Lithium-ion batteries are on the verge of a scientific revolution. The American Institute of Physics (AIP) has just announced the discovery of a new process to improve the energy density of batteries. The announcement caused a wave of optimism in the scientific community and in the industry. After all, improved batteries are essential to achieving the goals of the Paris Agreement.
Lithium-ion batteries enjoy a virtual monopoly on the market for electric vehicles and stationary electricity storage. Any scientific discovery thus facilitates the electrification of societies and the transition to renewable energies. However, the discovery of AIP is likely to encounter significant obstacles to its widespread commercialization. In this respect, it is probably not as revolutionary as the AIP researchers have suggested.
The importance of lithium-ion batteries in the energy transition
In recent months, many countries have announced ambitious energy transition targets. This summer, China disclosed its goal of carbon neutrality by 2060. Similarly, South Korea and Japan have announced a similar target from 2050. Even in the United States, newly elected President Joe Biden has promised to accelerate the decarbonization of the U.S. economy.
In order to achieve these goals, states will have to electrify their energy mix by focusing more on electric vehicles. Today, according to the International Energy Agency, these vehicles represent only 1% of the world’s fleet. To comply with the Paris Agreement, this share would have to be multiplied by more than 15 by 2030. The same applies to stationary electricity storage, without which it will be difficult to integrate intermittent renewable energies.
In this context, lithium-ion batteries are expected to play a considerable role in the coming years. Already, these batteries are benefiting from a significant drop in cost due to economies of scale in the industry. According to Bloomberg, costs have dropped by 86% in 10 years to $156 per kWh. The agency estimates that by 2024, batteries will reach parity with gasoline engines, giving a de facto boost to electric vehicles.
The performance problem
Although the cost of batteries has been declining for the past 10 years, performance still leaves a lot to be desired on many points. One of the difficulties is the low energy density of this type of battery, which limits the amount of storage. This low density is particularly problematic for stationary storage, which requires managing a high capacity of electricity. The recent discovery made by AIP, however, could address this difficulty by increasing the energy density of the batteries.
The main advance made by AIP was the use of carbon coatings called Super P to conduct electricity. These coatings were then added to NCM electrode materials containing nickel, manganese and cobalt. As a result, the researchers found a contact point between the Super P and the NCM particles. In particular, this improves the connectivity between the two elements and thus facilitates the transport of lithium-ion.
The battery’s energy density will thus increase significantly, which will result in significant gains in terms of the quantity stored. Electric vehicles will therefore be able to benefit from a greater range, limiting the need to recharge. Remember that today, these vehicles have an average range of 200 km against 480 km for gasoline vehicles. Therefore, the discovery of AIP could greatly improve the competitiveness of electric vehicles in the automotive market.
Structural problems still hinder full development
The scientific discovery of AIP, while important, is not expected to disrupt the battery market. Indeed, there are still major hurdles to overcome before lithium-ion batteries overtake gasoline engines. In this, AIP research only improves energy density but does not address other structural problems.
For example, the use of Super P in NCM batteries has no impact on the supply of raw materials. This supply represents a major challenge for a sector that is highly dependent on resources such as cobalt or nickel. Dependence on cobalt is particularly problematic as 50% of the reserves are in the Democratic Republic of Congo (DRC). For nickel, the recent Indonesian embargo has shown the fragility of manufacturers in the face of geopolitical risk.
Similarly, the industry is over 80% dependent on China for metal refining. This dependence even reaches 60% in the manufacture of components. This Chinese domination of the entire value chain is a risk for the development of lithium-ion batteries. Recall that Beijing has already used the weapon of the embargo on metals in 2010 after tensions with Japan.
This is why the issue of recycling has become so important in recent years. However, this sector is still in its infancy and involves only a few companies. Today, it is even more cost-effective to purchase new materials than to use recycled materials. Improving recycling will however be central to reducing the geopolitical risk posed by China and the concentration of resources.
The scientific findings of AIP therefore do not address some of the structural problems of lithium-ion batteries. Certainly, by improving energy density, the use of Super P can facilitate the deployment of batteries in the energy mix. However, this deployment can only be truly achieved with better control of the value chains, which are currently dominated by Beijing.