“When you move into an all-electric vehicle,” Ford CEO Alan Mulally recently told a Fortune magazine forum on green technology, “the battery size moves up to around 23 kW·h, [and] it weighs around 600 to 700 lbs. They’re around $12,000 to $15,000 [each]” in a compact car the size of a $20,000+ gasoline-powered Focus. “So you can see why the economics are what they are.”
Despite the highly anticipated arrival in 2011 of vehicles fully or partially powered by batteries, the numbers for the first full year of sales for the Chevrolet Volt range-extender and the Nissan Leaf EV full-electric have been weaker than expected. If car buyers didn’t hesitate over limited range and recharging infrastructure, the cars’ high upfront costs certainly scared off many potential customers. Those high price tags are largely driven by the cost of the lithium-ion (Li-ion) battery.
Unfortunately, those costs are not likely to drop anytime soon, according to Kevin See, lead analyst for the electric vehicle service of Lux Research, an independent research and advisory firm that focuses on emerging technologies. “The costs are too high and will remain so despite increasing economies of scale,” he stated, which bodes ill for widespread adoption of EVs in the near future. “We need innovations and new strategies to reduce the costs further, faster.”
While other promising avenues such as lithium-air, lithium-sulfur, and magnesium-based batteries may become available at some point, they all remain immature technologies. For the rest of the decade, plug-in vehicles’ fates will be tied to the cost of Li-ion batteries. “Lithium-air is a major value proposition,” he noted, “but it can’t cycle repeatedly and it has a long way to go.”
Value-chain cost structure
“We follow the entire value chain of the EV market, and it is the materials that go into the batteries that determine both its performance and cost,” See observed. The analyst and his colleagues try to read the tea leaves of the future EV market by developing a quantitative model of the cost structure of Li-ion batteries. They then use it to investigate how expected technological innovations might affect costs.
Reviewing Lux’s recent report, he emphasized that while increasing manufacturing scale is critical, it will not be nearly enough to reach aggressive cost targets.
“The first premise we looked at is that scale will be the savior of the EV market, that rising production volumes will cut costs enough” to drive widespread vehicle acceptance, See said. Incremental improvements in materials properties and cost will help further, but the result still falls short of the major leap that will be required.
“That gets you nowhere close to the U.S. Advanced Battery Consortium target of $150/kW·h by 2020.”
The Lux team next ran the cost model to see what happens by 2020 if the batteries use the same materials as today but successor designs are augmented by the incremental technical innovations that are likely to occur in the coming two decades. Such a "business-as-usual" scenario yielded nominal EV pack costs of $397/kW·h in 2020.
Battery makers’ secret sauce
Aside from liquid vs. solid/semisolid electrolyte types, the report said, cathode technology remains the principal Li-ion cell differentiator. It accounts for the largest percentage of cell cost and is typically the limiting factor in cell design and cell capacity.
Using their cost-barometer model, Lux researchers considered the effect on cost if an advanced Li-ion battery were to feature a voltage increase of 1 V (4.7 V overall) and a cell capacity rise of 40 MA·h/g, which would require a future cathode capable of storing 200 MA·h/g of electric charge. In this optimal case, the 2017 nominal pack cost drops from $477 to $384/kW·h, a 19% reduction.
The Lux report highlighted several cathode materials with higher capacity potential. Lithium-manganese-spinel is attractive for cost and safety but lags in energy—a fault that can be ameliorated by mixing it with high-energy-content materials such as nickel-manganese-cobalt-oxide (NMC) and lithium-nickel-oxide. The flexible NMC formulation provides tunable ratios of three elements for tailoring performance and cost. Lithium-iron-phosphate (LFP) excels in safety characteristics but entails sacrifices in performance.
Meanwhile, other next-generation materials promise higher energy and lower costs, according to the Lux report. Cathodes with both higher capacity and voltage could boost energy density and thus lower cost per kilowatt-hour. One possibility is lithium-iron-manganese-phosphate, which could retain the advantages of LFP while significantly raising energy content. An alternative is the lithium-rich "layered-layered" NMC cathode technology licensed from Argonne National Laboratory, which offers higher capacity and operating voltages. Issues with cycle life must be overcome before this material can be commercialized.
Anode innovations ahead
Silicon represents one of the most highly researched alternative anode materials because of its high theoretical capacity, the report noted, but it will take time to emerge because silicon undergoes significant volume changes as lithium ions move in and out of it. This process mechanically stresses the anode, causing breakage and limiting cycle life.
Lithium titanate, another alternative anode, has excellent power performance, potentially providing a strong value proposition for fast-charging batteries. Lithium titanate also allows for a higher degree of usable energy than carbon anodes, but it sacrifices energy density.
Electrolyte suppliers look to mix and match additives to push performance. Within the liquid, solid, or gel electrolyte categories, researchers vary the formulations to improve thermal stability and safety, for instance. As cathode developers seek to use higher voltages, voltage-resistant electrolytes will become crucial, according to the report. Ionic liquids may provide a long-term solution. These salts feature low melting temperatures, which allow for higher-voltage operation, but high costs and low ionic conductivity mean significant work remains before they will be ready for mass-production.
“There are a lot of different strategies,” See said, but some of the surest routes to cost reductions are:
• Improved performance at the cell and pack level
• More efficient use of materials
• Expanded window of usable energy
• Reductions in battery capacity fade
Batteries have to be oversized to ensure long-term function, as they suffer performance degradation over time, said See, who believes a potential cost savings of 20% to 30% can be realized by a reduction in oversizing.
Battery management technology also impacts costs. A battery management system can improve a battery’s performance with no improvement in the cell itself—especially in regards to cycle life and defense against the effect of defective cells—by controlling smaller groups of cells and optimizing the usable SOC window of each group of cells using new software algorithms.
See said that the industry’s need for materials innovation to drastically cut costs has led to significant activity in the lithium-ion battery value chain, including capacity expansion, new entrants to the market, and partnerships.
“Suppliers and end users have to cooperate to grow the electric vehicle market further,” he advised. “Automakers are getting increasingly involved in battery design and even the materials, and they’ll need to support and cooperate more and more with their suppliers.”