The many varieties of lithium-ion batteries battling for market share

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Hello, everyone, and welcome back to Battery Week!


We’ve talked about why lithium-ion batteries (LIBs) are so
important and we went through a basic primer on how they work.
Today, we’re going to get into the competition within the broad
lithium battery family, among all the different kinds of
batteries that use lithium and exchange charged lithium ions.
(See the previous post for a full list.)


There are a few clear leaders — lithium nickel manganese cobalt
oxide (NMC), lithium nickel cobalt aluminum (NCA), and lithium
ferro phosphate (LFP) — that have achieved mass market scale and
several others looking to get in on the action.


The market prize is likely to exceed a trillion dollars within
the next decade, so if any of these competitors can even carve
out a substantial niche, it could be worth billions. Let’s look
at the players.


Better NMC and NCA


The bulk of LIB research these days is going to improve the
dominant batteries on the market, mainly by reducing the amount
of cobalt (the most toxic and expensive ingredient).


Most EV makers use NMC batteries; Tesla uses NCA. In the past,
it’s been difficult to push down the amount of cobalt in these
batteries (it plays an important balancing role), but
manufacturer LG recently introduced an NMC 811 battery: 80
percent nickel, 10 percent manganese, 10 percent cobalt. GM will
use them in its new line, including in the Hummer, and Tesla will
put them in some of its Model 3s in China.


Most big battery manufacturers, including Panasonic (which
supplies many of Tesla's batteries), have vowed to gradually
reduce and eventually eliminate cobalt.


Nickel is the key to energy density. Tesla, VW, and others are
working on special high-nickel battery varieties that will be
used for specialty vehicles that require extra-high energy
density, like larger SUVs and trucks.


But not every vehicle needs that, and nickel supply constraints
are looming, so work is also being done to further boost
manganese — a much more stable, abundant material — and reduce
cobalt.


Silicon anodes


Many LIB developers are experimenting with silicon as an anode
coating, partially or completely replacing graphite. Tesla has
been working to increase the proportion of silicon in its anode
since at least 2015.


Silicon holds on to nine times more lithium ions than graphite,
so energy density improves (range expands by 20 percent), and a
silicon battery can charge and discharge much more quickly than
graphite batteries, so power density improves as well. But
silicon expands when it absorbs ions, so it breaks down quickly;
cycle life is still much lower than graphite. If engineers can
overcome that problem (and Tesla has vowed it can), LIBs could
take a leap forward soon.


SILA Nanotechnologies, in its brief on the future of LIBs,
considers silicon anodes the biggest potential near-term
market-shifting breakthrough in the space. It summarizes:


[T]here are no high-volume commercial Li-ion batteries (yet!) in
which a silicon anode entirely replaces the graphite one. When it
does arrive, the reward will have been worth the wait. We expect
automotive cells with NCA or NCM cathodes paired with Si-dominant
anodes will increase energy density by up to 50%, thereby
dropping the $/kWh cost by 30-40% in less than a decade.


That is a mind-boggling prize, if any manufacturer can unlock it.
(Read Canary’s Julian Spector on Sionic, a battery company that
has recently debuted a silicon anode that it says can fit into
existing LIB manufacturing.)


Silicon anodes are technically “cathode agnostic,” though most
testing so far has used NMC cathodes. If engineers can crack the
code and make silicon anodes with high cycle life, it could
benefit any and all cathodes (e.g., see LFP below).


Fluorides as cathodes


One thing I didn’t mention about silicon-as-anode: it doesn’t
operate via intercalation. Instead of nestling into the anode,
ions react with the silicon and bond with it, a process called
“conversion.” That makes it more difficult to peel the ions off
without damage, but it can hold way more ions.


With anodes (which are the limiting factor on most batteries now)
improving, there’s more room for cathode improvement. SILA is big
on research into fluorides — it cites metal fluoride-based
cathodes (like iron fluoride or copper fluoride) and sulfur-based
cathodes — which also operate via conversion rather than
intercalation and can also store more ions. It writes:


It’s plausible that with a conversion cathode and an engineered
low-swell silicon anode, the cycle life of Li-ion can be extended
all the way to 10,000 full cycles while also having the highest
energy density in the market — thus breaking the [power vs.
energy] compromise.


SILA believes it’s only that combination — a conversion-based
anode and a conversion-based cathode — that can bring LIB prices
down to “~$50/kWh by 2030 and ~$30/kWh by 2040.” If it happened,
that would be absolutely wild and almost certainly crush all
competitors.


Lithium ferro phosphate (LFP)


LFPs, which use a lithium-iron compound as cathode, were among
the first LIBs to commercialize. They are already standard in
China, used in its ubiquitous scooters and small EVs. “The big
Chinese battery makers — BYD and CATL and Lishen — each one of
those is larger by itself than any other battery company that's
not in China,” says Lou Schick, director of investments at Clean
Energy Ventures, “and they have been making lithium iron
phosphate cells for 10 years.”


A few years ago, it looked like LFPs were going to be displaced
by NMCs and NCAs, but lately they’ve made a comeback and now have
a decent case that they could take the lead in the EV and
stationary storage markets. They have already captured almost
half of the Chinese EV market.


LFPs use lithium ferrophosphate (LiFePO4) as the cathode,
replacing nickel, manganese, and/or aluminum. The advantages
relative to nickel-based competitors:


* cheaper on a materials basis (though not yet on $/kWh);


* higher cycle life (Matt Roberts, previously executive director
of the Energy Storage Association, now working at battery company
Simpliphi, says his company’s LFP batteries are warrantied for
10,000 cycles, compared to 2,500 to 5,000 for cobalt batteries.);


* higher power density;


* high safety and low toxicity (“They're almost literally
bulletproof, in that they can't catch fire,” says Schick.);


* replaces problematic and/or rare metals with iron, which is
safe and abundant.


In exchange for these advantages, LFPs offer lower energy density
(there are fewer spaces for ions to intercalate). However,
because they are so safe, LFPs do not require the same protective
packaging as NMCs and NCAs, so they can gain some of that
efficiency back at the pack level. Tesla says that, while LFPs
have 50 percent of the energy density of their high-nickel
competitors, an LFP-based vehicle can still get 75 percent of the
range.


VW announced last month that, starting in 2023, it would be
“employing lithium iron phosphate, or LFP, in entry models;
nickel-manganese in volume models; and nickel-rich NCM in
high-end models.”


Tesla said more or less the same thing at its Battery Day event
in 2020. It plans to use LFPs for an upcoming cheap (under
$25,000) vehicle, the Model 3, and commercial energy storage.


Current LFPs are not going to feature in high-performance
vehicles, but most vehicles aren’t that. They are “good enough,
essentially, for any kind of commuter car,” Schick says. “I think
you're going to see a whole bunch of economy cars that are LFP.”
LFP will be used in taxis, ride-share vehicles, and fleet
vehicles, along with scooters and rickshaws and motorcycles. It
will be the cheap, reliable, everyday option.


And if LFPs can make use of silicon anodes, they could
potentially nudge up into the over-300-mile range category.


LFP in energy storage markets


Energy density is also less important in the energy-storage
market, where price, capacity, and safety rule.


LFP’s high cycle life and low costs make them attractive in the
grid-storage market. As Julian Spector wrote in February at GTM:


In 2015, LFP batteries only served 10 percent of the grid storage
market, according to research from Wood Mackenzie. NMC
dominated, with more than 70 percent market share. But since
then, NMC's market share has trended down while LFP's rose.
Analysts predict LFP will become the leading chemistry
for grid batteries by 2030, capturing 30 percent of an
increasingly diversified market.


As for distributed, behind-the-meter storage, in some markets
like California and New York City, Tesla home batteries (still
NMC) are not allowed inside garages, thanks to the risk of
thermal runaway, which can lead to fires. LFPs have passed an
extensive regimen of safety tests and will be available
everywhere; that gives them a tangible market advantage.


Roberts is convinced the safety issue is going to rise in
salience, thanks to the repeated recalls from manufacturers like
LG Chem. (The latest is going to cost Hyundai a cool $900
million.)


“What's your levelized cost of energy?” Roberts asks. “You're out
there quoting, ‘I can do $100 a kilowatt-hour for a battery
pack.’ If in two years, though, you have to do a billion-dollar
recall, when does that get factored into the LCOE?”


With sufficient manufacturing scale, the price of any battery
approaches the price of its materials, and LFP uses incredibly
cheap materials. If it scales sufficiently, it could potentially
get cheap enough to dominate the storage market, fighting off
other LIBs in the home-storage market and other chemistries and
form factors (which we’ll look at in the next post) in the
bulk-storage market.


“Of all the lithium-ion chemistries, LFP may play the largest
role in accelerating the world’s transition to sustainable
energy,” says Jordan Giesige, who makes battery explanatory
videos under the moniker The Limiting Factor. (They are superb; I
cannot recommend them highly enough.)


Lithium manganese oxide (LMO) and lithium manganese nickel oxide
(LMNO)


Manganese is abundant, safe, and stable at a wide variety of
temperatures, though its energy density is lower than cobalt or
nickel. Because LMOs don’t contain cobalt and avoid the threat of
thermal runaway, they are used in medical equipment, as well as
power tools, electric bikes, and EVs.


“The original Nissan LEAF was a lithium manganese oxide cathode,”
says Dan Steingart, a materials scientist and co-director of
Columbia University’s Electrochemical Energy Center, “and the
Nissan LEAF has never had a battery that that initiated a fire.”


The LEAF also didn’t go very far on a charge, though — LMO may
have trouble escaping its niche.


LMNO (“high-voltage spinel”) batteries try to retain some of the
energy density of nickel while replacing cobalt. According to a
2020 study in the Journal of Power Sources, in the search for
“novel cathode materials with high energy density, low cost, and
improved safety,” LMNO is “one of the most promising candidates
yet to be commercialized.”


LMNO batteries will need to boost their still-struggling cycle
life before they can compete with more-established chemistries.


The next three batteries use lithium or lithium compounds as the
anode rather than the cathode.


Lithium sulfur (Li-S)


Li-S burst on the scene to some excitement in the late ‘00s,
demonstrating that a cell with lithium as the anode and sulfur as
the cathode — two elements with extremely low atomic weight —
could double the specific energy of conventional LIBs. Plus
sulfur is incredibly cheap.


One problem is that sulfur has very low conductivity, so
something (usually carbon) has to be added to pull in the ions.
More importantly, Li-S batteries degrade quite quickly and have
low cycle life. To date, they remain commercially unavailable.
(This paper reviews the remaining challenges.)


Lithium metal anodes


Simple, solid lithium metal makes for a great anode, in that it
is highly prone to releasing electrons and ions. Use of lithium
metal as an anode actually dates back to the 1970s, preceding LIB
development. In a lithium-metal battery, charged lithium ions
“plate” on (attach themselves directly to) the metal anode.


The problem is that lithium is highly reactive and ions tend to
form “dendrites,” or tree-like formations, that reduce energy
density and cycle life and increase the chances of a short or
fire. It was problems with lithium’s reactivity that originally
led to the addition of graphite to the anode, so the ions could
intercalate rather than plating. That was the birth of LIBs.


But researchers and developers have recently returned to
lithium-metal, figuring out new ways to prevent dendrite
formation. Losing the graphite on the anode drops weight and up
to doubles energy density.


To date, lithium metal has typically been paired with a standard
NMC cathode. US startup Lavle is building a gigafactory to
produce just such batteries, expected to open in 2023. It is
aiming first at markets where energy density is prized, like
shipping and aviation.


Technically, though, lithium-metal is cathode agnostic. It could
potentially work to enable rechargeability and better performance
from cheaper cathode materials like zinc, aluminum, and sulfur.
Based on pure materials costs, “the true least-cost system for a
lithium-based, rechargeable battery is lithium metal and a sulfur
cathode,” says Purdue University’s Rebecca Ciez.


Much of the R&D action, though, is around electrolytes.
Lithium-metal batteries with liquid electrolytes are around (and
still being researched), but it’s the solid electrolytes
generating the most excitement.


Solid electrolytes (solid-state)


The liquid electrolytes used in most LIBs limit the kinds of
electrodes that can be used and the shape of the battery cell;
plus, they are often flammable, a safety hazard. Tons of research
is underway on solid electrolytes that enable much higher energy
density and can’t catch fire.


Many researchers expect solid-state batteries to set off a whole
new round of innovation. RMI writes, “several solid-state
companies are targeting 2024–2025 for initial EV commercial
lines, but demonstrations would likely happen before then.”
Companies with lithium-metal, solid-state batteries — like Solid
Power and QuantumScape — have received huge investments from
automakers and investors like Bill Gates.


Nonetheless, for all the hype, there is a considerable strain of
skepticism about solid-state. The EV company Fisker, after years
of big promises, abandoned solid-state entirely earlier this
year. “It’s the kind of technology where, when you feel like
you’re 90 percent there, you’re almost there,” founder Henrik
Fisker told the Verge, “until you realize the last 10 percent is
much more difficult than the first 90.”


“The cost and safety of current lithium-ion tech is improving so
rapidly that a technology that's 10 years away, in [Fisker’s]
estimation, is just not worthy of pursuit,” says Roberts. “At the
end of the day, energy density is just not critical in a lot of
applications.”


Schick is blunt: “None of the solid-state lithium batteries are
on track to do anything that anybody cares about.”


“While there are technical reasons why this technology appears to
be the holy grail of batteries,” writes SILA Nanotechnologies,
“the reality is that even if the technology works (and that is a
big ‘if’ after 40 years of development) it is unlikely to find
more than niche opportunities in the market.” (Read Jason Deign
on the current solid-state market.)


Let’s call this one an important Maybe.


Lithium titanium oxide (LTO)


LTO batteries have lithium-titanate nanocrystals coating the
anode, which increases surface area and allows for many more
electrons to be released much faster than graphite. Consequently,
they have incredibly high power density (they can release energy
quickly) and can recharge faster than any other LIB. They also
have high cycle life and high recharging efficiency.


They are lower voltage than conventional LIBs and thus have lower
energy density, but because of this they are also extremely safe
to operate.


“The performance characteristics are amazing,” says Roberts, “but
it's just crazy expensive.”


For now, LTOs are used in some EVs and smaller applications like
e-bikes. If they come down in price, they could find other niches
where power density is important, like industrial machinery.


Lithium-air (Li-air)


Out toward the research frontier is Li-air, which uses lithium
metal as the anode, a variety of materials as the electrolyte
(that’s where research is most intensive), and as the cathode …
air. Yes, air. Lithium exchanges electrons and ions with the air,
through the electrolyte. Wacky.


Because it jettisons the entire weight of the cathode — air is
quite light — Li-air has incredibly high specific energy (energy
per unit of weight), theoretically as high as the specific energy
of gasoline. In practice, only a fraction of that potential has
been demonstrated, but even that fraction is about five times the
specific energy of conventional LIBs.


All sorts of improvements in electrolytes, cycle life, and
scalability will be needed before Li-air will become practical,
but in terms of 2030 dark horses, this is one to watch.


So that’s a review of the lithium-based battery chemistries
jockeying for position in a trillion-plus-dollar market.


In my next post, I’ll look at a few non-lithium-based chemistries
that are hoping to capture some of these niches — zinc and flow
and liquid metal, oh my.


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