Battery Market: The Lithium-Ion Battery Technology Revolution

The battery technology market, a dynamic and transformative sector, lies at the heart of our rapidly evolving technological landscape.

As our world becomes increasingly reliant on portable electronic devices, electric vehicles, renewable energy sources, and energy storage solutions, the demand for advanced battery technology is soaring to new heights.

Battery technology, a multi-billion dollar industry, is not only reshaping the way we power our daily lives but also revolutionizing our approach to sustainability and environmental responsibility.

In this exploration of the battery technology market, we will delve into the details to gain a comprehensive understanding of this electrifying realm.

The origin of the lithium-ion battery technology

The lithium-ion battery was first commercialized by Sony in 1991 to power their video cameras. However, the first rechargeable lithium-ion battery technology was already invented at Exxon by Michael Stanley Whittingham in the 1970s, which laid the foundation for modern lithium-ion batteries.

The development of the LCO (lithium cobalt oxide) cathode material in the 1980s by John B. Goodenough dramatically improved the performance of lithium-ion batteries. Further, the scientist Akira Yoshino discovered graphite as safe and stable anode material. Both discoveries were essential for the commercialization of the lithium-ion battery technology.

All three scientists received the Nobel Prize in Chemistry “for the development of the lithium-ion battery” in 2019 for their groundbreaking work in the field of lithium-ion batteries, which has had a profound impact on modern battery technology and energy storage.

After their commercialization, lithium-ion batteries gained importance in more and more mobile electronics due to their high energy density, which is a measure of how much energy can be stored per volume or weight.

Different battery technology

Compared to other available battery technology in the 1990s, the Lithium-Ion Battery (LIB) had the highest specific energy ranging from 100-150 Wh/kg. This was higher than the Nickel-Metal Hydride (NiMH) battery (60-100 Wh/kg), the Nickel-Cadmium (NiCd) battery (40-60 Wh/kg) and the Lead-Acid battery (30-40 Wh/kg).

However, at that time the lithium-ion battery was also substantially more expensive than other battery technologies due to the small production volume and raw material costs (above 1000 USD/kWh).

Modern lithium-ion battery technology

Since the 1990s, the performance of lithium-ion batteries has been improved continuously by new scientific discoveries, while the production volume increased due to their high demand for various applications in mobile electronics and electric transportation.

Modern lithium-ion battery technology enables high energy densities above 250 Wh/kg, while the costs dropped to 100-200 USD/kWh in high volume production. The globally largest lithium-ion battery manufacturers are in Asia:

Japan: Panasonic, Toshiba, Sony
South Korea: LG Chem, Samsung SDI, SK Innovation
China: CATL (Contemporary Amperex Technology Co. Limited), BYD (Build Your Dreams), A123 Systems

Other countries in Europe and North America are rapidly expanding their lithium-ion battery production to meet the growing demand on the market.

Europe:

Sweden: Northvolt
Germany: BMZ Group, Accumotive (Mercedes-Benz Group)
France: Saft

North America:

United States (US): Tesla, East Penn Manufacturing Co., Clarios Advanced Solutions
Canada: Taranise, Ionomr Innovations, Canbat

Applications of lithium-ion batteries

Lithium-ion battery technology has a wide range of applications in our daily life. They are used in mobile electronics (e.g., smartphone, tablet, laptops), electric transportation (e.g., E-scooter/bike, electric vehicles, drones) and gain more and more importance in backup power applications in commercial and residential buildings (battery energy storage systems, BESS). Even larger battery farms are being used in the energy storage of renewable energy from solar power in Australia, the USA and China.

The future of the battery market

Forecasts predict a dramatic increase in the demand for lithium-ion battery technology on the market in the next decades. Better performance and safety of lithium-ion battery could potentially enable wide applications in aircraft, helicopters, spaceships, and satellites, which could be realized with novel electrode materials and other battery components like the electrolyte and the packaging of batteries.

The global demand for lithium-ion battery technology in 2023 is about 500 GWh (500 billion watt-hours), which is estimated to double within the next 3 years and will reach around 3,000 GWh in 2033. A study in Nature Energy from October 11, 2023 names electrification of transportation as the major driving industry for batteries. This is a promising forecast for the battery industry and requires drastic expansion of the manufacturing capacity in the near future. Global battery manufacturers plan to expand their production capacity to 5,500 GWh until 2030, where CATL plans to take the lead with 800 GWh.

Battery technology from the gigafactory

Most manufacturers produce their batteries in a gigafactory, which means that their annual total energy storage capacity is at a level of gigawatt-hours (GWh).

By producing batteries in such large volumes, a gigafactory can take advantage of economies of scale, which can lead to cost reductions in both manufacturing and materials procurement. That way a battery gigafactory can help drive down the cost of batteries, making them more affordable for consumers.

Challenges of the battery market

The supply chain:

One of the biggest concerns about lithium-ion battery technology is the instability of the supply chain for raw materials that are used for manufacturing. Critical elements like lithium (Li), cobalt (Co) or nickel (Ni) are connected to geopolitical risks and price volatility besides concerns about ethical and environmentally acceptable mining practices.

The production of battery materials and components is concentrated in a few countries, including China, Japan, South Korea, and a few European nations, which can also lead to supply chain vulnerabilities and geopolitical risks.

Recycling of batteries:

Lithium-ion batteries contain plenty of valuable materials that could be of interest for recycling, including the expensive metals lithium (Li), cobalt (Co), nickel (Ni) and copper (Cu), as well as graphite and electrolyte.

In research study from July 7, 2023 in ACS Sustainable Chemistry & Engineering demonstrated that recovered electrode materials can be obtained via direct recycling process. The purification method leads to an improvement in the overall electrochemical performance of the recovered cathode material. However, the recycling process must be economical to be competitive on the battery market and many recycling steps require large amounts of solvent and energy.

More efficient routes are in development to reduce costs and the environmental impact for the recycling of lithium-ion batteries, that could soon play an important role in the manufacturing on the battery market.

Extreme operating conditions:

Batteries lose a substantial amount of their capacity under very cold conditions e.g., extreme winters. The reason for that is that the diffusion of lithium ions between the electrodes is a temperature dependent process which is directly linked to cell performance. Another aspect is that liquid electrolytes can solidify if the temperature drops a certain point.

On the other hand, the upper temperature limit for safe operation of lithium-ion battery technology is typically around 60°C. Beyond this temperature, there is a risk of thermal runaway, which can lead to overheating, gas generation, and potentially catastrophic failure, including fires and explosions.

Conclusion

Sony commercialized the first lithium-ion battery in the 1990s. Research continuously improves battery performance since the last decades.
Modern lithium-ion battery technology provides high energy density (above 250 Wh/kg). Their costs dropped significantly due to high volume production on gigafactory scale.
The battery market is a multi-billion dollar industry with a global demand of about 500 GWh (500 billion Watt-hours) for lithium-ion batteries in 2023. It is estimated to double within the next 3 years.
The largest growing demand for lithium-ion battery technology in the future will be in electric transportation, energy storage systems (commercial and residential) and large scale battery farms for renewable energy.
Some if the biggest challenges of the battery market are the instability of the supply chain, finding economic solutions for battery recycling and safe operation of batteries under extreme conditions.