 2030. Most of those would be hybrids but it also intends to sell about two million pure electric vehicles annually by then, a figure that includes battery-powered cars and those powered by hydrogen fuel cells. It has said it intends to start selling a fully electric sport-utility vehicle called the bZ4X next year.
Toyota’s announcement follows similar plans laid out by its global competitors. General Motors Co. , Ford Motor Co. and Volkswagen AG have all said they plan to build their own battery factories.
Toyota’s closest competitor in terms of sales, Volkswagen, hasn’t disclosed how much it plans to spend on these factories, but VW has said that by 2030, in Europe alone it would be able to produce batteries with output of 240 gigawatt-hours of electricity annually. Toyota said its factories would produce around 200 gigawatt-hours of batteries by the same deadline.
The roughly $9 billion investment in production is part of a plan to spend around $13.5 billion overall on batteries, with the remainder going into research, Toyota said.
Toyota has been slower than some competitors to bring an electric car to the market because it wants to offer consumers a good combination of safety, price and performance, said Masahiko Maeda, Toyota’s chief technology officer.
“There’s a trade-off. If we focus on safety, then performance suffers,” Mr. Maeda said. The company is trying to build its batteries so they retain 90% of their charging capacity after a decade, a target that is still elusive, Mr. Maeda said.
For years Toyota has been researching a solid-state battery in which the electrolyte—the material through which electrons flow as they travel between the battery’s terminals—consists of solid material. Standard lithium-ion batteries in today’s electric vehicles and smartphones have liquid electrolyte.
In theory, solid-state batteries could pack more power and recharge faster because they don’t have the fire risk of liquid-electrolyte batteries. But Mr. Maeda said Toyota was still dealing with development challenges, in particular the solid-state battery’s lifespan. He said it sought to sell a car containing the battery this decade.
“We cannot be optimistic yet. There are a lot of difficulties we are facing,” Mr. Maeda said. “We are looking for the best material for solid-state batteries.”
Battery Makers Tied To Power Grid Attract Big Investors
Investment firms have committed hundreds of millions of dollars to startups developing so-called long-duration batteries.
Big investors are charging into startups touting experimental new battery technologies that would make it possible for renewable energy sources to produce most of the country’s electricity.
Deep-pocketed investment firms such as TPG, Apollo Global Management and Paulson & Co. in recent months have plowed hundreds of millions of dollars into the companies, which make what are called long-duration batteries.
Unlike mobile-phone or electric-car batteries that can deliver electricity for about four hours straight, long-duration batteries can discharge for longer periods, ranging from six hours to several days, and store far more power.
That allows them to overcome the major drawback of renewable energy: The wind doesn’t always blow and the sun doesn’t always shine. The batteries can release electricity into the power grid when customers need it, cutting dependence on fossil fuels. They can also be used as backup power sources after storms.
Between 2021 and 2023, power companies are expected to install large-scale battery systems capable of producing 10,000 megawatts of power, 10 times the capacity that existed in 2019, according to an August report by the Energy Information Administration. One reason is cheaper batteries. Battery-storage costs fell by 72% between 2015 and 2019, according to the EIA.
The Energy Department in July set a goal of reducing the cost of grid-scale long-duration energy storage by 90% within the decade. “We’re going to bring hundreds of gigawatts of clean energy onto the grid over the next few years,” Secretary of Energy Jennifer Granholm said in a statement.
Renewable energy makes up one-fifth of utility-scale electricity generation in the U.S., compared with about 60% that comes from natural gas and coal, with nuclear making up most of the rest, according to the EIA. The Energy Department on Wednesday released a report showing that solar energy alone could power as much as 40% of the nation’s electricity by 2035.
Shifting the power grid toward renewables is an important part of the decarbonization puzzle, experts say. Not only does it remove fossil-fuel burning power plants from the grid, it means electric vehicles will be able to charge from sources that don’t add greenhouse gases to the atmosphere.
Investor interest in energy storage has soared in the past year. Venture capital firms have invested $4.9 billion in rechargeable battery companies so far this year, up from $1.6 billion in all of 2020, according to PitchBook.
Despite the momentum, investing in rechargeable battery companies can be risky. Some technologies that seem attractive in a lab don’t pan out on an industrial scale because of the complexity of manufacturing the devices and the cost of materials in the batteries.
“This is a field littered with miscues and failed attempts,” said Marc Mezvinsky, business unit partner with TPG. The firm recently invested in Form Energy Inc., a Somerville, Mass., company that has developed a battery it says can discharge electricity for 150 hours straight. “We believe in the technology” at Form, Mr. Mezvinsky said.
In August, Ambri Inc., a Marlborough, Mass., battery company said it had secured $144 million in financing to help commercialize its long-duration technology and build a manufacturing facility. Investors included Paulson & Co. and Microsoft Corp. co-founder Bill Gates, the company said.
Donald Sadoway, the Massachusetts Institute of Technology chemist behind the technology, said investors are more open to alternative battery technologies than they were when he started the company more than a decade ago. “It feels a lot better than it did at the beginning of the journey,” he said. “There’s a greater appreciation for the need for storage.”
Ambri was started with seed money from Mr. Gates and French energy company Total SA, now known as TotalEnergies SE. The company is based on a liquid-metal technology Mr. Sadoway developed in his lab at MIT. Unlike lithium-ion batteries that can overheat and catch fire, Mr. Sadoway’s batteries thrive on heat and require temperatures of around 750 to 1,000 degrees Fahrenheit to operate.
Form Energy in late August closed a round of fundraising that brought in $240 million, including investments from TPG’s Rise Fund. State and federal mandates on clean energy have helped give investors more confidence that the trend will be lasting, Form Energy Chief Executive Mateo Jaramillo said.
Investors in recent years have been burned by battery companies that didn’t pan out because of technical snafus or weak consumer enthusiasm for electric vehicles.
The trend should help encourage more innovation in batteries, according to Mr. Jaramillo. Big investors are putting cash into more established battery startups that are scaling up production. That gives early-stage investors more confidence there will be funding for companies that are often little more than an idea hatched in a lab.
The workhorse of Form Energy’s battery is a cheap, abundant element: iron. A collection of the batteries can fill entire warehouses and discharge electricity for nearly a week. That gives it a different use than a battery with a shorter discharge period such as Ambri’s, which can discharge for about as much as 24 straight hours, according to Mr. Sadoway.
Companies that help manage the complex task of directing energy to and from battery storage platforms are also attracting interest from big investors. In August, FlexGen Power Systems Inc., which provides software to manage energy storage, said Apollo Global Management Inc. funds had invested $150 million in the company.
FlexGen CEO Kelcy Pegler said the rise in electricity outages such as those seen in Texas and New Orleans this year in the wake of storms is increasing the urgency to expand energy storage.
“These events are really an eye-opener,” he said. “We’ve exhausted all reasonable excuses for not making our grid more intelligent.”
Why An Electric Car Battery Is So Expensive, For Now
At Tesla Inc.’s ballyhooed Battery Day event last year, CEO Elon Musk set himself an ambitious target: to produce a $25,000 electric vehicle by 2023. Hitting that sticker price — about $15,000 cheaper than the company’s least expensive model today — is seen as critical to deliver a true, mass-market product.
Getting there means finding new savings on technology — most critically the batteries that can make up a third of an EV’s cost — without compromising safety. Alongside Musk, traditional automaking giants including Toyota Motor Co. and Volkswagen AG are pouring tens of billions of dollars into the race.
1. Why Are EV Batteries So Expensive?
Largely because of what goes in them. An EV uses the same rechargeable lithium-ion batteries that are in your laptop or mobile phone, they’re just much bigger — cells grouped in packs resembling big suitcases — to enable them to deliver far more energy.
The priciest component in each battery cell is the cathode, one of the two electrodes that store and release electricity. The materials needed in cathodes to pack in more energy are often expensive: metals like cobalt, nickel, lithium and manganese. They need to be mined, processed and converted into high-purity chemical compounds.
2. How Much Are We Talking?
At current rates and pack sizes, the average battery cost for a typical EV works out to about $6,300. Battery pack prices have come down a lot — 89% over the past decade, according to BloombergNEF. But the industry average price of $137 per kilowatt hour (from about $1,191 in 2010) is still above the $100 threshold at which the cost should match a car with an internal-combustion engine.
Costs aren’t expected to keep falling as quickly, and rising raw materials prices haven’t helped. Still, lithium-ion packs are on track to drop to $92 per kWh by 2024, according to BNEF forecasts, and $58 per kwh by 2030.
3. How Will The Batteries Get Cheaper?
A major focus for manufacturers is on the priciest commodities, and particularly cobalt. One option is to substitute the metal with nickel, which is cheaper and holds more energy. Doing so requires safety adjustments, however, as cobalt’s advantage is that it doesn’t overheat or catch fire easily.
Another move has been to use alternatives that don’t contain cobalt at all, like low-cost lithium iron phosphate cells, once derided for poorer performance but winning a revival as design changes deliver improvements. Simplifying battery pack design, and using a standard product for a range of vehicles — rather than a pack tailored to each model — will deliver additional savings.
4. What About Fire Risks?
Lithium-ion batteries, whether used in grid-sized storage facilities, cars or devices like smartphones, can catch fire if they’ve been manufactured poorly, damaged in an accident, or the software that runs them hasn’t been designed properly.
Incidents remain rare, but garner huge scrutiny in what remains a developing sector. A decision in August by General Motors Co. to carry out a $1.8 billion recall of more than 100,000 Chevrolet Bolt models as a result of battery defects underscored the seriousness.
Blazes or overheating incidents this year also impacted major energy storage projects in Australia and California. And the fires aren’t easy to extinguish; it took firefighters four hours and took more than 30,000 gallons (113,560 liters) of water to douse a Tesla Model S after a fatal crash in Texas. Tesla insists that incidents involving electric models garner undue attention.
According to its 2020 Impact Report, cars with internal-combustion engines (ICE) catch fire at a “vastly” higher rate. From 2012 to 2020 there was about one Tesla fire for every 205 million miles (330 million kilometers) traveled, compared to a fire every 19 million miles for ICE vehicles, the EV pioneer said.
5. Who Are The Biggest Manufacturers?
Asia dominates manufacturing of lithium-ion cells, accounting for more than 80% of existing capacity. The Chinese company Contemporary Amperex Technology Co. Ltd. (CATL) shipped the highest volume in 2020, capturing almost a quarter of the market.
By September this year it had extended its lead to 30%, followed by South Korea-based LG Energy Solution and Japan’s Panasonic Corp. Tesla and Panasonic’s joint venture is the biggest battery producer in the U.S. Emerging producers include Northvolt AB in Sweden, founded by former Tesla executives, and Gotion High-tech Co. in China.
6. Are The Batteries All The Same?
They have the same basic components: two electrodes — a cathode and an anode — and an electrolyte that helps shuttle the charge between them. But there are differences in the materials used, and that’s key to the amount of energy they hold. Grid-storage systems or vehicles traveling short distances can use cheaper and less powerful cathode chemistry that combines lithium, iron and phosphate.
For higher-performance vehicles, automakers favor more energy-dense materials, such as lithium-nickel-manganese-cobalt oxide or lithium-nickel-cobalt-aluminum oxide. Further refinements are seeking to improve range — how far a vehicle can travel before recharging — as well as charging speed.
7. So China’s In Pole Position?
Yes, in almost every aspect. China is responsible for about 80% of the chemical refining that converts lithium, cobalt and other raw materials into battery ingredients, though the metals themselves are largely mined in Australia, the Democratic Republic of Congo and Chile. China also dominates processing capacity across four key battery components (cathodes, anodes, electrolyte solutions and separators), with more than half of the world’s commissioned capacity for each, BNEF data shows.
The nation faces a challenge when it comes to advanced semiconductor design and software, components that are increasingly important as cars become more intelligent. Less than 5% of automotive chips are made in China, according to the China Association of Automobile Manufacturers.
8. Is Cost The Only Hurdle?
There’s still an issue with driving range. While the most-expensive EVs can travel 400 miles or more before a top up, consumers considering mainstream models remain anxious about how often they’ll need to recharge. Automakers and governments have become directly involved in the roll-out of public recharging infrastructure for drivers on the road.
However, most recharging is expected to take place at home, and that means another cost for consumers. While the average price of a home-charging kit has fallen 18% since 2017 to about $650, some top-of-the-line bi-directional chargers (which let you send energy from the vehicle to the home or grid), cost more than $6,000. Installation costs in the U.S. can run from as little as $400 to more than $3,300.
9. What’s Around The Corner?
Most keenly anticipated is the arrival of solid-state batteries, which promise a huge performance upgrade by replacing the flammable liquids that enable charging and discharging with ceramic, glass or polymers.
QuantumScape Corp. says it has innovations in that field to increase a car’s range by as much as 50% and the technology could be deployed in vehicles at dealerships as soon as 2026. Another industry focus is modifying anodes — typically made using graphite — to add more silicon, or by using lithium metal.
That would likely make it viable to power smaller aircraft. Storing renewable power with utility-scale batteries for days or weeks, rather than hours at present, is also a key challenge. Form Energy Inc. is developing iron-air batteries that it says could enable entirely carbon-free grids. CATL and others are also working on plans to substitute lithium, or combine it with, far cheaper sodium-ion technology for some niche applications.
Ford, Redwood To Partner On Recycling EV Battery Materials
The automaker will provide the startup with used lithium-ion batteries to help create a closed loop for cell production within the US.
Redwood Materials Inc., the startup founded by Tesla alum J.B. Straubel, has formed a partnership with Ford Motor Co. to recycle and reuse key ingredients within the lithium-ion batteries that will power the automaker’s burgeoning fleet of electric vehicles.
The goal of the partnership, announced Wednesday, is to create a closed loop for EV battery production within the US. Ford will supply Redwood with used electric-car batteries as they become available, and Redwood will extract from them such key metals as lithium, cobalt, nickel and copper, to be used to build more batteries. Ford in May announced a joint venture with Korea’s SK Innovation to make batteries.
Recycling will give Ford and its joint venture a domestic supply of battery materials, most of which currently come from Africa, Australia, China and South America. It should also reduce both the cost and the environmental impact of making battery cells.
Redwood will likely start by recycling scrap from battery production, before spent batteries become available in bulk. Ford has also invested $50 million in Redwood, which a $700 million capital raise this summer valued at about $3.7 billion.
Ford Chief Executive Officer Jim Farley in May boosted spending on electric vehicles by one-third to $30 billion by 2025.
The company’s electric Mustang Mach-E has begun outselling the gasoline version of the pony car and Ford just doubled factory capacity of the battery powered F-150 Lightning pickup, which is set to go on sale next spring and already has more than 150,000 reservations from potential buyers, according to the automaker.
“We could sell our scrap to anybody, but that’s not the point — the point is to get it to someone who can turn it into material that we can then re-consume and keep it closed loop,” said Lisa Drake, Ford’s chief operating officer for North America. “If we can recapture that value and not have to mine again, and have some domestic supply security, that’s incredibly valuable for us.”
Tesla Is Building A New Battery Factory In California
A California mayor said Tesla Inc. broke ground in his city on what it calls a new “Megafactory,” praising the planned facility in a Facebook post that was deleted and is now visible again.
“We are proud to be the home of the Megafactory, Tesla’s most recent expansion here,” Lathrop Mayor Sonny Dhaliwal wrote in the post. “The future of green energy will be produced right here in our community.”
The plan is for a factory expansion to make Megapacks, the energy-storage product Tesla sells to utilities. Lathrop, in San Joaquin County, has long been home to the company’s warehouses and logistical operations. Tesla’s flagship U.S. auto plant is in Fremont in neighboring Alameda County. The company is based in Palo Alto.
Tesla, which currently manufactures battery packs at a plant in Nevada, didn’t respond to a request for comment, and the mayor’s office didn’t respond to questions about why the original post was taken down.
An expansion in Lathrop, a city of more than 24,000, would be a good sign that California is still a key part of Tesla’s footprint.
After Chief Executive Officer Elon Musk moved to Texas in December and criticized California policies, there was concern Tesla’s operations might leave the state. The company is building a new factory for production of the Model Y and Cybertruck in Austin.
While Tesla is known for its electric vehicles, it’s always been more than a car company: Its official mission is to “accelerate the world’s transition to sustainable energy.” Utility-scale batteries are needed to store the electricity produced by wind and solar.
PG&E Corp. and Tesla have constructed a 182.5 megawatt system at an electric substation in Moss Landing, near Monterey, that should be operational later this year.
EV Battery Investments Are Getting More Political
Mercedes-Benz and Ford have both made bets this week on unproven battery companies. What they offer instead is localism.
Car makers’ battery investments took a nativist turn this week. That isn’t a surprising development, but it brings extra risks.
On Friday, Mercedes-Benz said it would take a 33% stake in Automotive Cells Company, a European battery startup that previously received backing from French energy giant Total, trans-Atlantic car giant Stellantis and, crucially, the European Union.
Total, Stellantis and Mercedes-Benz will end up with a third each of a venture that plans to spend at least €7 billion, equivalent to roughly $8.22 billion, through 2030 to build European cell-manufacturing plants, or “gigafactories” in Elon Musk’s phrase. Mercedes-Benz said it was committing less than €1 billion in total, implying heavy doses of debt and subsidies in the project.
The deal follows news earlier this week that Ford will invest $50 million in Redwood Materials, a startup trying to bring the lithium-ion battery supply chain to the U.S. The brainchild of Tesla co-founder and former Chief Technical Officer J.B. Straubel, Redwood has plans that match Tesla’s for wild ambition.
Last week, the company said it aimed to produce enough battery-electrode materials for one million electric vehicles by 2025 and five million by 2030, which would equate to almost half total U.S. vehicle production in a typical year.
These are very different deals, but they have something in common: Emblematic car brands on either side of the Atlantic are getting behind local battery ventures with not just local plants but also local founders and owners.
Earlier this year, Ford launched a joint venture with South Korea’s SK Innovation, one of the cabal of East Asian companies that currently dominate the global battery business.
Until now, the most important battery suppliers to Mercedes-Benz, whose largest shareholder is Chinese automotive billionaire Li Shufu, were both Chinese: CATL and Farasis Energy, in which it has a small equity stake. The companies needed these partners for their proven know-how and production capacities.
ACC and Redwood are unproven startups with little but grand plans and well-connected backers, but they carry a political weight that East Asian companies can’t. In Europe, ACC emerged from Franco-German plans for an Airbus -style consortium for batteries, which are a pillar of the European Union’s new industrial strategy to compete with China.
The U.S. under President Biden is taking a similar road. Even within the high-priority EV sector, Redwood, with its focus on bringing supply chains onshore, sits in a sweet spot for Washington. Currently American-made batteries are heavily reliant for inputs on metals processing in China. Tesla gets lithium from China’s Ganfeng, for example.
The advantage of following political priorities for the likes of Ford and Mercedes-Benz is that they might benefit from more public support and subsidies. The car industry cannot hope to avoid politics. But there is a disadvantage, too: They are straying from East Asian players with more technical experience.
Mercedes-Benz in particular is making its biggest battery bet yet on a company that at this point consists of little more than a research and development operation. Volkswagen is in a similar position with its roughly 20% stake in Swedish battery darling Northvolt.
Homegrown battery companies in the U.S. and Europe alike have very high expectations to live up to.
Battery Fires Haunt The Electric Car And Clean Power Revolution
Even 30 years after lithium-ion batteries were first deployed, in camcorders, risks remain with manufacturing on a massive scale.
In late August, General Motors announced that it was recalling 142,000 Chevy Bolts — every Bolt ever made — because of fire risk. Over the course of about 17 months, the company confirmed 13 fire incidents involving the model — 11 in the U.S. and 2 overseas. GM said the recall was due to rare manufacturing defects by South Korea-based supplier LG Corp.
On Monday, the automaker said it has found a fix and will begin replacing defective batteries in October. Even so, GM has advised Bolt owners to park their cars 50 feet away from other vehicles to reduce the risk that a spontaneous fire could spread.
Recent battery fires haven’t happened just to cars. In early September, Vistra Corp.’s massive 300 megawatt Moss Landing battery plant in northern California was knocked offline after overheating triggered the sprinkler system.
In late July, a fire broke out at one of the largest utility-scale storage projects using Tesla Inc. batteries in southeastern Australia. And in 2019, a blaze at an energy storage facility in Arizona injured four firefighters.
Leading automakers are investing billions of dollars to transition away from gas-powered cars, while energy storage systems are being added to electricity grids to help integrate more solar and wind and meet ambitious climate goals.
Executives from both industries are realizing that batteries — widely seen as a key technology to enable the shift away from fossil fuels — aren’t entirely free of risks. Even 30 years after the first lithium-ion cells were deployed in camcorders, the sector remains a developing industry that’s continually seeking to balance performance, safety and costs.
Fires, while rare, hit laptop computers and cell phones in the early days of lithium-ion battery-powered consumer devices. Now they are in much larger products — and any fire becomes a case study in what to do better.
“Lithium-ion is a technology that has really been a revolutionary advance for us as a society,” said Haresh Kamath, director of energy storage and distributed generation at the Electric Power Research Institute in Palo Alto, California. “I think there are some surprises about some of the challenges that we are going through.”
Batteries are typically quiet and efficient, Kamath said. “Then in rare cases, when you have a problem — it’s very dramatic.”
The 2019 Arizona fire, which caused a major explosion on the fringe of suburban Phoenix, was an “extensive cascading thermal runaway event, initiated by an internal cell failure within one battery cell,” according to an investigation on behalf of Arizona Public Service, the state’s largest utility.
APS said it has put in place new safety and operational standards designed to prevent a repeat of the incident.
The GM recall and recent storage system incidents will see the industry increase focus on safety, including on the materials and components used in cells, said Max Reid, a London-based analyst at Wood Mackenzie Ltd. and previously a research scientist focused on areas including batteries.
Fire incidents remain rare, according to Reid, even as battery production booms. Tesla contends that gas-powered cars remain many times more likely to be involved in blazes than its own electric models.
Batteries are here to stay. Global passenger EV sales may reach almost 5.6 million units in 2021, up about 83% from 2020, thanks to high sales of electric cars in China and Europe, BloombergNEF said in a report published last week.
The global energy storage market is also on track to install 11 gigawatts by year end, double the volume installed in 2020. The U.S. will see the biggest growth through 2025, led by installations in California, Texas and the Southwest.
Battery-related fires present unique challenges for first responders, including the potential for electric shock, thermal runaway and battery reignition.
Last week, the National Transportation Safety Board announced that it is sending investigators to Coral Gables, Florida, where a Tesla Model 3 crashed into a tree and was engulfed in flames, killing both occupants. The NTSB investigation will focus on “the operation of the vehicle and the post-crash fire that consumed the vehicle.”
* Sept. 4: Moss Landing Energy Storage Facility experienced an overheating issue with a limited number of battery modules, said Vistra Corp. in a statement. Teams from Vistra, battery manufacturer LG Energy, engineering and construction firm Fluence, and other external experts are conducting the investigation. The 300 MW facility remains out of service. Joel Mendoza of the North County Fire District said that a number of racks overheated to the point of triggering smoke alarms and the fire sprinkler system, but the detection and suppression systems were effective in cooling the batteries and kept batteries from igniting and going into thermal runaway.
* Aug. 20: GM announced an expanded recall of the Chevy Bolt, saying that GM discovered manufacturing defects in certain battery cells produced at LG facilities. On Monday, GM said it has found a fix and will begin replacing defective batteries in October.
* Aug. 4: LG Energy issued a recall for about 10,000 home energy storage batteries, intended to be paired with solar panels, after five reports of systems smoking and catching on fire. One incident resulted in an injury, the company said.
July 30: During initial testing, a fire occurred within a Tesla Megapack at the “Victorian Big Battery” in Australia. There were no injuries and the site remains disconnected from the grid. An initial assessment by fire crews found the blaze was likely caused by an electrical fault. Further investigations are being undertaken, including by owner Neoen SA and Tesla
Another Big EV Battery Fantasy, Another Letdown
Electric-car makers keep looking past cheaper and safer power options, which means their high-risk ventures are rarely high-reward — for companies or investors.
There it is again: Another automaker makes a big announcement about its electrification plans with a battery manufacturer. Going by previous proclamations, that’s not just ambitious, but it’s also far-fetched.
Ford Motor Co. and SK Innovation Co. announced they’re partnering to spend $11.4 billion on three electric-car battery plants across the U.S., making it the most sizable investment in Ford’s 118-year history. The deal to build the biggest battery plant ever in America would catapult the South Korean firm to the status of a leading battery maker in the U.S. and is also its largest single outlay. All very big.
It comes at a time when President Joe Biden’s administration has been talking up electric-vehicle subsidies, including tax credits. In addition, anything made in the U.S. or with higher domestic content, including battery cells, would get more government support. That’s on top of a new national blueprint for lithium-ion batteries, making it perfect timing for Ford and SK’s blockbuster investment. There’s more to consider, however.
Beyond the potential feats the investment brings for the companies, it’s worth taking a closer look at their plans and the batteries they are promising. Through the 129 gigawatt-hours of battery annual production capacity they will build, the firms expect to produce 1 million power packs for sport utility vehicles and trucks (like the all-electric F-150 Lightning pickup Biden recently took a ride in).
SK’s focus has been on commercializing high-nickel content batteries, or NCMs. Five years ago, it developed the NCM811 and now the Nickel 9 battery that’s 90% nickel. This, the company says, will “be mass produced in the U.S., powering Ford’s F-150 Lightning.”
Biden got behind the wheel of the all-electric F-150 Lightning pickup during a visit to Ford in Dearborn, Michigan, for a test drive that went 0-60 mph in about 4 seconds.
“This sucker’s quick,” he said pic.twitter.com/NUvnrRGf3H
— Bloomberg Quicktake (@Quicktake) May 18, 2021
For starters, this type of battery has not yet proven to be entirely safe. While SK hasn’t registered an EV battery-related fire, high-nickel content power packs — although they deliver significant energy — have been known to be chemically unstable and prone to combust.
Such batteries forced General Motors Co. to recall every EV Bolt vehicle that it’s made since 2017, at a total cost of $1.8 billion to the firms involved. The cars were equipped with the NCM type made by another South Korean company, LG Energy Solution, a unit of South Korean industrial giant LG Chem Ltd.
Yet the South Korean battery companies have continued to stay on this path. That means they aren’t fully considering the cheaper, safer and more realistic option (the lithium iron phosphate, or LFP, power packs that the Chinese are focused on improving).
This would set them, and their auto partners, on a path toward their lofty electrification goals, while taking advantage of the subsidies the administration could have on offer and complying with stringent emissions regulations.
Installations of improved LFP types have sharply outpaced NCMs in recent months, running against most market expectations and forecasts. Instead, SK Innovation recently signed a contract with Ecopro BM Co., a company that makes and sells high-nickel parts (cathodes and others) for batteries, to supply 80% to 90% nickel-content products for NCMs for 10 trillion Korean won ($8.5 billion) starting in 2024. That will cost them.
Separately, SK has had a few setbacks over its battery technology in the U.S., after trade secrets disputes with LG Energy that risked its ability to grow production in the country. In April, the companies settled, with SK set to pay LG $1.8 billion in lump sum payments and a running royalty.
They’ve agreed to withdraw all pending legal disputes and said they are “all for the future of the U.S. and South Korean electric vehicle battery industries.”
There’s also commercial viability to consider. While these plans are ambitious, there is the reality of the cost of doing business. Although SK and its South Korean peers have been focused on high-energy density power packs, currently a technology barrier, these batteries are still extremely expensive and a profitable future is a while away for them.
SK Innovation’s battery business, for instance, posted a -26.5% operating margin in 2020 but is hoping to be in the “high single-digit” range after 2025, according to Daiwa Securities Group Inc. analysts.
The high returns that should come with high risks don’t seem immediately on offer. Big isn’t always better — as investors and the firms should know by now.
Volkswagen, Ford, Other Big Auto Makers Push To Make Solid-State Batteries The Next Big Thing For EVs
Hurdles remain in effort to replace lithium-ion batteries, which are considered flammable.
In the race to build a cheaper and longer-range electric car, auto companies are pouring more money into a technology long considered a moonshot: solid-state batteries.
Today, most electric vehicles use lithium-ion batteries, which have become more powerful and affordable over the years but have limitations, including the risks of catching fire.
The configuration has the potential to deliver faster charging times and make the packs safer by eliminating the flammable electrolyte solution used in lithium-ion batteries, auto executives and analysts say.
Still, the technology remains costly and relatively unproven in real-world applications, a hurdle that is expected to take years to solve for the mass market.
Toyota Motor Corp. is pursuing in-house development of solid-state battery cells. Earlier this month, the Japanese auto maker said it needed more time to develop the technology for fully electric cars, though it would use smaller solid-state batteries in hybrid vehicles for now.
Other major car companies, such as Volkswagen AG , Ford Motor Co. and Bayerische Motoren Werke AG have invested in solid-state battery startups to help them perfect the technology and make it ready for mass production.
A number of leading battery startups have so far received around $2 billion in investment from auto makers and financial investors, the consulting firm AlixPartners LLP estimated, with half of that going to QuantumScape Corp. , whose investors include Bill Gates and Volkswagen AG .
The pressure to build a better battery has grown in recent years with car companies betting big on electric vehicles. Investment globally in plug-in models has increased 40% over the past year, said John Loehr, managing director of automotive at consulting firm AlixPartners.
Solid-state technology remains a longer-term endeavor. Mr. Loehr said it could be close to a decade before such batteries are ready for mass production, but auto makers are investing now to gain expertise and ready their manufacturing operations, he added.
“They don’t want to get caught where everybody else has this technology and they don’t,” Mr. Loehr said.
Advances in lithium-ion battery technology in the 1980s and 1990s gave birth to Tesla Inc., the first commercially successful electric car maker. Since then, lithium-ion batteries using a liquid electrolyte have improved in the travel range they can deliver between charges and are significantly cheaper than when they first appeared.
But the lithium-ion batteries also have drawbacks. General Motors Co. recently recalled about 142,000 Chevrolet Bolt electric cars to fix a manufacturing defect linked to battery fires. Some car companies have had to recall electric vehicles because of fire concerns involving the battery and warn customers not to fully charge their cars or park them in garages until the problem was fixed.
Industry executives and analysts say that using solid-state technology would make the batteries safer, because the core material is less likely to be combustible.
One big hurdle with the lithium-ion batteries is that as the energy density rises, the risk of catching fire increases, said Tim Bush, a battery technology analyst with UBS Research.
“If we get rid of electrolyte and replace it with solid material, we no longer have a safety risk, and energy density could go to twice as much as what we have today,” Mr. Bush said.
No one has yet succeeded in building solid-state batteries that can be mass produced and plugged into millions of cars. But some startups are hopeful they can achieve that goal by teaming up with auto manufacturers who have more than a century of mass production experience.
In December, the Silicon Valley startup QuantumScape said it had achieved a breakthrough, successfully testing batteries using its solid-state material.
In March, VW said its battery scientists independently verified QuantumScape’s tests in their own lab and agreed to invest an additional $100 million in the startup, bringing its total investment in the company to $300 million. QuantumScape has a market value of roughly $10.5 billion.
VW also agreed in principle to build a pilot facility to make EV-ready solid-state batteries using QuantumScape technology. Final approval of the pilot line is still outstanding, awaiting a decision from the German government on whether it will financially aid the project.
“Solid-state technology is the game-changer,” Frank Blome, who leads battery development at VW, said in March.
Following the QuantumScape news, BMW and Ford announced in May they were investing $130 million in Solid Power Inc., which is developing a solid-state battery.
Solid Power CEO Doug Campbell said the company would build a pilot line to begin building “automotive scale” solid-state batteries next year.
“We believe if the next technology comes it will be solid state,” Oliver Zipse, chief executive of luxury car maker BMW, told reporters on the sidelines of the Munich auto show in September.
Although a believer in the technology, Mr. Zipse is skeptical about how fast it could be ready for mass production, because of unknowns about the costs of manufacturing and its ability to work safely in extreme hot and cold climates.
“What’s not solved yet is the cost,” he said. “An electric car and the battery have to function in a very wide band of temperatures,” he added.
Toyota last year built a prototype vehicle using solid-state batteries and ran it through a range of tests. Masahiko Maeda, Toyota’s chief technology officer, said this month that the tests showed that these batteries had higher output than conventional lithium-ion ones. But it also found that they had a short service life.
“To solve this and other issues, we need to continue development, mainly of solid electrolyte materials,” Mr. Maeda told reporters at the company’s technology event.
The U.K.’s Energy Crisis Is An Opportunity For Batteries
Paying today for the insurance of storage and redundancy would mitigate the volatility of tomorrow.
Hoarding is how we maintain civilization and also how we end it. A good example of the latter is on display in the U.K., where the keep-calm-and-carry-on brigade have devolved into filling plastic water bottles with flammable fuel.
Similar to the more daredevil plastic-bag fillers who sprung up stateside during the Colonial Pipeline hack, Brits pre-emptively topping up tanks on reports of fuel shortages help to foster the very thing they fear most.
Yet hoarding, of the organized type, is also vital to helping things run smoothly most of the time. Oil tanks and caverns full of stored natural gas are tranquilizers for energy markets (and ultimately consumers) apt to freak out at the slightest hint of disruption. Keep this in mind as the arguments over energy crunches and decarbonization heat up.
We store commodities of all types as insurance against shocks — to manage volatility, in other words. It’s just easier to plan, invest, stay solvent and maintain a stiff upper lip when one can rely on a steady supply of essentials at reasonable prices.
We are used to this, if never quite prepared for it, as previous crises have pushed humanity to build strategic reserves of everything from crude oil to frozen pork.
While dry gasoline pumps appear to stem largely from a shortage of labor and a surfeit of panic, the U.K.’s (and the EU’s) natural gas squeeze is a different beast. Nikos Tsafos of the Center for Strategic and International Studies published a concise, and highly recommended, explanation of the confluence of factors here.
One is a lack of redundancy. With declining domestic gas production, and having decided in 2017 to close its only major storage facility, the U.K. is now extraordinarily dependent on imports for a fuel that heats the vast majority of its homes and accounts for almost two-thirds of dispatchable power (meaning generation that doesn’t rely on weather or water-flow to work).
As such, if the wind drops for a while and Asian buyers bid more for cargoes of liquefied natural gas, U.K. energy prices go haywire.
Tight supply, and fear of tighter supply as winter approaches, have caused U.K. energy prices to spike.
One solution is to invest in more supply of dispatchable energy sources, which tends to mean gas. However, this would only work for the U.K. if it also dealt with its reliance on LNG imports (and maybe rebuilt its storage capabilities). Moreover, doubling down on gas also runs counter to reducing carbon emissions over time.
“Over time” is the operative phrase there, because natural gas plays a critical role backing up renewable power from London to Los Angeles.
Electricity is different from other energy sources because it is costly to store. We “hoard” it mostly by hoarding spare generating capacity; an inventory of potential, rather than stored, power. In deregulated markets, such as the U.K. and large parts of the U.S., generators can be paid to simply have plants available when necessary or, as in Texas, rely on occasional price spikes to make most of their profits.
The expansion of renewables messes with this. Once built, solar and wind power tend to displace gas-fired turbines during, say, sunny or windy afternoons.
Yet the grid relies on dispatachable generation, particularly gas, to step in when the sun sets or wind drops. Running fewer hours of the day and absorbing more wear and tear from ramping up and down, those gas plants require higher and higher prices to justify staying open.
In other words, transitioning energy systems must value gas plants increasingly for availability versus just raw output. But markets don’t necessarily do this well. Texas, for instance, relies on scarcity pricing to entice generators of all types.
Yet this is likely to become ever less tenable as a wave of incoming solar power blunts the price spikes on hot afternoons that historically rewarded gas plants. Similarly, California finds itself having to pay old gas plants and even backup generators on an ad-hoc basis just to stay open and cover the surge in evening demand when the sun fades.
In the near term, capacity payments — either at the grid or government level — will likely expand to make up for the shrinking revenue opportunity for gas plants in wholesale power markets.
Power suppliers looking at the cascade of disasters or near misses in energy markets these past few years should find some value in contracting for firm capacity. The objective is to keep plants open that might otherwise close.
As much as that might seem to work against decarbonization, the other lesson of 2021 — especially during this week of congressional wrangling — is that while technology and finance have swung toward the energy transition, political momentum remains indispensable.
High energy prices and fears of shortage have a way of messing with that. Longer term, batteries and other potential forms of storage, along with more sophisticated demand management, offer alternative backups to renewable power. But the long term is, after all, merely a succession of short terms.
On the plus side, volatility offers a powerful signal to speed up the development of batteries. For example, Andreas Gandolfo of Bloomberg NEF points out in a recent report that when day-ahead power prices for September 15 in the U.K. spiked to a record GBP425 — mostly on the back of surging gas prices — a four-hour battery could have supplied electricity at an all-in cost of GBP250.
Getting to the scale where batteries can make a difference will take years. That means putting a value on the insurance provided by gas-fired power remains an economic and political necessity, too.
A transition inevitably means friction, yet the imperative of climate change also means it can’t be abandoned. When this winter passes, we will still face the implacable reality of rising emissions and average temperatures. Unlike prior energy crises, “all of the above” isn’t tenable. Just like prior crises, however, paying today for the insurance of storage and redundancy would mitigate the volatility of tomorrow.
Iron Battery Breakthrough Could Eat Lithium’s Lunch
Iron-flow technology from ESS is being deployed at scale in the U.S.
The world’s electric grids are creaking under the pressure of volatile fossil-fuel prices and the imperative of weaning the world off polluting energy sources. A solution may be at hand, thanks to an innovative battery that’s a cheaper alternative to lithium-ion technology.
SB Energy Corp., a U.S. renewable-energy firm that’s an arm of Japan’s SoftBank Group Corp., is making a record purchase of the batteries manufactured by ESS Inc. The Oregon company says it has new technology that can store renewable energy for longer and help overcome some of the reliability problems that have caused blackouts in California and record-high energy prices in Europe.
The units, which rely on something called “iron-flow chemistry,” will be used in utility-scale solar projects dotted across the U.S., allowing those power plants to provide electricity for hours after the sun sets. SB Energy will buy enough batteries over the next five years to power 50,000 American homes for a day.
“Long-duration energy storage, like this iron-flow battery, are key to adding more renewables to the grid,” said Venkat Viswanathan, a battery expert and associate professor of mechanical engineering at Carnegie Mellon University.
ESS was founded in 2011 by Craig Evans, now president, and Julia Song, the chief technology officer. They recognized that while lithium-ion batteries will play a key role in electrification of transport, longer duration grid-scale energy storage needed a different battery.
That’s because while the price of lithium-ion batteries has declined 90% over the last decade, their ingredients, which sometimes include expensive metals such as cobalt and nickel, limit how low the price can fall.
The deal for 2 gigawatt-hours of batteries is worth at least $300 million, according to ESS. Rich Hossfeld, chief executive officer of SB Energy, said the genius of the units lies in their simplicity.
“The battery is made of iron salt and water,” said Hossfeld. “Unlike lithium-ion batteries, iron flow batteries are really cheap to manufacture.”
Every battery has four components: two electrodes between which charged particles shuffle as the battery is charged and discharged, electrolyte that allows the particles to flow smoothly and a separator that prevents the two electrodes from forming a short circuit.
Flow batteries, however, look nothing like the battery inside smartphones or electric cars. That’s because the electrolyte needs to be physically moved using pumps as the battery charges or discharges. That makes these batteries large, with ESS’s main product sold inside a shipping container.
What they take up in space, they can make up in cost. Lithium-ion batteries for grid-scale storage can cost as much as $350 per kilowatt-hour. But ESS says its battery could cost $200 per kWh or less by 2025.
Crucially, adding storage capacity to cover longer interruptions at a solar or wind plant may not require purchasing an entirely new battery. Flow batteries require only extra electrolyte, which in ESS’s case can cost as little as $20 per kilowatt hour.
“This is a big, big deal,” said Eric Toone, science lead at Breakthrough Energy Ventures, which has invested in ESS. “We’ve been talking about flow batteries forever and ever and now it’s actually happening.”
The U.S. National Aeronautics and Space Administration built a flow battery as early as 1980. Because these batteries used water, they presented a much safer option for space applications than lithium-ion batteries developed around that time, which were infamous for catching on fire.
Hossfeld says he’s been able to get permits for ESS batteries, even in wildfire-prone California, that wouldn’t have been given to lithium-ion versions.
Still, there was a problem with iron flow batteries. During charging, the battery can produce a small amount of hydrogen, which is a symptom of reactions that, left unchecked, shorten the battery’s life. ESS’s main innovation, said Song, was a way of keeping any hydrogen produced within the system and thus hugely extending its life.
“As soon as you close the loop on hydrogen, you suddenly turn a lab prototype into a commercially viable battery option,” said Viswanathan. ESS’s iron-flow battery can endure more than 20 years of daily use without losing much performance, said Hossfeld.
At the company’s factory near Portland, yellow robots cover plastic sheets with chemicals and glue them together to form the battery cores. Inside the shipping containers, vats full of electrolyte feed into each electrode through pumps — allowing the battery to do its job of absorbing renewable power when the sun shines and releasing it when it gets dark.
It’s a promising first step. ESS’s battery is a cheap solution that can currently provide about 12 hours of storage, but utilities will eventually need batteries that can last much longer as more renewables are added to the grid.
Earlier this month, for example, the lack of storage contributed to a record spike in power prices across the U.K. when wind speeds remained low for weeks. Startups such as Form Energy Inc. are also using iron, an abundant and cheap material, to build newer forms of batteries that could beat ESS on price.
So far, ESS has commercially deployed 8 megawatt-hours of iron flow batteries. Last week, after a six-month evaluation, Spanish utility Enel Green Power SpA signed a single deal for ESS to build an equivalent amount. SB Energy’s Hossfeld, who also sits on ESS’s board, said the company would likely buy still more battery capacity from ESS in the next five years.
Even as its order books fill up, ESS faces a challenging road ahead. Bringing new batteries to market is notoriously difficult and the sector is littered with failed startups. Crucially, lithium-ion technology got a head start and customers are more familiar with its pros and cons. ESS will have to prove that its batteries can meet the rigorous demands of power plant operators.
The new order should help ESS as it looks to go public within weeks through a special-purpose acquisition company at a valuation of $1.07 billion. The listing will net the company $465 million, which it plans to use to scale up its operations.
Mercedes-Backed Farasis Says Silicon Boosts Battery Energy 25%
* China’s Farasis, Group14 Say Their Technology Has Longer Range
* Executive Predicts Cells Will Be In Electric Vehicles In 2023
Farasis Energy, the Chinese battery manufacturer backed by Mercedes-Benz, said a lithium-silicon battery it’s developing with Group14 Technologies Inc. passed a key performance test, paving the way for its commercialization in electric vehicles.
Group14, which makes battery materials, is part of a crowded field of companies trying to land on new battery chemistries that could speed EV adoption by providing automakers with safer, cheaper alternatives or improvements to lithium-ion batteries.
The cell that Farasis and Group14 have developed was found to have 25% more energy density than a typical lithium-ion battery in cars today, according to Group14, meaning it can go farther on a single charge without increasing cost.
It also retained 80% of its storage capacity after being charged and discharged 1,500 times, matching the performance of current lithium-ion batteries, said Rick Luebbe, chief executive officer of Group14. The results were also verified by the U.S. Advanced Battery Consortium.
“People talk about what might be available in 2026 or 2027,” Luebbe said. “This is a today technology that Farasis has validated works right now.”
Farasis confirmed the battery that contains Group14’s materials works in an EV-sized cell and meets automotive specifications.
“We’ll see these in cells in electric vehicles by 2023,” Luebbe said. “But we expect to be in the majority of EV battery cells by 2025.”
Farasis, whose parent is based in Ganzhou, China, declined to comment on when it plans to offer the battery to customers. “With continued progress this technology could be successful in future generations of vehicles,” the company said in a statement.
Batteries have three major components: two electrodes — an anode and a cathode — and an electrolyte that helps shuttle the charge between them. The materials used to make them determine how much energy batteries store and at what cost.
The cell developed by Farasis and Group14 has a silicon-carbon anode instead of the graphite in most EV batteries today. It is one of several breakthroughs that companies are targeting to improve range and lower costs.
Companies like QuantumScape Corp. are taking a different path by pursuing solid-state lithium-metal batteries, which use solid materials instead of flammable liquids to enable charging and discharging.
“There’s a bit of a horse race going on between these two” technologies, said Venkat Srinivasan, director of the battery center at the U.S. government-backed Argonne National Laboratory. “It comes down to who is going to execute, create those large numbers of batteries, capture the market, and demonstrate the battery they’re making can satisfy all the metrics for the application.”
A common stumbling block with silicon anodes is that charging makes the silicon swell, reducing battery life. Group14 says that by using nanoengineering — manipulating molecules — it can prevent that from happening.
Group14 counts SK Materials Co. and Chinese battery maker Amperex Technology Ltd. as investors. It’s in the process of raising money in a private funding round to fuel its expansion, Luebbe said.
Group14 is building a battery materials plant in South Korea through a joint venture with SK. It also has a materials plant near its headquarters in Woodinville, Washington, and is building a second factory there that will begin operation in early 2023 to expand production of its silicon-carbon composites. It is planning a third U.S. plant, as well as one in Europe.
Farasis counts Mercedes, Volvo Car AB and Zhejiang Geely Holding Group Co. as customers. Mercedes parent Daimler AG has invested and its development chief, Markus Schaefer, said last month that the German automaker is considering expanding the relationship.
U.S. Loosens China Grip On $46 Billion Lithium-Battery Industry
* China Ranks No. 1 In Supply Chain Ranking With U.S. Edging Up
* Tesla And Biden Policies Help Drive U.S. Gains In Value Chain
The U.S. is narrowing the gap on China’s dominance of the $46 billion lithium-ion battery industry thanks to investments from Tesla Inc. and the Biden administration’s policy push to drive growth of electric vehicles.
The U.S. rose to second spot in BloombergNEF’s global lithium-ion battery supply chain ranking for both this year and a 2026 projection, the energy data and analysis firm said in a Thursday report. The nation was sixth for 2020 in last year’s inaugural ranking.
The U.S. has the second-largest EV market globally, after China, and Tesla and Asian cell makers are making “significant” investments in the country as government policies help establish a domestic battery supply chain.
“The U.S. has many of the ingredients needed to foster a domestic lithium-ion battery value chain,” James Frith, BNEF’s head of energy storage, said in the report. “Now that there is policy support in place, we are seeing a coordinated effort from companies across the supply chain to anchor more value within the country.”
China still continues to dominate the ranking due to continued investment and strong local and domestic demand for its lithium-ion batteries.
The Asian nation hosts 80% of all battery cell manufacturing capacity today, with capacity expected to more than double, enough for more than 20 million electric vehicles, in the next five years, the report said.
Yet, as governments worldwide recognize the strategic importance of the battery industry, local supply chains are emerging to challenge China’s dominance. European countries are climbing the rankings as passenger EV sales steadily grow.
While European nations are ranked individually in the report, the ability for tariff-free trade in Europe means that as a continent its battery demand is second only to China. If ranking Europe as a whole, it comes in first for both 2021 and 2026 rankings.
Toyota, Stellantis To Build EV-Battery Factories In North America
Car makers accelerate push into the American electric-vehicle market as President Biden toughens fuel-efficiency standards.
Toyota Motor Corp. and Jeep parent Stellantis NV said separately Monday they would build battery factories in North America, the latest in a string of big-ticket investments by auto makers looking to sell more electric cars.
Stricter fuel-efficiency targets set by the Biden administration, combined with broader efforts around the globe, are pushing car companies to spend tens of billions of dollars collectively on new factories for electric vehicles and the batteries to power them.
Toyota said it planned to spend $3.4 billion through 2030 to build electric-car batteries in the U.S. Previously, it said it would spend roughly $9 billion building battery factories around the world as part of a $13.5 billion battery plan that includes research, but it hadn’t specified how much would be spent in the U.S.
Toyota didn’t present a full breakdown on the U.S. spending, but it said it and an affiliated company would spend $1.29 billion on a new battery plant. The plant aims to start production in 2025 and create 1,750 new jobs, the company said.
Separately, Stellantis said it was teaming up with LG Energy Solution, the battery-manufacturing arm of South Korea’s LG conglomerate, to build a new factory for lithium-ion batteries in North America.
The companies didn’t disclose the size of investment, but said the plant would be able each year to produce batteries with a combined output of up to 40 gigawatt hours, enough to supply hundreds of thousands of EVs.
The announcements highlight the two main paths being taken by car makers on batteries. Some, like Toyota, plan to build many of their batteries in-house. Ford Motor Co. has also said it eventually would build its own batteries. Others, such as Stellantis and General Motors Co., are teaming up with electronics manufacturers for their batteries.
“We’ve got pretty good resources,” said Chris Reynolds, Toyota’s North American chief administrative officer. “That doesn’t mean we’ll never, ever have a partner. We’re always on the lookout for the right partner.”
Toyota has been an EV skeptic compared with others in the industry, so its plans are an acknowledgment that pressure is building to develop and sell battery-powered cars.
Earlier this year, Toyota said it planned to have 15 different battery-powered models to sell by 2025. It doesn’t sell any mass-market EVs in the U.S. yet but plans to have the first model ready next year.
By 2030, Toyota hopes to be selling around two million electric vehicles a year globally, a figure that includes those powered both by batteries and by hydrogen fuel cells.
Toyota’s competitors have bigger ambitions. GM plans to spend $35 billion on electric vehicles and battery plants through 2025. Stellantis, whose brands include Jeep, Ram and Chrysler, said it would spend $35.5 billion over the same period. By contrast, Toyota’s new U.S. battery plant will initially concentrate on producing batteries for hybrid models.
Toyota CEO Akio Toyoda has criticized a push by governments around the world to ban or restrict the sale of gasoline-powered cars, saying it could cost millions of jobs and put the price of cars out of reach for most buyers.
SK Targets New EV Battery Technology Two Years Ahead of Rivals
* SK Innovation Says Will Deliver Solid-State Batteries By 2025
* Quarterly Battery Sales Rose 68%, SK Innovation Says Friday
SK Innovation Co. plans to get two years or more ahead of its rivals and deliver solid-state batteries by 2025, according to the head of battery research at the South Korean company, which released results Friday showing a jump in sales last quarter.
Battery sales rose 68% from a year earlier to 816.8 billion won ($698 million), the company said. It forecasts sales to climb above 3 trillion won next year and 6 trillion won in 2022, when it aims to turn to profit. The results followed an announcement the previous day that SK Innovation is teaming up with U.S.-based Solid Power Inc. to develop and produce solid-state batteries.
The batteries are a keenly anticipated development in the industry, potentially hastening EV adoption by providing automakers with a safer and cheaper alternative to lithium-ion batteries. The technology could potentially slash EV charging times to about 10 minutes from as much as several hours.
SK Innovation plans to use a nickel-cobalt-manganese cathode and anode based on silicon or graphite for its solid-state batteries by 2025 and also seeks to deliver one with a lithium-metal anode by 2030, said Seongjun Lee, head of the department overseeing battery research.
LG Energy Solution, the world’s second-largest lithium-ion battery maker, has said it aims to commercialize solid-state batteries between 2027 and 2030. Another Korean player, Samsung SDI Co., is forecast to start mass producing the batteries in 2027, according to BloombergNEF.
“We have never caused fires with our batteries and we have the world’s best technology for high-nickel batteries,” Lee said in an interview on Thursday at the company’s campus in Daejeon, to the south of Seoul.
The unit of conglomerate SK Group hasn’t laid out a schedule for its next-generation battery before. The plan comes as the company looks to increase its global presence, and after LG apologized for a $1.9 billion recall of General Motors Co. Chevrolet Bolts due to battery fires.
As part of Thursday’s agreement with Solid Power, which is backed by Ford Motor Co. and BMW AG, SK Innovation will invest $30 million for a stake in the Colorado-based company, which plans to go public via a reverse merger.
Among others, BMW has joined the race with a plan to build a prototype of a solid-state battery car before 2025, while Toyota aims to commercialize EVs with the batteries by mid-to-late decade.
“Why the relationship with SK is so valuable to us is that our business model doesn’t have us being a cell producer in this automotive industry at scale,” Solid Power Chief Executive Officer Douglas Campbell said Thursday.
Solid Power has an agreement to test its cells in Ford and BMW vehicles. Campbell said in an interview last month that if manufacturing is successful, the company will deliver them in 2022, with an eye toward full battery production in 2025 and vehicle manufacturing in 2026. He said Solid Power would look to partner with an automaker or existing battery manufacturer for full production.
SK Innovation chose Solid Power as a partner because its quality of sulfide electrolyte might enable the Korean firm to switch some of its operation lines from lithium-ion batteries to solid-state, Lee said. The company aims to use 60%-70% of its production lines for solid-state batteries in the future.
“We also favored Solid Power’s ability to produce large-size cells,” Lee said.
SK Innovation is seeking other partners mainly in the U.S., he added.
Asked about solid-state batteries during Friday’s earnings call, SK Innovation’s head of business strategy, Jinsuk Yu, said the company is seeking various partnerships, especially to resolve problems such as dendrite.
That refers to spiky structures formed by lithium ions as a battery charges. They can grow long enough to reach the other electrode and short-circuit the battery, potentially causing a fire.
“SK Group has a reputation of good investment strategy, especially in M&A,” said Hyun-Su Kim, a fund manager at Seoul-based IBK Asset Management. “If SK invests on something, you need to look at it even if the size is small.”
South Korea unveiled plans in July to invest $35 billion in its EV battery industry by the end of the decade. SK Innovation’s shares have soared 88% in the past 12 months, giving it a market value of almost $20 billion.
Despite the rising sales, SK Innovation’s battery division posted an operating loss of 98.7 billion won in the third quarter through September. Overall, though, the company’s operating profit beat analyst expectations, coming in at 618.5 billion won compared with a loss of 28.9 billion won a year earlier.
“We aim to hire more researchers for solid-state batteries,” Lee said. “We already have about 150 specialists in organic and inorganic chemistry at our refinery and petrochemical businesses. They are now helping battery projects. This campus will be getting bigger.”
Battery Unicorn ProLogium Gets $326 Million As EV Race Heats Up
* dGav, Primavera And SBCVC Participated In Fundraising Round
* Taiwanese EV Battery Unicorn Aims To Expand Globally
Taiwanese battery maker ProLogium Technology Co. raised $326 million in its latest funding round, as venture capital firms flock to startups benefiting from the global electric vehicle boom.
The investment was joined by dGav Capital, Primavera Capital Group and SB China Venture Capital, the company said on Friday. Taipei-based ProLogium plans to use the fresh funding to boost its production capacity in Asia, Europe and the U.S.
Major automakers around the world are increasingly pivoting to greener cars, fueling a race to master next-generation battery technology. In China, EV sales jumped almost 10% last year, despite the pandemic-induced disruptions, and battery-run vehicles are expected to account for about one-fifth of new car sales by 2025.
ProLogium, whose other backers include China FAW Group Co. and a Bank of China Ltd. unit, was valued at more than $1 billion before the most-recent funding, according to one person with knowledge of the matter. A representative for the company declined to comment on the valuation.
The startup is considering going public and has held talks with potential advisers about options including listing in the U.S. through a merger with a special purpose acquisition company, Bloomberg News reported earlier this year.
Founded in 2006, ProLogium started out as a battery supplier to consumer electronics firms before expanding its offering to electric-car makers. It specializes in so-called lithium solid-state batteries, an innovation that promises to deliver more power while shortening recharging times.
However, competition in the space is fierce. South Korea’s Samsung SDI Co., Silicon Valley-based QuantumScape Corp. and Japanese auto giant Toyota Motor Corp. are among companies that have stepped up efforts to develop solid-state batteries.
China’s Ganfeng Wins Deal To Supply Tesla With Lithium Products
* Surging Electric Vehicle Sales Spark Boom In Battery Metals
* New Tesla Deal Replaces Three-Year Agreement Signed In 2018
Ganfeng Lithium Co. won a deal to supply Tesla Inc. with lithium products for three years, enabling the car-maker to lock in crucial supplies as prices for battery metals surge.
The Chinese company will provide battery grade lithium hydroxide products to the electric-vehicle maker from 2022 to 2024, according to a statement. Ganfeng didn’t give a value for the contract in the filing.
The new deal comes as Tesla enjoys booming orders that have sent its shares surging and helped founder Elon Musk extend his lead as the world’s richest person.
With the adoption of electric-vehicles gaining traction globally, analysts expect key battery raw materials including lithium and cobalt to extend this year’s gains as the race for new supply heats up.
Global lithium consumption is projected to grow fivefold by end of this decade, according to BloombergNEF. Tightening supplies are sparking a wave of dealmaking among lithium miners, with Ganfeng and other producers involved in a flurry of acquisitions in recent months.
Ganfeng signed a three-year deal with Tesla in 2018 to supply a fifth of its production to the vehicle maker. China’s largest lithium miner didn’t disclose details on sales volumes as the new agreement was announced on Monday.
GM’s Battery Bet Shows Off Lithium-Metal Cell That Tops Rivals
* SES Will Deliver Cells For Testing To GM, Hyundai By Year-End
* Startup To Build Factory In Shanghai To Mass-Produce Batteries
SES Holdings Pte, a startup backed by General Motors Co., is unveiling a lithium-metal battery big enough to power a car, a sign the newcomer is pulling ahead of rivals in its efforts to commercialize technology that could boost the range of electric vehicles.
Singapore-based SES, which is going public through a $3.6 billion reverse merger with a shell company led by billionaire mining investor Robert Friedland, on Wednesday is showcasing a lithium-metal battery cell with more than 100 amp hours, or units of charge. The average capacity of a lithium-ion battery cell in EVs today ranges from 50 to 120 amp hours.
Automakers, cell manufacturers and startups are spending billions to pursue battery breakthroughs that could dramatically speed up EV adoption by providing safer, cheaper alternatives to current lithium-ion technology.
Batteries with a lithium-metal anode, like the one SES is developing, could provide a technological leap by making lighter, more energy-dense cells. The next challenge will be successfully commercializing the offering.
“Making lithium-metal cells of that large a format is a challenge,” said Jagjit Nanda, leader of the energy storage group at Oak Ridge National Laboratory in Tennessee.
The SES product would be a “bridge between current state-of-the-art lithium-ion, and solid-state battery tech,” Nanda said. Solid-state batteries use solid materials instead of flammable liquids to enable charging and discharging.
QuantumScape Corp., which went public through a reverse merger last year, is developing a solid-state lithium-metal battery.
SES is taking a “hybrid approach,” using a liquid in the cathode and a dry coating on the lithium-metal anode to suppress fire. The materials used to make batteries help determine how much energy they can store and at what cost.
SES plans to deliver its vehicle-ready cells to GM, Hyundai Motor Co. and others for road testing by the end of this year, said Qichao Hu, the battery maker’s chief executive officer.
It is building a factory in Shanghai that will produce tens of thousands of the cells once completed in 2023, he said. The company aims to have its technology in the next generation of GM’s electric Hummer.
‘Race to Be First’
“Global carmakers are in a race to be the first to put a lithium-metal battery inside a car,” Hu said. “This is evidence that we are further along” than competitors.
The 107-amp-hour battery cell SES is touting shows “marked improvement” over what rivals have shown, though the company is still a ways off from commercialization, said James Frith, BloombergNEF’s head of energy storage.
QuantumScape, which is a competitor to SES, hasn’t disclosed the capacity of the lithium-metal battery it is developing. The company said it has already shared data showing that its cells meet automotive requirements in real-world conditions.
QuantumScape also said making a lithium-metal battery with liquid electrolytes — as SES is doing — can make charging times take as long as five hours, which it expects will impede consumer adoption.
“To our knowledge, QuantumScape is the only company that has demonstrated excellent cycle life” and charging rates under an hour, the company said by email.
South Korea-based SK Innovation Co. is aiming to introduce solid-state batteries by 2025 and to deliver one with a lithium-metal anode by 2030. LG Energy Solution, the world’s second-largest EV battery maker, has said it should commercialize solid-state batteries between 2027 and 2030.
SES is scheduled to complete its merger with Ivanhoe Capital Acquisition Corp. by the end of this year, Hu said. Investors include GM, Koch Strategic Platforms, Hyundai, Geely Holding Group, Kia Corp. and Foxconn Technology Group.
Fast-Charger Maker Tritium Is Seeing A Boom In U.S. Orders
CEO Jane Hunter talks about an EV tipping point and what she sees as her company’s hardware advantage.
Electric vehicle owners in New York City, many of whom don’t have a driveway or garage where they can plug in, in June got a new place to recharge their cars. Revel, the startup best known for its moped-sharing service, opened a charging depot in a former Pfizer building in Brooklyn.
The Superhub, as Revel calls it, has 25 fast chargers built by the Australian manufacturer Tritium, each capable of adding about 100 miles of range in 20 minutes. For Tritium, which specializes in building weatherproof fast chargers for public networks, the Revel installation is part of a boom in U.S. orders.
In May, when the company announced plans to begin trading in the public markets via a merger with the blank-check company Decarbonization Plus Acquisition Corporation II, it had more than 4,400 chargers installed around the globe.
Today the number stands at about 5,250, with an increasing share found on roadsides in North America. In May, 70% of the company’s total sales came from Europe; 20% from North America, and the remaining 10% from the Asia Pacific, but that balance has since shifted, according to Tritium chief executive office Jane Hunter, to 45% from Europe and 41% from North America.
Hunter, who joined Tritium in 2019 and became CEO in March of 2020, spoke with Hyperdrive in October, about the EV tipping point in the U.S., the company’s decision to do a SPAC merger, and how her company’s hardware stands apart. The interview has been edited for clarity and length.
You Had A Pretty Good Job At Boeing. What Brought You To Tritium?
I was the chief operating officers for the international Phantom Works division of Boeing, which was a phenomenal job, headquartered in Brisbane with operations in Saudi Arabia, India, South Korea, the U.K., and the United States. We were doing autonomous systems — unmanned aerial vehicles, unmanned underwater vehicles.
I had just secured the Royal Australian Air Force to co-invest in the Loyal Wingman, which is a 38-foot stealth drone. So it was a very hard job to top. But it just was such an interesting time for electric vehicles, just before the tipping point. Everyone was saying, “It’s coming. It’s coming.” But people in the industry had been saying that forever.
Our founders have been together for 20 years and working on these chargers since 2012. Everyone could see that e-mobility was about to take off in a big way. And at Boeing we knew that Tritium had something because we were working in drones and were looking at the potential to electrify charging for those.
They had the only liquid-cooled charger successfully being sold globally. It seemed like an amazing opportunity with a technology that is not yet fully commoditized. We have a world leading technology, with a technology moat, at a point where if all we do is hang on to our current market position the total addressable market is enormous.
Why Is Liquid Cooling Important For Chargers?
It allows for a fully sealed enclosure. For everyone else, you’re sucking air in across filters and pushing it out the back. That’s how you’re cooling the power electronics, which get hot. For us, you’re not pulling any particulates into the charger. The liquid cooling works its way around the enclosure and keeps it at the right temperature and that lasts for five years before you need to replace the coolant.
If you look at one of our chargers, you’ll see there’s a grille down the bottom which may look like an air intake vent. That doesn’t take any air into the top of the charger. The heat moves into the base of the machine via the coolant and allows you to push the warm air out through that vent while the electronics are fully sealed in the top. It matters a lot where it’s corrosive or dusty or highly polluted.
And it also matters where you have things climbing into chargers to nest inside. We know competitors have issues with mice, rats, geckos, ants, all manner of things. You can imagine why a technology like this might have developed in a country where we have every creepy-crawly known to man, including snakes, and spiders.
They all are looking for somewhere warm and dry to nest. The sealed enclosure improves uptime [the share of hours when the chargers are working], which is critical. Liquid cooling enables that because you’re not pulling things across the insides of the charger, you’re not getting outages.
I can attest that there are few things worse for an EV owner than rolling up to a broken charger, especially if there are not options nearby.
That hits the nail on the head. At the gas pump, if there is an outage, it has a sheath over it that says out-of-order, so you know not to queue there. But charging is an entirely different experience. We’ll go into PlugShare and read about the user experience and watch some of the YouTube videos that people post as they cross [the] country.
They might have to move the car three times. A charger is out. They move it again, plug in, and it doesn’t work. It’s just a horrible experience. One thing that we really discourage our customers from doing is having only one charger at a key site.
What’s Finally Brought The Ev Industry To This Tipping Point?
In every country where the uptake of EVs is high, government has driven it. That’s very clear across the globe. It doesn’t have to be subsidies, but what it does take is an indicator from the government, that they’re going to support the technology, that the change is coming, and that next time you buy a car, you should buy an EV.
People are waiting to hear that. What you’re seeing with President Biden now is the kind of indicator that you need.
It’s the government saying, ‘this is what’s coming.’ That allows people to go out with confidence and buy an EV. The other thing is that several of the car manufacturers decided to go in, boots and all, and make the shift to EVs.
So there’s no longer a choice for government to say, ‘We’re not shifting to EVs, we’re going to stick with internal combustion engine, or we’re going to do hydrogen,” because unless you make the cars yourself, you are not going have enough models.
Tritium Seems Like A Relatively Mature Business For A SPAC. Why Go That Route?
Battery Price Declines Slow Down In Latest Pricing Survey
BNEF’s 2021 survey is a wake-up call for the battery industry — prices may not necessarily fall every year.
The key takeaway: On a volume-weighted average basis across the battery industry, prices fell to $132 per kilowatt-hour in 2021. This is down from $140/kWh in 2020 (in real 2021 dollars). The 6% drop isn’t as drastic as the 9% decline we had forecast last year.
Why are this year’s prices higher than expected? The cost of raw materials used in the cathode — lithium, cobalt and nickel — and other key components including the electrolyte have risen this year, putting more pressure on the industry. The increases have been more prominent in the second half of 2021, and even led to Chinese battery manufacturer BYD announcing a 20% battery price increase in November.
The results aren’t as bad as I had feared when I previewed the early findings in September. There are four reasons behind this. First, prices for raw materials and components were relatively low in the first half of the year. This meant that for the first six months of 2021, battery prices were lower than they were in 2020, helping the yearly average to fall.
Second, low-cost lithium iron phosphate (LFP) batteries have been used more in 2021, in both the passenger EV and stationary storage sector.
Despite the increase in the price of LFP cells in China in the second half of the year, the average price of these cells in the country is now the same as the average price of high-performing nickel-based cells in the first half, at around $100/kWh. Again, higher adoption of these low-cost batteries has helped to bring the average price down.
Third, when using nickel-based cells, automakers have more widely adopted cathode chemistries that reduce the amount of expensive cobalt used, such as NMC (811). This resulted in lower average NMC prices in the first half of the year, helping to reduce some of the impacts of higher raw material costs in the second half.
Finally, when automakers place large battery orders, they increasingly use contracts that link raw material costs to a commodity index. These prices are normally reviewed on a quarterly basis, and use a price averaged over three months trailing the quarter by a month. This means that prices in the fourth quarter of this year would use an average price from June, July and August.
Many automakers won’t feel the hit from the huge lithium price rise seen in September and October until the first quarter of 2022.
We expect prices next year will be $3/kWh higher than 2021 prices on a nominal basis. This would mark the first price increase that the battery industry has seen since we began tracking these prices in 2012. Inflation also will affect the outcome for 2022. Once adjusted for real 2022 dollars, we could still see prices fall.
When I start talking about battery prices, I inevitably get a bunch of folks saying that these prices are unobtainable and unrealistic. However, this really depends on the sector you are working in and how big your order volumes are. Automakers with annual orders in the tens of gigawatt-hours are able to negotiate more competitive pricing.
In 2021, battery-pack pricing reported to BNEF ranged from $85/kWh to $546/kWh. Low-volume, niche applications came in at the top of the range.
In sectors like stationary storage, prices still are slightly higher than the industry average — $152/kWh this year, a 16% fall from last year’s average, and only $20/kWh higher than the average. As the scale of other sectors grows, we expect prices to continue trending closer to our industry average.
2021 has been a wake-up call for the battery industry, with the realization that we are at a point now where prices may not necessarily fall every year. In the long run, I’m still confident prices in 2030 will be close to half of what they are today, but it may not be smooth sailing to get there.
For the moment we need to concentrate on getting the industry through the next 18 months, to ensure the continued electrification of transport and other sectors.
Danish Startup Gets Billionaire Backing To Store Energy In Salt
A startup developing a technology to store energy in molten salt has raised about $12 million from backers, including Denmark’s richest man.
Hyme will spend some of the money on a pilot plant to find new ways to store unused electricity from wind and solar, Chief Executive Officer Ask Lovschall-Jensen said in an interview. And the Danish company is already considering another financing round “to ensure that we can head toward global deployment,” he said.
Denmark gets about 40% of its electricity from wind power but is often unable to use all the power generated at night when demand is lower. The problem has been magnified in 2021 because wind speeds have been lower than normal and energy prices have soared in Europe.
Hyme, a spinoff from nuclear startup Seaborg Technologies Aps, expects that its storage facility can keep energy at a cost of about $20/kWh and store it for as long as 14 days without losing significant heat. The firm has developed its method using hydroxide salt — a corrosive material known as caustic soda. When heated and melted into liquid, hydroxide salt can be used to store and transmit energy at 1/10 of the cost of solar salts.
Investors include a series of existing owners of Seaborg, including Danish billionaire Anders Holch Povlsen through his investment arm Heartland A/S.
Heartland CEO Lise Kaae expects energy consumption to rise in coming years and says Hyme has the potential to deliver one of the solutions to store energy from renewable sources.
“Even though we know we invest at a very early stage, we believe investing in innovation in this area can make a positive difference,” Kaae said by phone.
Nobel-Winning Battery Pioneer Suggests Letting EVs Power The Grid To Go Green
* Nobel-Winner Akira Yoshino Sees Key Role For Two-Way Charging
* Plug-In Vehicles Could Help Nations Like Japan Add Renewables
Electric vehicles that allow power grids to tap their batteries when parked will be key for nations like Japan to add more clean energy, according to a Nobel Prize-winning developer of lithium-ion technology.
Rising adoption of battery-powered transport and the further development of vehicle-to-grid, or V2G, systems — which allow the two-way flow of electricity — could offer a potentially better option to store renewable energy than expensive, dedicated battery facilities, Akira Yoshino said in an interview.
Japan, which has been criticized over the slow pace of its transition away from fossil fuels, is constrained by limited space for solar power, onshore wind farms and battery storage hubs. Prime Minister Fumio Kishida’s government is seeking to cut greenhouse emissions by 46% from 2013 levels by 2030.
“While power storage systems will be definitely needed to spread renewable energy, it’s not cost effective to create a new storage system for that purpose,” said Yoshino, an honorary fellow at battery component manufacturer Asahi Kasei Corp. “We can utilize electric vehicles as a power storage system while they don’t operate.”
Japan is among countries testing out the capabilities of the technology, and more than half of current global pilots involve Nissan Motor Corp.’s Leaf cars, among the few major models that currently offer two-way charging.
The global fleet of passenger and commercial electric vehicles topped 10 million last year and should be at least 550 million by 2040, according to BloombergNEF. That will create a huge opportunity for V2G technology, even if only a small proportion of models are fitted with bi-directional charging and able to export energy to homes or grids.
“If EVs becomes widely used, Japan will definitely go in that direction,” Yoshino said. The 73 year-old Japanese scientist was awarded the Nobel Prize in Chemistry in 2019 together with two others for work on development of the modern lithium-ion battery.
Japan should be able to tap a meaningful amount of power storage capacity when the country’s EV fleet reaches 5 million, he said. The country’s EV adoption is lagging behind other nations and annual sales won’t exceed 200,000 before 2025, BNEF said in a sector outlook in June.
Elsewhere, startups such as Form Energy Inc. are working on improvements that aim to dramatically lower the costs of dedicated, long duration battery storage systems.
Grid-scale hubs are being deployed in increasing numbers, led by projects in California, Australia and China. France-based Neoen SA last week brought a new 300 megawatt capacity facility into operation near Geelong in southeastern Australia.
Mercedes-Backed Farasis Wins Incentives For Turkey Battery Plant
Farasis Energy, the Chinese battery manufacturer backed by Mercedes-Benz, obtained a wide range of financial incentives for its Turkish joint venture.
Turkey’s government said in a decree on Saturday that it will provide tax deductions and direct aid to Siro — the umbrella company that includes Farasis and Turkish carmaker TOGG — for their planned 30 billion lira ($1.8 billion) investment in the factory.
The joint venture aims to have 15 gigawatt hour capacity and will be exempted from some customs and value added taxes, get discounts on its energy use, and receive direct grants as high as 12.5% of total capital expenditure for the next decade, according to the decree published in the Official Gazette.
The plant will be the first of its kind in Turkey and is a key part of the domestic car project undertaken by TOGG, a firm that serves as an umbrella organization for five companies that are building their first car factory in Gemlik.
Their planned investment will enable the production of five models, including SUVs, and a total output of 175,000 vehicles annually, a target to be reached gradually in the years following the first car’s production in 2022.
Battery Storage Soars On U.S. Electric Grid
Falling costs and green mandates are boosting demand for batteries capable of storing large amounts of wind and solar power for later use.
Companies are poised to install record amounts of batteries on America’s electric grid this year, as government mandates and a steep decline in costs fuel rapid growth in power storage.
The U.S., which had less than a gigawatt of large battery installations in 2020—roughly enough to power 350,000 homes for a handful of hours—is on pace to add six gigawatts this year and another nine gigawatts in 2022, according to S&P Global Market Intelligence.
Demand for utility-scale storage is expected to keep rising world-wide for the next several years, driven by rapid growth in the U.S. and China, as new storage technologies and pressure to add renewable energy sources to stem carbon emissions reshape the electricity industry.
Giant batteries, often paired with solar farms, can charge when sunshine is plentiful, then send electricity to the grid later when the sun goes down or demand otherwise spikes and power is more valuable.
The installations, most of which currently use lithium-ion batteries like the ones found in electric vehicles and laptops, resemble rows of boxy shipping containers, and usually provide up to four hours of backup power.
The surge in battery development has the potential to substantially change the power generation sector. Electricity discharged from batteries is increasingly replacing electricity generated by gas-fired power plants in certain parts of the country, especially those that only fire up during periods of peak demand.
Already, utilities, power generators and investors are rethinking the need for conventional power plants, as batteries become cheaper and more viable.
Plummeting costs for lithium-ion batteries, which have become ubiquitous in smartphones and laptops and are increasingly in high demand for electric vehicles, have made utility-sized battery projects more economical. Lithium-ion battery packs, which cost more than $1,200 per kilowatt-hour in 2010, have fallen to around $132 this year, according to data from BloombergNEF.
California is driving much of the U.S. battery market’s expansion. It is racing to secure power to make up for the impending closure of several gas-fired power plants as well as a nuclear facility that provides nearly 10% of the electricity generated in the state. A California law passed in 2018 requires the state to decarbonize its power grid by 2045.
At least eight other states so far have storage mandates or targets, including New York, Virginia and Nevada, according to the U.S. Energy Storage Association. Goldman Sachs expects the U.S. market for stationary batteries to grow from about $1 billion in 2020 to $13 billion to $14 billion by 2030.
Storage developer Key Capture Energy now has 370 megawatts of battery projects in operation or under construction, up from 54 megawatts this time last year. The company is working on projects in New York, New England, Texas and elsewhere, including a 20-megawatt installation on the site of a Maryland coal plant that is set to retire in the coming years.
Jeff Bishop, Key Capture’s co-founder and chief executive, said declining costs have enabled the company to expand to Oklahoma, Michigan and other states where it has historically been economically challenging to build batteries.
“Five years ago, most energy storage developers were small shops like us that had a couple of people and PowerPoints and dreams,” Mr. Bishop said. “Now, it’s companies with real money behind them and billions of dollars for growth.”
Some states that lack storage mandates have had a boom in battery installations anyway, including Arizona and Texas, where batteries are being built alongside large renewable energy projects, but also as stand-alone projects that aim to take advantage of fluctuations in power prices.
The major Texas grid operator had 225 megawatts of utility scale battery storage operating at the end of 2020. Now one company, a subsidiary of Italy’s Enel ENEL 1.59% SpA, has 551 megawatts under construction in Texas. This month, it connected a 55 megawatt site to the grid southeast of Dallas.
Enel’s battery development plans include adding 1.4 gigawatts of storage to the U.S. grid between 2022 and 2024—accounting for more than half of its global plans. Much of it is in Texas or in PJM Interconnection, an electricity market serving 13 states from Virginia to Illinois.
“The U.S. is central in our development strategy,” said Alberto De Paoli, Enel’s chief financial officer. “We are almost doubling the level of investments in the United States versus what we had previously planned.”
The Biden administration’s support of renewables and the expected extension of existing renewables tax credits, have helped drive that decision, Mr. De Paoli said.
Higher raw materials prices are expected to stall further near-term declines in battery costs. But that is unlikely to be a drag on battery demand, and cost inflation could be more than offset by potential new tax incentives, said Steve Piper, director of energy research at S&P Global Market Intelligence.
U.S. lawmakers are considering what would be the first investment tax credit for stand-alone storage projects as part of the Biden administration’s proposed Build Back Better spending plan. Congress has delayed that debate until next year, and the bill as currently written is imperiled, though energy tax credits haven’t been the controversial parts of the legislation.
Right now, many battery projects are paired with solar farms to qualify for solar’s current 26% credit. Developers can roll battery costs into project costs for the credit.
John Carrington, chief executive at energy-storage firm Stem Inc., said a stand-alone credit could spur projects in more states and cause some renewables owners to consider adding batteries to existing projects.
“There’s a retrofit piece that is remarkable, because now you can go put storage into every location they have solar,” Mr. Carrington said.
Batteries can interact with the grid in a more dynamic way than wind or solar by releasing electricity when it is most needed.
“Developers and asset owners are learning how to economically use their battery to dispatch it into the market and make money,” said Vanessa Witte, senior energy storage analyst with Wood Mackenzie. “There’s a lot of different opportunities for batteries, where solar and wind have more set revenue opportunities.”
Like other lithium-ion batteries, the utility-scale battery projects can pose safety risks. Several have caught fire, including one using Tesla Inc. battery packs in Australia in July.
Large projects by utilities and developers dominate the storage market, with about 89% of installations this year, according to the latest market report from Wood Mackenzie and the U.S. Energy Storage Association.
But the U.S. residential market for battery storage is on the upswing too, projected to surpass $1 billion next year as more homeowners pair storage with home solar installations.
“I think there’s also increasingly significant attention now for residential customers on the question of reliability and resilience, particularly in places that are experiencing things like public-safety power shut-offs or wildfires, hurricanes or other disruptions,” said Jason Burwen, interim chief executive of the U.S. Energy Storage Association.
Many customers in California and Hawaii can get incentives to add batteries to their homes, and those are the top states for residential storage. But storm-prone Florida is No. 3 for installations. “That’s not a fluke,” Mr. Burwen said.
Northvolt’s First Battery Cell Leaves Assembly Line On Schedule
* Startup Kicks Off Production At Gigafactory In Northern Sweden
* Firm Aims To Shift Battery-Making Balance To Europe From Asia
Northvolt AB assembled its first battery cell at a factory in Skelleftea in northern Sweden, meeting its deadline to start production at the site before the year is over.
Made on Dec. 28, the lithium-ion cell is the first to have been designed and produced at a large-scale factory by a homegrown European company, Northvolt said Wednesday.
“We look forward to Northvolt Ett expanding its production capacity greatly to enable the European transition to clean energy,” Chief Executive Officer Peter Carlsson said in a statement.
Northvolt, with a stated ambition to shift the balance of battery-making power to Europe from Asia, said it has now secured more than $30 billion worth of contracts from electric-car manufacturers including BMW AG, Volkswagen AG, Volvo Car AB and Polestar.
The plant’s production capacity will increase toward 60 gigawatt-hours a year in the coming years. Northvolt said it plans to make cells of varying formats with commercial deliveries starting next year.
Investors in Northvolt include Volkswagen, BMW, Goldman Sachs Group Inc. and Tesla Inc. shareholder Baillie Gifford. Spotify Technology SA CEO Daniel Ek also is a backer.
GM, Volkswagen Build Up Their Battery Supply Chains Amid Electric-Vehicle Push
Like Tesla, traditional auto makers are investing more in needed supplies as the industry returns more to vertical integration.
Auto makers are trying to control more of the supply chain for electric vehicles, forging new partnerships with raw materials producers and investing in facilities that make chemicals for batteries.
General Motors Co., Volkswagen AG and other major car companies have already been spending heavily on joint-venture factories to ensure their own supplies of electric-vehicle batteries.
Now, they are also looking to expand further as they seek to lower costs, secure sought-after components and exert more control over battery quality and performance.
Tesla Inc. was among the first to insource more of its EV-battery making, moves that helped the electric-vehicle pioneer become the world’s most valuable auto maker. The push by auto makers to control more of their supply chains also comes as a semiconductor shortage has hampered vehicle production.
In recent weeks, Volkswagen and Stellantis NV have announced deals to lock up supplies of lithium, the silvery-white metal whose electrochemical properties make it ideal for electric vehicles’ powerful batteries.
GM said in early December that it will invest in a new North American factory with Korean steel and chemical maker POSCO to produce cathode materials, a critical component of the battery that accounts for a big chunk of its cost.
Volkswagen has plans to build a similar cathode-material factory of its own with Belgian materials company Umicore SA.
The moves point to an industry that is again embracing elements of vertical integration, a strategy that traces its roots to the early days of the auto industry when some manufacturers owned or acquired much of the supply chain necessary for production. Ford Motor Co. at one point owned mines and a steel mill.
The change also comes as electrification threatens to disrupt the industry’s normal hierarchy between auto makers and their suppliers, analysts say.
Traditionally, auto makers have been able to improve profitability by pitting suppliers against one another. With just a handful of players making the highest-quality batteries and chemicals, auto makers have diminished pricing power.
Relying solely on suppliers to develop their battery technology would be akin to not making their own engines, said Thomas Schmall, a VW board member and chief executive of the company’s parts business, last year.
Ken Morris, GM’s head of electrification, said at the company’s investor day in October that bringing more of its battery supply chain in-house was key to meeting its future profitability and environmental targets outlined to investors.
In addition to the cathode-material factory, GM also signed a deal over the summer to invest in a geothermal extraction project in California’s Salton Sea for lithium.
“Vertical integration will help us do it quicker, at a lower cost and more sustainably,” he said.
The global auto industry has been aggressive in its efforts to sell more electric vehicles, with some major car companies committing billions of dollars to expand lineups.
In addition, governments are offering incentives to spur production and sales while simultaneously tightening emissions rules. As a result, plug-in models are expected to account for half of all new vehicles sold globally by 2030, according to analysts at Morgan Stanley.
Still, these vehicles require a radically different supply chain than those built up over decades for gasoline-powered cars and trucks.
The sharp shift to electrics has spurred concerns about whether companies will be able to secure enough high-quality materials for making the batteries and other components that are core to meeting future sales targets.
Executives say controlling more supply-chain production can help insulate companies from future price increases and shortages.
The disruptions related to the Covid-19 pandemic and the recent semiconductor shortage are further pushing the car industry in this direction, prompting manufacturers to lessen their reliance on global outsourcing.
“Everybody wants to secure the supply chain and not repeat the very painful experience of the semiconductor shortage,” said Mathias Miedreich, CEO at Umicore.
In recent decades, car companies have largely shifted away from vertical integration, spinning off parts-making operations and relying more on outside suppliers to provide components.
Vertical integration can be capital-intensive and risky, and in the past, auto manufacturers have struggled to bring new competencies like software development in house, leading to delays and dented sales.
When Tesla invested more in its battery-making capabilities, it did so in part out of necessity. It needed huge quantities of batteries to accomplish its goal of making affordable, mass-market electric vehicles.
To meet its own demand, Tesla built its first gigafactory, a joint venture with Japanese battery-maker Panasonic Corp., which opened in 2016.
Years later, nearly every major auto maker has emulated Tesla’s approach and made investments in its own joint-venture battery plants. To offset risks in moving further upstream, auto manufacturers are striking partnerships to help share the cost burden for projects and tap the expertise of companies already in the field.
“There’s a lot of pressure to integrate,” said Ulderico Ullisi, an analyst at research firm Rho Motion. Those that don’t, he said, risk becoming overly dependent on battery suppliers for the car’s costliest technology and ceding margin to them.
Lithium-ion battery production relies heavily on China for refining and producing key inputs, according to analysts. That reliance increases shipping costs and leaves auto makers—particularly those in the U.S.—subject to geopolitical risks, they say.
“Right now, there are materials and inputs into this value chain that are zigzagging the complete world,” said Anirvan Coomer, executive director of GM’s global electrification supply chain. “We see an opportunity in terms of making the value chain a lot more sustainable and leaner.
Tesla Strikes Battery-Metal Deal In Push To Ensure Supply
* Tesla Agrees To Buy Nickel From Talon Metals Mine Project
* EV Demand Is Leading Manufacturers To Strengthen Supply Chain
Tesla Inc. agreed to purchase nickel supplies from miner Talon Metals Corp. as an expected surge in demand spurs automakers to secure access to battery metals and other electric-car parts.
Tesla committed to purchase 75,000 metric tons of nickel concentrates produced from Talon’s Tamarack project, with the price linked to the London Metal Exchange’s cash-settlement price for nickel, Talon said in a statement Monday.
Tamarack, a nickel, copper and cobalt joint venture between Talon and Rio Tinto Group, is located in Minnesota and isn’t yet in commercial production.
Tesla’s billionaire boss, Elon Musk, has repeatedly expressed concern about future supplies of nickel due to challenges in sustainable sourcing, with demand set to skyrocket as the world increasingly moves toward electric vehicles.
The agreement with Talon comes less than six months after Tesla struck a nickel-supply deal with BHP Group.
“Responsible sourcing of battery materials has long been a focus for Tesla, and this project has the promise to accelerate the production of sustainable energy products in North America,” Drew Baglino, the senior vice president of powertrain and energy engineering at Tesla, said in the statement.
The announcement also follows a flurry of activity among carmakers securing supplies of nickel and other materials needed to produce batteries that will power the green-energy transition.
BHP, the world’s biggest miner, said Monday it will buy a minority stake in a Tanzanian nickel project as it expands its footprint, and General Motors Co. last month said it will build a plant to make magnets using rare-earth materials supplied by MP Materials Corp.
The Biden administration has pledged to invest in U.S. domestic manufacturing and move away from reliance on adversaries for critical inputs. In October, Tesla said higher prices of nickel were having an impact on battery cells.
Talon said it will use “commercially reasonable efforts” to achieve commercial production by Jan. 1, 2026 at the Tamarack project, which may be extended by the agreement of the parties for up to 12 months.
“Rio Tinto is working to support Talon to bring the Tamarack mine into production, as we strengthen our battery materials portfolio,” Rio Tinto Minerals Chief Executive Sinead Kaufman said in a statement.
“We look forward to seeing it supply Tesla with nickel that is essential for the production of their electric vehicles.”
Solar Power And Battery Storage Will Be The Real Test For Tesla
This year, the company is attempting to push solutions for the home and the grid.
Elon Musk has long insisted that Tesla Inc. is more than just a carmaker. Now that vision, which for years has taken a back seat to the challenges of vehicle production, is coming into focus.
In 2022, Musk’s electric auto company is making a serious effort to become a more important supplier of energy storage, both for people’s homes and for the power grid writ large.
“Over time, we think the demand for stationary storage is going to be at least as high as the demand for vehicles,” Musk said during the company’s annual shareholder meeting in October.
In households, Tesla is angling for comparisons to Apple Inc.’s hardware ecosystem, which tends to push people who’ve already bought in to buy more.
Lots of customers already have the trifecta of key Tesla products: an electric car in the driveway, solar panels or a Tesla Solar Roof up above, and a home battery called the Powerwall in the garage (or maybe rigged up outside).
“Tesla’s core concept is to make the house as energy-independent and self-reliant as possible,” says Pol Lezcano, an analyst for BloombergNEF, Bloomberg LP’s primary research service on the energy transition. “The idea is to have a Tesla-powered home.”
This combo platter tends to arrive in courses. Electric cars have long been the gateway to solar, because charging a car means a serious upswing in household electric bills, and over time solar can help defray those costs.
In October, Musk estimated that a two-car home that swapped both its gas vehicles for EVs would see its power needs double.
And Tesla strongly encourages customers who pay the requisite tens of thousands of dollars for its solar gear to buy a Powerwall, too. So far the company has installed more than 250,000 of them around the world.
This year, Tesla’s macro projects are poised to gain ground, too. Battery storage for renewable energy is an attractive option for utilities, which are under pressure to reduce greenhouse gas emissions from coal and natural gas.
In the San Francisco Bay Area, PG&E Corp. and Tesla have built the 182.5-megawatt Elkhorn Battery Energy Storage System, located at the utility’s substation near Monterey Bay.
When it comes online later this year, it will be among the largest such utility-owned systems on Earth, capable of powering an estimated 136,500 homes for several hours.
Tesla’s utility-scale battery product is a modular system called the Megapack, which, according to the company’s website, starts at about $1.4 million for a 0.8MW battery the size of a shipping container. The Elkhorn system is using a bunch of them.
Musk’s team is building a factory to begin mass-producing Megapacks in Lathrop, in California’s Central Valley. (Yes, they’re calling it the Megafactory.)
At the nexus of home and grid is a Tesla pilot program for a so-called Virtual Power Plant, which allows customers of California’s three largest utilities to dispatch their electricity back to the grid when demand is high.
Tesla participants to date own a combined 42MW of batteries, according to the California Public Utilities Commission—enough juice for about 31,500 homes.
In Texas the company recently won approval to sell electricity directly to consumers and is building an energy trading team that will pitch batteries to wholesalers.
Tesla will have a lot of challenges to navigate. A dearth of battery cells and a tight labor market for qualified electricians have repeatedly delayed its ambitions in the energy industry.
The company faces fierce competition from large industrial conglomerates as well as established rooftop solar and battery installers such as Sunrun Inc. Leaders of its energy division rarely stay for long, which can compound delays.
And new bosses must contend with Musk’s fixation on Tesla’s Solar Roof, shingle-size pieces of textured glass with photovoltaic cells inside.
The Solar Roof looks cool and is popular with customers, but it remains expensive and difficult to install, more than five years after Musk’s demo models helped persuade Tesla shareholders to agree to a $2 billion buyout of a solar panel installer called SolarCity.
The deal was rife with conflicts—Musk was SolarCity’s chairman and largest shareholder, and his cousins ran its day-to-day business—and has become the subject of a Tesla shareholder lawsuit. (Musk has said he recused himself from the deal, but court filings indicate he remained actively involved, even advocating for it directly with bankers and investors.)
None of this appears to have given the true believers much pause. During the trial over the SolarCity acquisition last summer, Antonio Gracias, an early Tesla investor and former board member, testified to a Delaware Chancery Court that the company hasn’t swerved from an early plan to remake the very way the world produces energy.
“My view was that Tesla was going to be the GE of the 21st century,” he said. “We’ve been on that road ever since.”
France Plans $1.1 Billion To Safeguard Metals For EV Batteries
* Government Wants To Reduce Dependence On Non-EU Supply
* Move Comes Amid Tight Supply Of Some Raw Materials And Chips
France is aiming to raise 1 billion euros ($1.1 billion) to help secure enough supply of metals for industries like battery manufacturing as prices of raw materials skyrocket.
The plan unveiled Monday includes 500 million euros in public money, according to the environment and industry ministries. The government wants to reduce reliance on supplies of nickel, cobalt and lithium from outside the European Union, it said.
Procuring enough raw materials for EV batteries that also comply with ethical and ecological standards is becoming a focal point for carmakers, while France has also put pressure on manufacturers Renault SA and Stellantis NV to produce batteries at home. Both companies have taken steps to ensure long-term supply of some of the metals required for output.
The government is calling on the private sector to design projects that could be backed by an investment fund and aimed at bolstering supply chains of metals.
A report submitted to the government Monday by Philippe Varin called for development of battery-metals processing at Dunkirk and for magnets in Lacq, in southwestern France.
It also called for spending on “strategic metals” supply that could include investment in mines.
10 Companies Bidding For Incentives Under Indian Battery Scheme
* Bidders Include Unit Of Reliance Industries, Hyundai
* Facility Must Be Set Up In 2 Years To Qualify For Incentive
Billionaires and automobile giants are among those who have sought incentives to manufacture technology-agnostic battery cells under an Indian government-led effort to cut imports and make batteries at competitive prices.
A renewable energy unit of tycoon Mukesh Ambani’s Reliance Industries, Hyundai Global Motors Co. and Ola Electric Mobility Pvt. are among 10 bidders applied for 181 billion rupees ($2.4 billion) in the production-linked incentive program , according to a Press Information Bureau release on Saturday.
Automaker Mahindra & Mahindra Ltd. and engineering conglomerate Larsen & Toubro are among the other companies that put in bids for the government’s Advanced Chemistry Cell Battery Storage scheme.
The manufacturing facility would have to be set up within a period of two years and the incentive will be disbursed thereafter over a period of five years on sale of batteries manufactured in India, the statement said.
Nikola Signs Battery Deal With Proterra For Electric Big Rigs
Nikola Corp. announced a long-term supply agreement with Proterra Inc. for battery technology, giving the electric big-rig maker a second source for the critical components.
Burlingame, California-based Proterra will start delivering prototype systems to Nikola next quarter, with full production of trucks using Proterra’s battery packs starting in the fourth quarter, the companies said Tuesday in a statement.
The technology will also be used for hydrogen-fuel-cell electric trucks, which are due to go in to production in the second half of 2023.
The agreement bolsters the supply chain for embattled startup Nikola, whose road to production of battery-electric and fuel-cell semi trucks has been plagued by challenges. Phoenix-based Nikola has previously disclosed Romeo Power Inc. as a pack supplier and discussed working with multiple cell suppliers, without disclosing their names.
Nikola’s stock fell 1.1% to $9.97 at 9:47 a.m. in New York. Proterra’s shares tumbled 5%.
EV Makers’ Next Headache: Scarce Battery Chemicals, Made In China
Lithium used to make electric-vehicle batteries is getting dear; that is only leading edge of supply-chain problem.
Last year was the year of electric vehicles—global sales are likely to have hit a record, in turn pushing up battery demand.
Now too much of a good thing is causing problems: Many key battery materials, including but not limited to processed lithium itself, are in short supply and prices are rising sharply.
Adding to the geopolitical risks for global auto makers is the supply chain concentrated in a country determined to make itself the EV capital of the world: China.
Lithium is the most spectacular example: Prices of lithium carbonate have quintupled in China from a year earlier, according to Benchmark Mineral Intelligence.
Other battery materials from nickel to cobalt have also been rising and could remain elevated as new supply will take time to come online. Sustained high costs will eventually pass onto car makers.
The rapid rise in demand for EVs has also created shortages in some lesser known components that go into batteries.
For example, Morgan Stanley says supplies of binder material polyvinylidene fluoride or PVDF—used to enable connections between electrodes—will likely be insufficient to meet demand until 2025.
The bank says global battery-grade PVDF capacity will more than double between 2021 and 2025—but demand will quadruple. Manufacturers might be able to substitute regular PVDF for battery-grade PVDF to make up some of the shortfall, but that would add cost and take time.
Wet separators, which are placed between a battery’s positive and negative electrodes, are another battery component that could face shortages, according to the bank.
Shortages are adding to already substantial concentration risks regarding China’s dominance in the EV supply chain. The country has three-quarters of the world’s wet-separators market and more than half of that for battery-grade PVDF, according to Morgan Stanley.
Most of the mining for materials like lithium and cobalt isn’t in China, but the country dominates the subsequent steps in the value chain.
China in general has more than 60% market share in the chemical processing and refining of critical battery minerals and that might be above 80% for some materials like cobalt and graphite, according to Benchmark.
China also mines more than 60% of the world’s natural flake graphite. Companies like Hong Kong-listed Ganfeng Lithium, which supplies lithium compounds to Tesla, have also been expanding upstream, acquiring mines overseas.
While other countries will also invest in more localized supply chains, China’s head start—in part due to years of generous EV subsidies which helped nurture a robust battery supply chain upstream—means it will remain dominant for the next few years at least.
Securing material supplies is also getting more important for car makers. They will increasingly need to either vertically integrate or establish joint ventures with battery suppliers, says Yu Du, research analyst at Rho Motion.
Tesla, for example, signed an agreement with Australian miner Syrah Resources this month to secure graphite supply.
In a comment to the U.S. Trade Representative supporting the waiver of tariffs on artificial graphite imported from China, the car maker said there are no suppliers in the U.S. that meet its specifications and capacity requirements.
EV sales have been speeding ahead, but the supply chain has a lot of catching up to do. Expect that to cause a lot of headaches for EV makers in the months and years ahead—and potentially geopolitical jitters.
Tianqi Lithium Returns To Annual Profit Thanks To Battery Boom
* Company Sees Full-Year Net Income Of 1.8 To 2.4 Billion Yuan
* Chinese Lithium Carbonate Prices Are Surging On EV Demand
Tianqi Lithium Corp., the Chinese battery-material supplier that’s planning to list in Hong Kong, will return to profitability for the first time in three years due to surging electric-vehicle demand.
The company said late Wednesday it expects preliminary full-year net income of 1.8 billion yuan to 2.4 billion yuan ($284 million to $378 million) for 2021.
It cited capacity expansions by battery manufacturers, higher lithium product prices and sales volumes, and improved investment income from miner Sociedad Quimica y Minera de Chile as reasons for the result. The official figures are likely to be released in late April.
Chinese lithium carbonate prices have been on a tear, jumping by almost a third this year after surging more than 400% in 2021. The global push toward an electrified transport fleet has fired up consumption of the battery material and supplies are struggling to keep pace.
The resurgence in demand helped Tianqi make a profit for three quarters in a row last year, after suffering seven consecutive quarterly losses. It made a 1.8 billion yuan loss in 2020 amid debt repayment pressures that forced it to sell part of its stake in the Greenbushes mine — the world’s largest lithium project — in Western Australia.
First-quarter earnings should continue to be supported by higher lithium carbonate prices, Daiwa Capital Markets analysts Dennis Ip and Leo Ho said in a note. However, Tianqi will likely see a sharp increase in the cost of spodumene — a lithium-bearing raw mineral — under an annual price adjustment mechanism, they said.
Tianqi, whose shares already trade in Shenzhen, is reviving a plan to list in Hong Kong. The lithium supplier is working with China International Capital Corp., Morgan Stanley and CMB International on a share offering that could take place as soon as mid-2022 and may raise $1 billion to $2 billion, people familiar with the matter said earlier.
Shares of the company rose as much as 6.8% on Thursday in Shenzhen.
The Real Brake On America’s Electric-Vehicle Revolution
Capital is pouring into U.S. EV and battery plants, but not into the foundations of a domestic battery industry, leaving the supply chain uncomfortably dependent on China.
Electric vehicles won’t get a “100% Made in U.S.A.” stamp for a good while yet.
U.S. auto makers are pouring billions of dollars into domestic EV factories and lithium-ion battery plants to supply them. General Motors this week announced $6.6 billion of EV investments into two Michigan plants, including $1.3 billion from its South Korean battery partner, LG Energy Solution. Ford announced similar projects in Tennessee and Kentucky last September alongside LG’s archrival, SK Innovation.
Move further upstream in the U.S. EV supply chain, though, and the torrent of capital turns into a trickle. Unless that changes, the headlong pursuit of EVs in Detroit and California alike risks replacing the American driver’s dependence on Middle Eastern oil with an equally problematic reliance on Chinese battery materials.
Some projects are under way, often led by partnerships or supply deals with car makers. Relative to the scale of investment downstream, though, they seem small.
GM last month announced a joint venture with Posco Chemical, another South Korean company, to open a cathode materials plant in the U.S. in 2024. The cathode is the most valuable component of a battery cell, accounting for about 40% of its cost. The car maker said the factory would employ hundreds of people.
At the start of the supply chain, a clutch of miners are developing U.S. prospects for battery materials such as lithium and nickel. Toronto-listed Talon Metals, which owns the Tamarack nickel project in Minnesota alongside iron-ore giant Rio Tinto, last week said it would sell stock worth at least 33.9 million Canadian dollars, or roughly $27 million, to further its plans, exploiting a strong share price after Tesla committed to purchase at least 75,000 metric tons of Tamarack nickel over six years.
Yet it is the obscure intermediate links in the supply chain that require most attention. This is where China really dominates the battery industry today.
Chinese lithium miners Ganfeng Lithium and Tianqi Lithium do more work turning the metal they extract into useful chemical compounds than their big U.S. peer, Albemarle. Ganfeng even makes EV batteries itself.
In their emphasis on vertical integration, the Chinese players are in some ways clean-energy takes on the likes of Exxon Mobil and Royal Dutch Shell —“integrated oil companies” that pump, refine and market their resources.
As for nickel, there is so little processing in the U.S. that the only domestic production site today, the Eagle Mine in Michigan owned by Lundin Mining, sends its output to Canada for processing. From there it might head to the processing hub of Finland or elsewhere before reaching global markets. In the context of batteries, that usually means China.
Until this kind of situation changes, America’s new battery plants will have to source materials chiefly from China, handing geopolitical leverage to Beijing as the EV industry expands. The need to avoid this outcome is a rare point of bipartisan consensus in Washington.
The infrastructure bill President Biden signed into law in November included $6 billion of funding for the production and recycling of batteries and their raw materials, with priority for companies owned and operated in the U.S.
Recycling might seem a low priority given how few EVs are on the road, but recycling startups are in fact among the more promising American battery-materials suppliers.
Redwood Materials, the five-year-old brainchild of Tesla’s longtime chief technology officer, JB Straubel, and its smaller rival Li-Cycle collect waste battery materials—sometimes called “urban mining”—break them down and then reprocess them for sale back into the supply chain. Redwood also plans to turn its recycled materials into cathodes.
The recall of GM’s Bolt model last year was a boon for Li-Cycle, which has a partnership with the car maker. Such problems aside, the recyclers will rely much more on manufacturing scrap than end-of-life EVs for source matter over the coming decade.
As much as 40% of raw materials can be lost as battery factories ramp up while trying to meet demanding automotive quality requirements. Even mature plants typically scrap 5% to 10% of their supplies.
A private funding round valued Redwood at $3.7 billion last summer, and it got another $50 million from Ford in September. The sector needs much more investment, but its economics remain unproven. Competing with a much better-established Chinese industry isn’t an obvious proposition for investors, even with subsidies thrown in.
That leaves U.S. car makers tentatively leading even the upstream supply-chain push, in alliance with the Energy Department. The future of EVs is often assumed to depend on solving consumer problems such as slow charging infrastructure and range anxiety. Instead, they could be slowed down more by the conundrum of building the foundations of a battery industry.
Thiel-Backed Lithium Miner Partners With Bilfinger On Refinery
* Bilfinger To Help Construct Rock Tech’s German Smelter Project
* Project Bets On Demand From Europe’s Electric-Vehicle Shift
Rock Tech Lithium Inc. and Bilfinger SE have agreed to cooperate on building Europe’s first lithium refinery in a push to supply the region’s shift toward battery-powered cars.
The Canadian miner and the German industrial services provider have signed a memorandum of understanding to build a lithium hydroxide converter for Rock Tech’s planned battery-metals facility in Guben southeast of Berlin, according to a joint statement Wednesday.
Bilfinger will do engineering work and later potentially also procurement for the plant that’s expected to have an annual production capacity of 24,000 metric tons of lithium hydroxide — enough to supply batteries for half a million electric vehicles. The facility is due to start production in 2024.
“The production of lithium hydroxide is essential” to help reduce transport-related emissions, Bilfinger’s interim-Chief Executive Officer Christina Johansson said. Rock Tech’s concept for the refinery “is innovative and technologically convincing.”
Refineries are needed to convert the lithium oxide found in spodumene rock deposits into battery-grade chemicals. Having a local smelter would allow Europe to avoid some of the complex logistics involved in shipping what is a highly corrosive substance that reacts violently with water.
Rock Tech plans to largely source the ore for the German factory — which would be near Tesla Inc.’s planned facility and a Volkswagen AG EV plant — from its own spodumene mine in Georgia Lake, Ontario.
Backed by venture capitalist Peter Thiel, Christian Angermayer and hedge fund billionaire Alan Howard, Rock Tech is also preparing a Nasdaq listing to broaden its investor base and help finance the refinery, people familiar with the matter told Bloomberg last year.
Mercedes Chips In To The Solid-State Battery Funding Bonanza
Stellantis, BMW and VW also have placed bets on promising technology that could hasten EV adoption.
Lithium-ion batteries and the electricity they store represent the lifeblood of modern electric vehicles, much like gasoline was for 20th-century cars. With China expected to continue dominating production of lithium-ion cells, the West is now hoping to win the race for a vastly improved successor.
European automakers spending billions of euros in pursuit of battery breakthroughs are increasingly focusing on solid-state cells, a technology the industry hopes will hasten EV adoption because it promises to be more powerful, safer and cheaper than the current standard.
The solid-state battery market is expected to start growing in 2025.
Germany’s Mercedes-Benz last week signed a deal with ProLogium to develop solid-state batteries and invest a “high double-digit million euro” sum in the Taiwanese startup.
Mercedes and Stellantis last year said they’re investing in Massachusetts-based battery maker Factorial Energy, and BMW has thrown its weight behind Colorado-based Solid Power, which went public by merging with a special purpose acquisition company late last year.
Volkswagen was Europe’s solid-state pioneer. In 2012 — years before it admitted to rigging diesel engines to cheat on emissions tests — VW invested in QuantumScape, a secretive Silicon Valley startup attempting to make cells promising to increase driving range by as much as 50% and reduce charging times to 15 minutes.
QuantumScape went public in 2020 in a SPAC deal and, in a sign of the investor frenzy that gripped the nascent sector, briefly surpassed the valuation of Ford without generating any meaningful revenue.
Batteries are the most expensive component of an EV, representing roughly 40% of a typical car’s cost, according to Bloomberg Intelligence. It’s also key to performance, so mastering the technology is crucial. It’s understandable Europe’s carmakers are chasing this next big thing. But the battery industry is renowned for its secrecy, rendering decisions on which horse to bet on all the more difficult.
Beyond holding tightly to proprietary materials and trade secrets that are key to beating rivals, startups also generally keep battery performance data private. That’s a potential headache for investors and has already sparked short-seller activity.
Activist firm Scorpion Capital called QuantumScape a “scam” in a report released last April. While the battery maker’s CEO Jagdeep Singh said the paper was filled with “lies, misinformation and innuendo,” QuantumScape’s shares are down some 87% from their peak in late 2020.
To grasp the potential of solid-state batteries, it’s helpful to understand that all batteries have a standard configuration that hasn’t changed in more than two centuries.
But, Like, What Is A Battery Even?
All batteries consist of four components: anode, cathode, electrolyte, and separator. As a battery is charged, ions flow from the cathode to the anode. When it’s discharged, the ions reverse course.
The components can come in a tightly wound cylinder steeped in liquid electrolyte. The amount and proportion of ingredients fluctuate with metals used.
The battery industry is eager to solve the problem of dendrite, the spiky structure formed by lithium ions as a cell charges. They can grow long enough to reach the other electrode and short-circuit the battery, potentially causing a fire. And when EVs are set ablaze, extinguishing them is terribly difficult.
It took firefighters four hours and more than 30,000 gallons (113,560 liters) of water to douse a Tesla Model S after a fatal crash in Texas last year.
Solid-state batteries would do away with that problem by replacing the liquid electrolyte with something — you guessed it — solid. QuantumScape, for example, uses what it says is a dendrite-resistant ceramic. Moreover, solid-state cells open up opportunities to use different anodes and cathodes, potentially resulting in higher energy density. Producing them also can be simpler because several steps, including the electrolyte filling, are no longer needed.
Right now, it’s difficult to say who’s ahead. QuantumScape and Solid Power are both expanding production facilities to scale up manufacturing around the middle of the decade. South Korea’s SK Innovation plans to deliver solid-state batteries by 2025, potentially vaulting yet another Asian producer to the forefront.
Tesla, the leader among carmakers when it comes to EV battery technology, has been notably absent from the solid-state race, instead pushing its 4680 cells that it expects to go into Model Ys this quarter.
BloombergNEF expects automakers to deploy solid-state cells first in higher-priced models.
“We don’t expect cost-competitive cells and mass-market adoption until supply chains and manufacturing technologies mature,” BloombergNEF analysts wrote in a recent report. “We expect this will occur closer to 2030.”
Rising Battery Prices Add Uncertainty To Electric-Vehicle Costs
Demand for lithium outstrips supply, ending yearslong price declines.
Surging prices for the metals that make up electric-vehicle batteries have ended a decadelong decline that brought the cost of EVs to within spitting distance of gasoline-powered vehicles.
With electric-vehicle sales taking off and a wave of new models hitting the market this year, the price increases could weigh on growth.
Since 2010, lithium-ion battery prices on average have tumbled 90% to about $130 per kilowatt-hour. The magic number that makes electric vehicles competitive with internal-combustion engine vehicles is roughly $100 a kilowatt-hour.
Many expected the battery industry to reach that mark in 2024, a goal that is looking increasingly elusive.
Lower costs helped boost EV sales by 112% in 2021 to more than 6.3 million units world-wide from the previous year, according to Benchmark Mineral Intelligence, which tracks the global battery supply chain.
Now, prices are soaring for the key ingredients in batteries. Battery-grade cobalt prices are up 119% from Jan. 1, 2020, through mid-January 2022, nickel sulfate gained 55% and lithium carbonate rose 569%, according to Benchmark.
“What’s happening in the supply chain is casting doubt on that $100 kilowatt-hour price,” said Caspar Rawles, Benchmark’s chief data officer. “We’re hearing [about] quite significant price increases for auto makers from cell suppliers.”
Some battery-cell makers that historically offered long-term fixed-price contracts have switched to variable-price deals, letting them pass on some of the costs of rising metals prices to customers, he said.
Most major U.S. and European auto makers shifted their focus to electric vehicles in the past few years, prompting a burst in demand that quickly outpaced supplies.
China, which dominates the battery supply chain and has the world’s largest EV market, has also significantly increased EV production. Since it typically takes seven to 10 years to open a new mine, many battery materials could remain in short supply for years.
“You’ve got soaring demand for all these battery metals, and there’s this complete disconnect” between the mining sector and the automotive industry, said Daniel Clarke, thematic analyst at GlobalData, a data analytics group in London.
The lithium market is expected to see its biggest shortage on record in tons in 2022 amid soaring demand, labor problems and Covid-19 disruptions, according to Benchmark. EV auto makers in China have already started boosting prices, with BYD Co. raising the sticker price on some models by more than $1,000, Benchmark said.
Tesla Inc. Chief Executive Elon Musk last year said one of his biggest raw-material concerns was nickel. “So hopefully this message goes out to all mining companies,” he said on an earnings call. “Please get nickel.” Tesla has a contract to get nickel from BHP Group Ltd., the world’s largest miner by market value.
New projects also often face protests from nearby communities, raising questions about expanded supplies. In January, Serbia revoked Rio Tinto PLC’s lithium exploration licenses following a wave of protests. Rio Tinto in a statement said it is “working through what this means for the project and our people in Serbia.”
Some factors could mitigate the demand crunch. Mining companies can expand current operations faster than they can launch new projects. Battery recycling is a growing business, providing an expanding source of supply. And new battery chemistries can offset demand for certain materials, such as cobalt and nickel.
A more-affordable battery technology championed by Tesla in China could provide some relief. Batteries that use lithium iron phosphate, or LFP, accounted for 57% of total battery production for vehicles in China last year, up from less than half the previous year, according to official Chinese figures.
The batteries use cheaper, more plentiful iron in their cathodes instead of more expensive metals such as nickel and cobalt. The drawback of the technology: They typically have a shorter range than standard lithium-ion batteries that use nickel and cobalt.
“LFP serves as a really nice relief valve on those supply chain shocks,” said Gene Berdichevsky, chief executive of battery-part maker Sila Nanotechnologies Inc. and a former Tesla employee.
The sudden burst in demand for LFP batteries last year helped push costs for lithium-ion batteries up some 10% to 20% in the later months of 2021, according to IHS Markit. And since LFP batteries use lithium as an electrolyte, they remain exposed to price pressures in the white metal.
Slack in the lithium supply was mostly used up in 2021 as inventories were drawn down, Benchmark’s Mr. Rawles said. Shortages in supplies could lead to temporary plant shutdowns at battery and auto makers, adding to costs, he said.
Demand for lithium carbonate equivalent, a common metric for the refined metal used in batteries, rose about 40% in 2021 from the previous year to 491,896 metric tons, and is expected to more than double again to 1.1 million tons by 2025, according to Benchmark.
A potential solution to the lithium crunch is an alternative electrolyte. China’s Contemporary Amperex Technology Co., or CATL, the world’s biggest electric-vehicle battery maker and a Tesla supplier, last year unveiled a so-called sodium-ion battery that lowered the amount of lithium required in the cell. While the technology remains experimental, CATL said it plans to build a complete supply chain for the battery chemistry by 2023.
Scaling up a new battery technology to mass production carries technical and logistical risks, experts said. “CATL is very bullish on sodium ion, but any change in technology is a slow process,” Mr. Rawles said.
Choke points in the battery supply chain should be ironed out toward the later half of the decade as new mining projects come on line. And EV prices could continue to decline, despite higher commodity prices, amid fierce competition for market share as more auto makers join the race.
“I started building electric vehicles in 2001, I was employee 7 at Tesla, so I think in a very long arc,” Sila’s Mr. Berdichevsky said. “Ten years from now, EVs will dominate.”
Where Is There More Lithium To Power Cars And Phones? Beneath A California Lake
The U.S. race to secure a material known as ‘white gold’ turns to the Salton Sea, where energy companies hope to extract lithium from a geothermal reservoir.
In the U.S. hunt for lithium, an essential component of the batteries that power electric vehicles and cellphones, one big untapped source might be bubbling under a giant lake in Southern California.
The U.S. currently imports almost all of its lithium, but research shows large reserves in underground geothermal brines—a scalding hot soup of minerals, metals and saltwater. The catch: Extracting lithium from such a source at commercial scale is untested.
At California’s Salton Sea, three companies, including one owned by Warren Buffett’s conglomerate Berkshire Hathaway Inc., are pushing ahead with plans to do just that.
Those efforts are backed by money from governments eager to secure supplies of critical minerals that are key to several modern technologies. Prices of lithium recently rose at their fastest pace in years as supply-chain bottlenecks mounted and demand from electric-vehicle makers such as Tesla Inc. intensified.
The plans could turn this southeastern corner of California into one of the largest producers of what some call “white gold” at a time when most of that material comes from Australia, Chile and China.
The geothermal reservoir under the Salton Sea area is capable of producing 600,000 metric tons a year of lithium carbonate, according to estimates from the California Energy Commission. That level of output would surpass last year’s global production.
This push for lithium could also produce thousands of jobs in an area that sorely needs them. Imperial County, where the lake resides, has a population of 180,000 and is dependent on a volatile and low-wage farming industry. Unemployment was 14.7% in December, compared with 6.5% for the state. The county’s 20% poverty rate is the fourth-highest among California’s 58 counties.
“If it is what we hope, it would lift this entire valley off of what we have been living with,” said Imperial County Supervisor Ryan Kelley.
The key to unlocking all that lithium is the superheated geothermal water deep beneath a broad area that includes the Salton Sea. For decades a number of local geothermal plants have extracted that water to produce electricity. Some of those same operators now want to reach for the dissolved lithium that also resides in the geothermal brine.
An initial push came in 2017 after the California Energy Commission began awarding grants to help advance lithium extraction processes. Berkshire Hathaway Energy, which is conducting tests at one of its 10 geothermal plants, received $6 million and another $14.9 million in federal funds. The company said that commercial production should begin in 2026.
Another recipient was EnergySource Minerals, which was the first to report success in developing a commercial product at a facility roughly 10 miles north of Calipatria and obtained a $2.5 million grant.
The San Diego energy company said it plans to break ground on a lithium plant by the end of June with a goal of starting operations in 2024, and that it could employ over 70 full-time employees and another 120 for support services.
On a recent afternoon at the Salton Sea, clouds of steam billowed into the blue desert sky above EnergySource Minerals’ geothermal brine project. At the pilot plant, briny water passes through a series of compact processing stations, where lithium chloride is removed by a patented technique and deposited in a white plastic bucket.
The brine is heated to 500 degrees and comes up through production wells at the rate of 6,000 to 7,000 gallons a minute, according to Derek Benson, EnergySource’s chief operating officer.
“It doesn’t look like much, but it’s absolutely doing the key part of the process,” Mr. Benson said.
Converting lithium into battery-grade chemicals is a long, expensive ordeal. Currently, lithium is mainly produced through traditional hard rock mining in Australia and China–where the rocks are crushed and the mineral extracted. In South America, brines are pumped out of the ground and then left to evaporate, leaving the mineral behind to be collected.
To tap geothermal lithium directly, as operators hope to do in Southern California, miners typically drill thousands of feet deep into the earth, bringing the naturally-existing brines to the surface. There, chemical technologies are used to separate the lithium out of a complex mineral-rich soup whose temperature can reach up to 300 degrees Celsius.
Aside from providing an additional source of an in-demand commodity, advocates said the process isn’t as bad for the environment as other methods. Traditional collection from brine, for instance, involves evaporating large amounts of water, sometimes diverting it from local communities, according to the critics of the process.
Geothermal production plucks lithium out of waters that are then returned to the ground, while heat from these brines can be used to drive a turbine that generates electricity.
Operators face a number of challenges. One is the potential for local opposition. Last September, members of the Barona band of Mission Indians and other tribes marched in neighboring Arizona against proposed lithium operations there as well as the Salton Sea. Among their concerns is that the extraction would dry up springs on ancestral grounds if it punctured one of them during drilling.
“Who knows what’s really down there?,” said Bobby Wallace, a Barona activist. “They might tap into a water system that runs east over west.” Michael McKibben, associate professor emeritus of geology at the University of California, Riverside, said surface water likely wouldn’t be disrupted because the geothermal drilling is so deep.
Another big hurdle for local lithium producers is moving from small demonstration projects to commercial levels of extraction. Determining how costly such projects could be is difficult. “The companies need to establish how much brine can be extracted, at what rate and lithium grade, and for how long, and how much of the lithium content can be recovered,” said Yuen Low, an analyst at Liberum.
The transition has proven tricky for miners in other fields. In recent decades, several miners successfully tested using high temperatures and sulfuric acid to leach nickel out of ores, but faced problems when they tried to increase to commercial scale.
“Geothermal lithium would go a long way to providing the U.S. with what it needs,” said Patrick Dobson, who runs a geothermal research program at the Lawrence Berkeley National Laboratory, which conducts research on behalf of the Energy Department. “But it remains untested, and we shall find out in the coming years whether it works.”
Once a destination resort after floods formed it in 1905, the Salton Sea fell into decline over the past half-century. Runoff from surrounding agricultural operations fouled it with fertilizer and pesticides while decreased natural water and high evaporation raised its salinity to more than double that of the ocean, making it lethal to most fish, scientists said. It also developed an episodic pungent sulfur smell.
The local economy focused on agriculture, and communities around the lake fell into decline as the region became whipsawed by events including the relocation of major tomato operations to Mexico. Calipatria’s population of 7,400 is bolstered by the 3,000 inmates of Calipatria State Prison, another major employer.
Standing behind the front desk of his near empty Calipatria Inn & Suites on a recent day, manager Dipak Patel expressed doubt that lithium would turn things around. “I don’t see anything good right now,” Mr. Patel said.
Imperial County has been the focus of other economic development plans that didn’t pan out. In the early 2000s, speculators poured in to search for zinc deposits under the lake. But zinc prices crashed, and that put an end to that quest, according to Mr. Kelley, the Imperial County supervisor. Solar plants have also expanded here, but those ended up with few hoped-for permanent jobs while displacing valuable farmland, the county supervisor added.
“We’ve been left behind,” Mr. Kelley said.
California has plenty of competition from other geothermal lithium projects under way around the world as the need for the material intensifies. Bank of America forecasts an average annual increase in demand of 28% through 2025 and said there are 14 geothermal lithium projects past the exploration stage in China, Australia, Germany and North America.
Australian operator Vulcan Energy Resource said it already sold out the first five to six years of planned production from its geothermal lithium plant in Germany, citing agreements with car makers Volkswagen AG and Renault SA, and battery maker LG Energy Solution Ltd.
Vulcan’s pilot plant in the Rhine Valley isn’t expected to move to full-scale production until 2024. In California, EnergySource is targeting the same year. So is Controlled Thermal Resources Ltd., which has drilled two wells more than 8,000 feet deep and estimates it could generate around 300,000 metric tons of lithium carbonate a year, while providing enough electricity to power 1 million homes.
Last July, auto giant General Motors Co. announced a multimillion-dollar investment in CTR to get first rights to the miner’s future lithium production.
One hurdle for CTR and others at the Salton Sea is that the sea’s geothermal reservoir is particularly salty and rich in magnesium, zinc, silicon and other minerals. That makes it harder to sift out the lithium.
“There are bad apples in the barrel, you have to get rid of them,” said Rod Colwell, chief executive Controlled Thermal Resources.
CTR plans to separate and sell the other minerals, such as silicon and zinc. It also hopes to create 1,880 jobs and 2,500 indirectly, Mr. Colwell said. “We want to hire to the greatest extent possible local talent,” Mr. Benson said.
In a few years, analysts said, it will be clear whether geothermal brines can be a significant source of lithium.
“The jury is out, but they are putting the jury into the jury box right now,” said William Stringfellow, an expert at the Lawrence Berkeley National Laboratory.
How Much Lithium Will the World Need? It Depends Who You Ask
* Estimates Vary On Whether Lithium Faces Surpluses Or Deficits
* Surging Prices For Metal Crucial To EVs Stoke Supply Concerns
Lithium’s vital role in electric-vehicle batteries means automakers, miners and investors are racing to figure out how much supply the world will need in the coming years — and also how much it’s going to get.
The problem is the predictions vary wildly.
The metal’s price has surged fivefold in the past year, reflecting mounting worries about availability. For years, batteries and EVs have become cheaper to make as the technology improved and production stepped up.
But now there’s a risk that rising costs of raw materials — and lithium in particular — could hobble the transition just as momentum picks up.
The stakes are high for carmakers that are spending billions of dollars betting on a battery-powered future. Mining companies and governments are responding with ambitious plans to boost production.
But demand is growing at such a breathtaking pace that it’s not clear whether it will be enough.
In a survey of six leading lithium forecasters, estimates for how the market will look in 2025 range from a deficit equal to 13% of demand to a 17% surplus. Projections for the market’s size diverge sharply too, with demand forecasts ranging from as little as 502,000 tons to as much as 1.3 million tons.
The gulf between forecasts reflects lithium’s status as a small market on the cusp of seismic expansion, with the average of the six estimates suggesting annual growth of more than 20% for both supply and demand between 2021 and 2025.
That compares with typical growth rates of 2%-4% in larger and mature markets like copper, where surpluses and deficits usually equal a fraction of demand.
In a further sign of how quickly the surge in EV sales is reshaping the lithium landscape, Citigroup Inc. on Wednesday almost doubled its price forecast for 2022, warning that an “extreme” rally will be needed to rein in booming demand.
Forecasts matter because banks use them for everything from gauging future car sales to valuing loans in mining projects. Vague market projections leave more room for sharp price swings when supply panic kicks in.
That could be particularly unnerving for the the car sector, which has placed lithium at the center of its electrification plans.
It has spent years experimenting with different chemical compounds to minimize use of other battery metals like cobalt — which is sometimes mined in unethical conditions — while boosting usage of abundant elements like iron.
With lithium at the core of virtually every battery technology in commercial use and development, higher prices could quickly start to bite.
For example, if lithium spot prices remain at levels currently seen in China, that could add up to $1,000 to the cost of a new EV, according to Benchmark Mineral Intelligence.
Benchmark is among those forecasting supply to fall short of demand, even as it predicts output to roughly double from 2021 levels by 2025. Top lithium miners including Chile’s SQM reported annual demand growth of close to 50% last year.
“There’s a complete overoptimism about the responsiveness of supply in the lithium market,” said Andrew Miller, chief operating officer at Benchmark Mineral Intelligence.
“It’s very hard to see how it’s going to accelerate at the speed that the battery market and electric vehicles are accelerating.”
So far, the auto industry has been relatively relaxed about lithium supplies, mainly because they occur in high concentrations in mining-friendly countries including Chile, Australia and Canada.
If anything, worries that large spikes in supply could quickly swamp the market is partly why some of the biggest miners have shunned developing lithium assets.
Rio Tinto Group is the only mega-cap miner who’s so far been tempted to move into the metal — a market that’s still tiny compared with commodities like iron ore and copper.
History shows that even current heavyweight lithium miners like Ganfeng Lithium Co., Albemarle Corp., SQM and Livent Corp. should be cautious. A spike in prices a few years ago quickly unraveled as producers flooded the market. Some analysts warn it could happen again.
“We have some pretty open-ended supply opportunities opening up,” said Tom Price, an analyst at Liberum who started covering commodities in the early 1990s. “There are really no constraints on resource upgrades and additions for new supply.”
On the other hand, there are also good reasons why supply could lag.
The mining industry has a reputation for failing to deliver on targets, and McKinsey & Co. estimates that more than 80% of projects come in late and over budget.
Many assets being studied are owned by junior miners who don’t have as much experience or existing revenue streams to fall back on as the majors.
Even the biggest miners face obstacles to bringing on new supply because of environmental concerns, despite lithium being a key material for a greener world. Serbia last month put a stop to Rio Tinto’s plans for a $2.4 billion mine after a nationwide backlash over the potential environmental risks.
In Chile, home to the world’s largest lithium reserves, the mining industry is also running into stiff political headwinds.
But as compelling as the supply risks are, it’s the potential for huge demand growth that’s really behind the difference in opinions on whether lithium will be over or undersupplied.
While Bank of America Corp. is among the most optimistic on supply, it’s forecasting deep deficits once consumption is factored in.
“There’s an awful lot of tons that producers need to bring into the market,” said Michael Widmer, head of metals research at the bank in London. “We have a disconnect where on the demand side we’re pushing very hard, but on the supply side, miners are only just starting to commit.”
Beam Global To Buy Battery Supplier As EV Charging Heats Up
Takeover will help cut costs for Beam’s solar-powered chargers.
Beam Global, a maker of solar-powered charging stations for electric vehicles, said it agreed to buy energy storage company AllCell Technologies in an all-stock deal that could be valued at $30 million, bringing one of its key suppliers in house.
The takeover will give Beam greater control over its supply chain and cut costs while speeding up product development as it takes on AllCell’s clients, the San Diego-based company said. Beam uses AllCell battery packs in its charging stations.
“The cross-pollination opportunities here are absolutely fantastic for us,” Beam Chief Executive Officer Desmond Wheatley said in an interview. “They’re selling to EV companies, drone companies, micro-mobility companies. We’re in the business of charging all of those vehicles.”
The transaction, expected to close March 1, will give investors of closely held AllCell 1.06 million restricted common shares of Beam, and the potential for more stock depending on AllCell’s revenue performance in 2022 and 2023.
The deal’s total value could be $30 million, with more than half of that purchase price paid through the earn outs, according to the CEO. Beam’s stock has fallen 75% in the past 12 months and closed Tuesday at $12.32 in New York trading.
Northvolt Plans A Third Battery-Materials Factory In Sweden
Northvolt AB plans to convert a closed paper mill in Sweden into a new battery-materials factory, adding a third production facility in the Nordic country to supply demand fueled by the growing electrification of transport.
The plant is expected to start the first part of its operations in late 2024 and will employ as many as 1,000 people, according to a statement on Friday.
When operating at full capacity, the site will be able to produce more than 100 gigawatt hours of cathode material a year and will also feature cell production. It will be powered with renewable energy.
“There is a massive global demand for sustainable, high-quality lithium-ion battery cells and systems,” Chief Executive Officer Peter Carlsson said in the statement.
“With the blueprint developed at Northvolt Labs and Northvolt Ett, we will now put in another gear to scale up production even faster and larger than before.”
Northvolt says it wants to shift the balance of battery-making power to Europe from Asia, and has now secured more than $50 billion worth of contracts from electric-car manufacturers including BMW AG, Volkswagen AG, Volvo Car AB and Polestar.
It had previously said orders amount to about $30 billion. Its investors include Volkswagen, BMW, Goldman Sachs Group Inc. and Tesla Inc. shareholder Baillie Gifford. Spotify Technology SA CEO Daniel Ek also is a backer.
The site for the new unit is the Kvarnsveden paper mill in Borlange closed by Stora Enso Oyj last year. Northvolt said it plans to reuse and refurbish much of the existing facilities and infrastructure.
The companies signed a letter of intent on the transaction, with a final agreement seen concluded over the next few months, Stora Enso said in a separate statement
Northvolt announced earlier this month it would set up a cell plant in Gothenburg, Sweden, with Volvo Cars to supply Volvo and Polestar models from 2025.
U.S. Bets On Faster-Charging Battery In Race To Catch Energy Rivals
With private and public funding, the startup Ion Storage aims to offer a longer-lasting power source.
The U.S. is far behind its global rivals in the race for energy supremacy in a low-carbon world. To catch up, it is pinning its hopes on companies such as Ion Storage Systems, a next-generation battery company started in a University of Maryland chemistry lab with a $574,275 federal grant.
At a new factory outside of Washington, D.C., Ion Storage will be among the first companies in the U.S. to produce a new kind of faster-charging, longer-lasting battery. The company’s batteries also don’t catch fire; combustibility is a problem that has bedeviled the industry’s batteries for years.
The U.S. government and private investors have poured cash into battery startups hoping to catch up to the Chinese, Japanese and South Korean companies that dominate battery manufacturing. The goal is to leapfrog their rivals with better technology.
There is an urgency for U.S. battery makers to get products to market because big customers such as auto makers are lining up long-term suppliers. If there are no U.S. options, the buyers will go abroad. “This is our last chance to get it right” in the U.S., said Ricky Hanna, Ion Storage’s chief executive and the former executive director of battery operations at Apple Inc.
Ion Storage plans to begin producing batteries later this year. The company has a contract to develop batteries for the U.S. Army, and it is working on battery development with defense giant Lockheed Martin Corp. Company officials say they are in talks with five auto makers regarding batteries for electric vehicles.
The company is one of several startups focusing on solid-state lithium-ion batteries. These batteries differ from most lithium-ion batteries today because the electrolyte that conducts a charge between cathode and anode is solid, rather than a flammable liquid.
That allows faster charging, less risk of fire and longer battery life. Ion Storage scientists demonstrate their batteries’ durability by cutting them open with scissors or putting them before an open flame.
Now the company is pondering an initial public offering of stock in the next year or so, said Mr. Hanna, who helped oversee production of the batteries that power iPhones, iPads and other devices while he was at Apple.
The technology behind Ion Storage is the brainchild of Eric Wachsman, director of the Maryland Energy Innovation Institute at the University of Maryland. Mr. Wachsman first became interested in alternative energy in the 1980s, when he worked on batteries and fuel cells at Stanford University.
Mr. Wachsman is a “top-notch, world-class scientist, especially in solid state” battery technology, said Susan Babinec, a leader of battery research and development at Argonne National Laboratory in Illinois. Ms. Babinec helped oversee Mr. Wachsman’s battery projects for several years at the Energy Department’s Advanced Research Projects Agency-Energy program, known as ARPA-E.
Ion Storage faces stiff competition in the U.S. and abroad. Silicon Valley solid-state startup QuantumScape Corp., which is backed by Volkswagen AG , went public in 2020 and briefly became more valuable than Ford Motor Co. Toyota Motor Corp. , the world’s largest car maker, says it is working on solid-state batteries.
Other competitors include Colorado’s Solid Power Inc., which has had backing from Ford, Hyundai Motor Co. and BMW AG. Factorial Energy, a solid-state company based in Woburn, Mass., last month said it had raised $200 million in a funding round led by Mercedes-Benz Group AG and Jeep maker Stellantis NV.
Some experts are skeptical that solid-state batteries will be able to compete with today’s standardized lithium-ion power packs soon. A vast supply chain and manufacturing industry has been created to build those batteries, helping drive down costs some 90% in the past decade. Much of the production lines for certain solid-state batteries will need to be built from scratch or borrow methods used in other industries.
“There’s still quite a long way toward commercializing any kind of solid-state technology, especially when it comes to electric vehicles,” said Andrew Miller, chief operating officer at Benchmark Mineral Intelligence, which studies battery technologies and their supply chains. “These batteries haven’t been proven at scale.”
Ion Storage says it can compete on cost because its batteries don’t need cobalt or nickel, which have surged in price during the past year amid booming demand for lithium-ion batteries used in electric vehicles. The company also says its devices require less lithium than standard rechargeable batteries. Lithium prices have surged more than 500% in the past year.
Skyrocketing demand for the minerals that make up electric-vehicle batteries threaten to end a decadelong decline in the cost of batteries. Electric-car sales hit 6.6 million in 2021, nearly 9% of the global car market and triple the number sold just two years earlier, according to the International Energy Agency.
The Biden administration is counting on technological breakthroughs nurtured by its big universities and research institutions with government and investor support to jump-start the U.S. battery industry.
The clean-energy funding push is one of the biggest government efforts at industrial policy in decades. The hope is that government money will help drive private investment in startups such as Ion Storage.
A decade ago, Mr. Wachsman’s University of Maryland group won the $574,275 award from ARPA-E based on decades of research that went back to his time at Stanford. One advantage of the technology is that it can withstand high temperatures of about 300 degrees Fahrenheit.
Such high temperatures could start a fire in many of today’s batteries. Fire risk has been a significant issue for batteries in cars, consumer electronics and jetliners. General Motors Co. last year recalled tens of thousands Chevrolet Bolts, its marquee electric car, for fire risk, while Tesla Inc., Ford and BMW have recently issued recalls for new battery-powered models.
Six years after his first ARPA-E award, Mr. Wachsman founded Ion Storage in 2019. Soon after, it hired Mr. Hanna, who brought to the company years of experience with the global battery supply chain.
Mr. Wachsman’s University of Maryland group and Ion Storage have collectively received more than $20 million in federal grants, and the company received commitments for $25 million earlier this year in a round of private fundraising. Ion Storage will use those funds to start producing cellphone-size batteries later this year from its Maryland facility.
The company expects to have the capacity to produce 1.5 million such batteries a year by 2023, and it plans to start producing batteries for electric vehicles for the commercial market by 2026. Mr. Hanna said the company will soon branch into lithium-free stationary batteries used to power the electricity grid.
Mr. Wachsman said Ion Storage plans to locate all of its production in the U.S. “We think we’re the company that’s not going to blow it,” he said.
Australian Miners Ramp Up Search For Lithium To Meet EV Demand
* Miners’ Spending On Exploration Rose 11% In December Quarter
* Lithium Supply Seen Struggling To Meet Demand In Years Ahead
Exploration spending by Australian-listed miners hit an eight-year high in the fourth quarter of 2021, driven by the search for new lithium resources to meet surging demand from battery and electric vehicle makers.
Miners invested A$973 million ($700 million) in the three months ended Dec. 31, according to a report by consultancy BDO, up 11% on the prior quarter. The spending lift was supported by a record A$3.75 billion worth of financing flowing into the sector through equity and debt raisings.
“It’s not just a continuation of the trend we’ve seen in the last three or four quarters, it’s a substantial increase,” Sherif Andrawes, BDO’s Global Head of Natural Resources, said in a phone interview. Miners were spending more on investment and exploration, while steady access to capital meant they had been able to replenish their funds, he added.
Prices for a wide range of raw materials, from copper and nickel to iron ore, have surged on the back of government stimulus spending to boost the economic recovery from the pandemic. The mining industry is stepping up its efforts to find new resources to meet strong demand and cash in on the strong price environment, but is playing catch up after years of under-investment.
Cash flowed freely into the lithium sector, as producers scrambled to bring new resources on stream to help reduce a supply deficit forecast in the years ahead.
The key battery mineral overtook gold in attracting the most capital, receiving over A$2 billion in financing in 2021. Liontown Resources Ltd., which is developing a lithium project in Western Australia, had the single biggest fund raising in the December quarter, earning A$450 million via an equity issue.
“The time is right for lithium now,” Andrawes said. He also noted a trend toward lithium producers investing in processing infrastructure, to allow them to play a broader role in the EV battery supply chain.
“By doing so, these companies have positioned themselves to become more than just a lithium mining company, but also a provider of battery products and components that feed into the EV and renewables industries,” the report said.
BDO expects growth in exploration activity to continue, backed by strong capital inflows, although the sector may be constrained by the availability of resources, Covid-related travel restrictions and a shortage of skilled labor. Some 740 junior miners lodged quarterly cashflow reports to the Australian exchange in the December quarter, up from 704 the previous quarter.
Tesla Vets Seek To Jolt Europe’s EV Makers With Greener Batteries
Sweden’s Northvolt is leading an effort to forge a regional champion that can beat rivals from Asia.
In a dense forest just below the Arctic Circle, a half-dozen windowless concrete buildings rise above the snow-laden pines. Inside, massive machines combine lithium, nickel, manganese, and cobalt into a mix that will ultimately be turned into electrodes for shiny silver batteries.
The facility represents Europe’s biggest effort to compete in the fast-growing market for electric vehicles, and the company behind it, Northvolt AB, promises to do so with far lower greenhouse gas emissions than rival manufacturers.
“We are laying the foundations for one of the largest recycling facilities in Europe,” says Chief Executive Officer Peter Carlsson. “We need to build greener batteries, because if we don’t, we have a major climate impact.”
Since its founding six years ago by a pair of former Tesla executives, Northvolt has signed contracts valued at more than $50 billion with Europe’s leading automakers, which want to foster a battery industry in the region to match Asian giants such as China’s CATL, Japan’s Panasonic, and LG Chem from South Korea.
Northvolt’s investors include Volkswagen, BMW, Goldman Sachs Group, and Spotify co-founder Daniel Ek. Although Europe’s automakers have long been leaders in combustion engines, they risk falling behind in a world where the most important—and expensive—part of the vehicle is the battery. “There are people at Volvo and Volkswagen who are super experts on how to squeeze the most out of an engine,” says Emad Zand, head of Northvolt’s battery systems. “Exactly the same thing applies to batteries. If you don’t have that technological knowledge, you’re lost.”
The factory in the sub-Arctic town of Skelleftea, where winter temperatures can drop below -25C (-13F), made its first batteries in December. By 2026, Northvolt expects to have 3,000 full-time employees at the plant churning out 60 gigawatt-hours of battery capacity annually, enough to power about 1 million cars.
The company has chosen a location near the southern Swedish city of Gothenburg for a second facility, and it’s close to deciding on a site in Germany. By the end of the decade, Northvolt aims to be able to make enough batteries to power more than 3 million cars a year.
Although electric cars emit no carbon, creating their batteries requires massive amounts of energy and raw materials shipped from far-flung mines. Northvolt says it can supply European carmakers with greener batteries by tapping Scandinavia’s hydro and wind power: While Skelleftea will consume about 1.5% of Sweden’s total energy production, it will come from renewable sources.
Added to its ambitious recycling program, those efforts will help Northvolt reach its goal of cutting emissions of carbon dioxide per kilowatt produced by about 80% vs. producers using electricity generated by coal.
By 2030 about half of the material Northvolt uses for new cells will be extracted from recycled batteries, and the company says it aims to someday reach 100%. That’s important because global supplies of nickel, cobalt, and lithium are already stretched and the shift to electric cars is just getting under way.
Recycling “is the only way for the electric-car industry to be both environmentally and economically sustainable,” says Emma Nehrenheim, who manages Northvolt’s recycling program from a research facility an hour’s train ride west of Stockholm.
The trouble is that Northvolt’s recycling program is as unproven as it is ambitious. Extracting the materials from old batteries is expensive and cumbersome and tends either to be energy-intensive or require hazardous chemicals.
And there’s a risk of overcapacity as a slew of companies, including the big Asian players, are planning more than 40 battery factories across Europe. Management consultant Roland Berger predicts that by 2030 capacity will exceed demand by a third.
All of those companies, meanwhile, will be seeking to hire from the same pool of talent in the nascent industry, which means it may be tough for Northvolt to get the workers it needs, especially for jobs in remote locales including Skelleftea.
“Producing lithium-ion cells is no trivial matter,” says Wolfgang Bernhart, a partner with Roland Berger. Even experienced cell manufacturers replicating their Asian factories in Europe “have experienced substantial quality problems.”
Northvolt, though, has already overcome plenty of challenges, Nehrenheim says. Early on, “the numbers just wouldn’t add up” for recycling. “The cost for the customer would have been too high,” she says. But after more than a year of honing the process, her team managed to bring the cost down to an acceptable level.
And Fredrik Hedlund, the head of the Skelleftea site, says he’s had about 50,000 applicants for jobs there. He predicts demand for EVs will grow so fast that there will be room for multiple players and many different factories across Europe. “A single company or a number of companies from Asia cannot do it alone,” Hedlund says. “It’s good that there are more projects. But many of them have not passed the first hurdles as we have.”
Enphase Energy Expands Battery Storage In Belgium
Enphase Energy, Inc. (NASDAQ: ENPH), a global energy technology company and the world’s leading supplier of microinverter-based solar and battery systems, announced today that Enphase installers in Belgium have seen a growing number of deployments of the Enphase® Energy System, powered by IQ™ Microinverters and IQ™ Batteries, following the launch of the IQ Battery in Belgium last year.
Belgium is a leader in driving home battery adoption. It was among the first countries globally to offer subsidies for home battery systems as energy consumers paid high energy prices and received low value for exporting excess solar energy.
The Enphase Energy System provides an all-in-one solution with its IQ Batteries and IQ Microinverters that allows homeowners to store their energy for later use and avoid relying on expensive energy from the grid.
“Belgium recorded exceptionally high power prices in 2021 which pushed homeowners to look for innovative ways to save money on their energy bills,” said Kristof Lassaut, chief executive officer at K.L. Electro, an Enphase Platinum level installer. “We’re proud to partner with Enphase to offer our customers some of the best technology available, giving them more energy independence and an exceptional customer experience from start to finish.”
“As a solar installer, superior customer experience is a key part of our own business success and critical to advancing the widespread adoption of more sustainable, smarter home energy solutions,” said Wiet Vande Velde, chief commercial officer at EnergyKing, an Enphase Silver level installer. “Together with Enphase, we are delivering our customers cutting-edge hardware and software that enables homeowners to get the most out of their home energy systems.”
Enphase delivers a safer solar-plus-battery solution which does not expose installers or homeowners to high-voltage DC. The Enphase IQ Batteries feature Lithium Iron Phosphate (LFP) battery chemistry, which provides a long cycle life and safer operation through excellent thermal stability. Enphase IQ Batteries accommodate over-the-air software upgrades and come with a 10-year limited warranty.
“Belgium is looking at solar energy as a reliable, affordable, and clean resource to help it become more energy independent,” said Erik Mosselmans, chief executive officer at EMSolar, an Enphase Silver level installer. “We’re working with Enphase to give people the power to produce, store, and use their own clean energy whenever they want. The Enphase Energy System will give our customers the ability to better manage their electricity bills, while also helping to advance renewable energy in Belgium.”
“We’re pleased to see the uptick in Enphase Energy System deployments across Belgium, thanks to an excellent network of installers,” said Dave Ranhoff, chief commercial officer at Enphase. “Homeowners are looking for more energy independence. The Enphase Energy System, powered by IQ Batteries and IQ Microinverters, enables homeowners to power their lives with their own clean energy from the sun, day or night.”
Enphase plans to further expand the IQ Battery product availability in the European market. It is currently available to customers in Belgium, Germany, and North America.
About Enphase Energy, Inc.
Enphase Energy, a global energy technology company based in Fremont, CA, is the world’s leading supplier of microinverter-based solar and battery systems that enable people to harness the sun to make, use, save, and sell their own power—and control it all with a smart mobile app.
The company revolutionized the solar industry with its microinverter-based technology and builds all-in-one solar, battery, and software solutions. Enphase has shipped more than 42 million microinverters, and approximately 1.9 million Enphase-based systems have been deployed in more than 130 countries.
China’s New Wave of Electric Car Battery Giants Are Going Public
Planned expansions by emerging suppliers will help Beijing keep its dominant position in the EV supply chain.It’s easy to think, with the blizzard of announcements around new EV battery capacity being added in Europe and the U.S., and a blockbuster listing for South Korea’s LG Energy Solutions, that China’s dominance of the sector is finally under serious challenge.
Automakers including GM and Ford are building U.S. battery facilities with partners from outside China, while Sweden’s Northvolt is adding more plants and has secured $50 billion of contracts from customers including BMW and Volkswagen.
Yet that huge push to diversify supply chains won’t end China’s control of lithium-ion batteries. The nation will still account for about two-thirds of manufacturing capacity by the end of 2030, versus about 74% now, as a wave of currently smaller players complete ambitious expansions.
Plans by CALB for a $1.5 billion initial public offering this year and proposals to add vast volumes of new manufacturing capacity underscore the nation has no intention of losing its grip.
Just as Contemporary Amperex Technology Co. Ltd., or CATL as it is known, jumped from relative obscurity to become the global battery leader after its 2018 trading debut in Shenzhen, CALB aims to use a Hong Kong listing to rapidly accelerate its own growth.
SVolt Energy Technology, a spinoff of carmaker Great Wall Motor and another rising giant of China’s EV supply chains, is meanwhile studying a listing on Shanghai’s Nasdaq-like Star Board, Chairman Yang Hongxin said last year.
Investors have shown they’re ready to back China’s battery industry. CATL has surged more than 1,800% since its listing, and currently has a market valuation of more than $181 billion, ranking it ahead of auto sector leaders including VW, Ford and Mercedes-Benz. In its latest funding round in December, SVolt raised 6 billion yuan ($943 million).
CALB, a battery supplier to automakers including Guangzhou Automobile Group and Changan NEV, already ranks among the world’s top 10 by manufacturing capacity, according to BloombergNEF data. By early 2025, CALB’s growth plans should catapult the company to the No. 2 position behind CATL, closely followed by Svolt, which has an agreement to supply Jeep maker Stellantis.
Jiangsu-based CALB is working with Huatai Securities on a planned listing that’s likely to happen in the coming months, people familiar with the details said last week. The IPO could be Hong Kong’s biggest in 2022.
It’ll bring vast new attention to CALB’s growth plans and cement chairwoman Liu Jingyu’s role as a key player in the industry’s future. She’s already led a restructuring in the company that’s focusing sales on regular cars, rather than buses or other niche markets, and is spearheading a drive to add global research facilities, including in North America.
China is forecast to remain the pivotal EV battery supplier at the start of the next decade, even as the U.S. and Europe invest in capacity.
CALB, with eight major production bases across China, aims to add 100 gigawatt hours of additional capacity in Guangzhou and Jiangmen, has a project to add production of 100,000 tons of lithium cathode materials a year, and signed an initial agreement to add a battery plant in Europe. It also returned to profit last year, according to its sales listing document.
The firm’s rise will bring fresh scrutiny of CALB’s ownership and government ties, however. The company was established in 2015 and emerged from state-owned conglomerate Aviation Industry Corp. of China, or AVIC, a supplier of defense equipment including to China’s military.
CALB currently counts entities controlled by the Jintan district government as its largest shareholder, according to a regulatory filing, but it has disposed of its stakes in a unit that engages in military industrial business after considering its potential impacts and risks.
Still, the efforts to add more capacity by both SVolt and CALB, along with huge expansions planned by CATL, are likely fuel more worries about the global EV sector’s reliance on Beijing.
U.S. Senators including Democrat Joe Manchin and Republicans Lisa Murkowski on Friday sent a letter to the Biden administration raising fresh concerns about the country’s dependence on China. Those qualms are likely to linger as the country’s big battery industry gets even bigger.
Panasonic Scouts U.S. Sites For New Tesla Battery Factory
* Company Eyes Locations In Oklahoma, Kansas; Talks Ongoing
* Plant To Turn Out ‘4680’ Cells For Tesla, Potentially Others
Panasonic Corp. is engaged in talks over the site for a new U.S. factory that would supply Tesla Inc. and potentially other electric-vehicle manufacturers with next-generation lithium-ion batteries, people familiar with the matter said.
The longtime Tesla supplier is looking at several locations for the multibillion-dollar factory, including one in Oklahoma and another in Kansas, the people said, asking not to be identified because the discussions are confidential. The plant could begin operating as soon as 2024, they said.
Though still at an early stage, the plans represent a bold step for Panasonic. Even as it has faced high demand for batteries from Tesla, Panasonic has been slower to build scale compared with rival suppliers LG Energy Solution of South Korea and China’s Contemporary Amperex Technology Co.
In the new U.S. plant, Panasonic plans to make a newly developed, bigger and more powerful “4680” battery, one of the people said. Panasonic may install lines for other batteries at the new facility, as well, though that will depend on customer demand.
Because of the larger volume of 4680 batteries, fewer cells and related parts are needed to power an EV, leading Elon Musk to tout the technology as the key to unlocking $25,000 Teslas. Panasonic will start mass production of 4680 batteries in Japan in the fiscal year starting April 2023. Ahead of that, the company is setting up a prototype production line for the batteries, also in Japan.
Japanese national broadcaster NHK reported earlier this month that Panasonic was looking at sites in Oklahoma and Kansas to build its new plant. The locations would benefit from being close to the new factory that Tesla is bringing online in Texas, where it recently established its headquarters.
A committee in Oklahoma’s Mayes County has been studying a proposal to “entice a business” to set up operations, according to a public document posted earlier this month, though it didn’t identify the party.
The timing and budget for Panasonic’s U.S. factory may shift going forward based in part on the company’s experience building 4680 manufacturing lines in Japan over the months ahead, one of the people said. Panasonic is also weighing potential plant locations based on land and labor prices and the availability of state subsidies, the person added.
Panasonic has not announced plans to build a new battery factory in the U.S., a spokesperson for the Osaka-based company said Monday.
Kazuo Tadanobu, chief executive officer of Panasonic’s energy business, said in an interview with Bloomberg News last week that the location of any potential new factories would be evaluated based on partnerships and the economics of certain areas.
Nothing has been decided, he said, adding that for the time being Panasonic is focused on building a “solid foundation” for future 4680 production at its Wakayama facility in Japan.
Panasonic and Tesla have a longstanding relationship, with the two companies jointly operating the massive battery plant known as the Gigafactory outside of Reno, Nevada.
While Tesla plans to make the 4680 cells in-house, it has asked Panasonic to begin producing them as well. The Japanese company wants to sell the batteries to other automakers, and it’s unlikely Tesla will invest in any Panasonic plant in the U.S., the person said.
Panasonic is betting that close to a century of experience making car batteries and its reputation for upholding safety will give it an edge over rivals in producing 4680 cells, which are seen as particularly difficult to mass produce.
The Japanese company’s move comes as a slew of automakers and battery producers announce plans to ramp up capacity to manufacture batteries in the U.S. in preparation for a coming wave of EVs.
In September, Ford Motor Co. and Korea’s SK Innovation Co. announced plans to spend $11.4 billion constructing an assembly plant and three battery factories in Tennessee and Kentucky, set to begin coming online in 2025.
A few months later, Toyota Motor Corp. said it will open its first battery factory in the U.S. in North Carolina, investing $1.29 billion with plans to start production also in 2025.
Mercedes Opens Battery Plant For Alabama-Made Electric SUVs
* Carmaker Will Start U.S. EV Production In The Coming Months
* China-Owned Battery Supplier Envision To Set Up Cell Plant
Mercedes-Benz Group AG opened a battery factory in Alabama months before the luxury-car maker starts assembling electric SUVs nearby in an effort to challenge Tesla Inc. in the U.S. EV market.
The German manufacturer will produce lithium-ion batteries at the new Bibb County plant, and start making all-electric EQS and EQE sport utility models at its existing factory in Tuscaloosa in the coming months.
Mercedes also announced a partnership with Chinese-owned battery company Envision AESC, which it said will set up a U.S. cell facility that will supply modules by the middle of the decade.
“We’re on a very fast track to turn over a whole industrial footprint toward EVs,” Mercedes Chief Executive Officer Ola Kallenius told Bloomberg Television. He said the carmaker “can’t make enough” of its newest electric models, which include the flagship EQS sedan introduced last year.
Mercedes has budgeted 40 billion euros ($43.8 billion) this decade for electrifying its lineup to defend its position in the premium-car market. The company said it’s invested $1 billion in Alabama between the battery plant, logistic centers and the production lines it’s upgraded to make EVs.
The Tuscaloosa factory will be able to flex production between combustion engine, plug-in hybrid and fully electric drivetrains.
“We’re going to see, over the next two to three years, the electric share of that production just go up and up,” Kallenius said.
Envision AESC already supplies batteries to Nissan Motor Co.’s Leaf hatchbacks in Smyrna, Tennessee. The Japanese carmaker sold a controlling stake in its AESC battery operations to China’s Envision Group in 2018 while retaining a 20% holding.
The battery system for the EQS SUV has a modular design already seen in the EQS sedan, the electric sibling to the S-Class. The cell chemistry used is predominantly nickel, along with cobalt and manganese.
Mercedes began to see commodity prices go up in the fall of last year, and the war in Ukraine is adding to those pressures. The company warned last month that profitability at its main cars division could slip from a record high last year.
“We’ll have some headwinds on that,” Kallenius said. “We try to counter-balance that with efficiency efforts on our end, but it’s something that we have to watch.”
Soaring raw-material costs and persistent supply-chain problems have been an industrywide challenge. BMW AG, which so far has been better able to navigate the persistent shortage of semiconductors, overtook Mercedes in sales last year for the first time since 2015.
Mercedes has several suppliers in Ukraine that it’s working with to minimize any affect on its vehicle production. The automaker has had to reduce output at a German factory due to disruptions in the supply of wire harnesses that power car electrical systems.
While chips will remain a constraint this year, Kallenius said he’s hopeful supply will improve in the second half of the year.
“We’re working with our partners around the world to improve this, and then take another step into more of something that looks like normalcy hopefully in 2023,” he said.
Tesla Supplier CATL Weighs Sites For $5 Billion Battery Plant
* Chinese Battery Maker Considering Mexico, U.S., Canada Sites
* Plant To Have 80 gwh Annual Capacity, Supply Multiple Firms
China’s Contemporary Amperex Technology Co. Ltd., the world’s biggest maker of batteries for electric vehicles, is considering sites across North America for a massive $5 billion plant to supply customers including Tesla Inc.
The company aims to build a factory capable of producing as much as 80 gigawatt-hours of batteries a year, according to people familiar with the matter.
The facility would eventually employ as many as 10,000 workers, said the people, who asked not to be named discussing private information.
Executives from CATL flew to Mexico earlier this month for meetings, the people said. The company is also considering sites in the U.S. and Canada, but has concerns over the availability of labor and other trade issues.
A spokesman for CATL in China declined to comment on the expansion into North America, the planned investment and evaluation of sites.
Backed by China’s strategic push into electric cars, CATL is riding a boom in demand for EVs as countries work to reduce carbon emissions and consumers embrace cleaner cars.
The company, which completed an initial public offering in 2018, has about a 30% share of the global EV battery market.
A manufacturing footprint in North America will be crucial for Ningde, Fujian-based CATL to avoid costly trade tariffs while supplying Tesla and other automakers.
The company has used its massive scale in China, which has the most cell manufacturing and metal refining capacity in the world, to lower costs for customers globally while spending heavily on research and development.
An expanded presence in North America could unsettle U.S. officials who are keen on supporting domestic suppliers.
President Joe Biden is allocating billions to cultivate the U.S. battery supply chain and wean the auto industry off its reliance on China, but those efforts will take years to come to fruition.
Global automakers from Ford Motor Co. to Volkswagen AG are electrifying their vehicle lineups, creating unprecedented demand for batteries.
Carmakers’ production plans have helped send prices of metals like nickel, cobalt and lithium soaring, prompting Tesla to announce last October it was switching to lithium iron phosphate batteries for short-range vehicles to offset pricing pressures.
Lithium iron phosphate, or LFP, batteries are cheaper and more stable than alternatives, but often provide shorter range because they lack energy density — though that is quickly changing.
CATL dominates the market for LFP batteries, and Tesla already uses LFP cells supplied by CATL at its Shanghai factory.
CATL’s new North American plant would produce a mix of nickel-manganese-cobalt and LFP cells, and supply both Tesla and other automakers, two people familiar with the matter said.
Tesla’s Elon Musk said in January that battery supplies would become a limiting factor once the chip crisis subsides.
To prepare for the crunch, Tesla is making its own 4680 battery cells in Fremont, California, and widening its supply circle beyond longtime partner Panasonic as it seeks to ramp up sales and prepares to open plants in Austin, Texas, and Berlin.
Panasonic also is scouting for a U.S. manufacturing site, Bloomberg reported earlier this month. The company makes 4680 cells for Tesla and supplies the automaker’s gigafactory in Reno, Nevada.
CATL has 145 gigawatt-hours of battery manufacturing capacity online and has announced or is in the process of building another 579 by 2026, according to data compiled by BloombergNEF.
The manufacturer also counts auto giants Daimler Truck Holding AG, BMW, Stellantis NV and BAIC Motor Corp among its customers around the world.
AGL Gets Greenlight For Liddell Battery In Push Away From Coal
* NSW Government Approves 500 Megawatt Battery At Liddell
* AGL Rejected A Takeover Offer From Brookfield-Led Consortium
AGL Energy Ltd., Australia’s top source of scope one greenhouse gas emissions, has received planning approval to build a 500 megawatt battery on the site of a coal-fired plant that is soon to be closed in New South Wales state.
The state government has given the go-ahead to the project at Liddell Power Station in the Hunter Valley, Treasurer and Energy Minister Matt Kean said in a statement Saturday.
The new battery is three times the size of Tesla Inc.’s battery in South Australia and will ensure NSW’s electricity grid will have enough supply as the Liddell power station is phased out over the next two years, NSW Minister for Planning and Minister for Homes Anthony Roberts said in the statement.
AGL earlier this month rejected an offer from Brookfield Asset Management Inc. and billionaire Mike Cannon-Brookes that aimed to accelerate the utility’s path to net-zero emissions.
The company has said the battery will be built in stages, with the first stage expected to be operational by 2023.
Stellantis, LG Energy Pick Ontario For Battery Plant
* Stellantis Likely To Confirm Location Of Facility Next Week
* Companies Announced Plans For North America Factory In October
LG Energy Solution and Stellantis NV will build their new planned battery plant in Ontario, Canada, according to a person familiar with the matter, with an official announcement likely on March 23.
The Canadian government’s incentives for clean-energy businesses helped lure the companies, the person said, asking not to be identified because the decision isn’t public.
LG Energy and Stellantis said in October they were planning a battery-cell making factory in North America, as Stellantis — whose brands include Jeep and Ram — expands its electric vehicle lineup with a goal of raising U.S. EV sales to 40% of deliveries by the end of the decade.
The pair said construction of the plant is due to begin next quarter, with production slated to kick off in early 2024.
A spokesperson for LG Energy said there wasn’t any information to share as yet, while a representative for Stellantis had no comment.
When asked for comment, Vic Fedeli, Ontario’s Minister of Economic Development, Job Creation and Trade, said he “is confident the province will land at least one EV battery manufacturing plant before the election in June.”
Ontario’s next provincial election is expected to be held in June.
There have been a rash of tie-ups and arrangements between automakers and battery manufacturers in recent months, particularly in North America as governments there — including U.S. President Joe Boden’s administration — prioritize the pivot toward clean energy vehicles and infrastructure.
The auto industry is in the midst of an historical shift away from the combustion engine, a pivot that has been dominated in recent years by China and parts of Europe.
LG’s South Korean rival Samsung SDI Co. signed a memorandum of understanding with Stellantis in October to construct a plant in the U.S. that should have an annual output of around 23 gigawatt hours by the first half of 2025.
Meanwhile, Panasonic Corp. is engaged in talks over the site for a new U.S. factory that would supply Tesla Inc. and potentially other EV manufacturers, Bloomberg News has reported.
In September, Ford Motor Co. and Korea’s SK Innovation Co. announced plans to spend $11.4 billion constructing an assembly plant and three battery factories in Tennessee and Kentucky.
Toyota Emphasizes Battery Durability In High-Stakes Electric SUV
The target for the bZ4X’s battery: retain 90% of capacity after a decade of use.
A few weeks ago, I roused myself at 5 a.m. to catch a bus, two trains and then a taxi to a racetrack in the middle of a forest outside Tokyo.
The early start, long trip and jostling from my taxi driver’s suggested mountain-road shortcut was, however, worth it in the end.
Along with a handful of other reporters assembled at Sodegaura Forest Raceway, I got to test out for the first time a prototype of what is arguably the most important upcoming model from the world’s biggest automaker: Toyota’s bZ4X.
The bZ4X crossover is Toyota’s first major global, mass-produced electric vehicle. There’s a lot riding on it.
Toyota has been criticized by some for dragging its feet in the pivot away from gasoline engines, and being a late entry to the arena of mass market EVs. The bZ4X is the first of 30 EVs Toyota plans to launch globally by the end of the decade.
When it debuts in major markets later this year, it will provide an early indication of how future Toyota electric models will size up against competitors.
At the racetrack, I spoke with Daisuke Ido, the Toyota official in charge of the development of the new EV. He talked about the bZ4X being the end product of more than two decades of experience Toyota has accumulated building battery-powered cars, mostly in the form of hybrids.
Ido said that personally, he never thought Toyota’s stance on EVs was backward. Work been going on behind the scenes for years that the company is only just now able to show off. Ido points specifically to the bZ4X’s battery as exemplifying that preparation.
Toyota has said the model will offer around 250 miles of range per charge in the U.S. That’s short of Tesla’s Model Y crossover, which offers an estimated 318 miles of range, though the bZ4X is also going to sell for a much lower price.
What will really stand out will be the battery’s durability, according to Ido. Twenty years of tinkering with temperature-management systems and materials has enabled Toyota to target a 90% capacity-retention rate for the bZ4X’s battery after 10 years of use.
Battery deterioration is a big sticking point for consumers with range anxiety or those hoping to eventually be able to resell their EVs for a decent price.
As someone who grew up commandeering their parents’ RAV4 crossover, it was an interesting experience taking its sleek electric lookalike for a spin around the track. The bZ4X is roomy on the inside, but you don’t feel its weight at all. It’s quick to accelerate (as you’d expect from an EV) and shockingly quiet thanks to soundproofing glass and its lack of an engine.
Inside, the bZ4X feels simple but high-tech, with a big central display and another panel mounted behind the steering wheel. It’s equipped with Toyota’s latest driver-assistance technology and is capable of over-the-air updates. Some models even come with rooftop solar panels that help charge the car when it’s parked outside.
Toyota has built its brand over decade by offering affordable, reliable, quality vehicles backed by large-scale manufacturing. We’ll now get to see how well that recipe fares in the age of the electric car.
Stellantis, LG Energy Form $4.1 Billion Battery Joint Venture in Canada
* Stellantis, LG Pick Windsor For Ev Battery Plant Joint Venture
* South Korean Company To Also Build Arizona Battery Plant
LG Energy Solution and Stellantis NV said they will invest more than $4.1 billion in a joint venture to build a new electric-vehicle battery plant in Windsor, Canada.
The 45 gigawatt-hour plant, which is expected to begin operations in 2025, will create 2,500 jobs and supply Stellantis’s assembly plant in Windsor and others across North America, the companies said in a statement Wednesday.
The South Korean battery maker will invest about $1.5 billion and own 51% of the venture, it disclosed in a filing in Korea earlier Wednesday. Stellantis will control 49%, the automaker said.
“Our joint venture with LG Energy Solution is yet another stepping stone to achieving our aggressive electrification road map in the region aimed at hitting 50% of battery electric vehicle sales in the U.S. and Canada by the end of the decade,” Stellantis Chief Executive Officer Carlos Tavares said in the statement.
Competition among battery makers to ramp up capacity is intensifying in North America as auto manufacturers including General Motors Co. and Ford Motor Co. electrify their fleets and President Joe Biden looks to encourage the technological shift.
China’s Contemporary Amperex Technology Co. is said to be considering sites across North America for a massive $5 billion plant, and Japan’s Panasonic Corp. is engaged in talks over the site for a new U.S. factory that would supply Tesla Inc.
As part of its electrification plan, Stellantis is developing five large factories across North America and Europe to produce 400 gigawatt-hours of capacity by 2030.
Stellantis announced last October it would create a joint venture with Korean battery maker Samsung SDI Co. to build a plant in the U.S. that will be operational by 2025, and eventually have 40 gigawatt hours of capacity.
Stellantis will announce the location of a second battery plant to be built in the U.S. in the coming weeks, Mark Stewart, the company’s chief operating officer for North America, said at a news conference Wednesday.
The Canadian government’s incentives for clean-energy businesses helped lure LG and Stellantis, Bloomberg reported March 20. Stellantis declined to comment on any economic incentives it received to build the Windsor plant.
Details of the project “are subject to commercial confidentiality” and will only be disclosed after “due diligence is completed,” Canada’s Ministry of Innovation, Science and Industry said in a statement.
In a separate statement Thursday, LG said it will spend 1.7 trillion won ($1.4 billion) to build its own plant with 11 gigawatt hours of capacity in Queen Creek, Arizona, that will supply cylinder-type batteries for EV startups. Construction will start in the second quarter with an aim for mass production in the second half of 2024.
“With the establishment of our new Arizona plant, LG Energy aims to deliver unparalleled consumer value in the rapidly growing cylindrical battery market,” Chief Executive Officer Youngsoo Kwon said in the statement.
With the addition of the plants in Ontario and Arizona, the Korean battery maker will have at least 200 gigawatt hours total capacity in North America in 2025, enough to power 2.5 million electric cars traveling 500 kilometers on a single charge, LG said. That includes three plants jointly built with GM for pouch-type cells.
The Canadian project is the second one Stellantis released fresh details on in a matter of hours. The automaker announced earlier Wednesday that its joint venture with Mercedes-Benz AG and energy giant TotalEnergies SE had reached an agreement with Italy for state support of a third manufacturing site in Europe.
Koch Industries, Built On Oil, Bets Big On U.S. Batteries
CEO Charles Koch has fought climate regulation; his company is now spreading investments across the U.S. battery supply chain.
Koch Industries the energy-based conglomerate whose CEO long opposed environmental regulation and funded groups that questioned climate change, has emerged as one of the biggest financial backers of the battery industry.
A Koch Industries unit has made at least 10 investments worth at least $750 million in the U.S. battery supply chain and electric vehicles in the past 18 months, regulatory filings, news releases and FactSet data show. Koch’s battery investments are among the biggest from outside the auto industry, analysts say.
Founded more than 80 years ago as an oil refiner, Koch Industries is now the most diversified U.S. battery investor, said Vivas Kumar, a former Tesla Inc. senior manager and industry analyst who last year launched a battery-parts startup.
“It’s stunning just how many different battery supply chain players they’ve taken a stake in,” he said.
Koch Industries is now a top shareholder in startups such as Freyr Battery SA, Aspen Aerogels Inc. and Standard Lithium Ltd. The money comes at a crucial time for many of these companies, which need to spend heavily to commercialize their products. Koch appears to be focused on building up the battery industry in the U.S.
“The speed of the energy transition is directly correlated with companies like Koch participating in it,” said Tom Jensen, CEO of Freyr, a Norway-based company working to make low-cost, sustainable batteries.
Koch Industries has a 10% stake in Freyr, which was worth about $120 million as of the end of last year, according to FactSet. The companies have a joint venture to make batteries in the U.S.
Koch Industries, based in Wichita, Kan., declined to comment about its battery investments. It has said little publicly about its battery strategy.
The company has made the investments through Koch Strategic Platforms, a subsidiary of its investment group that it launched in late 2020 to invest in the energy transition, computing, automation and healthcare.
Koch Industries operates thousands of miles of pipelines that move oil and gas around the country and several large refineries. The company posts annual sales of about $120 billion through brands such as Brawny paper towels and Dixie cups, fertilizers and fabrics.
Chief Executive Officer Charles Koch and his late brother David donated billions of dollars to conservative and libertarian political causes, including some that opposed environmental regulation and questioned whether climate change is a problem.
One of the groups they have backed, Americans for Prosperity, has fought efforts by the Environmental Protection Agency to regulate carbon emissions.
They have donated to the Competitive Enterprise Institute and the CO2 Coalition, both of which also supported former President Donald Trump’s 2017 withdrawal from the Paris climate accord, argue against the benefits of electric vehicles and question whether global warming caused by the burning of fossil fuels is a major issue.
In late 2020, Charles Koch, then 85 years old, wrote in a book that his partisanship was a mistake and said he hoped to address societal problems. His company’s political-action committee has continued donating heavily to Republican candidates.
Koch Industries has targeted companies that aim to provide raw materials for batteries, including lithium producer Standard Lithium and battery recycling company Li-Cycle Holdings Corp. Most battery materials are produced overseas, often in China, and shortages have driven up prices.
The company has also backed startups out to make better batteries, such as Solid Power Inc., a maker of solid-state batteries that is backed by Ford Motor Co. and Bayerische Motoren Werke AG. Aspen Aerogels makes products that boost battery performance.
Koch has made the wagers through a combination of equity stakes and convertible debt that would become equity if share prices rise.
Shares of many of the companies have been volatile, with many clean-tech startups down recently on Russia’s invasion of Ukraine, interest-rate increases and supply-chain disruptions swinging markets.
Short sellers who wager on share-price declines have bet against Standard Lithium, arguing that the company’s technology doesn’t work.
Koch has said it conducted extensive due diligence before investing and is excited about Standard’s potential. Standard has called the accusations false and misleading.
Some analysts expect Koch Industries’ investments will spur others to follow them.
“When you see these large players jumping in the pool, you have to wonder, ‘What do they see that I don’t?’ ” said Chris Berry, founder of House Mountain Partners LLC, an adviser to battery-metals companies and investors.
Mercedes, Stellantis Battery Venture To Add Site In Italy
* ACC Now Has Three Planned Sites Across France, Germany, Italy
* Total Capacity Targeted At 120 GW/h As EV Shift Accelerates
The European car battery venture led by automakers Stellantis NV and Mercedes-Benz AG is adding a third manufacturing site in Italy, boosting the region’s ambition to become less dependent on Asian players.
The Automotive Cells Company’s planned factory in Termoli will be the venture’s third site in Europe for a total capacity of at least 120 gigawatt-hours by 2030, according to a statement Wednesday.
Italian authorities have agreed to support the investment, it said, without providing details of the level of any subsidies.
ACC’s two other locations in France and Germany will each be able to produce at least 40 gigawatt-hours a year by the end of the decade, the company said.
The venture, which also includes energy giant TotalEnergies SE, has been gradually laying out manufacturing plans and boosting the scale of the investment since it was forged in 2020 by Total’s Saft unit and Stellantis, the carmaker formed from the merger of PSA Group and Fiat Chrysler last year.
The Italian site will be developed at an existing factory that was part of the Fiat manufacturing footprint.
“We believe in a local for local sourcing approach and will develop and produce battery cells and modules with ACC in Europe,” Mercedes’s development head Markus Schaefer said in a separate statement. The German company entered the venture last year with a one third stake.
The government backing by France, Germany and now Italy is part of the European Union’s push to chip away at Asia’s dominance of EV batteries and create new jobs.
The venture is going up against the likes of Sweden’s Northvolt AB, the battery manufacturer co-founded in 2016 by former Tesla executives that’s won contracts with Volkswagen AG and BMW AG.
“After only 18 months of existence, ACC is on track with both its R&D center in Bordeaux and its pilot site in Nersac already operational,” ACC Chief Executive Officer Yann Vincent said in the statement.
China’s Electric Car Battery Champion Is Mostly Welcome in U.S.
CATL is said to be scouting sites for a North American factory.
Contemporary Amperex Technology Co. Ltd., the world’s biggest manufacturer of electric-vehicle batteries, is scouting sites for a new $5 billion battery plant in North America, my colleagues and I reported last week.
It’s considering locations in Mexico, Canada, and the U.S. for an 80 gigawatt-hour plant that would supply Tesla as well as other EV makers, according to people familiar with the project.
The conventional wisdom is that China, with its state-led economic planning, has outflanked the U.S. in a global chess game that has put the latter’s economic, energy and national security at risk.
CATL, which has risen rapidly to become the global battery leader with the help of state backing, is the poster child for that strategy. So how are people in the U.S. battery world reacting to its potential arrival?
Jim Greenberger, the executive director of NAATBatt International, a trade group that advocates for battery development and manufacturing in the U.S., said he has no objection to a CATL plant in North America, so long as the company brings battery manufacturing technology and know-how to the U.S., not just low-wage assembly jobs. The U.S. should mimic China’s joint ventures with western businesses.
“The principle would be largely the same: we’ll give you market access, and in exchange, you have to transfer tech to us and our people,” he said. “That plants the seeds for future economic development that could be quite valuable.” Battery cell design, manufacturing equipment, and factory operations all are areas where, as Greenberger sees it, the U.S. could use some tutoring.
Jeff Chamberlain is the chief executive officer of Volta Energy Technologies, a venture capital firm spun out of Argonne National Laboratory to invest in energy storage. He describes Volta’s mission as “the free-market capitalist democratic approach to what the Chinese are doing.”
Chamberlain is in favor of CATL putting stakes in the ground in the U.S., for several reasons. First, the U.S. is going to face a supply-chain crunch on batteries, so it needs all the cells it can get. Second, building those cells here will create tens of thousands of jobs.
Third, the more batteries the U.S. produces domestically, the faster it will speed EV adoption and grow a domestic supply chain — in other words, the pie will get bigger.
“The whole thing about this energy transition, this decarbonization that’s happening,” Chamberlain told me, “is how quickly can we scale and how quickly can we integrate the supply chain? We want CATL here because it enables both.”
As a VC, Chamberlain offers one small caveat for startups who might want to work with CATL: their IP could filter back to China, so they’ll need to be vigilant about protection.
Next, I sought a small battery startup — would it be concerned about being undercut by CATL, whose massive scale and cost competitiveness makes even its fellow cell-making giants sweat?
Chaitanya Sharma is a former Tesla engineer who’s now the CEO of iM3NY, a startup building a battery plant on a former IBM campus in Endicott, New York.
The company aims to commercialize a chemistry patented by Stanley Whittingham, who won the Nobel prize in 2019 for the development of lithium-ion batteries.
Sharma said he was happy when he read the news about CATL. His company makes prismatic, or rectangular-shaped, batteries that are less common in the U.S. than the cylindrical cells Tesla uses, or the pouch cells in GM’s Ultium batteries.
As a result, he’s struggled to find a supplier to make rectangular-shaped cans and lids to house his cells.
CATL also makes prismatic cells. Sharma said piggybacking on a giant buyer could make it easier and cheaper for his company to get what it needs. And battery demand is so strong right now, from many different industries, that he’s not worried about being squashed by bigger players.
“There’s enough volume here for every different kind of manufacturer,” Sharma told me. “I’m excited about CATL coming and driving the raw material supply chain costs down, so we will be welcoming them.”
One person who isn’t so enthusiastic is Abigail Seadler Wulf, the director of critical minerals strategy at Securing America’s Future Energy, or SAFE, the Washington think tank advocating for U.S. energy independence and supply chain security.
She said the U.S. hasn’t made a serious commitment to develop the capacity to process battery materials or make battery components, so CATL’s entry could exacerbate the country’s dependence on China.
“CATL’s expansion into the United States should worry anyone who hopes to wean ourselves off of dangerous over-dependence on China for the materials we need for the energy transition,’’ she said in an email.
“We see what’s happening with the EU’s over-reliance on Russia for their energy today; we don’t want to be in that situation with batteries and China tomorrow.”
India’s EV Battery Race Is Led By A Newbie Scooter Maker
A Bengaluru-based startup will get more government subsidies than the much larger Reliance Industries.
The dark horse of India’s battery race is pulling away from the pack, but can it beat the bookies’ favorite?
Ola Electric Mobility Pvt., a Bengaluru-based startup, will get state support to manufacture EV batteries that can store a total of 20 gigawatt-hours of power, the government said on March 24.
Reliance Industries Ltd., the country’s largest conglomerate, will get subsidies for five gigawatt-hours. The upstart is getting 40% of the total capacity covered by New Delhi’s $2.4 billion in battery incentives over five years. The plan is to shave off $33 billion from the country’s fuel-import bill.
Paying firms to play has a checkered history in India: Favored companies invariably ask for protectionist cover. But with Brent crude oil at $120 a barrel, this particular gamble has some merit.
Consumers are already shelling out too much at the pump because of high domestic taxes on gasoline and diesel. However, cutting the levies will only make the government’s pandemic-strained budget creak and groan. Hence, the desperate policy push to EVs.
There’s another goal behind giving money to battery makers, something that can’t be articulated in a government press release. The idea is to keep the nascent EV adoption as far away from Chinese technology and raw materials as possible so that India’s hydrocarbon dependence doesn’t metastasize into a different kind of geopolitical liability in the future.
“Today 90% of global capacity is in China,” Ola Electric founder Bhavish Aggarwal said on Twitter after winning state support. “We will reverse that and make India a global hub for EVs and cell tech.”
That’s a lot of chutzpah for a startup valued at $5 billion, based on its last $200 million funding round in January. Ola Electric, backed by SoftBank Group Corp. and Tiger Global Management, is tiny compared with Reliance, which is 45-times bigger in public markets. The conglomerate is controlled by Mukesh Ambani, Asia’s richest man, who also owns the world’s largest oil-refining complex.
Last year, he pirouetted to clean energy by announcing plans for everything from solar panels and batteries to green hydrogen and fuel cells. He committed $10 billion, but has already raised the investment target to $76 billion. There’s unlikely to be a bigger national champion of India’s bold pledge at the COP26 climate summit.
Yet, New Delhi is backing the lesser-known newbie. Aggarwal won incentives for the maximum 20 GWh that any one company was eligible to receive. Reliance also applied for the full quota, but was put on the waitlist for 15 GWh.
Unlike Reliance, which recently bought a U.K. company with patents in sodium-ion cells — cheaper than lithium-ion, and therefore, potentially more attractive to buyers in emerging markets — Ola is yet to drop a hint about its technology.
It wants to research and develop its own batteries, and fill the gaps with investments like the one it made recently in Israel’s StoreDot, whose silicon-dominant anodes claim to provide rapid charging.
To show his commitment to R&D, Aggarwal has roped in Prabhakar Patil, a former chief executive of LG Chem Power Inc., the U.S.-based research arm of the world’s No. 2 EV battery maker, to the Ola Electric board.
Like Ambani, Aggarwal too has made a pivot. In 2011, three years after graduating with a computer science degree from the prestigious Indian Institute of Technology, he cofounded Ola Cabs, a ride-hailing app that competes in India with Uber Technologies Inc.
But as the pandemic sucked the wind out of transportation services, Aggarwal jumped on to the EV manufacturing bandwagon.
Last year he built — in record time — a “Futurefactory” that would be the world’s largest producer of electric scooters at full capacity, run entirely by 10,000 women and 3,000-plus robots.
It’s had a bumpy start. The first product — the two-wheeler S1 Pro — initially got delayed, and then ran into bad press.
“In its hurry to launch a product, Ola Electric hasn’t given the battery enough time in the development process to evolve and mature, resulting in breakdowns that are potential safety hazards and could be Ola Electric’s undoing,” the Morning Context, a news portal, wrote last month based on user feedback.
Still, consumers appear to be keeping their faith. In February, Ola delivered 7,000 scooters, garnering a market share of nearly 9% among high-speed two-wheeler EVs, according to the research arm of Haitong International Securities Group. This month’s target is 15,000. Ola even bagged a slice of a separate $3.4 billion pool of incentives that New Delhi has set aside for auto and parts makers.
India is at the cusp of an EV revolution. It won’t start in cars but in the scooters and motorbikes that are usually the first vehicles owned by a middle-class family. Electric two-wheelers, which cost roughly $1,400 apiece, will see faster adoption in India than smartphones, according to Goldman Sachs Groups. Inc., whose base-case scenario is for EV penetration in the segment to swell to 38% by 2030 from 2% this year.
Still, Indian automakers don’t seem terribly interested in cell manufacturing. Indeed, the only established vehicle brand to have qualified for India’s battery subsidies is South Korea’s Hyundai Motor Co.
Which makes tiny Ola Electric the big exception — and in more ways than one. China’s ride-hailing giant Didi Global Inc. has become an unwitting poster child for Beijing’s crackdown against the tech industry. Grab Holdings Ltd., Southeast Asia’s Uber slayer, has diversified into financial services.
Its rival Gojek reduced its reliance on mobility by merging with Indonesian e-commerce platform PT Tokopedia to become GoTo Group. But they all stuck to the consumer-data business — none of them hit the shop-floor to get into EV and battery manufacturing.
The path ahead for Aggarwal is guaranteed to be a potholed Indian road, but as long as he can keep private-market investors, consumers and — above all — policymakers hooked to his vision, he can clock the miles.
Biden Considers Invoking Defense Production Act To Boost Minerals For EV Batteries
Administration has made efforts to get Americans to switch to electric cars.
President Biden is considering invoking the Defense Production Act as soon as this week to boost domestic production of minerals used in batteries needed for electric vehicles and other clean-energy technology, said people familiar with his plans.
The administration would include minerals like lithium, nickel and graphite, cobalt and manganese under the Korean War-era national security mobilization law, the people said.
The designation could help mining companies access government funding for feasibility studies on mining development, productivity and safety improvements, or on how to wring more of these metals out of ore already produced at facilities operating in the U.S. It could also prompt Congress to dedicate more money to such efforts, the people said.
The companies would still be subject to the regular environmental review process and permitting wouldn’t be expedited, the people said.
The Biden administration has made efforts to get Americans to switch to electric cars, a key part of the president’s plan to address climate change.
But the U.S. is highly reliant on other countries for several minerals critical to electric-vehicle batteries, and the prices of those minerals have been rising sharply as EVs have become more popular around the world.
Industry officials said invoking the Defense Production Act would be a small but potentially important step for businesses that are increasingly looking for financing.
The government funding could encourage mines to consider adding processing operations—now almost completely absent in the U.S.—and persuade lenders and investors that the government won’t impede U.S. mining development, lobbyists said. But the industry would need more money from Congress or Wall Street to make a major difference, they said.
“This is a historic move by the administration to begin to address a critical supply chain shortage,” said Rich Nolan, leader of the National Mining Association. “It signals to the market this country is finally getting serious about domestic minerals production.”
Mr. Biden’s plans to possibly invoke the Defense Production Act were earlier reported by the Intercept.
Mr. Biden has been under pressure from industry leaders and key members of Congress to address issues surrounding mineral prices and availability as he tries to push through his agenda on climate change.
Sen. Joe Manchin (D., W.Va.), a pivotal vote in Democrats’ efforts to pass any legislation, said this month at an industry conference in Houston that he had pushed to reduce the amount of money lawmakers were considering to help spur a transition to EVs out of fear it would make the U.S. car industry and drivers reliant on China.
“I’m old enough to remember standing in line, 1974, trying to buy gas—it was my day to buy it—so I can go to work,” Mr. Manchin said. “I don’t want it to happen to be standing in line waiting for my battery to come for my vehicle or vice versa and because now we’re dependent on foreign supply chain, mostly China. I think it’s ridiculous to get ourselves in that position.”
That same day, Mr. Manchin and several Republican senators sent Mr. Biden a letter urging him to invoke the Defense Production Act to help domestic production and processing of several minerals, including lithium and graphite.
Lithium supply has been one of the biggest concerns for the electric-vehicle market. Currently, less than 1% of global lithium output is both mined and processed in the U.S.
China—with a huge chemical industry and low costs—unearths about 13% and processes about two-thirds of what is dug up, according to Benchmark Mineral Intelligence, which tracks the global battery supply chain.
The lithium market is expected to see its biggest shortage on record in tons in 2022 amid soaring demand, labor problems and Covid-19 disruptions, according to Benchmark. EV auto makers in China have already started boosting prices, Benchmark said.
Tesla Inc. has also raised prices across its fleet in recent weeks. Chief executive Elon Musk last year said one of his biggest raw-material concerns was nickel.
The Russian invasion of Ukraine added to concerns about nickel. Russia supplies a fifth of the world’s class-one supply, according to Benchmark. And prices have soared for the metal, at one point roughly doubling in just one session before trading was shut down.
Such price swings have helped end what had been a decadelong decline that brought the cost of EVs close to the price of gasoline-powered vehicles.
Battery-grade cobalt prices were up 150% from Jan. 1, 2020, through March 2022, while nickel sulfate gained 71% and lithium carbonate rose 980%, according to Benchmark.
Rising prices are a potential setback for Mr. Biden’s plans to reduce pollution from the auto sector, which rests in part on convincing more U.S. consumers to buy electric vehicles.
He signed an executive order last year that called for sales of electric, fuel-cell and plug-in hybrids to account for 50% of car and light truck sales by 2030, though the order has no binding authority.
Boosting domestic mining could further help address climate change by reducing the transport of materials around the world before construction.
Processing capacity for several minerals has become so heavily concentrated in China that output from mines almost anywhere in the world, even the U.S., gets sent to China for refining before it goes back to manufacturing elsewhere, said Joe Britton, executive director of the Zero Emission Transportation Association, which counts companies such as Rivian Automotive LLC and Lucid Motors Inc. as members.
“From a carbon standpoint it makes no sense that we would be shipping materials all around the world just to come back,” he said. “The obvious solution is we should co-locate material processing with the production.”
The Defense Production Act would likely be more of a help to early-stage companies, said James Calaway, the executive chairman of the Australian company Ioneer Ltd. that is because the permitting process for mining projects often takes 10 years, more than three times as long as some other countries, according to the National Mining Association.
Mr. Calaway’s company is trying to develop a $1 billion lithium mine and processing plant in Nevada. It has spent a year working through the federal permitting process, which has been delayed over what the project would mean for a protected wildflower on the proposed site.
“The specifics, I say, so far, they’re encouraging, but they would not have such a significant impact on an advanced project like ours,” Mr. Calaway said of Mr. Biden’s consideration of the Defense Production Act. “It shines a bright light on the problem, which is that we desperately need to pick up the pace.”
The Battery Metal Really Worrying China Is Lithium, Not Nickel
Electric car producers and policymakers are urging more action to tame surging prices of the key material.
Nickel has captured much of the limelight among battery metals in recent weeks, and understandably so. Wild price swings, including an unprecedented 250% advance over two trading sessions amid a short squeeze, and concerns tied to Russia’s role as a key supplier have added to longstanding worries among automakers about securing enough of the material.
Even so, it’s another metal that’s been causing concern in the world’s largest electric vehicle market.
China’s government last month hauled in a whole range of market players for two days of talks focused on halting a breakneck run-up in lithium, the metal that’s vital for almost all rechargeable batteries and critical to the roll-out of emissions-free cars and clean energy.
Lithium carbonate in China jumped about 472% from a low last June to a record high on March 15, according to pricing provider Asian Metal Inc. An index of global lithium prices compiled by Benchmark Mineral Intelligence has surged almost 490% in the past year.
At the March seminar, which included industry groups, raw materials suppliers and battery manufacturers, China’s Ministry of Industry and Information Technology, demanded “a rational return” to more typical lithium prices.
Talks focused on supply bottlenecks, pricing mechanisms and what officials described as the healthy development of the country’s new-energy vehicle and battery sectors.
While similar interventions to manage soaring commodity prices have been common for coal and steel, it’s a rare step in the electric vehicle sector and underscores Beijing’s nervousness about the impact of rising lithium costs.
As my colleague Danny Lee wrote earlier Monday, automakers are already grappling with the hikes in raw materials. Several have raised sticker prices in response. By making electric models too expensive, they risk slowing the pace of adoption.
“The industry is facing a very strong headwind from cost escalation,” Brian Gu, president of Xpeng Inc., told Bloomberg Television last week. The Guangzhou-based producer last month raised the price of its vehicles by between 10,100 yuan ($1,572) and 20,000 yuan.
Vehicle manufacturers are suffering from “opportunistic price hikes,” to lithium products, Nio Inc.’s founder William Li said on an earnings call last month. He urged suppliers to consider the impact of higher costs on development of the EV industry.
The sector’s challenges follow decisions to slow or halt expansions and new projects during a two-year lithium price slump through the middle of 2020. That, combined with Covid-19 disruptions, means additions to supply simply can’t keep pace with rising requirements.
Demand for lithium will jump fivefold by the end of the decade, according to BloombergNEF. Roughly $14 billion of investment is needed to finance lithium resource and refining capacity by 2025, plus another as much as $5 billion by 2030, BNEF forecasts.
There are some signs that governments, producers and consumers are now recognizing the scale of that task.
Tesla Inc. signed two recent supply pacts with developers of future projects in Australia, while Ganfeng Lithium Co. — one of the world’s largest producers — said last week it’ll use record profits to support a huge expansion program, aimed at delivering eventual capacity of 600,000 tons of lithium carbonate equivalent, compared to production of about 89,000 tons now.
China’s authorities have called for quicker development of a domestic lithium sector that already dominates world production, highlighting growth prospects in Qinghai, Sichuan and Jiangxi provinces.
In the U.S., President Joe Biden last week added battery metals, including lithium, to a list of items covered by the Defense Production Act, meaning companies can access funding to boost output or to study potential new developments.
Battery Giant CATL Isolates Workers To Avoid Covid Shutdown
* Workers Will Be Shuttled Between Dormitories, Factory
* Move Comes Amid Outbreak Of Covid-19 Cases In Ningde
Contemporary Amperex Technology Co. Ltd., the world’s biggest maker of electric-vehicle batteries, has implemented a so-called closed loop for workers at its main factory in China in a bid to avoid the kind of Covid-19 shutdowns hurting Tesla Inc. and Volkswagen AG.
Workers will be shuttled between their dormitories and the factory in Ningde, where an outbreak of Covid cases has prompted the local government to tighten prevention and control measures, the company, better known as CATL, said in a statement Sunday.
“To ensure market supply to the best of our capabilities, we have adopted strict grid management measures for the orderly operation of the Ningde production base,” the company said.
Automakers including Tesla and Volkswagen have been forced to suspend production at their factories in Shanghai, with the city of 25 million locked down to curb the spread of the highly infectious omicron variant.
Chinese EV upstart Nio Inc. said Saturday it has halted production and delayed deliveries because many of its suppliers have had to suspend operations, particularly in Shanghai and Jilin, which is also under lockdown.
CATL said it has “strengthened communication with the local government” to tackle the pandemic. Workers will catch a dedicated shuttle bus between their dormitories and the factory to “prevent the spread of the coronavirus disease to the greatest extent possible.”
The battery maker holds about a 50% market share in China, and has more than 30% of the global market, according to Bloomberg Intelligence.
CATL is a key supplier to Nio, which delivered almost 10,000 vehicles to customers in March.
General Motors Agrees To Buy Battery Metal Cobalt From Glencore
* GM Strikes Multiyear Deal To Buy Cobalt From Australian Mine
* Automakers Are Moving To Secure Supplies Amid Shortage Worries
General Motors Co. struck a deal to buy cobalt from Glencore Plc, the top supplier of the key battery material, as car companies around the world seek to secure supplies amid worries about possible future shortages.
As the auto industry rolls out more electric vehicles, concerns are mounting about potential supply crunches of crucial battery metals such as lithium, nickel and cobalt.
Lithium prices are near a record high, while nickel surged as much as 250% at one point last month amid a short squeeze on the London Metal Exchange.
GM on Tuesday said it agreed multiyear deal for cobalt from Glencore’s Murrin Murrin mine in Australia. The companies gave no details on volumes or prices included in the accord. GM plans to be able to build 1 million EVs a year in North America by the end of 2025.
The global push toward a greener future is firing up demand for battery metals, at a time when the pandemic has exacerbated supply constraints, and higher prices has threatened carmakers’ margins.
Glencore has already signed cobalt supply agreements with Tesla Inc. and BMW AG, while rival miners Vale SA and BHP Group have struck nickel deals with automakers.
Electric Vehicle Growth Outpaces Installation of Battery Chargers
More plugs are needed but the gap isn’t inherently a bad thing.
As electric vehicle sales take off, the number of those EVs on the road is growing faster than the number of public charging points to support them.
That’s one of the high-level conclusions from an in-depth study on the state of public charging infrastructure that my BNEF colleague Ryan Fisher published recently.
The number of EVs on the road per public charging point globally rose to 9.2 at the end of last year, from 7.4 at the end of 2020.
That’s not surprising. Last year was a breakout year for plug-in vehicle sales globally, with 6.6 million sold, while charging infrastructure growth was more in line with historical averages. The global data hides a lot of nuance though. At the country level the dynamics get really interesting.
For example, despite record EV sales in China last year, public charging points there kept pace and the ratio between EVs and chargers has been relatively constant since 2018.
This is because of a huge push taking place in China to expand charging infrastructure taking place — the country claims more than half the world’s public charging points.
In markets like the U.S., the number of EVs on the road per charger has grown steadily higher over the last year, so there are fewer chargers for every EV on the road.
That effect is even more pronounced in Europe, where EV sales have surged since 2019. In Germany, the ratio went from 8 EVs per public charging point in 2019 to 20 in 2021.
A country like China probably needs more public chargers than the U.S. or Germany because of the housing stock there, as a much higher share of people there live in high rise apartments. Those high-rise dwellers are less likely to have home charging options and will need to rely on the public network more than an EV owner in a U.S. suburb who does 80-90% of their charging at home in their garage.
The landscape in the respective geographic regions is similar when it comes to fast and ultra-fast chargers. In China, there are 16 EVs for every ultra-fast charger; in the US that figure is over 100. In the Netherlands, which has the most favorable charger-to-EV ratio overall, most of the plugs are slow chargers.
There’s a temptation, when analyzing the data, to fall back on widely accepted, general notions about how more charging infrastructure is needed. That’s certainly true, especially given the growing EV fleet in the years ahead. But it’s not inherently a bad thing if the ratio of EVs on the road per charger rises.
More private investment in charging infrastructure is needed, and to get there, higher utilization per charger will be required to improve the economics of operating a given station.
Many stations are under-utilized. Most fast chargers need somewhere between 8-10 charging events per day to start to make a decent return for the investor, according to our analysis at BNEF. The exact number depends heavily on prices, charging speeds, site costs, fee structure, government support, and several other issues.
A balancing act is needed: fast charging operators want more charging sessions per day. But too many sessions could mean there are times when a driver will have to wait because a charging station already is occupied.
That in turn worsens the customer experience. Operators want high utilization, but not so high that customers get frustrated. Tesla’s Supercharger stations are unique on this front. Supercharger sites have an average of 10 ultra-fast charging points or outlets, while competing networks generally have two to four. Unsurprisingly, Tesla customers love this.
That may not be scalable globally, and getting it right every time will be tricky. In the long term, we’re expecting the ratio to level out somewhere between 30 to 40 EVs on the road per public charging point. That’s about where Norway, the most mature EV market in the world, is today.
Some markets will be higher or lower depending on the types of houses in the area, the strength of the electrical grid, how high charging speeds eventually go, and government policy.
Already there are a growing number of 350kW stations popping up that are capable of adding 100 kilometers of range to an EV in just a few minutes.
Each country will likely end up with a different mix of home, public and workplace charging, and varying spreads of power outputs. On a global level, the ratio of EVs on the road to charging points will likely keep climbing in the years ahead.
That’s not necessarily a bad thing.
China Battery Giant CATL Joins $6 Billion Venture In Indonesia
China’s top battery producer plans to boost its presence in the aspiring electric-vehicle hub of Indonesia by partnering with local state-owned groups to build a $5.97 billion mining-to-batteries complex.
A unit of Contemporary Amperex Technology Co. Ltd. will join PT Aneka Tambang and PT Industri Baterai Indonesia on the project that spans everything from nickel mining to battery materials, recycling, and an EV batteries factory.
The Southeast Asian nation is aiming to become a major player in the electric-vehicle supply chain linked to its massive reserves of nickel, a vital battery material.
CATL already has some involvement in Indonesia, while Chinese firms including Tsingshan Holding Group play a major role in the country’s nickel sector.
“The Indonesia project is an important milestone for CATL as we expand our global footprint, and it will become an emblem of the everlasting friendship between China and Indonesia,” Robin Zeng, founder and chairman of CATL, said in a statement on Friday.
The project will be based in Indonesia’s North Maluku province. The joint venture still needs approval from the companies’ shareholders and from regulators.
Rivian CEO Warns of Looming Electric-Vehicle Battery Shortage
Much of the battery supply chain isn’t built, challenging an industry aiming to sell tens of millions of EVs in coming years, RJ Scaringe says.
Rivian Automotive Inc. Chief Executive RJ Scaringe is warning that the auto industry could soon face a shortage of battery supplies for electric vehicles—a challenge that he says could surpass the current computer-chip shortage.
Car companies are trying to lock up limited supplies of raw materials such as cobalt, lithium and nickel that are key to battery making, and many are constructing their own battery plants to put more battery-powered models in showrooms.
“Put very simply, all the world’s cell production combined represents well under 10% of what we will need in 10 years,” Mr. Scaringe said last week, while giving reporters a tour of the company’s plant in Normal, Ill. “Meaning, 90% to 95% of the supply chain does not exist,” he added.
The CEO’s comments are the latest alarm bell to go off across both the auto and battery sectors with executives worried that the fast-rising demand for electric-vehicle parts and a shortfall of critical materials and production could result in an acute supply crunch.
For instance, Tesla Inc. CEO Elon Musk earlier this month tweeted that lithium prices have “gone to insane levels” and that Tesla “might actually have to get into the mining & refining directly at scale.”
Mr. Scaringe put a sharper point on the problems for the auto industry ahead, saying building enough batteries will be among the biggest hurdles in trying to boost electric-vehicle sales from a few million today to tens of millions within the decade.
The shortages will occur everywhere from the mining of raw materials, to processing them, to building the battery cells themselves, he said.
Already, demand for lithium-ion batteries, which are the core power source for electric vehicles, has surged to 400 gigawatt hours in 2021—up from 59 gigawatt hours in 2015—and it is expected to jump another 50% in 2022, according to Benchmark Mineral Intelligence, which tracks the battery supply chain.
The semiconductor shortage that is disrupting the auto industry was a relatively small supply-demand imbalance that then led to aggressive overbuying and stockpiling, putting the car sector in the difficult position it is in now, Mr. Scaringe said. With batteries, the problem is expected to be an order of magnitude worse, he added.
“Semiconductors are a small appetizer to what we are about to feel on battery cells over the next two decades,” Mr. Scaringe said.
Rivian, a California-based startup focused exclusively on selling electric trucks and SUVs, has spent the past several months working to spool up production at its vehicle-making factory in Normal.
The company began selling its first models last fall—the R1T truck and R1S SUV—and said reservations for the two were around 83,000 in early March. The company sold a total of 1,227 vehicles in the first quarter of this year.
Investors are closely tracking Rivian’s ability to execute on its manufacturing plans, following an initial public offering last year that raised nearly $12 billion in proceeds and briefly pushed the startup’s valuation above that of Ford Motor Co. and General Motors Co.
Rivian’s success is dependent on how quickly it can ratchet up production and boost sales revenue, a task made more difficult by its newcomer status and lower starting volumes.
Parts suppliers tend to give preference to large, more-established car companies that place big bulk orders and have a record of meeting their own targets on factory output, analysts and industry attorneys say.
The race to secure raw materials is growing increasingly competitive, in part because they are becoming more costly for battery makers. Raw materials account for 80% of the cost of a lithium-ion battery, up from 40% in 2015, according to Benchmark.
Materials for the battery cathode, such as lithium, cobalt and nickel, have collectively gained about 150% in the past year, including 25% to 30% in the past month, according to Benchmark.
The demand is coming from other sectors, too, with clean-energy companies looking to build more batteries to store power from sources, such as wind and solar, analysts say.
The Biden administration is adding to pressure from the clean-energy industry by pushing for less dependence on fossil fuels, and earlier this year invoked the Defense Production Act to boost U.S. production of materials used in rechargeable batteries to curb American reliance on China for key ingredients.
Rivian’s share price has slumped in recent months, due in part to manufacturing setbacks related to the semiconductor shortage and other problems getting automotive parts. Rivian’s stock closed at $38.23 Monday, down nearly 51% from the IPO price of $78.
In March, Rivian said it was sharply curtailing factory output this year, cutting its forecast to 25,000 vehicles—about half of what it could have built if it weren’t for constraints on getting parts and materials.
The car company’s 3.3 million-square-foot factory has the capacity to build 150,000 vehicles a year but currently isn’t running a full five-day week. In December, Rivian said it would add a second assembly factory in Atlanta, starting construction next year. That plant is expected to begin production in 2024.
Mr. Scaringe said the company plans to build a smaller, compact SUV called the R2 at the Atlanta plant that will help broaden Rivian’s buyer base.
The production line at the Normal plant—a former Mitsubishi Motors Corp. factory that Rivian purchased in 2017—demonstrates the stakes for the upstart car maker.
In addition to building trucks and SUVs, Rivian plans to produce an electric van at the factory for Amazon.com Inc.
Amazon, an investor in the startup, has a deal to buy 100,000 battery-powered delivery vans.
Other auto executives are also growing concerned about constraints in the battery supply chain. Some companies, such as GM, are joining with mining firms to secure access to critical ingredients such as cobalt and lithium.
Others are bringing more of their battery-cell production in-house, aiming to have more control over this core component for electric vehicles.
Still, even with all the planned battery production expected to be added, less than half of the forthcoming factories will produce cells with sufficient quality to supply global car companies such as GM, Toyota Motor Corp. and startups such as Rivian, according to an analysis by Benchmark.
“It varies by region, but it’s important for people to understand that capacity isn’t a quality, reliable battery supply,” said Simon Moores, Benchmark’s chief executive.
Mr. Scaringe said Rivian’s strategy for securing battery cells is diversification. It also plans to structure the deals with partners as co-investments in dedicated capacity and intends to eventually develop and build cells internally, he added.
“We are not going to have a single supplier,” he said. “We are going to have multiple suppliers.”
New Lithium-Extraction Technology Attracts Investors. But Is It Viable?
Developing a domestic supply is an important part of the U.S. push to expand alternative energy sources.
Lithium is a key component of rechargeable batteries, and developing domestic supply is seen as an important step in a broad push for the U.S. to transition to alternative energy sources.
In February, the Biden administration unveiled plans to invest $2.9 billion to boost production of advanced batteries and strengthen the battery supply chain in the U.S., including the development of domestic supplies of lithium.
Last month President Biden also invoked the Defense Protection Act to increase production of battery metals.
But newer, still-experimental lithium production and extraction methods that could help increase supplies, while attracting investors for their potential to speed up production and reduce the environmental impact compared with most current lithium-extraction methods, are so far unproven at large scale.
Current methods of lithium production mostly involve extracting the lightweight metal from hard rock or pumping the salty brines that contain lithium out of the ground into vast ponds where evaporation separates it from other elements.
Mining companies in Chile have used this environmentally hazardous practice for decades. It takes about 18 months to two years to produce lithium from a brine using ponds and several years to build such projects.
The new methods, known collectively as direct lithium extraction, or DLE, have been shown to be faster than traditional methods and more efficient.
While traditional methods yield about 40% to 50% of the lithium present in a mined resource, processes using DLE can extract 75% to 90%, companies behind the technologies say. Many DLE technologies use a chemical process or other methods to isolate lithium.
That means more lithium can be produced and made commercially available more quickly—at a time when demand for lithium is sending prices to all-time highs, while analysts are projecting shortages that could slow production of electric cars.
“We’re looking at dramatically accelerating the amount of time it takes to bring a project online,” says David Snydacker, chief executive of Lilac Solutions, an Oakland, Calif., startup that has developed a DLE technology.
Projects that once would have taken seven to 10 years to start producing will be able to produce in about four years using Lilac’s DLE methods, Mr. Snydacker says.
Lilac raised $150 million in late 2021 from investors such as BMW AG’s venture fund and T. Rowe Price Associates Inc. Backed by Bill Gates’s Breakthrough Energy Ventures, Lilac is working with Australian companies to extract lithium from salty brines at California’s Salton Sea as well as in Argentina.
One of the companies partnering with Lilac recently announced a preliminary agreement to supply Ford Motor Co. with lithium.
Another DLE technology innovator, Standard Lithium Ltd., based in Vancouver, British Columbia, said in December that it raised $100 million from a unit of Koch Industries Inc.
Standard is working with a German chemical company on a lithium-extraction project in Arkansas that it says will benefit from a proprietary DLE process.
Skeptics betting on its shares to fall say that the process doesn’t work and that the company is behind schedule. Standard has called these allegations false and misleading.
Prospecting In Nevada
In Nevada, where the ground is rich with lithium brines, a wave of lithium prospectors have taken out claims for potential projects in the past year. Many conventional lithium-extraction efforts, however, face opposition from environmentalists and permitting delays.
DLE is “going to be the game-changer,” says Cortney Luxford, fluid minerals program manager for Nevada’s Division of Minerals. “If you can get more refined lithium to market in weeks or days, that changes the economics of companies.”
The question is whether DLE is ready to make a major difference. Many DLE technologies that work well in a laboratory often run into trouble in the field, experts say. Many of the technologies would likely still require large amounts of water and power to run the devices on a large scale.
“Right now, it’s still very theoretical,” says Chris Berry, founder of House Mountain Partners LLC, an adviser to battery-metals companies and investors.
DLE is currently being commercially used only by the Philadelphia-based lithium miner and processor Livent Corp., alongside its other brine-extraction processes in Argentina, and by companies in China.
The DLE component of Livent’s Argentina project is small and isn’t producing lithium at a scale that would indicate a technological breakthrough, analysts say. And experts say there isn’t enough transparency about the DLE technology being used in China to know how successful it is.
Lilac’s Mr. Snydacker says his company has conducted a successful large-scale pilot program at an undisclosed location in the U.S.
The company says it will use the $150 million it raised last October to increase production, expand its workforce and deploy its technology. It’s working on projects in Nevada and North Dakota in addition to the projects in California and Argentina.
The Challenge Of Scale
North Carolina’s Albemarle Corp., the world’s largest lithium producer, has evaluated a range of DLE methods and companies and says it’s piloting the most promising candidates at selected lithium resources.
Glen Merfeld, chief technology officer, says there’s potential to increase lithium production with DLE, but a number of factors require consideration, such as the economics of a project and sustainability issues.
“It could look terrific in a beaker,” Mr. Merfeld says. “It could look great in even a small pilot. But to really be viable and competitive, you’ve got to get it to the large scales.”
He says the company plans to expand its mine in Silver Peak, Nev., which uses traditional methods and is the only active lithium mine in the U.S.
EnergyX, a privately held company based in Austin, Texas, that seeks to produce lithium using membranes in its DLE extraction process, says its method currently can extract as much as 90% of the lithium in brines.
The company, which has raised $20 million from investors including the University of Texas, has explored operating in Bolivia, a lithium-rich country whose government has long opposed private mining operations.
But EnergyX’s membrane doesn’t filter out salt and some other impurities in brines, which means other methods—such as ponds—are still required to purify the lithium, according to people familiar with the technology.
EnergyX CEO Teague Egan said in an email to reporters that his company’s initial technology will work alongside existing production methods like ponds, but that future iterations won’t need them. The company is currently trying to raise more money from investors, according to people familiar with its plans.
“Lithium and battery materials are absolutely essential,” Mr. Egan said in his email. “Companies are actively working really hard towards finding workable, sustainable solutions for the sector.”
Battery Giant CATL Beats On Full-Year Profit, But Warns On Costs
* Chinese Firm Says Lithium Inflation Adding Price Pressures
* Manufacturer Investing $2 Billion In New Xiamen Factory
Contemporary Amperex Technology Co. Ltd., the world’s biggest maker of electric-vehicle batteries, reported better-than-expected full-year profit and announced plans to spend 13 billion yuan ($2 billion) on a new factory in China.
Net income for 2021 more than doubled to 15.93 billion yuan, the company said late Thursday, beating analyst estimates of 13.51 billion yuan. Still, the manufacturer scrapped its dividend and reported weaker profitability at its key power battery systems division as it warned of surging raw-materials costs
CATL, as the company is better known, is contending with a raft of challenges from Covid-19 lockdowns in China that are hurting supply chains to inflated costs stemming from spiraling prices for materials like lithium, nickel and cobalt.
Its production base at Ningde in northeastern Fujian province has moved to a so-called closed-loop operation to shield workers and production from a Covid-induced shutdown. Its Shanghai factory reopened April 18, local media reported.
CATL plans to add another facility in the southeastern port city of Xiamen, it said Thursday. The company cited growing demand from the new-energy industry for the investment.
The Chinese battery giant also warned over raw-materials inflation. Prices of lithium, cobalt and nickel have jumped on supply shortages and speculative trading.
An index of global lithium prices compiled by Benchmark Mineral Intelligence surged 280% last year and another 127% in the first quarter as supply is squeezed by booming demand for electric cars.
The Chinese firm said lithium inflation has led to “great pressure on costs,” adding that it’s signing long-term supply agreements and striking mining deals to protect supplies.
What Bloomberg Intelligence Says:
CATL’s gross margin may see limited upside in 2022 as skyrocketing prices of lithium and other raw materials offset economies of scale stemming from higher EV battery sales.
Price increases help deflect some cost pressure onto automakers, yet overdoing it risks losing new orders to rivals, with its 1Q market share in China already falling from 4Q’s peak as BYD and CALB expand their turf.
Steve Man And Joanna Chen
The world’s dominant battery manufacturer is facing growing competition from newly listed and well-funded LG Energy Solution, which ranks No. 2, and other top 10 competitors including fellow Chinese companies BYD Co. and China Aviation Lithium Battery Co., or CALB.
CATL, with a share of about one-third of battery production globally and 50% in China, is a major supplier to Tesla Inc. and also sells its cells to a raft of automakers including Volkswagen AG and Chinese EV upstart Nio Inc.
Its Shenzhen-listed shares closed up 0.5% on Thursday ahead of the results. They’re down 30% this year after a 67% rise in 2021. The company will report first-quarter results on April 27.
Elon Musk Wants More Lithium For EVs But Very Few Places Have It
Elon Musk wants more lithium, but only a handful of countries can supply the material key to the electrification of transportation, at least for now.
The Tesla Inc. chief made a public appeal for more investment in lithium mining to close what he sees as a yawning gap between supply and demand, fueled by the adoption of electric vehicles.
Musk signaled the electric car giant might finally start mining lithium due to skyrocketing prices. He first mentioned that plan almost two years ago.
The urgency to have a lineup of supply of the silvery white commodity comes as demand growth is set to surge in the coming years.
While major producers such as Albemarle Corp. are expanding capacity and new projects are being built, supply growth is not fast enough due to a lack of investment following the boom-bust cycle in lithium from 2017 to 2019.
For now, lithium production concentrates in a few countries, with Chile and Australia accounting for 81% of global output. Few suppliers mean higher risk of supply disruptions.
Investors shied away from lithium producers, developers and explorers in the wake of the two-year price slump. At the time, a lot of lithium capacity was being brought online, triggered by the electrification hype when Tesla and non-hybrid vehicles came on the scene five years ago.
While junior miners and startups are developing newer and greener technology to mine lithium, none of them have achieved commercial scale, rendering auto companies such as Tesla to rely solely on traditional mining countries such as Chile and Australia.
‘Mr. Lithium’ Warns There’s Not Enough Battery Metal To Go Around
A mining company consultant with decades of experience doubts the industry will be able to support all the electric car production planned.
Batteries, and more precisely battery metals, are poised to replace chips as the new bottleneck for the auto industry.
While there’s been a lot of attention on nickel, especially after Russia’s invasion of Ukraine, another key metal — lithium — is a source of concern for manufacturers dealing with all manner of supply chain challenges.
The cost of the metal — mainly used to produce lithium-ion batteries, but also for pharmaceuticals and industrial lubricants — has been soaring. An index of key prices more than doubled in the first quarter, after surging 280% last year, according to Benchmark Mineral Intelligence.
That jump is worrying government officials in China, my colleague Annie Lee wrote earlier this month. Elon Musk, largely seen as ahead of the pack on scaling electric vehicle production, flagged the lithium shortage several times during Tesla’s earnings call this week.
“I’d certainly encourage entrepreneurs out there who are looking for opportunities to get into the lithium business,” Musk said Wednesday. “We think we’re going to need to help the industry on this front.”
One person who’s been warning of a lithium shortage for a while is Joe Lowry, a somewhat cantankerous expert who regularly draws mining bigwigs and analysts to his podcast. Known in mining circles as “Mr. Lithium,” the North Carolina resident has been in the business for decades.
Since striking out on his own in 2012, Lowry has been a consultant to mining companies and an investor. He owns shares of companies including Tesla and Lithium Americas.
I’ve been talking with Lowry to wrap my head around the EV battery supply chain and have summarized our conversation in Q&A form. Here’s an excerpt, edited for length and clarity.
You wrote a paper at the end of 2019 saying demand for lithium would outstrip supply. It looks like lithium prices have started to reflect that. What do you see?
In the next two years, even though there will be significant growth in supply, it will be less than demand, so the gap will just continue to grow.
It’s simple math. It’s like, the bus in front of me is going 50 miles per hour, I’m going 45 mph, but I’m saying I’m gonna catch it in 2025.
I believe there will be a day in the future when lithium is in oversupply, but it won’t be in this decade.
Why Will It Take So Long?
You can build a battery factory in two years, but it takes up to a decade to bring on a lithium project.
It’s not a commodity; it’s a specialty chemical. Lithium is often compared with iron ore or other major commodities, and it behaves nothing like that. The auto industry is just finally figuring that out. Lithium qualification for an auto company can take over a year.
It has to go through cycle testing. If you’re going to put something into a car that could ignite if the chemistry is wrong, you kind of want to know.
Is The Auto Industry Prepared For That Long Lead Time?
I take everybody’s gigawatt-hour projections and take them back to the lithium required to do it, and most of them are so far over what the lithium industry can supply. I don’t believe demand is going to be destroyed. Ultimately, I believe it’s just deferred.
The Additional Production This Year Will Be Less Than 150,000 Tons. So Then, It’s Who Gets The Material? Whose Ev Models Don’t Get Made?
In a 2050 scenario, there’s time for everything to happen that needs to happen. But in 2030, it just isn’t going to happen. Just look at the mess we’re in from a lithium supply standpoint with less than 10% EV penetration.
Lowry’s predictions chime with others assessments. BloombergNEF forecasts prices of lithium carbonate and hydroxide — the main lithium chemicals used in battery production — will be higher still by 2030 as a result of projected supply deficits.
Metal supply scarcity poses a more immediate challenge to automakers. Battery prices are expected to rise slightly this year, ending a long run of declines.
That will delay the point at which EVs achieve price parity with combustion engine cars, potentially by as much as two years, to 2026, according to BNEF.
This Device Powers Everything From Grids To Cooking Stoves
Enapter’s electrolyzers, which can store energy and make clean hydrogen, won the Earthshot Prize founded by the U.K.’s Prince William.
Enapter AG makes modular electrolyzers, which run an electric current through water to create hydrogen that can store clean energy. On its own, the device can be used to power home appliances such as cooking stoves, but stacked together they can grow big enough to support a community grid.
In October, Enapter won the 1 million pound ($1.3 million) Earthshot Prize, founded by the U.K.’s Prince William, that supports technologies helping to fight global warming.
The company started in Thailand in 2015, when German software engineer Sebastian-Justus Schmidt built a self-sustaining home using solar power and electrolyzers. Bloomberg Green caught up with co-founder Vaitea Cowan in London.
Bloomberg Green: So let’s talk about scaling up. You’re building a factory for mass production to be completed this year. Is that right?
Cowan: Yeah, Q4. That’s the ambition. By then, we want to have the machines moved in. It’s in North Rhine-Westphalia, so it’s northwest Germany next to the Netherlands border. We’re going to start by producing 10,000 units a month, which is how it begins and then it keeps growing.
BG: And I think I read that you’re already in 22 markets?
Cowan: So we’re in 44 different countries, actually. We’re quite strong in Europe. That’s a good market for us. And then we’re also quite present in Southeast Asia, as well as in Australia. I think the interesting markets that are growing as well are South America. So we do have some customers in Chile. And I think that the next big ones will be U.S. and India.
And of course, Africa is a whole market that we want to support not only from an energy storage perspective, but also from clean cooking gas perspective.
BG: But do you mainly supply homes?
Cowan: When we look at our use cases, residential is one thing and that’s where our story started. But actually, the applications today are 30% storage, and it’s a little bit of residential, but a lot more large-scale storage solutions, whether it is for neighborhoods or for communities. And this is where we have, for example, 100 inhabitants in Malaysia, running on solar hydrogen storage solutions.
But then you have also the mobility topic, and that’s generating green hydrogen on site, skipping the supply chain of fossil fuels, and then refueling trucks or planes or cars or buses. And then you’ve got the industrial applications, which is generating green methane or green ammonia for containerships, for example, or for ammonia for fertilizers.
So when we first started, it was 60% storage. Now it’s 30% storage, 30% mobility, 30% industrial and other use cases.
BG: Can you tell me more about the funding sources for Enapter? I think the last round you got was from the German government? And then you also just announced plans to issue new shares.
Cowan: To scale up the production of our AEM Electrolysers and develop our megawatt-scale product, we have received support from the federal government. The German state and the EU are supporting particularly innovative aspects of the mass production. Besides the public grants, we finance ourselves like any other company by equity and loans.
Specifically, regarding our latest funding news, in a first step, 30 million euros ($33 million) will be placed via a private placement. In a second step, already existing investors and private investors will get the possibility to purchase new stocks under the same conditions. An additional 70 million euros are reserved for institutional investors.
BG: And are you seeing increased interest as a result of the war?
Cowan: The war in Europe is a tragedy. The focus on decentralized renewable energy should exist without this conflict. Enapter will make green hydrogen cheaper than fossil fuels by bringing the AEM Electrolyser into mass production and leveraging massive economies of scale. We are convinced that green hydrogen enables energy security and independence. However, there is no way for us to find positive takeaways from any war anywhere. We would rather see it not happen.
BG: How does how does the economic case for green hydrogen change with the price spikes that we’ve been seeing in fossil fuels? With the price of gas and oil going up so high, how does that change the business case for your product?
Cowan: I mean, ultimately, we need to drive down the cost to be cheaper than fossil fuels, right? Green hydrogen is competitive actually already with fossil fuels, depending on the market.
I think when we look at where is the business case for green hydrogen, it always depends on the location. And then in terms of the capex cost. Well, that’s what we’re working on right now. And driving down the cost and seeing when it will be competitive.
Jaguar Owner Eyes Chipmaking, Plans EV Battery Factory
* Tata Sons’ Plans Will Ease Chip Crisis Hobbling The Sector
* Tata Motors Is Looking To Launch A Pure Electric Model By 2025
India’s Tata Group is planning a foray into semiconductor manufacturing as the coffee-to-cars conglomerate seeks to mitigate the pain from the global chip crisis as well as reduce dependence on imports.
Besides making chips, plans to manufacture batteries for electric vehicles will also be announced soon, N. Chandrasekaran, chairman of Tata Sons Pvt., the group’s main holding company, said at an event in Mumbai Friday.
Chandrasekaran had spoken about evaluating partnerships for cell and battery manufacturing in India and Europe in Tata Motors Ltd.’s annual report in June.
The initiatives by the $103 billion Tata Group are aligned to Prime Minister Narendra Modi’s attempts to make India a leader in semiconductor production and reduce its reliance on imports amid global chain disruptions.
Several international chip giants including Intel Corp. and Taiwan Semiconductor Manufacturing Co. are exploring India as a potential manufacturing base, the nation’s Technology Minister Ashwini Vaishnaw said on Thursday.
Automakers around the globe are grappling with a semiconductor shortage, exacerbated by pandemic lockdowns in China, which have hobbled the automobile and the electronics sector by raising input costs for makers.
“Supply chain is getting very precarious and uncertain,” said Shailesh Chandra, managing director at Tata Motors Passenger Vehicles in an interview on Friday. Lockdowns in China have worsened the visibility of semiconductors and the logistics have become the next challenge for Tata Motors given the lack of availability of containers, he said.
To mitigate the semiconductor crunch, Tata Motors is going for premium freight, finding alternatives for chips and buying them from the open market, Chandra said.
He expects the shortage to persist for six months at least and sees the fourth quarter being more uncertain than the previous year.
The impact of the chip shortage is more “acute” in electric vehicles than gasoline models, Chandra said. The waiting period for electric vehicles at Tata Motors could be as much as six months, compared with four months for cars with internal combustion engines, he said.
Volvo Car AB has said it would have a hard time meeting its production forecast for this year due to issues procuring a specific type of semiconductor, while Renault SA earlier this month halted production of its new electric vehicle because of a lack of components.
Tata’s foray into semiconductor making will also help its group firm, Tata Motors, which makes the iconic Jaguar Land Rover brands and has suffered due to these shortages.
Tata Motors, which has a 70% share of India’s nascent electric-car market, also announced plans to launch its first-ever pure electric car by 2025. The five-seater Avinya will have no gasoline variants, Chandra told reporters in a briefing on Friday.
Tata Motors currently sells two battery-powered models, the Nexon EV and Tigor EV, but these cars also have variants that run on fossil fuels.
Paris Suspends Use Of Bollore Electric Bus After Second Fire
Paris public-transit operator RATP said it’s temporarily suspending use of 149 electric buses manufactured by Bollore SA after a second vehicle caught fire on Friday.
There were no casualties from the fire, which broke out around 8 a.m. near the Francois Mitterrand library in Paris, but it’s the second incident of this kind within a month, RATP said in a statement. It said it has asked Bollore for a full assessment of the causes of these incidents.
Vehicles produced by Bollore’s Bluebus unit use lithium metal polymer batteries for power. That type of technology results in batteries that are “completely solid, with no liquid components, no nickel and no cobalt,” according to Bluebus’s website.
Known for investing in logistics and media, billionaire Vincent Bollore also made a big bet on electric vehicles, producing a shared car called Autolib for the city of Paris, which was discontinued in 2018. The family-controlled group still produces electric buses in its factory in western France.
In an emailed statement, Bollore said that its Bluebus unit was actively cooperating with the RATP and relevant authorities in order to determine the causes of the fires.
Ford And GM Need U.S. Battery Sector To Avert Another Supply Shock
Bill Ford and Mary Barra offer assurances they’re well-sourced — at least for the next few years.
After Ford showed off the first F-150 Lightning electric pickups at its plant in Dearborn, Michigan, this week, I caught up with Bill Ford, the chair and founding family scion, and asked what I confessed was a geeky question: Where will Ford get all the lithium and other metals for the many electric vehicles the company plans to produce?
“It’s not a geeky question; it’s a good question,” Ford said. Echoing his crosstown counterpart, General Motors Chair Mary Barra, Ford said his company had secured enough supply of battery metals including lithium, cobalt and manganese to make 2 million EVs a year by 2026.
But beyond that, the U.S. industry needs to grow a domestic business because America just plain doesn’t make enough of the raw materials that go into EV batteries.
Lithium is the biggest piece of the problem. The lightweight metal is essential to the lithium-ion batteries that power not only EVs, but iPhones and other contemporary devices.
The element itself is plentiful, but there isn’t enough mining going on globally, and precious little production happens in the U.S.
Worse yet, the processing done to make lithium usable in battery cells is mostly done in China — about 80% of it, according to Piedmont Lithium, a startup pursuing lithium production in North Carolina.
Automakers have similar concerns about nickel and cobalt, much of which happens to be sourced from geopolitical pariah Russia and the Democratic Republic of the Congo, where extraction has been linked to human rights abuses and environmental destruction.
Automakers have been taking or considering extreme measures to line up supply. Elon Musk recently tweeted that Tesla may have to enter the lithium mining and refining industry. GM’s Barra last year announced an investment in and joint venture with Controlled Thermal Resources to source lithium from California’s Salton Sea.
Bill Ford said at the Lightning launch event that his company will look into similar deals, but those may take years to get to scale.
All of this is a big change for the incumbent carmakers. Tesla has emphasized its desire to be vertically integrated, meaning it handles or has a role in making components including batteries, chips and motors.
Older carmakers have long outsourced more and more parts-making and raw material procurement to suppliers.
The companies have pushed over decades to wring every bit of savings out of those partners, which has contributed to the manufacturing of key components moving to markets with lower-cost labor. Now, the industry is looking to in-source and re-shore production to build up a domestic battery sector.
Bill Ford said his company is in regular conversations with the federal government to foster mining and manufacturing of key battery materials. He said Ford has had conversations with the Biden administration and members of Congress to make it happen.
“Down the line, there is the whole supply base issue, not only in terms of raw materials but where are they going to be made,” Ford said. “Are we going to have a national effort to ensure that we have an American supply base for a lot of these things?
As we think about infrastructure that needs to be built out and the supply base we’d like to have in America, it’s going to require some partnerships with federal and local governments.”
He’s right. U.S. automakers have fared worse during the chip shortage than their Japanese and Korean competitors, which have maintained a steadier supply to keep vehicle production going.
Toyota managed to sell more cars in the U.S. than GM last year for the first time since 1931 and stayed ahead in the first quarter of this year.
For now, carmakers are at the mercy of a far-flung group of miners and suppliers that are racing to keep up with demand for electric vehicles.
Prices are soaring: lithium alone has risen more than 200% since Tesla’s Model 3 first shipped in July 2017, notes Grayson Brulte, who consults carmakers on government affairs. Price hikes like that are surely setting off alarm bells in Dearborn and Detroit.
AMLO’s Lithium Grab And War On Green Energy Will Hurt North America
Nationalizing Mexico’s lithium reserves and extending state control over electricity and energy will undermine the region’s prosperity and security.
By reasserting state control over Mexico’s natural resources, President Andres Manuel Lopez Obrador is once again slowing the nation’s economic recovery and its potential for longer-term growth.
As sad and predictable as his actions may be, however, their damage will extend beyond Mexico’s borders, affecting the North American continent’s ability to shorten and strengthen its supply chains, address the damaging effects of climate change and regulate migration.
More broadly, they will retard the process of integration on which the region’s future depends.
Since 2013 Mexico’s constitution has allowed private investment in energy. Money has flooded in. Deepwater and onshore oil fields have brought in billions of dollars from global companies including Shell Plc, Chevron Corp., Exxon Mobil Corp., and BP Plc. Private domestic and international capital has gone into pipelines, gas storage facilities and retail outlets.
Exxon and BP stations now dot busy commercial corners, eroding state-controlled Pemex’s monopoly over gas pumps. Private investment has transformed electricity production as well.
As available wattage has soared, rolling blackouts no longer pepper Mexico’s industrial heartland. Overall prices have fallen, too, as the auction process favored lower-cost generators. The influx of private funds kicked off Mexico’s green energy transition, building out much of the nation’s wind and solar capacity.
Since taking office, Lopez Obrador, known as AMLO, has systematically undermined these changes. He suspended auctions for new oil fields. His administration has refused or revoked permits for private sector energy projects, and abruptly canceled contracts for others.
Regulatory changes have made it prohibitively expensive for independent electricity generators to sell to the national grid. And his government has taken to arbitrarily shutting down operations, for instance closing privately owned gas importing and storage terminals that compete with Pemex, on specious permitting grounds.
He used his party’s majority in Congress to pass the Electricity Industry Law in 2021, setting off a continuing legal and political tussle. Since the law contravenes current constitutional provisions by prioritizing state-generated power over often cheaper, more efficient, and cleaner private production, hundreds of mostly successful lawsuits have ensued.
In response, AMLO pushed a constitutional reform to overturn the current markets and fully return electricity and energy to state hands. When the bill failed to gain the necessary two-thirds majority in the lower house in an Easter Sunday vote, AMLO’s vengeance was swift.
His party president has announced that the party will block all opposition legislation going forward, and he has threatened to prosecute legislators that voted against the energy reform.
Moreover, the bill’s failure hasn’t stopped the government from undermining private investment in the energy sector. A stalemate in the Supreme Court over the 2021 law’s constitutionality has enabled the administration to erect bureaucratic barriers for private operations and thrown decisions back to lower courts not always known for their judicial independence or their sophisticated energy market expertise.
Permits will be even harder to get, regulations will layer on costs and new obstacles, and arbitrary closures will rise, leaving private companies in legal jeopardy and operational limbo. Translation: Energy is likely to become both dirtier and more expensive.
AMLO’s focus is now on lithium. While the bounty of Mexico’s natural resources is already guaranteed in Article 27 of the Constitution, a new law (passed by a simple MORENA majority) nationalizes lithium reserves and mandates the creation of a state-owned enterprise to manage them.
While Mexico’s ranks tenth in global reserves, its clay-based deposits are far more expensive to extract than the brine-based deposits found throughout South America. Without access to new technologies and techniques, Mexican lithium under public management is even less likely to be mined, meaning Mexico and its economy won’t benefit from the surge in lithium demand to come.
More broadly, the Mexican government’s fiscal rigidity and often capricious approach to the private sector has undercut its Covid recovery: It remains one of the only nations in the Western Hemisphere whose economy has yet to regain its pre-pandemic size.
The politicization of the courts and private sector contracts, and a future without abundant, affordable and green energy, will sandbag future investment and drag down the nation’s longer-term potential growth.
And that was before the inflationary impact of Russia’s invasion of Ukraine and the Covid lockdowns in China.
As Mexico’s economy has slowed, unauthorized U.S.-bound migration has risen. For most of the 2010s, more Mexicans left than came to the U.S. No longer: Mexicans outnumber all other nationalities arriving at the U.S. southern border, exacerbating the current administrative and political challenges.
U.S. and Canadian companies working in Mexico have also suffered. Mexico’s retreat will make it harder for the U.S. to realize ambitious plans to secure vital supply chains.
Treasury Secretary Janet Yellen recently proposed rebuilding trade relationships around trusted partners. How this goes easily or well without Mexico is hard to see.
Its geographic proximity, preferential trade access, extensive industrial base, long history of bilateral business ties and complementary labor force and natural resources make it the most obvious counterpart for many industries, including pharmaceuticals, electric vehicle and large capacity batteries, and mining and refining of many critical minerals.
Mexico’s economic path matters for U.S. economic competitiveness. As globalization has picked up its pace over the last three decades, those industries that developed North American supply chains, including autos and aerospace, were able to survive and thrive.
Now, as logistics costs rise, the economic impact of Russia’s invasion metastasize and the divide between the U.S. and China deepens, Mexico has a historic opportunity to expand its reach and welcome back a broader set of manufacturers.
Yet so far Mexico is missing out on this historic opportunity. Yes, some companies have located, relocated, or expanded operations in Mexico as they move a part of their operations out of China.
But overall Mexico hasn’t kept pace, much less captured a growing slice of global production.
Take electronics. China’s portion of global manufacturing began to decline in 2018, weighed down by rising wages, Trump’s tariffs, and its own policy choices. During the last four years as supply chains began reshuffling, Southeast Asia’s share rose from 15% to 24% of world production.
Mexico’s share fell a full percentage point to just over 17%. Mexico’s lost potential matters for the U.S. and Canada, as it leaves their suppliers on the global sidelines as well.
The USMCA provides a way to protect particular companies and some of the gains from existing North American supply chains. But it can’t replace an attractive business climate or preserve the benefits of robust regional supply chains for companies and workers across nations.
For that, the Mexican government would need to recognize the advantages that come from open markets and trading ties. Sadly, this seems unlikely under the current government—a slow-motion tragedy likely to slow the larger progress of the North American continent and blight the prospects of the very citizens whom AMLO claims to want to help.
Sila To Make Advanced Battery Materials In Washington State
Factory to supply up to 500,000 electric cars, with room to grow.
Sila, one of a wave of young companies trying to pack more power into batteries, will open its first stand-alone factory in a small city in central Washington state, as the U.S. tries to build up its own energy-storage supply chain and expand the production of electric vehicles.
Sila has purchased a facility in Moses Lake to make its silicon-based anode material, which the company says can boost the energy density of lithium-ion batteries by 20%.
While not releasing full financial details, Chief Executive Officer Gene Berdichevsky said buying and equipping the building for the first phase of production will cost “$100-plus million,” with full operation expected in the first half of 2025.
Until now Sila has made its material, which can replace graphite in battery anodes, at its headquarters in the San Francisco Bay Area.
President Joe Biden has made ramping up U.S. battery manufacturing a pillar of his efforts to fight climate change, and battery makers are planning plants across the country.
Berdichevsky said Sila isn’t receiving any federal help for the new factory’s initial phase of production, projected to make enough anode material for 100,000 to 500,000 electric cars per year, depending on whether the substance completely or partially replaces the graphite in their batteries.
The company has announced partnerships with Bayerische Motoren Werke AG (BMW) and Mercedes-Benz Group AG.
But the facility could be expanded to supply as many as 10 million cars per year, and Sila may seek federal funding for expansion, Berdichevsky said. As the global battery industry booms, more of it can and should be based in the U.S., he said.
“You either get behind it,” Berdichevsky said, “or you get left behind.”
Chinese Miners And Battery Makers Team Up In Rush For Lithium
* Surge In Price Of Lithium Has Triggered Flurry Of Deals
* China’s Dominance Of Lithium Chain Prompts Rethink In West
Chinese miners and battery makers are forging closer ties as the accelerating shift to electric vehicles highlights the shortage of a metal that’s key to the clean-energy revolution.
Lithium jumped more than 400% in China over the past year, unnerving Beijing and sparking a flurry of deals from Argentina to Zimbabwe. Battery manufacturers are rushing to secure supplies of lithium — a silvery-white material used in power packs — as EV demand pushes prices higher.
Chinese battery maker Gotion High-tech Co. is looking at cooperating with Argentina’s state-owned miner Jujuy Energía y Minería Sociedad del Estado, while weighing the construction of a lithium carbonate refinery in the region.
In Zimbabwe, Chengxin Lithium Group Co. and Sinomine Resource Group Co. are setting up a joint venture to explore for the metal.
“Much of the new developments involve smaller players in China looking to secure resource supply overseas, a strategy that China has employed to gain control of the supply chain,” said Allan Ray Restauro, analyst at BloombergNEF. Nationalization in some countries may pose a risk to that strategy, he said.
Chinese mining giant Tianqi Lithium Corp. is teaming up with battery maker CALB. The companies will invest, cooperate and research in areas including battery-cell production and lithium salt refining, after signing a separate supply deal.
China’s domination of the battery metals industry is also forcing the U.S. and Europe to respond as supply chain woes during the pandemic showed the importance of having materials readily available locally.
The Biden Administration has been pushing to accelerate U.S. production of key battery metals, while on Monday commodities trader Trafigura Group announced plans to invest in a new lithium refinery in the U.K.
Panasonic Seeing Robust Tesla Demand For Batteries, Development
* Electronics Maker Had Been Expected To Unveil New US Plant
* CFO Says Tesla Is Pushing For Faster Development Of 4680 Cell
Panasonic Holdings Corp. is being asked by Tesla Inc. to speed up development of its next-generation 4680 batteries, said Hirokazu Umeda, chief financial officer.
Anticipation had been building for the Japanese company to unveil plans to construct a new battery factory in the US, but instead the CFO spoke at a post-results briefing about ongoing robust demand for batteries, including the 2170 cells it supplies for Tesla’s electric vehicles.
Panasonic has been scouting sites in Oklahoma and Kansas for its multibillion-dollar factory, Bloomberg News reported in March. The newly planned plant is part of its push to increase investment in EV cell production — a segment the 104-year-old Japanese electronics giant sees as critical for future growth.
“We can’t say more than what has been released, but we are getting many requests,” Umeda said on Wednesday. “We seeing continued strong demand from Tesla, for 2170 batteries, but also for faster development of the 4680.”
At its planned US factory, Panasonic is aiming to manufacture 4680 batteries, which are bigger and more powerful, people familiar with the matter have said.
The Japanese company its betting that the newly-developed technology — championed by Tesla CEO Elon Musk as the key to unlocking $25,000 EVs — will open up doors to supply other automakers in addition to Tesla.
Both Oklahoma and Kansas have for some months been working on financial incentive packages to lure the Japanese company and the jobs the factory would bring.
For Panasonic, settling on either location comes with the benefit of being close to the new factory that Tesla recently opened in Texas.
Yuki Kusumi, Panasonic’s chief executive officer, said in April that the manufacturer will invest 600 billion yen ($4.6 billion) in automotive batteries, supply chain software and other areas the company sees as core to its growth.
Panasonic also views opportunities in supply-chain software. Last year, it spent $7.1 billion buying Blue Yonder, one of its biggest-ever acquisitions. The company said earlier on Wednesday that it is considering an initial public offering of the business.
Lithium Sector Needs $42 Billion As Pivot From China Adds Costs
* EV-Makers May Have To Start Mining Vital Material: Benchmark
* Europe, North America Are Seeking To Develop Own Supply Chains
The global lithium industry needs as much as $42 billion of investment by the end of the decade in order to meet demand for the crucial battery-making material, with attempts to build supply chains outside of China subject to much higher costs, according to a data and market-intelligence provider.
The sector will require $7 billion of investment each year from now until 2028, Benchmark Mineral Intelligence said in a report. That would help it meet forecast demand of 2.4 million tons a year by 2030, which is four times higher than the 600,000 tons that’s estimated to be produced in 2022.
The forecast comes as Europe and North America look to reduce their dependency on Chinese imports and develop their own lithium production. That strategy that could require around twice as much capital than relying on getting the refined product from the Asian powerhouse, Benchmark said.
China has enjoyed a stranglehold over the lithium supply chain, bolstered by economic clustering, a high level of expertise, and lower labor and energy costs.
“If you want lithium with as little ESG impact as possible, the solution may cost more outside China,” analyst Cameron Perks said in the report.
In the U.S., the Biden administration has been pushing to accelerate production of key battery metals, with more than $3 billion in grants to help process elements including lithium.
Meanwhile, Canada has also earmarked up to C$3.8 billion ($2.9 billion) in this year’s budget to build a domestic critical metals supply chain.
Lithium, which is central to the clean-energy transition, has surged more than 400% in China over the past year, as supply struggles to keep pace with the electric-vehicle boom.
Tesla Inc. Chief Executive Officer Elon Musk has made a public appeal for more investment in lithium mining, and said that the car giant might consider mining or refining it directly after prices rose to “insane levels”.
The shortfall of raw materials to produce batteries is limiting the production of EVs, meaning their makers may have to get involved in mining if they want to make the cars at scale, Benchmark’s chief executive officer, Simon Moores, said in the report.
While lithium’s major producers have large investments planned, those alone will not be sufficient and new mines are needed, the note added.
Automakers could step in and “they have more than one reason to do so,” according to Perks. “Unlike investors, they are not just looking for a return from profits generated by lithium. They are looking to secure supply for their batteries.”
Mercedes’s Electric G-Wagon Will Get Range-Boosting Battery Tech
Mercedes-Benz AG’s upcoming electric G-Class will offer latest battery technology to bolster the distance the off-road icon can drive on one charge.
Mercedes will incorporate materials developed by California’s Sila Nanotechnolgies Inc. as an option for a range-extended version of the vehicle from around 2025, it said Tuesday. Sila makes a silicon anode material that goes into battery cells, boosting the amount of energy they can store.
“Delivering such a high energy density is a true game changer and allows us to think in completely new directions when developing future electric cars,” Mercedes Chief Technology Officer Markus Schaefer said in a statement.
Battery technology has become a key battleground for automakers looking to overcome consumers’ anxieties over electric-vehicle ranges. Mercedes in 2019 invested in Sila — which is among several firms trying to substantially improve the performance of lithium-ion batteries — to supply future models.
The G-Class is among the most expensive cars in the Mercedes range, playing an increasingly important role in the manufacturer’s strategy of boosting margins to help fund its transition to EV technology.
When a battery is charged, ions flow from the cathode to the anode. When it’s discharged, the ions reverse course. The conventional anode material is graphite, but researchers have been looking at silicon as an alternative to develop a battery that can pack more energy.
While Mercedes-Benz didn’t provide an update on the electric G-Class’s range, it said Sila’s technology would boost battery energy density by as much as 40%.
When Mercedes came up with the G-Class in the late 1970s, its boxy design and all-terrain capabilities were envisioned for soldiers and explorers. It largely stayed in that niche until the SUV boom vaulted the model more into to the mainstream, gaining high-profile customers including Sylvester Stallone, Kim Kardashian and Megan Fox.
Tesla Battles For Battery Engineers Commanding CFO-Like Salaries
From line workers to PhDs in materials science, the competition for talent is fierce.
If you’re tired of reading about shortages, I have some bad news for you.
We’ve talked about the lack of cars, chips, batteries, and all manner of minerals needed to make them, be it cobalt, nickel or lithium. Lately, I’ve been thinking about another pinch the industry is in: the shortage of people with the knowledge and skill to develop and produce batteries at scale.
The talent scarcity was apparent a few weeks ago when I attended Battery Brunch, an online networking event organized by the Volta Foundation, a nonprofit that aims to connect thousands of battery geeks around the world in their common mission to electrify transportation and curb climate change.
It’s a monthly event, and there’s usually a slate of wonky topics discussed in breakout rooms: battery-pack failure modes, seabed mining, nanoscale materials.
Last month’s agenda included a chat with Tesla engineers and recruiting managers who spent a few hours of their Saturday answering questions about what it’s like to work for the electric vehicle leader.
If the most valuable car company in the world, with a cult following and celebrity CEO, has to scrounge for battery engineers like this, what does it say about the rest of the auto industry?
Tesla has been working toward mass EV production for over a decade. These are still relatively unchartered waters for incumbent automakers.
Sure, General Motors has been tinkering with EV projects since the days of the EV1. But designing, planning, hiring and building to mass manufacture EVs and batteries? This is their first big push.
There are at least a dozen major battery plants that have been announced or are being built in the U.S. right now, creating thousands of jobs openings.
Median salaries for U.S. battery engineers have been climbing for years. In 2021, they ranged from around $100,000 for a junior engineer to nearly $200,000 for a director, according to a report from the Volta Foundation, which compiled data using H-1B visa applications. Battery executives in the C-suite reported salaries close to $400,000.
“A senior battery engineer in the U.S. sometimes can cost as much as a CFO,” Qichao Hu, the chief executive officer of SES AI, a solid-state battery startup backed by GM and Hyundai Motor, told me. “This whole industry now, it’s not sustainable, from people to raw materials.”
The Woburn, Massachusetts-based company has an in-house recruiter, though Hu will occasionally rely on an outside headhunter for certain positions.
He does so sparingly, since they’ll in some cases charge a 25% to 35% commission on a successful hire, he said. SES recently got into a bidding war with Tesla, Rivian, GM and QuantumScape over a new hire. Tesla won out.
One battery engineer who works for a global automaker told me recruiters for Rivian, Ford, Tesla, Amazon and CATL have been showing up in his LinkedIn inbox.
An engineering degree is one thing; experience solving problems on a factory floor or sourcing raw materials are another. Ramping up a plant is hard. It can take years to yield enough good batteries to be profitable.
PhDs in materials science aren’t the only ones who make that happen. There’s a shortage of line workers, too.
“It’s not even just the high-skilled, it’s the medium-skilled,” said Ryan Melsert, who helped build Tesla and Panasonic’s Nevada factory before becoming CEO of American Battery Technology, a battery-recycling company.
Tesla’s expansion plans for the factory near Reno have been stymied by worker shortages, he said. “They can’t find enough labor, even in northern Nevada, to justify expansion.”
Yen T. Yeh, a battery engineer turned entrepreneur who started the Volta Foundation with friends from MIT, said he’s been talking with universities and labs about trying to set up sort of workforce pipeline for the industry. But it’s still early days.
“Workforce development is the key issue,” he told me. “If we don’t solve this, Americans are not going to be the leader we want to be in the battery race.”
One Mine Auction Draws 3,448 Bids Amid Scramble For Lithium
* Controlling Stake In Sichuan Mine Sells For 2 Billion Yuan
* China Lithium Carbonate Prices Surged Over 400% In Past Year
An auction for a controlling stake in a Chinese lithium mine has garnered 3,448 bids, underscoring the scramble to secure the battery metal that’s key to the clean-energy transition.
The 54.3% stake in Yajiang Snowway Mining Development, which owns the mine in Sichuan, a southwestern province in China, was sold for about 2 billion yuan ($299 million), according to the JD.com’s judicial auction platform.
That’s nearly 600 times higher than the starting price of about 3.35 million yuan. Details of the winning bidder weren’t immediately available.
The heated bidding war, which concluded on Saturday, was joined by 21 participants, while over 980,000 people watched online throughout the five-day event.
“We believe the auction price indicates a bullish Chinese primary market for future lithium prices as well as the strategic importance of Sichuan spodumene assets,” Daiwa Capital Markets’ analysts Dennis Ip and Leo Ho said in a note.
The shift to electric vehicles has spurred a global rush for lithium, which is used in virtually all EV batteries, and seen Chinese prices of lithium carbonate surge more than 400% over the past year.
The highest bid in a tender in April by Australia’s Pilbara Minerals Ltd. for spodumene concentrate, a partly-processed form of lithium, more than doubled in just six months.
Yajiang Snowway is undergoing a bankruptcy process. The Dechenonba lithium mine in Sichuan’s Yajiang area covers 1.14 square kilometers, with estimated reserves of 24.9 million tons and a planned 1-million-ton capacity per year.
Hunt For Lithium Sparks Frantic Rush Into Argentine Mountains
Looming shortage of lithium, key for electric vehicles, gives Argentina a chance to become a mining mecca.
At a lavish lunch this month in Buenos Aires, 400 mining executives and government officials gathered to toast Argentina’s natural resource riches amid the kind of corporate giddiness not seen since the country’s first attempt to develop its shale oil resources a decade ago.
The attraction for investors this time around is Argentina’s lithium. There’s a looming shortage of the rare metal, a key raw material in the batteries used in electric vehicles. Elon Musk signaled Tesla Inc. might get involved in mining to secure supplies.
Chinese and US companies engaged in bidding wars for Argentina’s lithium resources, while Rio Tinto Group and Zijin Mining Group Co. are pouring more than a billion dollars into the country.
“If Argentina didn’t come through, it’d be almost impossible for the lithium market to stay well-supplied,” said Michael Widmer, head of metals research at Bank of America.
Argentina has 13 lithium projects in the pipeline, more than any other country. The US has 10.
The world needs lithium supplies to grow fivefold by the end of the decade to meet projected demand as the electric-vehicle revolution gets into full swing, according to BloombergNEF.
It could be Argentina’s last shot at moving beyond its traditional offerings of soybeans, grains and beef to emerge as a global heavyweight in a new sector.
The country has 19 million metric tons of lithium resources that haven’t yet been mined, twice as much as Chile. But Argentina has long struggled to lure the consistent, hefty international capital flows needed for mass development of oil, natural gas, gold and silver locked underground.
Patagonian shale formation Vaca Muerta is perhaps the best example. A decade ago, it was all buzz and promise. There was a special exemption from capital controls that attracted Chevron Corp. But the trickle never became a flood: Argentina’s broader woes and interventions in fuel markets kept development in check.
Now, the world’s largest lithium producer, Albemarle Corp., plans to restart exploration in the Salar de Antofalla in Argentina, a more remote and less developed area than Australia and Chile, where the company has been mining so far.
“We don’t always get to choose where our resources are. Now, the EV market is accelerating and demand is really growing, we need to develop that next resource,” said Kent Masters, chief executive of Albemarle.
It’s a tall order. A two-year price slump through the middle of 2020 had put some new mines on hold and had driven investors away, meaning that additional supply isn’t growing fast enough now.
“It’s more mature on the demand side now. You can bank on it more,” said Jon Lamb, portfolio manager at a metals and mining investment firm Orion Resource Partners. Consultancy Benchmark Mineral Intelligence expects the lithium market to grow to $40 billion by 2030 from just $1.2 billion in 2015.
Posco Holdings Inc., one of the largest steelmakers, is investing $830 million in a lithium hydroxide plant in Argentina.
Such investment is crucial, considering that Australia and Chile’s dominance in lithium is set to fade. While Australia and Chile account for 76% of output, their share in the project pipeline is only around 34%, BofA’s Widmer said in a note.
Argentina will overtake Chile in lithium production around 2027, according to Daisy Jennings-Gray, senior analyst at Benchmark Mineral Intelligence, which advises governments on critical minerals. Lithium Americas Corp. and Ganfeng Lithium Co.’s Cauchari-Olaroz is likely to be the first new project to produce significant volumes in 2023.
Argentina, Chile and Bolivia — the so-called lithium triangle — account for more than half of global resources, and are looking to cooperate on ways to move beyond mining the metal into producing higher-value products.
“The three countries have different perspectives on how to produce the lithium, but we have a shared perspective on what to do next with it,” Argentina Mining Undersecretary Fernanda Avila said. “We’re working together to develop new technologies and techniques to go further in the value chain.”
With history of capital controls, which Argentina uses to protect its foreign reserves, the country fights the perception of being “like ‘Hotel California’. You can come in anytime you want, but you can never leave,” said Andy Bowering of American Lithium Corp., which has a project in Peru.
Argentina makes companies turn export revenues into pesos. It then stops them from freely accessing dollars or pounds again and moving them abroad.
For instance, several commodities companies including top shale oil driller YPF SA had to re-finance dollar bonds because Argentina won’t let it buy enough greenbacks to service debt.
But with the country stuck for ways to grow the economy, especially in the mining sector, it recently created capital-control loopholes for big investors.
The world’s hunger for lithium outweighs all the hesitancy, said Jon Evans, chief executive of Lithium Americas, which outbid China’s Contemporary Amperex Technology Co. Ltd., the world’s largest battery maker, to buy Millennial Lithium Corp. last year. The three-way bidding battle for Millennial’s lithium assets in Argentina lasted four months and included two Chinese suitors.
Argentina “is the best lithium opportunity in South America,” Evans said.
Samsung SDI, Stellantis Invest $2.5 Billion In US Battery Plant
* EV-Battery Factory Will Create 1,400 Jobs In Kokomo, Indiana
* Project Adds To $4.1 Billion Battery Plant With Lg In Canada
Stellantis NV and South Korean battery maker Samsung SDI Co. will invest $2.5 billion to build a battery plant in Kokomo, Indiana, as the automaker speeds its shift to electric vehicles.
Samsung’s first US battery plant will have annual output of about 23 gigawatt hours when it opens in 2025 and eventually will raise that to 33 gigawatt hours, the companies said Tuesday.
The project will create 1,400 new jobs in and around Kokomo, which already is home to Stellantis engine and transmission plants. The city is roughly halfway between the automaker’s vehicle-assembly plants in Illinois and Ohio.
Competition among battery makers to ramp up capacity is intensifying in North America as auto manufacturers including General Motors Co. and Ford Motor Co. electrify their fleets and President Joe Biden looks to encourage the technological shift.
Stellantis Chief Executive Officer Carlos Tavares is racing to transform the sprawling manufacturer after it was formed in the mega-merger between Fiat Chrysler and PSA Group last year.
As part of its electrification plan, Stellantis is developing five large battery factories across North America and Europe to produce 400 gigawatt hours of capacity by 2030.
Stellantis already employs about 7,000 people at its engine, transmission, and casting plants in Indiana, including 6,300 members of the United Automobile Workers union, according to the company. The automaker said it will respect the right of its future hourly workers to form a union at the battery plant.
“Those future employees have the right to decide their representational status through secret ballot elections,” spokeswoman Jodi Tinson said in an email.
Cindy Estrada, director of the union’s Stellantis department, said in a statement that the UAW looks forward to reaching an agreement that “brings this new plant under our master agreement with traditional wages and benefits.”
Stellantis and Samsung initially agreed to form a joint venture to build a US battery plant last October. Samsung owns 51% of the venture while Stellantis owns 49%, and their investment in the Indiana plant could eventually reach $3.1 billion.
The Indiana Economic Development Corp. said it has pledged $186.5 million to support the project, including tax credits, training grants, infrastructure improvements and payments tied to performance targets.
Howard County, Duke Energy Indiana, Northern Indiana Public Service Company and the Greater Kokomo Economic Development Alliance are offering additional incentives, the IEDC said, without specifying the amount.
Stellantis, the owner of the Jeep, Peugeot and Ram brands, has pledged to sell 5 million battery-electric vehicles by the end of 2030. It aims to make all of its European passenger car sales fully electric by that time, as well to make half of its North American car and truck sales either plug-in hybrids or fully battery powered.
In March, Stellantis and Samsung rival LG Energy Solution announced a $4.1 billion joint venture to build a new electric-vehicle battery plant in Windsor, Canada.
These Are The Batteries We Need To Ease The Power Crunch
Industrial-scale powerpacks are being overlooked as one potential solution to the energy crisis.
The world is struggling with simultaneous energy and climate crises. To solve the first could require undoing all the progress made toward greener power and cleaner air. But it doesn’t have to be that way.
Euphoria for electric cars — and the powerpacks that run them — has obscured a more immediate and distinct need: batteries to run homes and businesses, as countries across the world deal with the repercussions of an ongoing power crisis.
Despite the worsening state of energy and rising electricity prices, existing technologies aren’t being put to use. Instead, everyone is just thinking about the steepening cost of generation, paralyzed by the thought of escalating bills and more frequent blackouts.
There’s a simple solution: Store the energy and use it when the need arises. As the market for EV batteries expands and evolves, large industrial-scale powerpacks — energy storage systems, or ESS — are being overlooked as a potential solution to this power crunch.
The market for the former, for instance, is expected to grow to $500 billion over the next two decades, while that of ESS won’t even make it past $100 billion, according to Morgan Stanley estimates. The latter is what we need far more urgently.
EV excitement has, no doubt, pushed development of battery technology overall and therefore helped ESS along as well. However, it hasn’t been driven by active concerns about our energy needs.
ESS are typically large, stationary powerpacks that can store excess energy from grids and other sources for later use, or when demand is peaking. As renewable energy contribution to power supply increases across the globe, the ability to store it and use it when people or businesses need it will become more important.
What’s underappreciated about these systems is that they benefit from all the EV battery developments like better energy density and safety, but don’t have the same problems or constraints. One big issue is size, for instance.
Electric car batteries need to be small, high-energy and safe. Its been difficult to get all three factors operational at the same time. But for ESS, size isn’t an issue since they don’t need to be housed in a moving vehicle. That reduces one variable.
In addition, factors that worry EV buyers about smaller batteries are different: Energy density doesn’t matter as much, nor does how far they need to take a vehicle, or the range. That’s key: this issue has driven manufacturers to push for other formulations that are expensive and tough to deploy commercially. What matters is charging cycles, battery life and frequency.
Viable options like lithium iron phosphate, or LFP, powerpacks, are underestimated. Life cycles and other metrics for stationary battery use are improving. Most materials used in this type are abundant, although prices have risen in recent months. They can operatefor several thousand cycles of charging and discharging.
All this means that existing technologies have come far enough to make ESS a reality — even for a few hours a day. Several manufacturers are already onto the imminent need for such systems, investing billions in building out these energy storage systems.
The world’s largest battery company, China’s Contemporary Amperex Technology Co., has been actively expanding its work in this area. It’s sold these products at six projects in Texas to an independent power producer.
The looming issue is upfront costs. Analysts often talk about how unviable these systems are, but in reality, there are too many unknowns to make accurate estimates on how steep industrial-scale energy storage projects will be.
The running expenses will depend on improvements including the quality of products and the life cycle of powerpacks — and these have both come a long way. Bottom line is, the status quo isn’t sustainable — it’s already cracking, and it’s time to look for solutions.
But are governments and companies willing to put ESS to use and boost adoption? The smart move would be to provide incentives, tax cuts, or consumer awareness programs to push things along.
Ultimately, the upfront costs need to be brought down and that requires talking about something less exciting than electric cars.
China, for instance, has been widely deploying LFP chemistry. As part of its goals to have 30 gigawatts of energy storage systems over the next three years, it plans to slash costs to help businesses adopt and deploy these systems.
Notably, it will ensure energy security to maintain its global supply chain heft. That’s not been a consideration for many others.
A recent MIT study on energy storage noted that the current policy focus on short-term decarbonization goals has encouraged both public and private attention toward “relatively mature technologies.”
That means markets and money haven’t pushed hard enough on new uses of storage and more effective energy utilization, since they continue to fly under the radar, set apart from mainstream policy.
Until they focus on the future, we should start worrying more about more blackouts and power shortages as climate change and extreme weather combine to put energy supplies at risk.
Buffett-Backed BYD Jumps Ahead of Tesla In Battery Metal Push
China’s electric-car giant sees a potential advantage in producing lithium from its own raw materials projects.
China’s BYD Co. is once again the largest shipper of electric vehicles in the world’s top market, after rivals including Tesla Inc. were disrupted by Shanghai’s lockdown.
The Warren Buffett-backed car producer is also working on plans to deliver a longer-term advantage over competitors, aiming to become more directly involved in the mining of lithium, the raw material that’s crucial for EV batteries.
In March, BYD agreed to invest up to 3 billion yuan ($449 million) in Chengxin Lithium Group Co., a supplier that has projects and interests in China’s Sichuan province and locations including Indonesia and Argentina. In January, the auto firm won a contract to produce the metal in Chile, the world’s No. 2 lithium producer.
A Chinese media report last week suggested the automaker is dramatically accelerating this strategy by striking a deal to buy six mines in Africa capable of producing enough lithium for more than 27 million EVs.
That could be sufficient to cover BYD’s lithium demand for the next 10 years, according to the report by The Paper, a Chinese digital newspaper. BYD hasn’t responded to requests to comment.
BYD’s reported shopping spree in Africa indicates the carmaker expects “a prolonged lithium shortage”, according to a note from Daiwa Capital Markets.
Automakers are contemplating ever-closer involvement in their supply chains, including in the mining and refining of key battery metals, after a year of escalating costs that have pushed many manufacturers, including BYD, to raise sticker prices.
One measure of lithium prices had an eye-popping rally of almost 500% in a year, and metals remain elevated now, even with some early signs the gains are cooling off.
EV battery prices are expected to tick up this year for the first time in more than a decade, and broader inflation could delay the point at which electric models are as affordable as conventional cars, according to BloombergNEF.
Though Elon Musk tweeted in April that Tesla “might actually have to get into the mining & refining directly at scale,” and said two years ago the company had acquired rights to a lithium clay deposit in Nevada, the company has mainly focused on sealing future supply agreements with existing producers.
Liontown Resources Ltd., developing a project in Western Australia, confirmed on Monday it expected to begin shipping material to the carmaker from 2024.
There are potential pitfalls for auto producers considering a leap into commodities production themselves. The mining sector has a patchy record of delivering projects as planned, a wave of resource nationalism is complicating developments in some key nations and ESG investors are closely scrutinizing extractive industries over potential environmental damage.
Securing sufficient supplies of raw materials is likely to be “the biggest challenge for all automakers for most of this decade,” Seth Goldstein, a Chicago-based equity strategist at Morningstar Research Services, told me last week.
The best solution would be for carmakers to lock in more long-term agreements with the industry’s major producers like Albemarle Corp. and Ganfeng Lithium Co., which have the most ability to bring on new supply, Goldstein says.
“Investing in junior miners who have never produced lithium, or new technologies, is relatively more risky and could result in not being able to secure enough lithium,” he said.
Investing In Electric-Vehicle Commodities Is Harder Than It Looks
Elliott Management’s $456 million lawsuit against London Metal Exchange for canceled nickel trades highlights problem with buying into trendy but niche battery metals.
Nickel might be a good investment given the rise of electric vehicles and the time it takes to bring on new supply. What that means for your portfolio is another question.
Hedge fund Elliott Management wants $456 million from the London Metal Exchange for its cancellation of trades during the spectacular short squeeze that followed Russia’s invasion of Ukraine. The LME’s owner, Hong Kong Exchanges and Clearing, is fighting the lawsuit.
Officially, nickel hit a 15-year high of about $48,000 a metric ton on the exchange on March 8, according to FactSet. But that excludes roughly $4 billion worth of canceled trades at much steeper prices.
Whatever the legal merits of the case in question, Elliott’s lost gains highlight the challenge faced by investors that want to buy into the trendy theme of battery metals as electric-vehicle sales take off—or to sell it if they consider it overhyped.
Few listed companies offer concentrated exposure. And where there is a financial market for the metals themselves, it bears a complicated relationship with the underlying physical market involving car makers, battery manufacturers, miners and refiners.
March’s short squeeze was triggered by the sanctions on Russia, a key nickel supplier, combined with a huge bearish position by Chinese stainless-steel giant Tsingshan.
The company, which also has become one of the world’s largest producers of nickel, had a lot of the metal on its books but couldn’t use it to settle with the LME because little of it was in the highly purified form the exchange requires.
Much of it was in a potentially useful form for the battery industry, though—the big growth market for nickel.
This disconnect between the financial market and the physical one it is supposed to mirror will only grow. Lithium-ion batteries for cars need to be extremely safe (think of General Motors’ recall of the Chevrolet Bolt), powerful, in ready supply and much cheaper—a formidable problem that means manufacturers want long-term supply agreements with suppliers they trust following rigorous qualification procedures.
This conflicts with the purpose of an exchange, which is to create a uniform product for buyers to trade, regardless of the seller.
Right now, the car industry is more worried about shortages of lithium than nickel, production of which is expanding massively in Indonesia, albeit with questionable environmental credentials.
Even more than nickel products, lithium compounds that go into batteries resemble specialty chemicals rather than traditional commodities.
The LME doesn’t offer liquid trading of lithium as it does nickel and cobalt, though it is experimenting with a new futures contract. Investors who want a piece of lithium can buy shares of U.S. miners such as Albemarle and Livent, but they are locked into confidential agreements with buyers that mean their profits might have little to do with the latest spot prices.
The LME’s nickel-market debacle has many lessons. One underlined by Elliott’s experience is that the complex reality of investing in battery metals can struggle to live up to the simple promise.
Volkswagen Is Looking At Making Its Own Batteries In North America
* In-House Production Could Help Ease Shortages, Executive Says
* Carmaker To Decide On UD Battery-Plant Site By End Of Year
Volkswagen AG is considering setting up an in-house battery cell manufacturing operation in North America, similar to what it’s doing in Germany.
The goal would be to ease a coming battery shortage by supplementing suppliers with its own production, according to Johan De Nysschen, chief operating officer of Volkswagen of America. The board is still weighing the idea, and no final decision has been made.
Vertical integration “has to be on our consideration of strategic options,” De Nysschen said Wednesday in an interview at VW’s new battery testing lab in Chattanooga, Tennessee.
The company has been scouting for US battery plant sites and should make a decision by the end of 2022, a spokesman said. VW is considering building its own cell-production facility, using third-party suppliers or entering into joint ventures.
Automakers from VW to General Motors Co. are exploring different business models as they race to electrify their lineups and catch Tesla Inc., the world’s No. 1 seller of electric vehicles.
They’re forging partnerships with battery cell makers and mining companies as they try to secure materials and know-how.
VW already operates a battery pilot line and recycling facility in Salzgitter, Germany, and plans to erect a full-scale factory to produce cells there starting in 2025, part of a $2.3 billion battery hub in Germany. VW has also created a dedicated company for its battery business, called PowerCO.
The carmaker has invested $800 million to retool the Chattanooga assembly plant to make EVs, and a new $22 million testing lab, which it opened to reporters and local officials at an event Wednesday. It has also built a battery-pack assembly plant next to the assembly facility.
The company, whose main brand swung to profitability in the US last year, is working to boost market share in the region, where it has long struggled due to a lack of popular SUV models in its lineup. In March, VW earmarked $7.1 billion over the next five years to improve its US offering, battery research and manufacturing capabilities.
China’s Massive Hydro Energy Storage Goals May Be Getting Bigger
PowerChina says construction will soon start on 270 gigawatts of pumped hydro plants to complement renewable power.
China’s biggest dam builder says the country is launching an even-larger-than-expected campaign to build hydro energy storage to complement renewable power.
The nation will start construction on more than 200 pumped hydro stations with a combined capacity of 270 gigawatts by 2025, Ding Yanzhang, chairman of Power Construction Corp. of China, the country’s largest builder of such projects, said in a Monday commentary in the Communist Party-run People’s Daily.
That’s more than the capacity of all the power plants in Japan, and would be enough to meet about 23% of China’s peak demand.
It would also be a massive increase from what China proposed just three months ago in its 14th five-year plan for energy development, when officials said the country wanted to have 62 gigawatts of pumped hydro in operation and another 60 gigawatts under construction by 2025.
PowerChina did not immediately respond to an email seeking comment, and the National Energy Administration did not answer calls to its Beijing office.
Hydro storage technology dates back more than a century. Water is pumped into an uphill reservoir using electricity when demand is low, and then generates power when needed by letting gravity carry the water downhill through turbines.
It can be paired with China’s rapidly growing fleet of solar panels and wind turbines to generate electricity when the sun isn’t shining and breezes aren’t blowing.
China has been eyeing a major pumped hydro build-out since at least last year. In August, a draft NEA document identified the potential for 680 gigawatts of pumped hydro in the country, and mooted a possible goal of starting construction of 180 gigawatts by 2025.
The final version of the plan released in September toned down the scale, but still called for 120 gigawatts of capacity operating by 2030. The entire world had 158 gigawatts of hydro storage at the end of 2019.
China is also ramping up plans to deploy newer forms of energy storage such as batteries, with the country’s largest grid saying it hopes to have 100 gigawatts of such capacity available by 2030.
Red-Hot Lithium Boom Pits Wall Street Against The Wonks
A bearish forecast from Goldman set off a backlash among industry experts.
There’s a fight brewing in the lithium market, after a controversial forecast from Goldman Sachs Group Inc. analysts set off a backlash among some of the industry’s most prominent experts.
Lithium is a vital component of electric-vehicle batteries, which means the outlook for supply, demand and pricing is increasingly consequential.
For years, a small group of niche consultants has dominated the conversation in a commodity that some say will become as important as oil in the coming century. Now, with prices surging and demand booming, they’re increasingly sharing the stage with Wall Street titans like Goldman.
The bank made headlines when it warned that a searing rally in lithium will go into reverse this year as supply from unconventional new sources overwhelms demand. Credit Suisse Group AG also joined in predicting a correction. But specialists including London-based Benchmark Mineral Intelligence are loudly pushing back.
The rift matters because both groups play important roles in the burgeoning electric-vehicle industry. The niche consultancies offer tailored research to miners, battery-makers and car companies that guides decisions about whether to invest in new projects; Wall Street banks — and the investors that read their research — help determine whether they can afford to do so.
Benchmark disputes Goldman’s forecast that a flood of new production is on its way, and that prices will crater as a result. The consultancy still sees prices retreating from recent sky-high levels, but takes a more pessimistic view on the scale and timing of new supply.
The mining industry is famously bad at hitting its production targets and lithium has added risks to due to the highly complex technical processes involved in making the final products used in battery packs, Benchmark says.
“You’ve got this additional hurdle arising because it’s not a commodity, it’s a specialty chemical,” Daisy Jennings-Gray, a senior price analyst at Benchmark, said by phone. “It’s a two-stage concern combining the traditional problems that the mining industry has faced with the additional challenges that a specialty chemical producer might face.”
The spat may seem trivial, but the stakes are high for those who rely on the forecasts, given lithium’s critical role in the electric-vehicle revolution and the wider fight against climate change.
If the deficits persist and prices spike further, it could cause car-makers’ margins to collapse, and potentially slow the mass roll-out of electric vehicles.
But if prices slump, miners could scrap major new projects, setting the stage for even larger spikes and deeper deficits in the 2030s, when sales of electric vehicles will need to outstrip those of conventional cars if the industry is going to have a hope of hitting its net-zero targets. Lithium carbonate in China was steady on Tuesday, and has risen 72% this year.
“The lithium industry in its current form is very young, and so it’s difficult to say with confidence how responsive miners will be in bringing on new supply,” said Peter Hannah, a senior price development manager at Fastmarkets, a price reporting agency and industry consultancy.
“A lot of it hinges on technology that we’ve never really seen before, and so there a lot of variables to consider, and each one could prove each of us wildly wrong, one way or another.”
Of course, disagreement among analysts is common in commodities markets, but the scale of the divergence is particularly acute in battery metals like lithium, where supply and demand are both growing at a breakneck pace.
While a market like copper typically grows by 2%-4% a year, lithium analysts are anticipating growth of more than 20% for both supply and demand between 2021 and 2025.
That means minor differences in analysts’ assumptions — for example about the chemical composition of batteries or the timing of new mining expansions — can have a major impact on their supply-and-demand estimates. It’s an issue that’s cropping up in other battery metals like cobalt and nickel as well.
George Heppel, who developed models for battery metals demand at commodities consultancy CRU Group before joining BASF SE earlier this year, said in a LinkedIn post last month that a minor error in calculating nickel demand meant forecasts underestimated usage by about 30%. And others in the industry were doing the same.
“Several months after fixing my model, I was having lunch with a nickel analyst at an investment bank who was angrily complaining about how the nickel demand numbers being generated by the bank’s battery division were far too low. It was with much satisfaction that I was able to reveal the likely issue,” Heppel wrote.
In lithium, expert consultancies claim that the wayfarers from Wall Street are far more likely to overlook the nuances of the industry in carrying out their research. Joe Lowry, the founder of specialist advisory firm Global Lithium, has frequently taken to Twitter to call out perceived shortcomings in research by banks.
Matt Fernley, the London-based managing director at Battery Materials Review, an industry researcher, said the sellside reports are “massively over-estimating” the ease of adding new supply, and failing to consider the complexity of bringing new assets into production and the qualification requirements.
“The lithium industry needs to raise hundreds of billions of dollars of capital for expansion over the next 10-15 years,” he said. “A lot of that needs to come from equity and that’s going to be difficult if equity prices are depressed because of such reports.”
Old Electric-Vehicle Batteries Are Getting A Second Life
Auto makers like Nissan and Renault are using retired batteries to build large-scale energy-storage systems.
Millions of electric vehicles will be scrapped in the coming years. For the batteries that power them, that won’t be the end of the road.
Eventually, auto makers and recycling companies want to harvest valuable materials from old EV batteries to make new ones. But before they are recycled, used batteries could be given a second life on the electricity grid.
Wind and solar plants are increasingly being coupled with lithium-ion batteries to store excess power for times when the sun isn’t shining and the wind isn’t blowing.
As these are the same type of batteries as those used in electric cars, auto makers say repurposing them could aid the expansion of renewable energy as well as address an electronic-waste challenge.
Auto makers such as Nissan Motor Corp. and Renault SA are stepping up efforts to repurpose old batteries and tap surging demand for energy storage. Global investment in grid-scale batteries reached $6.8 billion in 2021, up from $4 billion in 2020, according to International Energy Agency estimates.
There are currently 10 million EVs on the world’s roads, a figure that is expected to rise to 300 million by 2030, the IEA says. That will create a valuable market for retired batteries:
Roughly 1.7 million will be available for reuse in 2030, with a combined value of $5.1 billion, according to Circular Energy Research and Consulting, which collects data from sources such as car dismantlers and online marketplaces.
EV batteries degrade as they are charged and discharged. Drivers can expect upward of 100,000 miles of use before a battery loses 20% or more of its capacity, roughly the point at which performance drops noticeably, experts say.
But they remain useful for grid storage until their capacity drops to around 60%, potentially giving them another 10 to 15 years of service, according to Hans Eric Melin, founder of Circular Energy Storage Research and Consulting.
Used EV batteries can be resold for small-scale applications such as storing electricity from rooftop solar panels. Auto makers and power-equipment companies have been trialing larger-scale second-life applications for years. A soccer stadium in Amsterdam uses nearly 150 new and old Nissan EV batteries to power an energy-storage system.
As more old batteries become available, these projects are proliferating. Volkswagen AG’s Skoda unit last year started providing energy-storage systems—each of which uses 20 plug-in hybrid batteries or five all-electric batteries—to power charging stations at dealerships in Europe. Skoda said it could eventually make 4,000 of the units.
In March this year, European utility Enel SpA started operating a project with Nissan that uses 48 old EV batteries with 30 new ones in an energy-storage system at a power plant that provides electricity for Melilla, a Spanish enclave on the coast of Morocco with 86,000 inhabitants. The system can provide 15 minutes of backup power.
Nicola Rossi, head of innovation at Enel’s renewable-generation arm, said “every improvement and economy of scale enhancement that can be achieved on EVs can improve stationary batteries as well.” Enel is using second-life batteries to build an energy-storage facility for a 30-megawatt solar park at Rome Fiumicino Airport.
Soufiane El Khomri, director of Nissan Energy Services, said that the Japanese auto maker has a head-start in selling old batteries for the grid because it launched a compact battery electric car, the Nissan LEAF, back in 2010 and now has more than 500,000 EVs on the road. “We expect future opportunities to increase as the EV market continues to flourish,” he said.
Battery packs from a first-generation Nissan LEAF were sold for an average of $130 per kilowatt hour in 2021—roughly $3,500 for a 24 kilowatt-hour model—according to Circular Energy Storage Research and Consulting.
Auto makers often get old batteries back, for instance through leasing agreements with customers or by keeping hold of batteries that are upgraded.
Renault, for instance, has rented out more than 250,000 batteries that will come back for repurposing or recycling in the coming years, although it now usually sells the batteries with the new cars. Renault has several energy-storage sites in France that combine old and new EV batteries.
The combined capacity of retired batteries will climb from 10.4 gigawatt hours last year to 107.5 gigawatt hours by 2030, according to Circular Energy Storage Research and Consulting estimates. That would correspond to an hour of power consumption for around 80 million U.S. households.
In practice, not every old battery will wind up being used for energy storage. Some will retain enough juice to be used in another car.
Hans-Günter Schwarz, head of battery development at German energy provider RWE AG , said using repurposed EV batteries could be cheaper than new batteries, depending on the battery’s voltage and other factors. But the low volumes of batteries currently available means it is too early to know whether they will be a large-scale solution for the grid, he said.
RWE operates an energy-storage system with a capacity of around 4.5 megawatt hours in Herdecke, Germany, that uses 60 lithium-ion batteries taken from Audi EVs.
What happens to old EV batteries also depends on how the potential rewards from repurposing them stack up against those of reusing their materials in new batteries.
Specialist battery-recycling companies such as Carson City, Nev.-based Redwood Materials Inc. and Li-Cycle Holdings Corp. of Toronto are developing technology and building factories for battery recycling, teaming up with big auto makers.
Redwood, for example, collects and recycles battery components from Panasonic Holdings Corp. , Tesla Inc.’s main battery partner.
This year, the startup plans to supply the Japanese conglomerate with copper foil produced from recycled materials to make new lithium-ion cells at Tesla’s Gigafactory in Nevada. Li-Cycle is working on a General Motors Co. -backed battery-recycling effort.
In Europe, Renault SA has a partnership with Veolia Environnement SA and Solvay SA to extract and purify end-of-life EV battery metals.
Some experts say recycling is already a better option than finding new homes for batteries. Emma Nehrenheim, chief environmental officer at Swedish battery maker Northvolt AB, said recycling has become a cost-efficient way of recovering valuable metals, while second-life uses haven’t been proven on a large scale.
“Comparatively, the economics of immediate recycling are compelling,” she said.
But others envision a three-stage life cycle for batteries, with recycling being the final phase. “We want to enable a full-circle life cycle,” said Dustin Grace, chief technology officer at Burlingame, Calif.-based EV company Proterra Inc., which makes batteries for medium-and heavy-duty commercial vehicles and has sold more than 850 buses.
Proterra is now considering a second life for their batteries. One possibility is to put them into EV charging stations. “We like to think of the second-life application as something that we should do before they are recycled,” Mr. Grace said. He said batteries are too valuable to end up in landfill.
“The goal isn’t to build these large 1,500 pound batteries so they can be used and then put back in the earth,” he said. “You have a whole army of engineers thinking about this.”
QuantumScape’s Manufacturing Drama Tests Silicon Valley Moonshot
The departure of its top manufacturing expert is bad news for the battery startup backed by Volkswagen.
Battery startup QuantumScape dropped some news last week that we reporters like to call a Friday night news dump. That’s when companies try to bury unpleasant information by releasing it at the end of the work week, when reporters are tired and readers are headed to happy hour.
The company did just that on Friday, announcing the departure of Chief Manufacturing Officer Celina Mikolajczak after a year in the job. The Tesla and Panasonic veteran was a key hire when she joined QuantumScape to help bring battery innovations from the lab to the factory floor.
It’s a bad sign for the company backed by Volkswagen. QuantumScape has been targeted by shortsellers and pummeled with shareholder lawsuits alleging it oversold its technology to investors ahead of a buzzy SPAC merger in 2020 that raised $680 million. Mikolajczak brought credibility and the expertise to take the company’s ballyhooed battery into production.
The startup cited “differing management styles,” and said its manufacturing and supply chain teams will now report directly to CEO Jagdeep Singh, a well-regarded salesman and tech leader in Silicon Valley, but not a manufacturing expert.
Mikolajczak will join the company’s scientific advisory board for at least one year, and keep her stock grants.
She’s going to focus on building a “U.S.-based battery supply chain,” according to the filing. In response to this newsletter, QuantumScape said it has been “growing and strengthening our manufacturing team across the board.”
No doubt, Mikolajczak will have a new job soon. In the hyper-competitive race for battery talent, her experience scaling up Tesla’s Nevada gigfactory — and her years as a consultant figuring out “why batteries go boom,” as she once described it — make her a rare find. She’s also a female executive with serious technical chops in a very male-dominated field.
In her absence, Clayton Patch, a veteran of silicon chip foundries who joined the company in May 2021, will run manufacturing, QuantumScape told me. Patch worked closely with Mikolajczak.
QuantumScape is one of dozens of startups trying to reach the “holy grail” of battery innovation: a solid-state battery that can deliver longer range, faster charging times, long cycle life, lower fire risk, and lower cost. The company can make this battery at lab scale.
The big question is whether it can produce it for millions of EVs. Doubters say making QuantumScape’s key component, a ceramic separator, without too many flaws is very hard to do at an economically viable cost. QuantumScape’s solution is hidden behind closely-guarded IP.
There are differing theories on the split. One view is that Mikolajczak was brought in too early, when the cells weren’t yet ready for high-volume production and the kind of inflexible deadlines that large-scale manufacturing requires.
She had the right skills but at the wrong moment in time and was trying to change too much. The counterpoint to that is: that’s what she was hired to do. Mass production requires change. And a perusal of her LinkedIn page suggests early-stage cell work is well within her grasp.
QuantumScape, spun out of Stanford University and backed by tech luminaries John Doerr and Vinod Khosla, represents the Silicon Valley moonshot approach to innovation.
The company wants to leapfrog Asia in the battery race with a big breakthrough, not by incrementally improving what Korean and Chinese battery makers already do.
“I just think that’s a tough hill to climb,” Doug Campbell, the CEO of Solid Power, another battery startup, told me last month. “You’re going head to head with the Asians, and I think it just elevates your risk profile.”
Singh, the QuantumScape CEO, often compares his company to Tesla in its disruptive ambitions. But it’s not just large, well-funded battery manufacturers he’s up against.
While he spends the next couple of years working toward commercialization, competitors are bringing improved batteries to market that could erode the value of QuantumScape’s innovation. And he now must get from the R&D lab to the factory without Mikolajczak’s knowledge and skills.
One of World’s Biggest Cobalt Mines Is at Stake in Congo Fight
* Gecamines Says TFM Owes $7.6 Billion For Royalties, Interest
* Chinese Partner Says It’s Business As Usual At Tenke Mine
A dispute over one of the biggest copper and cobalt mines is escalating in the Democratic Republic of Congo, threatening to disrupt exports of essential battery materials and raising questions about the project’s future.
A top executive from state mining company Gecamines said that partner CMOC Group Ltd. owes $7.6 billion in overdue payments, and even accused the Chinese metals producer and trader of posing a threat to national security.
CMOC said it denies the allegations, “strongly” opposes what it views as unjustified attacks and will defend its rights and interests.
The crux of the dispute is over mineral royalties. Gecamines, which owns 20% of the Tenke Fungurume mine, accuses controlling shareholder CMOC of under-reporting mineral reserves and hiding data to avoid triggering higher payments under their agreement.
Earlier this year, a court ordered that the mine should be run by a temporary administrator while the two sides sort out their differences. However, CMOC says it’s still in charge of managing the project and insists it’s business as usual.
Now Gecamines is firing up the rhetoric, threatening last week to cancel the partnership altogether and take back the rights to the deposit. The company is owed about $5 billion in royalties and wants more than $2.5 billion in interest as well, said deputy chief executive officer Leon Mwine Kabiena.
LG Reviews $1.3 Billion Arizona Battery Plant On Rising Costs
LG Energy Solution Ltd., the world’s second-largest electric-car battery maker, is reviewing plans to build a $1.3 billion plant in Arizona as surging materials prices inflate the cost of the project.
Given “unprecedented economic conditions and investment circumstances” in the US, LG Energy is currently reviewing various investment options, the company said in response to a Chosun Ilbo report that it had decided to reconsider the project as construction costs have increased and amid concerns over weakening battery demand.
LG Energy had planned to spend 1.7 trillion won ($1.3 billion) to build a plant with 11 gigawatt hours of capacity in Queen Creek, Arizona, to supply cylinder-type batteries for EV startups.
Construction was set to start in the second quarter with mass production scheduled for the second half of 2024, LG Energy announced in March.
A final decision whether to build the Arizona plant will be made after LG Energy consults with customers on how it can reflect cost increases in battery prices, Yonhap New reported, citing an unidentified source.
The decision is expected to take at least one to two months, according to Yonhap. The company still plans to proceed with plants jointly owned with General Motors Co. in Tennessee and Michigan, Yonhap said.
“If we determine that it’s not working, even in marriages, there are always divorces,” Mwine said Monday in an interview at Gecamines’ headquarters in the mining hub of Lubumbashi. “It’s the biggest rip-off of the last twenty years, and Gecamines is not going to continue like this.”
The escalating fight is important because of Congo’s outsized role in supplying the world’s cobalt, a vital part of many electric-vehicle batteries. Tenke was one of the top cobalt producers last year, and is also a large supplier of copper.
The spat also takes place against the backdrop of President Felix Tshisekedi’s efforts to increase scrutiny of mining deals made under his predecessor, Joseph Kabila.
Its mineral riches make Congo hard to ignore for the global mining industry, but many have steered clear because of the perceived riskiness, so the dispute will be closely watched by other international miners and potential investors.
Gecamines’ next step may be to halt Tenke’s mineral sales, Mwine said. The state-owned company has not signed its annual commercial agreement with the venture and without that Mwine says any exports are technically illegal.
CMOC says the allegations against it are groundless and that royalty payments are clearly defined in its agreement with Gecamines.
“There are people, who ignore the basic facts and act against the established agreement, trying to sabotage the amicable environment of friendly talks by telling lies, making troubles, and attacking partners,” CMOC said in an emailed response. “This is not justified. CMOC opposes it strongly. We will retain all means, including legal means, to defend our legitimate rights and interests.”
CMOC bought control of Tenke Fungurume Mining Sarl from Phoenix-based Freeport McMoRan Inc. about five years ago in a deal that ultimately cost the company more than $3 billion.
CMOC announced a $2.5 billion injection into the mine last year in order to double production, raising questions from Gecamines and the government about whether it was under-reporting its reserves.
According to its 2010 amended mining convention, Tenke Fungurume Mining is supposed to pay Gecamines a royalty of $12 for every ton of proved and probable recoverable reserves of copper beyond 2.5 million tons.
Last August, Tshisekedi created a special commission coordinated by Mwine to investigate the deal, and Gecamines filed a lawsuit against the company in December. In February, the court decided in Gecamines’ favor, ordering that Tenke should be run for at least six months by the administrator, Sage Ngoie Mbayo.
Gecamines backed Ngoie when his appointment took effect earlier this month, but he says that Congolese soldiers, who’ve been protecting the mine from artisanal miners since 2019, barred him from entering. The large military presence at the site, and the refusal to allow Ngoie entry, is a threat to national security, Mwine said.
The deputy CEO also criticized TFM’s mining practices, as well as the number of expatriate workers who he said are doing jobs that could easily be performed by locals at the mine.
“It’s not just money that interests us,” he said. “Money is money, but it’s also the governance of the business,” he said.
Korean Battery-Parts Maker Eyeing IPO Expects 30% Margins by 2025
* W-Scope Chungju Plant Plans To Raise As Much As $765 Million
* Shares In Japan Parent Company Have Risen 131% Since January
W-Scope Chungju Plant Co., the South Korean battery-parts maker seeking to raise as much as 1 trillion won ($765 million) in an initial public offering, sees operating margins north of 30% by 2025 on robust demand for electric cars, Chief Executive Officer Won-Kun Choi said.
The company also expects revenue will increase around 40% to about $200 million this year, Choi said in an interview from the company’s headquarters in Chungju earlier this week. Chungju, a city known for its annual martial arts festival, is where W-Scope also has one of its manufacturing facilities.
“We’re all set for production plans for the next five years and we’re in talks with potential partners for new orders,” Choi said.
W-Scope Chungju Plant, which makes the separators used in electric-car batteries, is seeking a stockmarket valuation of least 3 trillion won, Choi said. Proceeds from the IPO will be used to build a new plant in Hungary.
Separators, or thin insulating membranes, physically isolate the anode and the cathode in an electric battery, preventing a short circuit, while allowing ions to circulate between them. A strong membrane that can endure high temperatures is key for battery makers to prevent fires in electric vehicles.
W-Scope Chungju Plant, a unit of Tokyo-listed W-Scope Corp., set an IPO price range between 80,000 won and 100,000 won a share, according to a prospectus submitted to the Korea exchange on Thursday. Trading is expected to begin in mid-August, Choi said.
Shares of W-Scope in Japan have soared 131% this year, partly on news of its Korean unit’s share sale listing plans, which first emerged in February.
Stock in rival separator maker SK IE Technology Co., however, has slumped 51% since January, a broader indication of worsening investor sentiment toward EV-related companies as the cost of raw materials spikes and the chip shortage drags on, according to Jeon Chang-hyun, analyst at Daishin Securities Co.
W-Scope Chungju Plant’s main customer is Samsung SDI Co., a battery unit of South Korea’s biggest conglomerate Samsung Group. It also supplies to LG Energy Solution Ltd. and Sony Group Corp., Choi said.
The Korean unit reported 185 billion won in sales and 40.4 billion won in operating profit for 2021 for a margin of almost 22%, company filings show.
Before founding W-Scope with other engineers in 2005 in Japan, Choi spent about a decade at Samsung Electronics Co.’s semiconductor and display division. It was there that he realized the technology for producing membranes could be used for separators for lithium-ion batteries.
“No investor believed me in South Korea when I told them I wanted to make a battery separator with a membrane,” he said. “That’s why I couldn’t list shares in Korea at the time.”
Two lessons he learned from Samsung — secure stable supplies for raw materials and meet customer demands.
“Partnering with Korean suppliers is crucial to keep input costs stable,” Choi said. “Samsung was also good at after service for customers.”