Battery Trends - Global Electric Vehicle Outlook 2023 - Analysis - IEA (2023)

Demand for automotive lithium-ion (Li-ion) batteries grows by around 65%, from around 330 GWh in 2021 to 550 GWh in 2022, mainly due to growth in passenger electric vehicle sales, with new registrations growing in 2022 compared to 2022. 55% in 2021.

In China, where demand for automotive batteries is growing by more than 70%, EV sales are expected to grow 80% in 2022 compared to 2021. Battery demand growth is slightly tempered by increasing PHEV participation. While EV sales will only increase about 55% in 2022, the demand for batteries in American cars will increase about 80%. While the average pure electric vehicle battery size in the US will only increase by about 7% in 2022, the average electric vehicle battery capacity is still about 40% larger than the global average, partly due to the involvement of SUVs. in US EV sales larger than other large markets,1And the manufacturer's strategies to offer a greater autonomy of fully electric driving. Global sales of BEVs and PHEVs are outpacing hybrid electric vehicles (HEVs), and demand for batteries is growing further due to larger battery sizes for BEVs and PHEVs.

Lithium nickel manganese cobalt oxide (NMC) will remain the dominant battery chemistry through 2022 with a 60% market share, followed by lithium iron phosphate (LFP) with a share of just under 30 %, nickel cobalt aluminum oxide (NCA) with a participation of around 8 %.

Lithium iron phosphate (LFP) cathode chemistry has achieved the largest share in the past decade. This trend is mainly due to the preferences of Chinese OEMs. About 95% of LFP batteries used in electric LDVs are used in vehicles made in China, with BYD alone accounting for 50% of the demand. Tesla accounts for 15%, and Tesla's share of lithium iron phosphate battery use will increase from 20% in 2021 to 30% in 2022. About 85% of lithium iron phosphate batteries produced by Tesla are made in China, with the rest being made in China and the United States using cells imported from China. Overall, only about 3% of LFP battery electric vehicles will be made in the US by 2022.

LFP batteries stand in contrast to other chemistries because they use iron and phosphorous instead of the nickel, manganese, and cobalt found in NCA and NMC batteries. One disadvantage of LFP is that the energy density tends to be lower than that of NMC. LFP batteries also contain phosphorus, which is used in food production. If all current batteries were LFP, they would account for almost 1% of the phosphorus currently used in mass agriculture, indicating a potential future conflict over phosphorus as demand for batteries increases.

Alternatives to lithium ion batteries have appeared in recent years, especially sodium ion (Na-ion) batteries. This battery's chemistry has the double advantage of relying on materials that cost less than lithium-ion, making batteries cheaper while avoiding the need for critical minerals altogether. It is currently the only viable lithium-free chemistry. The price of China's CATL-developed sodium-ion batteries is expected to fall by 30%nowthan LFP batteries. By contrast, Na-ion batteries differ in energy density from their lithium-ion counterparts (i.e.,75arrive160Wh/kg compared to 120 to 260 Wh/kg). This could make the Na-ion suitable for lower-range urban vehicles or stationary storage, but could be more difficult to implement where consumers prioritize maximum-range autonomy or where charging is not available. Currently there are about 30 sodium ion battery factories in operation, planning and construction, with a total capacity of more than100 GWh, almost all in China. For comparison, current lithium-ion battery production capacity is around 1,500 GWh.

Several automobile manufacturers have launched sodium-ion electric vehicles such asGaleb's WORLD, with an advertised range of 300 km, priced at $11,600 (with a possible discount, the price drops to $9,500), and the Sehol EX10, made by the VW-JAC joint venture, with a range of 250 km. While these early models may be a bit more expensive than the cheapest small BEVs in China, like the Wuling Mini BEV,SellPriced as low as $5,000 to $6,500, they're still cheaper than equivalent options with similar mileage. For comparison, Wuling's Mini BEV has a range of 170km, but BYD's Dolphin BEV, the second best-selling small BEV in China in 2022, has a similar range to the advertised Na-ion car and cancarryMore than $15,000. As battery production grows, BYD plans to gradually integrate sodium-ion batteries into all its models under $29,000. These announcements suggest that sodium-ion electric vehicles will be sold and driven for the first time in 2023-2024, bringing the technology to a ready level (TRL3) from 8-9, among the first commercial and commercial operations in the relevant environment. it is in 2022rate itTRL6 (complete prototype) en IEAA guide to cleaning technology, highlighting the rapid technological advance compared to just the TRL3-4 (small prototypes) in the 2021 evaluation.

Changes in the cost and availability of key minerals may also explain some of the developments in battery chemistry in recent years. NMC chemistries (NMC333 or NMC111) using equal proportions of nickel, manganese, and cobalt were popular prior to 2015. Since then, rising cobalt prices and concerns about public acceptance of cobalt mining have fueled a shift towards lower cobalt ratios, such as NMC622 and then NMC811. but they are more difficult to produce. In 2022, nickel prices rose to a high of twice the 2015-2020 average. This encourages the use of chemicals less dependent on nickel, such as LFP, despite their lower energy density.

Lithium carbonate prices have also risen steadily over the past two years. In 2021, the price quadrupled or quintupled and continued to rise through 2022, nearly doubling between January 1, 2022, and January 1, 2023. As of early 2023, lithium prices are six times the 2015-average price. 2020. Unlike nickel and lithium, the price of manganese is relatively stable. One of the reasons for the rising prices of lithium, nickel and cobalt is that supply will exceed demand in 2021. While nickel and cobalt are in excess supply in 2022, lithium is not, which leads to stronger price increases in 2022. From January 2023 to March 2023, lithium prices will fall 20%, returning to end-2022 level. Expected 40% of portfolioincreaseA lack of supply and slowing demand growth, especially for electric vehicles in China, contributed to the trend. That decline, if sustained, could lead to lower battery prices.

In addition to these materials, world prices for raw materials have skyrocketed in recent years asresultFactors such as supply disruptions due to the Covid-19 pandemic, rising demand as the global economy begins to recover, and the Russian invasion of Ukraine in February 2022 are among other factors.

Average Battery Price Forecast in 2022stopAt about $150 per kilowatt-hour, battery pack manufacturing costs account for about 20 percent of the total cost of a battery, up from more than 30 percent a decade ago. Packaging manufacturing costs continue to decline over time, falling 5% in 2022 compared to the previous year. By contrast, battery manufacturing costs in 2022 increased from 2021, returning to 2019 levels. This can be partly explained by higher material prices (which make up a large part of battery prices) and higher electricity prices (affecting production costs), while improved efficiency in battery pack production helps reduce costs. Bloomberg New Energy Finance (BNEF) predicts a further decline in battery pack manufacturing costs, by about 20% by 2025, while cell manufacturing costs are down just 10% from their record lows in 2021. Material price trends.

In 2022, the impact of rising battery material prices will vary by battery chemistry, with LFP batteries experiencing the largest increase (over 25%) and NMC batteries an increase of less than 15 %. Since LFP batteries are nickel and cobalt free and relatively expensive compared to iron and phosphorus, the price of lithium plays a relatively large role in determining the final cost. Since the price increase for lithium is higher than the price increase for nickel and cobalt, the price increase for LFP batteries is higher than the price increase for NMC batteries. Despite this, the specific energy capacity of LFP batteries is still lower than that of NCA and NMC.

Battery prices also vary between regions, with the lowest average price in China and the highest in the rest of the Asia-Pacific region. The reason for this price difference is that about 65% of the cells and almost 80% of the cathodes are made in China.