The other long read about Elon Musk we feature this week is about the very source of his fortune – batteries that power his cars, not quite as exciting as cryptos. Musk capitalised on the breakthrough in battery technology which allows lowering the cost of electric powered vehicles whilst saving the planet from the emissions caused by traditional internal combustion based engines. This piece in the WSJ does give us a run down on the changes in battery technology and where we are headed in terms of its utility, going beyond electric cars to potentially storage of electricity at power grids.
“In recent years, prices have fallen more quickly than expected due to demand from auto makers. Electric vehicle battery packs and motors currently cost about $4,000 more to manufacture than a comparable fossil fuel-burning midsize sedan engine. By 2022, the difference will be $1,900—and will disappear by mid-decade, according to investment bank UBS Group AG .
Globally, battery-powered electric cars made up around 4% of all new cars sold last year in the world’s largest markets—the U.S., Europe and China—up from around 1% in 2017, according to data from Deutsche Bank. In 2025, the bank expects that share of the market to be 22%.
…The same batteries are being deployed on the power grid in growing numbers. Construction began in January on a battery in Florida that will use 2.5 million lithium-ion cells—similar in chemistry to Tesla cells, only larger. Florida Power & Light, part of NextEra Energy Inc., said the battery will be capable of powering Disney World for seven hours.
Used automotive batteries, slightly degraded from years of filling up and discharging, are finding new life as storage projects. Amsterdam’s Johan Cruijff Arena has a three-megawatt “super battery” made from 148 Nissan Leaf battery packs, many of them recycled, storing electricity generated by rooftop solar panels and helping balance the stadium’s energy usage.
…The rise of rechargeable batteries is now a matter of national security and industrial policy. Control of the minerals and manufacturing processes needed to make lithium-ion batteries is the 21st-century version of oil security.
The flow of batteries is currently dominated by Asian countries and companies. Nearly 65% of lithium-ion batteries come from China. By comparison, no single country produces more than 20% of global crude oil output.
…To meet expected demand, global output of lithium, a silvery metal also used to make nuclear bombs and treat bipolar disorder, has nearly tripled in the past decade, according to Benchmark. Lithium is mostly mined in Australia and Chile, where it is found in underground brine deposits, although efforts to increase U.S. output from mines in Nevada and North Carolina are gaining attention from investors.”
Prices have come down a long way since January 2010, when Boston Consulting Group estimated battery costs at between $1,000 and $1,200 per kilowatt-hour. It said getting to $250—a level car makers were targeting—“is unlikely to be achieved unless there is a major breakthrough in battery chemistry.
…Today, battery prices are about $125 per kilowatt-hour, after big increases in manufacturing capacity lowered costs, and tweaks to chemistry and design yielded further savings.
Battery costs are widely expected to fall further, said Venkat Viswanathan, an associate professor of mechanical engineering at Carnegie Mellon University. He expects them to go as low as $80 per kilowatt-hour in two to three years before bottoming out.”
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