Factors that affect Li-ion battery cost.
The cost of Li-ion batteries is non-incontestably one of the main barriers to the mass adoption of electric vehicles. To address issues of oil dependence, global warming, and air pollution, in not only the United States but globally, battery costs need to be effectively reduced [1].
As governments set up policies for electric vehicles, battery cost will be a big determinant of whether these policies will be adhered to and whether the adoption of electric vehicles will be on the high in the future. For example, the state of California has set a goal to have 100 percent of zero-emission in-state sales of new passenger cars and trucks by 2035 [2]. Other nations such as Norway also have very similar ambitious goals targeted at zero emissions. It is important to note that electric vehicles’ cost of battery packs needs to fall below US$150 per kWh for battery electric vehicles (BEVs) to become cost-competitive with internal combustion vehicles [3].
Evaluating what drives the costs so high is necessary, as battery costs determine electric vehicle costs. Factors that directly affect Li-ion battery costs are the cost of raw materials, cell packaging, costs associated with electrode design, and manufacturing.
Raw materials
Raw materials consist of the biggest share when it comes to the cost of the battery. These material costs are broken down into positive active material, negative active material, battery jacket, state of charge regulator, separator, and electrolyte among others. Significant improvements need to be made in the cathode material as it covers the largest cost of the battery. Within the cathode, Cobalt is the most expensive material to use as on the cathode, so formulations of these materials with less cobalt typically lead to cheaper batteries [4].
According to [1], after an analysis of a PHEV20, it was found that material costs account for about 61% of the pack level cost. If we analyze the material cost itself, 38% of the cost comes from positive active materials, while less than 15 % of the cost comes from negative active materials. Contrary to popular knowledge, the cost of labor isn’t a big contributor to the cost of batteries.
Cell packaging
There exist three different alternatives to cell packaging: prismatic, pouch, and cylindrical cells. According to [5], cells for vehicles are likely to be prismatic (flat plate) or pouch-type rather than cylindrical, because these are easier to cool and arrange in stacks. This hasn’t stopped vehicle manufacturers such as Tesla from using cylindrical cells. The production process for flat-plate cells differs from that for cylindrical cells, but it is anticipated that the cost will follow a similar learning pattern as the 18mm *65 mm lithium-ion battery cells [5]. In addition, electrodes in prismatic cells are stacked and wound in cylindrical cells, these packaging differences account for differences in the cost as well.
According to [6], prismatic cells, which have more design flexibility to account for specific chemistry characteristics, can be larger, requiring less hardware per kWh and reducing costs. This reduction is most pronounced for Lithium Manganese Oxide (LMO) prismatic cells, which can be manufactured for less than half the cost of cylindrical LMO cells.
Electrode design
Another factor that has proved to influence battery cost is the electrode design/size. As stated by Satki [1], thinner electrodes deliver higher power per unit capacity, but they also require more inactive materials. This ends up having implications on not only the cost but also on the volume, weight, and life of the battery in general. Ciez [6], highlights that thinner electrodes can be desirable in applications where a high power density battery is required, as is the case in plug-in electric vehicles ( PHEVs). PHEVs require cells with a higher power-to-energy ratio and this can only be achieved through thinner electrodes that are found to be expensive. On the contrary, larger cells or cells with thicker electrodes offer a lower cost per kWh but have a downside of possibly cracking (if they exceed 100μm) because of the very small radius at the center of the cell[6]. Large pack BEV applications use lower-cost thicker electrodes and small-pack PHEV applications use high power cells with thinner electrodes as noted by Satki [1].
Manufacturing
Along with the aforementioned, manufacturing is also a factor to consider to reduce overall battery costs. According to Deng, challenges in manufacturing mostly have to do with 3 steps among the long-chain process, like drying, formation, and aging. These steps take a long processing time and affect the yield rate. Satki [1], finds that economies of scale in battery manufacturing are reached quickly at a production volume of ~200–300 MWh annually. The volume also does little to reduce unit costs, except potentially indirectly through factors such as experience, learning, and innovation but again this reduction is noted to be quite minimal. Although raw materials cost is considerable, the costs associated with manufacturing (e.g., cell production) also need to be managed to reduce the overall cost of a battery system [7]. An approach to this would be to have a smart product line that can inline control materials, process settings, and cell quality to improve cell performance and reduce manufacturing costs [7].
Conclusion
In conclusion, battery costs are a big determinant in the widespread adoption of electric vehicles. It is not possible to determine a completely reliable projection of future battery cost, and even if the higher initial battery cost drops as predicted over the next 10 years, battery cost will remain a barrier to PEV adoption as economies of scale have already been reached [8]. For electric vehicles to have further cost reductions, progress will have to be made in terms of electrode size, where thicker electrodes have proven to be cheaper, manufacturing, and changing the cell geometry. Other factors such as transportation cost although minimal can also be potentially used to reduce the costs further down. The Department of Energy’s goal for the industry is to reduce the price of battery packs to less than $100/kWh and ultimately to about $80/kWh and at these battery price points, the price of an electric vehicle will be lower than that of a comparable combustion engine vehicle [4].
References:
[1] A. Sakti, J. J. Michalek, E. R.H. Fuchs, and J. F. Whitacre, “A techno-economic analysis and optimization of Li-ion batteries for light-duty passenger vehicle electrification”, J. Power Sources, Sept. 2014. [Online]. Available: ScienceDirect, https://doi.org/10.1016/j.jpowsour.2014.09.078.
[2] Office of Governor Gavin Newsom. (2020, Sept. 23). Executive order N-79–20. [Online]. Available: https://www.gov.ca.gov/wp-content/uploads/2020/09/9.23.20-EO-N-79-20-Climate.pdf
[3] U.S Department of Energy. (2020, Jun. 4). Batteries: 2019 Annual Progress Report. [Online]. Available: https://www.energy.gov/sites/default/files/2020/06/f75/VTO_2019_APR_Batteries-FINAL2_-compressed_0.pdf
[4] The Conversation, “The road to electric vehicles with lower sticker prices than gas cars — battery costs explained”, 2020. [Online]. Available: https://theconversation.com/the-road-to-electric-vehicles-with-lower-sticker-prices-than-gas-cars-battery-costs-explained-137196. [Accessed: Apr.28, .2021].
[5] The National Academies Press, “Transitions to Alternative Vehicles and Fuels,” National Research Council Of The National Academies, 2013. Available: NAP, http://nap.edu/18264.
[6] R. Ciez, and J. F. Whitacre, “Comparison between cylindrical and prismatic lithium-ion cell costs using a process based cost model”, J. Power Sources, Nov. 2016. [Online]. Available: ScienceDirect, s. https://doi.org/10.1016/j.jpowsour.2016.11.054.
[7] J. Deng ,C. Bae, A. Denlinger, and T. Miller, “Electric Vehicles Batteries: Requirements and Challenges”, Joule, 2014. [Online]. Available: Joule, https://doi.org/10.1016/j.joule.2020.01.013.
[8] The National Academies Press, “Overcoming barriers to deployment of plug-in electric vehicles,” National Research Council Of The National Academies, 2015. Available: NAP, http://www.nap.edu/21725.
