The global lithium-ion battery race and Europe's role in it - Presentation at ITIF, Washington DC, 7 Nov 2018 Tobias S Schmidt, Energy Politics ...
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The global lithium-ion battery race and Europe’s role in it Presentation at ITIF, Washington DC, 7 Nov 2018 Tobias S Schmidt, Energy Politics Group, ETH Zurich
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Agenda
▪ Why is it a race to lithium-ion?
▪ What is Europe’s position in this race?
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Why lithium-ion (as opposed to other storage techs)?
Source: Kalhammer et al. 2007
+ high round-trip efficiency + government support (US, Japan, Korea, China)
+ low-temperature
+ relatively safe
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Historic demand for and innovation in lithium-ion batteries
Historic
Hist Source: Battke, Schmidt, Stollenwerk, Hoffmann. Research Policy (2016)
http://dx.doi.org/10.1016/j.respol.2015.06.014
oric
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Lithium-ion batteries have experienced massive cost reductions and will see more
in the future
Source: O. Schmidt et al. (2017), Nature Energy http://dx.doi.org/10.1038/nenergy.2017.110
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Future demand for Lithium-ion batteries will come from three main markets
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Rough cost composition of an EV and its battery pack (as of 2017)
100%
Pack: 40% 60%
Cell: 30%
10%
12%
8% 8%
2%
Cathode Anode other Cell Packaging Integration, EV
materials Manufacturing rest of vehicle
Source: EPG/ETH Zurich, based on 2017 market numbers
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The market for BEVs (past and outlook)
Electric vehicle sales (millions)
Source: BNEF
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Also stationary storage market is expected to grow massively, where it can create
value in many applications
Stationary storage applications along electricity supply chain and by type of value creation
BNEF: stationary storage (without PHS) is
a USD 1.2 trillion market till 2040
Source: Battke & Schmidt, Applied Energy (2015)
Source: BNEF 2018, https://about.bnef.com/blog/energy-storage-1-2-trillion- http://dx.doi.org/10.1016/j.apenergy.2015.06.010
investment-opportunit§y-2040/?sf94588529=1
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Lithium-ion batteries “eat into” stationary storage market
Preliminary results – do not cite or distribute
Technology market shares
[Newly-built electricity storage projects]
Low EV demand (5% CAGR) High EV demand (32% CAGR)
100% 100%
8h duration –
1 cycle/day
50% 50%
Utility-scale
0% 0%
2018 2022 2026 2030 2018 2022 2026 2030
100% 100%
1.75 cycle/day
4h duration –
50% 50%
0% 0%
2018 2022 2026 2030 2018 2022 2026 2030
Li-ion (NMC) Li-ion (NCA) Li-ion (LFP) VRLA Flow Battery PHS
Source: EPG/ETH Zurich
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Agenda
▪ Why is it a race to lithium-ion?
▪ What is Europe’s position in this race?
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Europe’s current position: pieces of the puzzle do not (yet) match
• Market share in cell manufacturing thus far attempts have failed (TerraE) or are faring; buy in from car industry only picking up now (it seems)
Source: Beuse, Schmidt, Wood, Science (2018) EPG | Energy Politics Group | 12D GESS
Three questions need to be asked (and answered)
1) Is a battery cell a commodity- 2) Is it possible to leapfrog? 3) How to catch up?
like component, to simply
source on the market?
Our opinion: Our opinion: Our opinion:
• Core component (strong • Hard if not impossible, as next • Generally it is possible to catch
influence on vehicle design) generation requires a lot of tacit up (see Korea/China from Japan)
• Strategic component (better cell knowledge in design and • Waiting only widens gap
makes a better EV) production • Airbus is not a good role model
• Complex component, requiring • Gaining tacit knowledge requires • We recommend a “technology-
tacit knowledge to design experience with design, smart” policy
• Market power might not be as production and use of the
clear as with other car technology
component suppliers • Complex industry value chains
involved, with strong need for
interaction
Source: Beuse, Schmidt, Wood, Science (2018)
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Our research aims to understand technology differences.
Policy should be “technology-smart” in order to be cost effective
What are elements of a “technology-smart” ...complex to design technologies:
catching
100%
up strategy?
80%
Wind 1) Interactions with downstream
60%
Wind 40%
Product
High activities
Process
1. Make production in Europe and partnerships
20%
0%
2) TransferWind turbines
of human capital Lithium- ion batteries
1991 1992 1995 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
with European firms attractive 3) Stable home market (to get
100% constant user feedback and new
80%
60%
PV Product Design users)
Solar PV
2. Create
40%
a large and predictable home
Combination
market complexity
20% Process
...complex to manufacture
(EV targets; more stringent caps of fleet
0%
technologies:
emission standards)
100% 1) Interactions with upstream
80%
60%
Li-ion Product Micro hydro plants activities Solar PV
Lithium-ion Combination Low
3. Only 40%
if enough learning and catching-up Process
has 2) Transfer of capital goods and
20%
(tacit) integration knowledge
taken place, create incentive for a “European
0%
3) Increasing (global) demand
cell”
Low High
Manufacturing
complexity
Relevant factors for catching up in…
Sources: Beuse, Schmidt, Wood, Science (2018); Schmidt & Huenteler, Global Env. Change
EPG | Energy Politics Group (2016); Malhotra, Schmidt, Huenteler; AAAS conference (2017) | 14D GESS
Thanks for your attention!
web: www.epg.ethz.ch
twitter: ETH_EPG
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