The battery market is surging, who will be at the top

Advances in battery technology and the electrification of vehicles have contributed immensely to
the ever-changing technological environment around us.
Today, competition between different battery technologies occupies the first place
in a variety of applications.
Ultimately, it is the fit between battery technology/chemistry and these application requirements that will determine the winner of this war
.

Lithium-ion batteries (LIBs) have been around since the 80s of the 20th century, but the recent adoption of LIBs in electric vehicles (EVs) has driven the development of
newer and better battery chemistries.
A recent report published by PreScoter details the current state of the EV LIB market and how
the market will evolve over the next decade.

According to the report, external factors will drive battery adoption, including the cost evolution of key raw materials, supply and demand forecasts, and the impact of key players and governments on the cost of battery adoption.
Domain's investment
.

Lithium production capacity doubled

With the popularity of electric vehicles and the growing demand for energy storage, lithium demand for automotive applications reached 34,000 tons of LCE (lithium carbonate equivalent) in 2017 and is expected to more than
double by the end of the decade.

Research and development has led to huge advances in battery performance, but safety concerns remain a drawback of these battery technologies, as many batteries contain cobalt, which is toxic and dangerous to humans, and can lead to thermal degradation
of batteries at high temperatures.
Other factors considered when choosing the relevant battery chemistry include cost, longevity, performance, and energy and power density
.

Geopolitics

It is one of the key external factors affecting the development of
batteries.
The main raw materials for the production of LIBs, which may be affected by geopolitics, are mainly cobalt, nickel and lithium
.

Cobalt: The world's leading producer of cobalt is the Democratic Republic of the Congo (DRC), which accounted for 50% of global resources and 64%
of mined cobalt production in 2017.
By 2025, the Democratic Republic of the Congo will account for 80% of global cobalt production
.
By 2040, demand is expected to triple to more than 300,000 tonnes, which could increase the price of
the resource.

Nickel: Nickel-manganese-cobalt (NMC) batteries evolved by using three times less cobalt in newer batteries, replacing cobalt content
with nickel.
While nickel prices have fallen recently, strong nickel demand for these new batteries has led to higher prices
.
Nickel prices rose more than 20% in 2019 as inventories in the London Metal Exchange's global warehouses fell to multi-year
lows.
The nickel market is worth more than $30 billion
annually.
The global supply of 2.
2 million tonnes per year comes mainly from Indonesia (23%) and the Philippines (18%), with the remaining 30 countries accounting for the remaining 59%.

Lithium: The lithium market is worth $3.
2 billion, and consumption will increase from the current 240,000 tons to 1.
7 million tons
by 2040.
Major lithium producers include Australia, Argentina and Chile
.
China has a significant impact on the market, controlling most of the chemical conversion facilities
used to lift concentrates.
In addition, China has several top lithium producers, including Tianqi Lithium and Ganfeng Lithium
.
However, lithium prices are expected to fall
as supply exceeds demand.

Lithium-ion batteries

Lithium-nickel-manganese-oxide (NMC) batteries: NMC batteries currently account for nearly 28% of global EV sales, and Fitch predicts market share will grow to 63%
by 2027.

Lithium-nickel-cobalt-aluminum oxide (NCA) batteries: NCA batteries are becoming increasingly important in electric powertrains and grid storage due to recent increases in energy density (> 280 Wh/kg), previously in the 150-220 Wh/kg range
.
NCA batteries require a small amount of active material but are able to provide higher energy density
.
They are also more stable
than NMC batteries thanks to the addition of aluminum.

Lithium iron phosphate (LFP) batteries: The overall market demand for LFP will double to more than
200,000 tons/year.
Asia Pacific is expected to dominate the market, with the main application being automotive
.

Lithium cobalt oxide (LCO) and lithium manganese oxide (LMO) batteries: LCO (cobalt only) and LMO (manganese only) batteries are the predecessors of
NMC and NCA batteries.
LMO batteries are often used with
NMC batteries in EVs.
This type of battery was first introduced
in Toshiba Battery's Mitsubishi i-MiEV.
Due to its cost advantage, LMO-NMC blends are present in
batteries of older Nissan Leaf models.
In 2018, Nissan Leaf introduced the LMO/NMC hybrid battery with a capacity of 40 kWh and the battery was manufactured
by AESC/LG Chem.

Current trends

Currently, batteries with cobalt (NMC / NCA) are preferred due to their high energy density
.
However, safety remains an issue because NMC and NCA are prone to thermal runaway, especially as devices continue to get smaller
.
Thermal runaway can be caused
by overcharging, internal failure, physical damage to the battery, thermal environment, or a combination of the above.

LFP batteries significantly reduce the likelihood of thermal runaway, but provide relatively low energy and do not contain cobalt
.
Despite its short cycle life, LFP batteries are widely used in China, and as a result, China (and the global market) benefits from this well-established manufacturing infrastructure and supply chain
.

In recent years, NMC Chemistry has become the technology
of choice for OEMs in the automotive industry.
Due to rising prices and toxicity concerns, companies are working to deploy batteries with less cobalt, which could change
.

Today, LFP chemistry dominates the Chinese market, accounting for more than
44% of total battery chemistry demand.
Although the rest of the world prefers NMC chemicals, China's dominance in the field over the next decade will increase the advantage
of LFP over NMC.
China's vast resources in soil materials such as phosphates have also led to a preference
for this chemical.

Looking to the future

According to PreScouter research, NMC will be the primary factor dominating the electric vehicle industry in the early 2020s, but it will be replaced
by LFP batteries when a new rise in cobalt prices coincides with the increase in energy density achieved by LFP through research and development.

The rising cost of cobalt compared to LFP batteries will also increase the price of NMC batteries because they contain cobalt, thus accelerating the market favor
for LFP.
If LFP gains market share on NMC, the Chinese market will become the center of the EV segment, with core stakeholders and capabilities to
R&D, manufacture and commercial products.