Annual production capacity will match 40 gigawatt hours. Honda and LG Energy: Announced a joint venture to invest $4.4B toward a US-based battery production facility, with lithium-ion battery production to start by 2025.Production capacity will be increased to 40 GWh. Toyota: Committed to an investment of up to $3.8B with a portion allocated to EV battery production.We expect CATL to make its plans for US manufacturing official within the next two months. CATL: The Chinese-based, world’s largest battery manufacturer has paused announcements on its plan to expand battery production to the US (potentially in South Carolina and Kentucky).More recently, from February to August 2022, the following OEMs and manufacturers announced additional plans to scale US facilities, including: At last count, 22 companies made announcements committing to investment and expansion of US-based battery production. In the coming years, we expect an increased emphasis on localized battery component manufacturing. These new sourcing guidelines come when China is the leading force in global electrification through its Made in China (MIC) 2025 initiative. The Inflation Reduction Act offers financial incentives and tax breaks for companies who comply with guidelines set for new materials, including sourcing from within the US or from countries with whom the US has a Free Trade Agreement. With continued geopolitical tension and supply chain constraints, the focus of the US government on localizing supply of rare materials for EV batteries has become increasingly apparent. The key CAM suppliers include L&F (South Korea), Kansai (Japan), POSCO (South Korea), EcoPro BM (South Korea), Mitsubishi Chemical Holdings (Japan), Umicore (Belgium), BASF (Germany), and soon-to-be Redwood Materials (US). If you’re curious, copper is a key battery material that is used in the anode. The primary material in the CAM is lithium, alongside a secondary metal which could be cobalt, nickel, or manganese. We estimate that 90% of the cost of a cathode lies in the cost of the CAM. What companies make cathodes?Ĭathodes are “made” by battery cell manufacturers including CATL (China), Panasonic (Japan), and LG (South Korea). CAM is so expensive due to the high costs of mining and refining materials, along with the global supply chain needed today to transport the CAM to battery cell manufacturers. In other words, the Cathode Active Material (CAM) makes up 8-10% of the cost of an EV. The material contents of the cathode make up about 50% of the battery cell cost. For example, in a $55K Model Y, the battery represents about $10-$12K. The battery in an EV is expensive, accounting for between 15-20% of overall vehicle cost. When this transfer of ions eventually stops, it signifies the end of the battery life.Through an external circuit (conductive path), ions flow from the anode to the cathode which balances out the charge and gives power to the vehicle.As ions flow, the anode builds up an excess of electrons.Ions flow from the cathode to the anode internally.The cathode plays an important role in the four workings of a battery cell, which include: Here’s how it works: During a battery’s charge, lithium ions (electrons) flow between the cathode and anode repeatedly which creates an output of energy (mechanical). The development of cathodes for lithium-ion batteries began in the early 1980s, so the underlying architecture has been around for about 40 years. The word “cathode” was derived in 1983 from the Greek word, káthodos, which means “descent” or “way down,” referring to the flow of energy through a battery. The cathode is one component of a battery cell and is one of two key elements that make a battery work, along with the anode. This report on the cathode is the first of our five “Battery 101” reports. While the EV segment has an impressive forecasted growth of a 35% annual run rate, we believe that the growth in battery minerals and components will-within the next ten years-exceed EV growth. Essentially, anything powered by gas today will be electric in the future.Įlectric vehicles (EVs) have been the focal point of investor thinking on electrification given that we’re seeing more and more of them on the roads. New segments are being disrupted by electrification, from homes to recreational vehicles to construction equipment. We’ve written about the imminent electrification of everything and the crucial role of the battery before.
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