A Battery Price War Is Kicking Off That Could Soon Make Electric Cars Cheaper
If you can avoid or minimize the use of expensive or controversial minerals, you can cut costs. That’s why Chinese companies such as CATL have all but monopolized the market on another chemistry, lithium iron phosphate (LFP) batteries. These batteries are cheaper, as they have no cobalt. They have other benefits too: a longer usable life and less risk of fire than traditional lithium battery chemistries. The downside is they have lower capacity and voltage.
The recent price cuts come from a deliberate decision to use abundant earth materials such as iron and phosphorus wherever possible.
What about lithium? Prices of lithium carbonate, the salt form of the ultra light silvery-white metal, shot up sixfold between 2020 and 2022 in China before falling last year.
Despite this, battery prices have kept falling – just not by as much as they otherwise would have.
The world’s huge demand for lithium has led to strong growth in supply, as miners scramble to find new sources. CATL, for instance, is spending A$2.1 billion on lithium extraction plants in Bolivia.
Growth in lithium supply is projected to outpace demand by 34% both this year and next, which should help stabilize battery prices.
Battery Options Are Multiplying
China’s battery makers have cornered the market in lithium iron phosphate batteries. But they aren’t the only game in town.
Tesla electric cars have long been powered by batteries from Japan’s Panasonic and South Korea LG. These batteries are built on the older but well established NMC and lithium nickel cobalt aluminate oxide (NCA) chemistries. Even so, the American carmaker is now using CATL’s LFP batteries in its more affordable cars.
The world’s largest carmaker, Toyota, has long been skeptical of lithium-ion batteries and has focused on hybrid and hydrogen fuel cell vehicles instead.
But this is changing. Toyota is now focused heavily on making solid-state batteries a reality. These do away with liquid electrolytes to transport electricity in favor of a solid battery. In September last year, the company announced a breakthrough which it claims will enable faster recharging times and a range of 1,200km before recharge. If these claims are true, these batteries would effectively double the range of today’s topline EVs.
In response, China’s battery manufacturers and government are working to catch up with Toyota on solid-state batteries.
Which battery chemistry will win out? It’s too early to say for electric vehicles. But as the green transition continues, it’s likely we’ll need not just one but many options.
After all, the energy needs of a prime mover truck will be different to city runabout EVs. And as electric aircraft go from dream to reality, these will need different batteries again. To get battery-electric aircraft off the ground, you need batteries with a huge power density.
The good news? These are engineering challenges which can be overcome. Just last year, CATL announced a pioneering “condensed matter” battery for electric aircraft, with up to three times the energy density of an average electric car battery.
All the while, researchers are pushing the envelope even further. A good electric car might have a battery with an energy density of 150–250 watt-hours per kilogram. But the record in the lab is now over 700 watt-hours/kg.
This is to say nothing of the research going into still other battery chemistries, from sodium-ion to iron-air to liquid metal batteries.
We are, in short, still at the beginning of the battery revolution.
Muhammad Rizwan Azhar is Lecturer, Edith Cowan University. Waqas Uzair is Research associate, Edith Cowan University. Yasir Arafat is Senior research associate, Edith Cowan University. This article is published courtesy of The Conversation.
