The automotive industry’s use of lithium-ion batteries is on track to grow seven-fold to 650 GWh by 2025, from 70 GWh in 2017; the increase in energy storage, although from a lower base, will add to this, says specialist international publisher Metal Bulletin.
It adds that the electrification of vehicles and the need to store electricity, generated by renewable energy sources such as wind and solar, point to huge demand growth for lithium-ion batteries.
Government subsidies and incentives in many countries – most notably China – are encouraging sales of electric vehicles (EVs) and e-buses.
For now, the cost of manufacturing EVs remains more expensive than a vehicle powered by a comparable petrol or diesel internal combustion engine (ICE), owing to the cost of the EV’s battery pack.
However, economies of scale are at work in bringing down battery costs; and as EV and ICE vehicle prices converge, the cheaper running cost of EVs is expected to make them the vehicle of choice.
Battery pack costs have fallen to around $200/kWh this year, from around $1 000/kWh in 2010, and may reach a battery cell cost of $100/kWh this year, with its battery pack costs expected to reach that level in 2020.
The $100/kWh price tag for a battery pack is thought to be the tipping point where EV and ICE costs are similar.
Metal Bulletin further expects many consumers to see EVs as a must-have status symbol well before prices converge. The publisher questions whether raw material supply will be able to respond in time.
“In most cases, the supply chain is coping with the rollout of EVs but the technology is at the start of the ‘S’-curve. The entire supply chain must work hard and in a coordinated way to feed this new supercharged era.
The supply response from raw material producers to processors, cathode and battery manufacturers and original-equipment manufacturers will be massive, with output needing to increase many times over in a short period to keep up with even the more conservative demand outlooks,” notes Metal Bulletin.
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