Batteries that will power the future
Battery technology may be the keystone of the energy transition, facilitating the decarbonization of the transportation sector while providing a critical backstop for intermittent solar and wind generation in power generation. But the widely used lithium-ion battery may not be up to the task of carrying the future of the global green economy.
President Joe Biden is making batteries a component of his carbon-neutrality strategy, suggesting that domestic production — rather than relying on Chinese and Korean imports — could create jobs. Right now, Chinese companies, including CATL, BYD, and Hefei Guoxuan High-Tech, produce 79% of the world’s batteries. Domestic manufacturers trail with 7%. The need to compete is evident.
Lithium-ion, or Li-ion, is the most prolific battery technology in use today. Li-ion boasts high energy density relative to older nickel-cadmium batteries, and the absence of a memory effect, which causes batteries to lose storage capacity with continued usage. ‘Self-discharging’ — wherein minuscule chemical reactions in a battery lower capacity over time, is minimal in Li-ion technology.
For these reasons, most of today’s electric vehicles (EVs) use some form of Li-ion battery. Tesla TSLA +3.7% employs its own lithium-nickel-cobalt-aluminum (NCA) chemistry, while lithium-nickel-manganese-cobalt (NMC) is common in the rest of the EV sector, produced by LG Chem and SK Innovation. The two Korean companies are embroiled in a legal battle, with the former accusing the latter of intellectual property theft. The International Trade Commission’s decision to bar certain imports from SK Innovation over the matter could disrupt America’s supply chain and Biden’s clean energy transition.
Unfortunately, Batteries that will power the future: Li-ion lifespans still aren’t particularly long, and experience significant deterioration within their first few years. Five years of extensive use can leave a battery at 70%-90% of original capacity. Li-ion batteries are still an expensive means of power, with the industry standard hovering around $137 per kilowatt-hour (kWh) in 2020. Tesla’s cutting edge NCA battery packs are rumored to be closer to $100/kWh. That being said, costs have come a long way: in 2010, battery prices were $1,100/kWh, representing a 90% drop over ten years. But that decrease is not sustainable over the next decade.