Battery Metals

CATL will be supplying BMW with cylindrical lithium-ion battery cells for electric vehicles, starting from 2025.

This interesting news was announced by CATL (via Reuters), which has confirmed the signing of an agreement with BMW, but without elaborating on it. We guess that details will be announced later by BMW itself.

“Chinese battery giant CATL on Friday said it will start supplying cylindrical cells to BMW from 2025 to power its new series of electric vehicles.

The battery maker has signed an agreement with BMW in which it is nominated as the supplier of the cylindrical cells for the German carmaker…”

Nonetheless, it’s pretty surprising considering that the German manufacturer so far was relying on prismatic cell format and that it’s also the main type produced by CATL.

If the switch from the prismatic to cylindrical cell format at scale is true, then there must be a serious reason behind it.

Earlier this month, we heard a rumor that BMW is going to use cylindrical battery cells in its next-generation platform “Neue Klasse”, as this type of battery has the potential to lower battery system cost by as much as 30% (compared to prismatic format). Bloomberg‘s report at the time was based on unofficial input from “people familiar with the plans.”

The list of BMW Group’s battery cell suppliers includes Samsung SDI, CATL, as well as EVE Energy and Northvolt. According to the rumor, BMW would like to source cylindrical battery cells from existing partners.

The word “cylindrical” is crucial but does not say what exact format is on the table. Tesla recently launched in-house production of the 4680-type cylindrical cell, which is a step up from the 2170-type and previous 1865-type.

BloombergNEF notes that in 2021, carmakers paid an average $118 per kWh of battery, on the pack level, and the battery cells typically make up four-fifths of the price of a battery system cost.

Due to a substantial increase in battery materials costs, manufacturers are looking at how to bring the costs down. The Bloomberg report suggests that the switch to the cylindrical cell format would help to lower costs. Well, only time will tell, but Tesla’s high operating margins might be another indicator of that.

May 25 (Reuters) – Silicon Valley startup Solo Advanced Vehicle Technologies has partnered with Michigan-based American Battery Solutions (ABS) to develop battery packs for its new driverless electric heavy-duty truck, Solo AVT’s chief executive told Reuters.

“We’re focused on decarbonizing the logistics industry,” CEO and founder Graham Doorley said in an interview, adding the company is raising money to assemble its Class 8 truck, the SD1, in the United States.

Doorley, a Stanford engineering graduate, did stints at Tesla (TSLA.O), Alphabet Inc’s (GOOGL.O) Google X, later Waymo, and Lockheed Martin (LMT.N). He will compete with former boss Elon Musk, whose well-publicized Tesla Semi still has not started production, and Swedish startup Einride, among others working on automated electric heavy haulers.

Year-old Solo AVT aims to begin testing prototypes of the SD1 in 2024, Doorley said, without specifying a date for full commercial production. A contract manufacturer will probably make the prototypes, he said, but ultimately “we want to build our own vehicles in our own factory.”

The SD1 idea took root when Doorley was working at Waymo on automating heavy trucks supplied by manufacturers PACCAR (PCAR.O) and Daimler .

Rather than retrofitting existing diesel-powered vehicles, Solo AVT is designing the SD1 from the ground up. The company has said it expects the SD1 to have a range exceeding 500 miles between charges, with fast charging capability and 600 kW of power delivered to multi-speed tandem axles with integrated electric motors.

The company has raised $7 million in seed money from Trucks Venture Capital, Maniv Mobility, Wireframe Ventures and Schox Patent Group. Doorley said he plans to launch a Series A funding round this summer.

Solo AVT is talking to potential commercial customers for the SD1, but Doorley did not provide specifics.

American Battery Solutions has a lithium-ion battery manufacturing facility in Springboro, Ohio and a technical center in Michigan.

(This story refiles to change name of company in paragraph 1 to American Battery Solutions)

Stellantis CEO Carlos Tavares said he expects shortages of the batteries and raw materials needed to make electric vehicles in the coming years, as the global automotive industry pivots to EVs to meet an expected increase in consumer demand and government regulations.

Tavares said he expects a shortage of EV batteries by 2024-2025, followed by a lack of raw materials for the vehicles that will slow availability and adoption of EVs by 2027-2028.

“The speed at which we are trying to move all together for the right reason, which is fixing the global warming issue, is so high that the supply chain and the production capacities have no time to adjust,” he told media Tuesday after the company announced a new $2.5 billion EV battery plant in Indiana.

Stellantis, the world’s fourth-largest carmaker, was formed by the merger of Fiat Chrysler and France-based Groupe PSA last year.

Tavares used the prospect of a shortage to urge policymakers globally to stop aggressively moving targets for EVs forward.

European regulators have been among the most aggressive in implementing new EV regulations, with those in the United Kingdom announcing plans to ban the sale of vehicles with traditional internal combustion engines by 2030, sooner than the previous target date of 2040. The Biden administration last year also announced a target for half of all vehicles in the U.S. to be EVs by the end of the decade.

“All the car companies now, at least the best ones, are now full speed ahead; in full execution mode, going as fast as they can,” Tavares said. “The only thing that really helps to deliver is stability. Stop playing with the rules. Leave the rules as they are and let people work properly.”

Tavares expects a bottleneck in batteries first, as more EV production plants come online. He then expects those facilities to create a shortage of raw materials for the vehicles. Such shortages have been a focus of Wall Street analysts when rating automakers and predicting their ability to sell EVs.

This isn’t the first time Tavares has warned of such a shortage, but it’s the most detailed.

“The point is, when we want to move too fast with a big magnitude and there is not enough feasibility studies, we may be bumping on this kind of stuff,” Tavares said. “You’ll see that the electrification path, which is a very ambitious one, in a time window that has been set by the administrations is going to bump on the supply side.”

Automakers globally have set sales expectations to transition certain brands to exclusively offering EVs by the end of this decade, if not sooner.

Stellantis is investing $35 billion in EVs and expects to achieve annual sales of 5 million electric vehicles globally by 2030. That would include all passenger car sales in Europe and 50% passenger car and light-duty truck sales in North America, in line with government targets.

Global sales of electric vehicles (EVs) surged last year and have continued to grow strongly this year, but soaring prices of critical minerals and supply chain bottlenecks are the greatest obstacles to a continued surge in EV sales in the short term, the International Energy Agency (IEA) said in its Global EV Outlook 2022 published on Monday.

Global EV sales broke all records last year and continued their strong performance in the first quarter of 2022, mostly thanks to sustained policy support in many markets, with overall public spending on subsidies and incentives doubling in 2021 to nearly $30 billion, the IEA said in the annual report.

Sales of fully electric and plug-in hybrid vehicles doubled in 2021 from 2020 to a new annual record of 6.6 million. Last year, more than 120,000 electric cars were sold each week globally, while back in 2012, a total 120,000 EVs were sold for the entire year, the IEA said.

Almost 10 percent of global car sales were electric in 2021, four times the market share in 2019. The total number of electric cars on the roads is now around 16.5 million, triple the amount in 2018. Global sales of electric cars have kept rising strongly in 2022, with 2 million sold in Q1, a 75-percent jump compared to the same period in 2021.

China accounted for half of the world’s EV car sales last year, with sales tripling to 3.3 million. EV sales also grew strongly in Europe—up by 65 percent to 2.3 million—and the United States, where EV sales more than doubled to 630,000, the IEA said.

The agency, however, warned that “In the short term, the greatest obstacles to continued strong EV sales are soaring prices for some critical minerals essential for battery manufacturing, as well as supply chain disruptions caused by Russia’s attack on Ukraine and by continued Covid-19 lockdowns in some parts of China.”

The supply of critical minerals for battery technologies will be the key to the continued roll-out of EVs globally, it says.

“Policy makers, industry executives and investors need to be highly vigilant and resourceful in order to reduce the risks of supply disruptions and ensure sustainable supplies of critical minerals. Under its new Ministerial mandate, the IEA is working with governments around the world on how to strategically manage resources of critical minerals that are needed for electric vehicles and other key clean energy technologies,” IEA Executive Director Fatih Birol said in a statement.

ABB and Siemens are leading a €100mn fundraising round by Morrow Batteries, a start-up that aims to start producing in its home country of Norway by the end of next year.

Boosting investment in battery production has become an urgent strategic goal for Europe as it races to address the energy crisis and the shortage created by declining Russian gas supplies.

The region’s biggest battery makers include Sweden’s Northvolt, which raised $2.75bn last year and started production in December, and Norway’s Freyr, which went public last year through a merger with a listed company.

Morrow said it would use its funding to build a 1.2GW pilot factory by the end of next year, which will produce batteries used in energy storage systems such as those used for rooftop solar panels.

Chief executive Terje Andersen said this initial production would allow the company to obtain certification for producing electric vehicle batteries, which would ultimately become its main market.

“The market is huge,” he said, acknowledging that Morrow was two or three years behind larger rivals such as Northvolt. He estimates Morrow is in the top third of European battery groups. “We are not in the front, and we are not in the back,” said Andersen.

At present China is the world’s biggest battery manufacturer. However, new European trade rules will make it extremely expensive to import batteries from Asia from 2027, creating an opening for Europe’s homegrown battery makers.

Morrow’s €100mn fundraising is being led by Siemens Financial Services, a subsidiary of the German industrial group, and ABB, the Swedish-Swiss power conglomerate. Additional investors include the Norwegian state’s Nysnø Climate Investments and Arendals Fossekompani, a hydropower company and green investment fund.

Morrow previously raised €32mn from investors including Danish pension fund PKA and Agder Energi Venture, which both participated in the second round.

At present Morrow’s battery development line is in South Korea, and the company said it would relocate the production to the new factory in Arendal on Norway’s southern coast.

Global shortages of cobalt and nickel are threatening to push up the price of electric vehicle batteries, prompting some manufacturers to invest in technologies that use less of these materials.

Andersen said the company was planning a battery that had no cobalt and used significantly less nickel. “We will replace nickel and cobalt with manganese. This is what the EV producers are keen to discuss with us.”

The perfect storm of crises and policy directives have converged to create the energy storage moment. Between the drive to reduce carbon output to “net zero” over the coming decades and the commodity crisis created by the conflict in Ukraine (including its impact on the supply and price of oil and natural gas), the pressure to deploy renewable resources has never been greater.

The term “renewable resources” could include wood or falling water, but policymakers tend to equate “renewable” with wind or solar generation. While wind and solar both produce electricity without carbon emissions and with zero fuel cost, standing alone, they are considered intermittent resources. Put simply, when the wind is not blowing or the sun is not shining, these resources do not produce electricity.

The Challenge of Intermittent Resources

The bulk power system, which powers our nation and enables modern civilization, relies on a continuous current, or uninterrupted flow of electrons, to quite literally “keep the lights on.” For decades, this problem was met through the use of baseload resources such as coal, nuclear, or natural gas, which runs continuously for long periods of time, generating a constant flow of electrons. As tens of thousands of megawatts of these resources seemingly retire each year, they are replaced with intermittent resources like wind and solar.

While batteries and other forms of energy storage have been around for a long time, and according to some theorists, thousands of years (see The Baghdad Battery controversy), widespread deployment of battery storage is a relatively recent phenomenon due to the historic problem of scaling up traditional batteries. With the growth of lithium-ion technology and other competing chemistries (such as iron flow, zinc air, and more), and tremendous demand, battery deployment has grown exponentially in recent years.

In fact, a recent report from Wood McKenzie shows battery storage deployment growth from approximately 257 MW in 2016 to 3,508 MW in 2021, a 1,263% growth rate over that five-year period. That same report shows explosive growth in battery storage continuing over the next several years.

Why Battery Storage Is the Answer

Grid-scale batteries work the same way as those used on a micro level in consumer products, but on a much larger scale. Electric energy is stored in the battery and then released when needed. For wind and solar, batteries can easily provide a solution to the intermittency problem while also taking advantage of market opportunities.

For example, while solar resources generate during the day and are inactive at night, a portion of the output from a solar array can be used to charge the battery, if the battery is deployed alongside the solar array. Then, the energy from the battery can be discharged after the sun goes down. For wind, where the resource typically produces more energy at night, a portion of energy can be diverted to charging the battery and then released from the battery during the day.

In cases where the storage device is not co-located with wind or solar, the economics still work well, as the battery can be charged with cheaper off-peak (overnight) energy and then released during periods of high demand, allowing for the resource owner to simply earn money based on the pricing differential while providing an incredibly valuable peaking service.

While grid-scale batteries can perform a variety of other functions, storage can complement and optimize intermittent resources like wind and solar, providing a cleaner alternative to baseload resources.