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Batter Specification PDF
Batter Specification PDF
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hat impact will future costs. In addition, we conduct- cycling. (See Exhibit 1.) In this report
the development ed more than 50 interviews with bat- we focus on the first four steps,
and cost of vari- tery suppliers, automotive OEMs, which make up the manufacture of
ous types of bat- university researchers, start-up com- battery packs for use by OEMs.
teries have on panies working on leading-edge bat-
the emerging market for electric tery technologies, and government Lithium-ion batteries comprise a
cars? How much progress can we agencies across Asia, the United family of battery chemistries that
hope to see in the next decade, and States, and Western Europe. employ various combinations of an-
what critical barriers will need to be ode and cathode materials. Each
overcome along the way? In this report, we explore four main combination has distinct advantages
questions: What technological chal- and disadvantages in terms of safety,
The automotive industry’s quest to lenges must be overcome in order for performance, cost, and other param-
limit its impact on the environment lithium-ion batteries to meet funda- eters. The most prominent technolo-
and transform automotive mobility mental market criteria? As battery gies for automotive applications are
into a sustainable mode of transpor- technologies reach maturity, what lithium-nickel-cobalt-aluminum
tation continues at high intensity, de- might their cost profiles look like? (NCA), lithium-nickel-manganese-
spite the current economic crisis. In What will electric vehicles’ total cost cobalt (NMC), lithium-manganese
an earlier report, we analyzed the of ownership (TCO) amount to? And spinel (LMO), lithium titanate (LTO),
technical and cost tradeoffs of com- how are industry participants likely and lithium-iron phosphate (LFP).
peting alternative power-train tech- to align themselves as they jockey for The technology that is currently
nologies.1 In this companion piece, position in the evolving market? most prevalent in consumer applica-
we address the two principal vari- tions is lithium-cobalt oxide (LCO),
ables in our analysis of the develop- The Current State which is generally considered unsuit-
ing market for electric cars: the tech- of Electric-Car Battery able for automotive applications be-
nical attributes and the costs of Technology cause of its inherent safety risks. All
lithium-ion batteries for electric-vehi- automotive battery chemistries re-
cle applications. The value chain of electric-car bat- quire elaborate monitoring, balanc-
teries consists of seven steps: compo- ing, and cooling systems to control
In assessing these variables, we drew nent production (including raw ma- the chemical release of energy, pre-
on The Boston Consulting Group’s terials); cell production; module vent thermal runaway, and ensure a
extensive work with automotive production; assembly of modules reasonably long life span for the
OEMs and suppliers around the into the battery pack (including an cells.
world and on a detailed analysis of electronic control unit and a cooling
the relevant intellectual-property system); integration of the battery
1. See The Comeback of the Electric Car? How
landscape. We also created a battery pack into the vehicle; use during the Real, How Soon, and What Must Happen Next,
cost model that allows us to project life of the vehicle; and reuse and re- BCG Focus, January 2009.
Manufacture of Production and Configuration of Installation of Integration of Use during spec- Battery reuse;
anode and cath- assembly of sin- cells into larger modules to- the battery pack ified in-vehicle deconstruction
ode active mate- gle cells modules that gether with sys- into the vehicle battery lifetime and cleaning
rials, binder, include some tems that man- structure, includ- preparatory to
electrolyte, and electronic man- age power, ing the battery- recycling of ma-
separator agement charging, and car interface terials and com-
temperature (connectors, ponents
plugs, mounts)
In this paper we do not address the electrolytes were filed principally by per kilogram of mass); and cost. (See
impact of new battery chemistries, universities, whereas those relating Exhibit 2.) On the business side, high
lithium-based or otherwise, because to pack structure, cooling, and con- costs remain the major hurdle. The
none of the players we interviewed trols were filed mainly by OEMs and challenge will be to reduce manufac-
expect that batteries based on new suppliers. LFP technology has been turing costs through scale and expe-
chemistries will be available for pro- the focus of at least twice as much rience effects as market volumes ex-
duction on a significant scale by patent activity as LTO technology pand. We discuss each of these
2020. However, there is increasing in- and four times as much as NMC hurdles in some detail below; we
terest and activity, particularly technology, most likely because of also address charge time, which does
among university research laborato- LFP’s promising safety characteris- not vary substantially among battery
ries, in exploring new electrochemi- tics and higher usable capacity. technologies but remains a signifi-
cal mechanisms that might boost the cant performance challenge for all
specific energy and performance of The recent explosion in innovation is of them.
future batteries. Patent filings related driven by the need to break some
to energy storage increased 17 per- fundamental compromises in battery Currently, as Exhibit 2 shows, no sin-
cent per year from 1999 through technology. On the technical side, gle technology wins along all six di-
2008, twice as fast as during the pre- competing lithium-ion technologies mensions. Choosing a technology
vious ten years and some ten per- can be compared along six dimen- that optimizes performance along
centage points faster than overall sions: safety; life span (measured in one dimension inevitably means
patent growth during the same peri- terms of both number of charge-and- compromising on other dimensions.
od. Of the energy-storage patents discharge cycles and overall battery NCA technology, for example, is a
filed in China, Japan, the United age); performance (peak power at fairly high-performance solution but
States, and Western Europe in 2008, low temperatures, state-of-charge presents safety challenges, whereas
lithium-ion technologies accounted measurement, and thermal manage- LFP technology is safer at the cell
for 62 percent, having grown at 26 ment); specific energy (how much level but provides a low specific en-
percent per year from 2005 through energy the battery can store per kilo- ergy. Interviews we conducted dur-
2008. Lithium-ion patents relating to gram of weight); specific power (how ing the course of this study suggest
electrode chemistry, materials, and much power the battery can store that multiple chemistries are likely
Exhibit 2. There Are Tradeoffs Among the Five Principal Lithium-Ion Battery Technologies
Performance Performance
Source: BCG research.
Note: The farther the colored shape extends along a given axis, the better the performance along that dimension.
32%
250 200–250
12%
0
Markup Scrap R&D Depreciation Direct and indirect labor Purchased parts
Active materials
Sources: Interviews with component manufacturers, cell producers, tier one suppliers, OEMs, and academic experts; Argonne National Laboratory; BCG
analysis.
Note: Exhibit shows the nominal capacity cost of a 15-kWh NCA battery and assumes annual production of 50,000 cells and 500 batteries, as well as a 10
percent scrap rate at the cell level and a 2 percent scrap rate at the module level. Numbers are rounded.
er of 15-kWh NCA batteries using power rather than energy storage ca- nominal battery capacity, which can
modestly automated production to pacity. In this paper we focus on larg- be significantly higher than actual,
make 50,000 cells and highly manual er batteries, as these are most rele- usable capacity. Depending on the
assembly to produce 500 battery vant for cars that are primarily chemistry of the battery, its usable
packs. These assumptions are in line electrically driven. capacity over a ten-year life span is
with currently observed trial produc- in the range of only 50 to 80 percent
tion levels. Scrap. One area in which there is of its nominal capacity. Furthermore,
clear opportunity to reduce costs is the costs described here are costs to
We estimate that this supplier’s 2009 scrap rates, where we observed a OEMs. Assuming typical OEM and
cell costs—$650 to $790 per kWh— broad range of performance in the dealer margins, the price that end us-
account for approximately 65 per- relatively manual production proc- ers will pay for batteries is likely to
cent of its total cost for the battery esses in use in 2009. Automotive- be 40 to 45 percent higher than
pack. Costs to an OEM for a 15-kWh industry cost structures, margins, and OEMs’ purchase price, or some
range-extender pack would be be- standards mandate scrap rates of less $1,400 to $1,800 per kWh. OEMs and
tween $990 and $1,220 per kWh—or than 0.1 percent, but we noted actu- dealers may subsidize this markup
more than $16,000. Cost per kWh for al scrap rates varying from 10 per- somewhat during launch periods,
smaller batteries, such as a 2-kWh cent to as high as 30 to 60 percent. but we believe that in the long term
pack for a more traditional, hybrid Manufacturers incurring the higher they will need to collect it in order to
car, would be higher, for two reasons. scrap rates are likely to have battery compensate for marketing and oper-
First, some pack-level costs, such as costs in the range of $1,500 to $1,900 ating the battery throughout its life
power management systems and per kWh. cycle.
wiring harnesses, are somewhat in-
dependent of battery size; second, Usable Capacity and Markup. The Chemistries. Differences in compo-
smaller batteries are optimized for values discussed above all assume nent-level cost structures for materi-
–65%
990–1,220
–60%
650–790
77%
69% 360–440
270–330
52%
46%
31% 23% 48%
54%
2009 2020 2009 2020
Total cost of ~$16,000 ~$6,000
Production-volume-dependent costs
battery pack
Production-volume-independent costs
Sources: Interviews with component manufacturers, cell producers, tier one suppliers, OEMs, and academic experts; Argonne National Laboratory; BCG
analysis.
Note: Exhibit assumes annual production of 50,000 cells and 500 batteries in 2009 and 73 million cells and 1.1 million batteries in 2020. Numbers are
rounded.
pace, and acceleration. That analysis We anticipate that the approximate- could reach $60 billion in 2020. How-
led us to forecast that mild and full ly 14 million electric cars forecast to ever, if governmental economic sup-
hybrids and electric vehicles would be sold in 2020 in China, Japan, the port were to fall short of our expec-
together achieve sales penetration of United States, and Western Europe tations, the market would grow more
between 11 and 42 percent of those will comprise some 1.5 million fully slowly, reaching just $5 billion.
markets under the steady-pace sce- electric cars, 1.5 million range ex-
nario, with a likely overall penetra- tenders, and 11 million hybrids. In Charging-Infrastructure Costs.
tion of 26 percent.2 that same year, the market for elec- Charging infrastructure is another
tric-car batteries in those regions will major component of electric vehi-
We continue to endorse that forecast be worth some $25 billion. This bur- cles’ operating costs. We estimate the
for 2020. Although the current eco- geoning market will be about triple total cost of the installed charging in-
nomic crisis and the recent drop in the size of today’s entire lithium-ion- frastructure through 2020 at approxi-
oil prices might appear to mitigate battery market for consumer applica- mately $20 billion—about 40 per-
strong market enthusiasm for alter- tions such as laptop computers and cent in the United States, 30 percent
native technologies, interest in long- cell phones. in Europe, and 30 percent in the rest
term sustainability remains keen in of the world. Some 60 percent
the car-buying public as well as This forecast applies to all compo-
among governments and their regu- nents sold to OEMs, from raw com-
latory bodies. We anticipate that modities through the complete bat- 2. The mild hybrid contains a small electric
motor that provides a start-stop system, re-
these groups will continue to encour- tery pack; it does not apply to the generates braking energy for recharging the
age the development of these tech- end-user market for batteries. If the battery, and offers acceleration assistance.
nologies; also, it is reasonable to as- acceleration scenario rather than the The full hybrid features both a larger battery
and a larger electric motor, giving the car
sume that oil prices will continue to steady-pace scenario were to prevail, electric launching, electric acceleration assis-
rise over the medium to long term. the market for electric-car batteries tance, and electric driving at low speeds.
29
30
20 19
15 14
11 11
9 21
10
15 55% of
8 10 consumers
want to break
1 1 3 5 even in three2
0
years or less
Western Europe United States Japan China
Incentives ($)3 7,500 7,500 4,500 3,000
have to meet either one of the fol- United States, thus reducing the ances in the industry: one in which
lowing three hypothetical conditions need for sustained incentives. OEMs forge new alliances with cell
in full or some combination of them manufacturers, and one in which
to a lesser degree: an oil price in- The Outlook for Industry they stick with tradition by buying
crease from $100 per barrel (the fore- Dynamics batteries from tier one suppliers
cast price) to $300 per barrel; a 200 that, in turn, may forge their own al-
percent increase in gasoline prices Competition for share in the estimat- liances with cell manufacturers. (See
caused by higher oil prices, higher ed $25 billion market for electric-car Exhibit 6.)
taxes, or both; or $7,500 in govern- batteries in 2020 is already under
ment incentives available per car way all along the industry value Forging New Alliances. Some OEMs
purchased, consistent with currently chain. Rivalry is particularly keen in have already established strong links
approved electric-vehicle incentives. the area of cell manufacturing, re- with cell manufacturers through alli-
flecting the critical importance of ances or ownership stakes. Examples
While it is unlikely that any one of cells to overall battery performance. are Toyota with Panasonic in Japan
these factors alone will allow pur- In the medium to long term, cell pro- and Daimler with Li-Tec in Germany.
chasers to break even in three years, ducers will play a crucial role in de- Such relationships give the OEM ex-
it is possible that some combination fining the balance of power—and clusive access to the know-how, tech-
of these and related factors might the way revenues are shared. The nology, and production capacity of
contribute to such a breakeven peri- key question is, with whom will cell the cell manufacturer and allow the
od. For example, measures such as producers join forces? OEM to differentiate its vehicles in
carbon taxes and congestion charges terms of a chosen battery technology.
are already in force in European Two Scenarios for Teaming in the However, relationships of this kind
markets; it is not unrealistic to think Industry. We envision two possible can limit an OEM’s ability to react
that they might be adopted in the scenarios for significant strategic alli- quickly to technological advances
Short term: Forging new alliances Medium term: Sticking with tradition
OEMs partner with cell suppliers Tier one suppliers provide batteries to OEMs
Com- Com-
Cell Module Pack Inte- Cell Module Pack Inte-
ponent produc- Recy- ponent produc- Recy-
produc- tion produc- assem- gra- Use produc- tion produc- assem- gra- Use
cling cling
tion bly tion tion bly tion
tion tion
Chemical/
component
producers
Tier one
suppliers
Battery cell
manufacturers
OEMs
Mobility
operators/
power
companies
OEMs try to secure the best battery Tier one suppliers drive scale and
technology and know-how standardization and manage OEMs
(battery chemistries are differentiating) (battery electronics are differentiating)
Source: BCG analysis.
T
technology to the consumer. Deci- emerge. The stakes are very high.
sions in this arena will have a signifi- he electric-vehicle and lithi-
cant influence on the market’s de- um-ion battery businesses
velopment beyond 2020, notably on hold the promise of large po-
the amount of financial support re- tential profit pools for both incum-
quired. bents and new players; however, in-
vesting in these technologies entails
Governments should consider the substantial risks. It is unclear wheth-
following questions: What are our er incumbent OEMs and battery
investment goals and horizons? manufacturers or new entrants will
Should we bet on specific technolo- emerge as winners as the industry
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