5 charts explaining the future of EV batteries

Successfully electrifying our world and decreasing our dependence on fossil fuels will hinge on a simple, familiar tech: batteries.

“Batteries are a key technology in achieving our goals for decarbonization, as well as improving reliability and resilience in our energy supply chain,” Haresh Kamath, program manager for energy storage at the Electric Power Research Institute (EPRI), told Emerging Tech Brew.

That’s especially true as it relates to electric vehicles, which largely run on lithium-ion batteries today. As companies rush into the rapidly growing EV industry, more resources than ever before are focused on making batteries more efficient, more affordable, and more widely available.

Here are five charts that outline some of the challenges and opportunities facing battery technology in the coming years, from scaling mining operations to squeezing more range out of battery cells.

Just three years ago, there were fewer than 1 million EVs in operation in the US. By 2030, more than 27 million EVs are expected to be on the roads, and EV purchases could make up 20% to 30% of all vehicle sales.

With commitments from 18 of the 20 largest automakers in the world to increase their fully electric offerings and sales, the next few years will see demand for EV batteries, and the materials that go into making them, skyrocket.

Right now, most batteries are built in Asia, with China accounting for more than 70% of global battery-cell production capacity. Last year, demand for batteries in Europe outpaced domestic production capacity. European demand more than doubled, to 52 GWh, but the region is only able to produce about 35GwWh, according to a recent IEA report. US battery production is even further behind.

“Asia is way ahead, and that’s simply because the existing infrastructure for lithium-ion [battery] production has been in Asia for the last 20, 30 years,” Kamath said. “The investments that have been made in the US have been relatively small in comparison and most of those investments have come from companies based in Asia.”

Decades of American companies manufacturing electronic goods in Asia gave the region a head start on lithium-ion batteries. Looking ahead, Kamath expects production of batteries in the US will increase as more EVs are assembled in America.

The price of lithium-ion battery packs fell 87% between 2008 and 2020, according to the US Department of Energy. Analysis from BloombergNEF estimated the average price of a battery was $137 per kilowatt hour last year. Most experts say getting the cost below $100/kWh will signify that EVs are about as affordable as combustion engine vehicles.

“The economics of this is very straightforward: As the volume increases, the cost falls,” Kamath said. “Manufacturing cost has fallen substantially.”

He anticipates another 50% reduction in cost from 2020 to 2030, with more efficient manufacturing techniques and battery-pack designs continuing to drive down prices. And as more advanced batteries are developed, the market will see a divergence in cost between very high-performance cells and those that can be produced more cheaply.

For example, Tesla has decided to use lithium-iron-phosphate (LFP) batteries in all of its standard-range cars moving forward. These batteries have a lower energy density than lithium-ion cells made with materials like nickel and cobalt, but are also much cheaper to produce. It’s also pursuing a new battery design with Panasonic, dubbed 4860, that would provide significantly more power for some of its other models.

As EV sales continue to grow, some of the materials used in lithium-ion batteries are expected to face shortages in the near term. There’s an ample supply of lithium available around the world—the issue is that mining operations aren’t scaling quickly enough to meet the demand.

“The materials we’re talking about are available and are actually available in large quantities,” Kamath said. “The resource issues in the past have been because of one of two things: Either the market was so small that nobody had bothered to develop it, so it was really hard to find people who were producing that material, or there were political issues.”

And it’s not just lithium. Mining enough of the other materials currently key to many cathodes, like nickel and cobalt, is also a challenge to the battery supply chain.

Cobalt in particular is often the hardest to source. It is less abundant than lithium or nickel and 70% of the world’s cobalt is produced in the Democratic Republic of the Congo, where many mining operations have severe human rights issues.

“Companies have been pushing toward less and less cobalt,” said Richard Wang, founder and CEO of battery startup Cuberg. “It’s really nickel, I think, that is going to become the biggest challenge long-term, because most advanced batteries use a large amount of nickel. Nickel is not as rare as cobalt, but it’s still kind of expensive, and again, there’s a lot of short-term supply issues with mining capacity not keeping up with battery manufacturing.”

The distance an EV can travel on a single charge has been one of the deciding factors for many consumers considering buying one. Last year, the median EV range surpassed 250 miles for the first time and at the top end of the market, EVs have reached 400 miles. With new battery chemistry that allows for lighter cells, EV range will continue to increase.

Range is the area where the divergence of low-cost and high-cost batteries may be most evident.

Moving to cheaper materials like iron could bring the cost of batteries down further, but still requires some trade-off on range. With lower energy density, LFP batteries provide up to 25% less range than their counterparts that use nickel and cobalt, according to Kamath.

“But it’s good enough for now,” he said. This type of battery is already used widely in EVs in Asia and could also be well-suited for energy-storage applications.

Several companies, including QuantumScape and Solid Power, are working on solid-state batteries in hopes of unlocking more range. These batteries use solid electrolytes (typically sodium) rather than the liquid electrolytes in current EV batteries. While this technology is still years away from being used in EVs, solid-state batteries could theoretically double the range that’s possible today.

While sourcing raw materials could be a short-term challenge for EV production, recycling battery materials creates an opportunity for a much more sustainable supply chain.

“It’s not like they degrade. You can recycle it over and over again and, assuming the process is good enough, you can put that right back into new batteries,” Jeffrey Spangenberger, director of the ReCell Center (a DOE–backed collaboration of industry experts, academics, and national laboratories working to advance battery-recycling tech) and group leader in materials recycling at Argonne, told Emerging Tech Brew.

In fact, batteries made from recycled components may even perform better than those made from newly mined materials, according to recent research.

More and more EV batteries will begin to reach the end of their life cycles in the coming years. There are established processes to recycle these batteries, but as of now there isn’t much money in it.

Ford has made big investments in battery recycling. In September, the automaker announced a $50 million investment in Redwood Materials and plans to contribute $7 billion to building battery production and recycling facilities with battery maker SK Innovation.

“Those raw-material values in the cathode can be relatively low compared to the amount of money it takes to make those raw materials into a new product,” Spangenberger said.

Since cobalt is typically the most valuable material in a battery, the effort to use less of it affects the recycling business model.

“In order to drive the cost down of batteries, we’re removing the expensive components. But at the same time, we’re removing the value of recycling,” he said. “That’s a huge challenge. It’s kind of a double-edged sword."