Battery technologies – where are we now?

Whichever way you look at it, electric vehicles remain expensive and give motorists range anxiety with not much more than 100mi. between charges on many EVs. There are challenges ahead, but progress is being made.


The nascent technology in today's electric vehicles is seen as relatively expensive.

#Lithium-ion battery cell packs have been costly (though that is changing, rapidly). Unit costs have been high for major EV components. Scale economies have yet to be effectively exploited.

The technology comes with innate technical challenges too. The batteries are heavy and energy density is low. Electric vehicles that need every weight saving gain going are hampered to start with by battery bulk and mass. Lithium-ion batteries are also beset with range limitations − the range on a full charge is considerably less than that available on most conventional engine cars. Moreover, there is an infrastructure issue with battery charge point networks and the time that batteries take to charge (unless expensive 'fast charge' solutions are employed). And lithium-ion batteries themselves contain materials that are in short-supply (most notably cobalt).

There has been a move to Li-ion (lithium-ion) based battery pack systems, offering particular advantages in increased energy density, less impact on vehicle package and reduced mass.

We are already seeing the development of Li-ion HEV packs for mainstream automotive from the likes of GM with the E-assist and BMW with Li-ion 5-Series HEV as well as the move to plug in HEV systems which offer a limited EV only range, Li-ion plug in Prius for example.

Most hybrids with moderate to significant powertrain hybridization use a NiMH battery. While such batteries offer a reliable power source for battery makers to see the market evolving towards plug-in hybrids and then to full electrification, the NiMH battery does not have the energy density or economical competitiveness to be a viable technology for the next generation of electric/hybrid vehicles.

Some people believe that the emerging EV and PHEV markets could flatten out due to unproven technology.

They reckon that the market will be initially bolstered by heavy subsidies to automakers, battery makers and consumers but that sustained growth will depend on yet-to-be-proven battery technology as well as on supporting government policies. We think that the development of Li-ion battery technology for EVs is still at a relatively early stage and that will not in itself hinder the EV and PHEV market growth. The mobile phone and PC markets have developed in a similar fashion.

In terms of battery configuration – and for certain applications, for example high power HEV systems cylindrical − cells still offer advantages, particularly in terms of power capability and thermal management.

However, there is a drive, particularly by the German OEMs, to standardize cell formats to a small selection with similar footprints that encompass enough variation to target EV, PHEV and HEV applications, all in a prismatic format. Standardization, commonality of parts across multiple vehicle platforms and modularization are then being used to drive down battery pack cost.

EV tech costs coming down

The automotive industry is also succeeding in lowering electric vehicle technology costs.

This is partly a natural consequence of heavy investment and gradually emerging scale economies as volumes rise. The cost of lithium-ion batteries used in fully electric vehicles has plummeted. According to Bloomberg New Energy Finance, the price of lithium-ion batteries fell from around US$1,000 per kWh of storage capacity in 2010 to around US$350 by 2015. And it's still going down. There are improvements in battery cell density ahead − more energy per cell to increase range and decrease battery pack weight and cost.

Tesla founder Elon Musk is planning a major ramp-up of battery production at his 'Gigafactory' in the Nevada desert. That will bring battery pack unit costs down further.

Higher volume is key. According to the US Department of Energy, increasing production volumes from 25,000 units to 100,000 units for a BEV battery pack allows a cut in battery pack production costs per kWh by 13%.

The International Energy Agency (IEA) forecasts that by 2030, Battery Electric Vehicles (BEVs) and Plug-in Hybrid Electric Vehicles (PHEVs) will become fully cost competitive with ICEs in Europe, where fuel taxes are high and oil prices likely to rise. Market penetration will undoubtedly rise as EV purchase costs and TCOs (Total Cost of Ownership) decline.


There are improvements in battery cell density ahead − more energy per cell to increase range and decrease battery pack weight and cost.

'Range anxiety', the role of hybrids and range-extenders

Whichever way you look at it, electric vehicles remains expensive and give motorists range anxiety with not much more than 100mi. between charges on many EVs. “While we don’t want to minimise the issue of range anxiety” says Jeff Kessen, director of automotive marketing, Automotive Solutions Group, A123 Systems. “It is important to note that according to the US Department of Transportation, roughly 80% of US drivers log 50mi. or less per day. There are of course periodic long range trips which an EV won’t support but it’s not reasonable to expect that an EV can replace every vehicle in the market. Rather, we expect that different segments of the automotive market will gravitate to different vehicle types over time. For example, households which have two vehicles may be well suited to enjoy the benefits of an EV in the vehicle predominantly used for work commuting.”

While extended-range EVs (EREVs) eliminate range anxiety, the costs of their range extenders will have to fall as fast as those of battery packs to keep then an attractive option.

We suspect that over time, EREVs will migrate to higher segments, offering sporty and luxury models as a way to provide zero emissions in city centres while maintaining peak performance at high speeds. Meanwhile, the low end is likely to migrate over time toward pure battery electric vehicles.

Securing lithium − VW's example

The Volkswagen Group and China's Ganfeng Lithium have signed a memorandum of understanding on long-term lithium supplies for battery cells. Ganfeng will supply lithium to the VW group and its suppliers for the next decade. VW said the deal secured "a significant share of its lithium requirement for batteries".

Stefan Sommer, the group's head of components and procurement, said: "Over the next 10 years the Group will be launching 70-plus new pure electric vehicles. That means approximately a quarter of the vehicles we deliver in 2025 will be powered by electricity.

“Consequently, there will be a rapid increase in our raw material demand for cell production in the coming years. We must make sure we cover this demand at an early stage. Long-term agreements like the one for lithium, a key raw material, that we have just concluded with Ganfeng are therefore of crucial strategic significance for implementing our electric offensive."

Global lithium demand is expected to more than double by 2023.

VW's e-mobility purchasing chief Michael Baecker said: "We are creating a secure basis for planning capacities and costs. The strategic collaboration is the result of an extensive market analysis executed by [our] e-raw material team focused on building close relationships with the raw material industry.

"We consider a sustainable value chain as equally important to securing material capacities and competitive pricing structures."

VW and Ganfeng also agreed to cooperate on battery recycling and solid state batteries.

Volkswagen has a stake in the California technology company QuantumScape Corporation and has formed a joint venture to commercialise solid-state battery technology by 2025.

The geopolitics of lithium

As Europeans know only too well from the example of Russian natural gas supplies, countries that deliver energy can greatly affect the destiny of those that consume it. With post-9/11 concerns of ‘energy security’ weighing heavily in the energy policies of developed countries, electric-drive vehicles seem to offer a promising route toward using energy more efficiently and slowing the consumption of petroleum products largely produced in the Mideast.

But if tens of millions of electric vehicles are to be built each year, in time, they will need lithium-ion battery packs. Will lithium become the crucial commodity of this new century? Could OPEC one day be supplanted by a cartel of lithium-producing countries? More simply, where is the world’s supply of lithium to be found?

The location question is easily answered. For North America, supplies turn out to be closer than the Middle East. The leading producers and exporters of lithium today are Chile and Argentina, with the largest reserves known to exist (largely untapped) in Bolivia, with lesser amounts in China and Russia. North America also has some reserves of its own. At the moment, however, China and Russia actually import lithium from Chile, because it is less costly than mining their own.

As production of large-scale lithium-ion cells for transportation use ramps up, that geographic dispersion will become important. Battery cells (in cars like the Leaf or Volt) will at first be a vehicle’s most expensive component and, in aggregate, one of its heaviest − so producing them near final assembly locations will prove most economical. Over the last 18 months, the US Department of Energy has given out billions of dollars of low-interest loans and grants for the establishment of lithium-ion cell manufacturing plants in North America, a majority of them in Michigan.

Whether cartels of lithium producers could form will not be known for many years, but control over lithium supplies emerged as a news item a few years ago when Toyota Tsuho − a trading company in which Toyota owns a stake − bought a 25% share of the Olaroz lithium-potash development in Argentina, backed by low-interest loans provided by Tokyo.

Trading houses Mitsubishi and Sumitomo have negotiated for rights to extract lithium from the Uyuni salt flats in Bolivia, which is the single largest reserve now identified. The South Korean conglomerate Posco also acquired shares in lithium extraction projects in Chile and Mexico, and Korean government officials are negotiating with Bolivia to develop reserves as well.

Despite alarmist headlines, it’s worth noting that unlike petroleum − which is gone for good once it’s burned − lithium can be recycled and reused, like most other battery components.

While new supplies of lithium will obviously be needed, the petroleum analogy is fundamentally flawed. The 12v lead-acid auto battery is by some accounts the most recycled consumer item in the world, so a model already exists for reclamation and reuse of the fundamental elements of lithium-ion battery packs. A combination of regulation and economic incentives is likely to bring that infrastructure into being well before large numbers of packs exhaust their useful life.


Despite alarmist headlines, it’s worth noting that unlike petroleum − which is gone for good once it’s burned − lithium can be recycled and reused, like most other battery components.

A more urgent short- and medium-term concern is the supply of rare-earth elements (among them terbium, lanthanum and neodymium) used in a variety of electric and electronic components, including one type of electric motors. China has been the low-cost producer of these elements for a decade or more, putting suppliers in other countries out of business through sustained low pricing. It has recently ratcheted down the supply of these crucial elements to non-Chinese automakers, including hybrid and electric-car manufacturers and the cell suppliers who provide their batteries.

In the long term, this too is a solvable problem, as closed mines for many of these elements exist in several countries. A US mine in Mountain Pass, California, that was closed 10 years ago is to be reopened, for one example.

Today, automotive and electrical engineers are working hard to reduce or eliminate the quantity of precious metals in various components. A good historic model may be the order-of-magnitude reduction in platinum used in each catalytic converter from 1975 to the present. But in the shorter term, supplies may be tight and the cost will almost certainly rise until alternative supplies come on line.

Strategic policy frameworks for batteries

Governments around the world have enacted policy support for the development of manufacturing capacity for automotive batteries. This reflects the dynamic development of battery technologies and the importance of EVs to achieve further cost reductions in battery storage for a multitude of applications.

In China, policy support aims to stimulate innovation and induce consolidation among battery manufacturers, giving preference to those that offer batteries with the best performance.

In the European Union, the Strategic Action Plan for Batteries in Europe was adopted in May 2018. It brings together a set of measures to support national, regional and industrial efforts to build a battery value chain in Europe. In combination with the leverage offered by its market size, it seeks to attract investment and establish Europe as a player in the battery industry.

In countries with a smaller domestic market, as is the case for Japan and Korea, the policy support is to reinforce export markets. And across the world, increasing attention is being given to solid state batteries − that’s a space to watch.