The cost of a lithium-ion battery pack fell 65% from 2010 to 2015 and is expected to drop below $100 per kilowatt hour over the next decade1, further adding to the appeal of EVs.
Meanwhile to improve EV driving range, different battery technologies such as lithium-sulphur or solid state batteries are currently being explored and could greatly increase battery capacities compared with current technologies2.
Global battery production for EVs is currently dominated by Panasonic which has a strategic partnership with Tesla. The companies are currently building the huge Tesla Gigafactory 1 in Nevada, a lithium-ion battery factory which will have a projected capacity for 2018 of 50 GWh/yr of battery packs and final capacity upon completion of 150 GWh/yr.
Terra E Holding also has plans to build a huge battery factory in Germany, which will reach full capacity by 2028, while Daimler is building a battery factory in China in a €655m joint venture with BAIC Motor.
Samsung SDI and LG Chem also both have plans for new battery plants, while VW is rumoured to be planning to build one or more giant battery factories.
Meanwhile there have been concerns that the limited range of technical alternatives within lithium-ion technology makes the automotive industry dependent on a small number of key raw materials such as lithium, nickel, silicon, manganese, cobalt and graphite.
For instance a recent report3 said a critical issue was meeting demand for graphite and cobalt. Some 95% of today’s reserves of natural graphite are found in China and almost half of global demand for cobalt comes from Congo.
1 An integrated perspective on the future of mobility – Bloomberg New Energy Finance, Mckinsey & Company
2 Electric vehicles in Europe – European Environment Agency
3 Emobility index, Roland Berger, Q1 2017