As electrification progresses, the demand for batteries continues to grow. Whether it’s for EVs, electronics, renewable energy production solutions, or drones, the battery is an integral part of the final product. For EV makers, recent events and the pandemic have created a tough environment for them as they seek to increase adoption while maintaining affordability. Currently, the average cost of raw materials used in EVs is $8,255 per vehicle, representing an increase of over 140% from the $3,381 previously needed to make an EV in March 2020. In terms of the battery, the average EV capacity is 40kW/h and as the average battery pack reached $151 kW/h, this means that up to $6,040 is needed for the battery alone. With increases in materials, can new battery design reduce the cost to produce batteries?
Increase in Material Costs
The car industry aiming towards EVs becoming the default choice of personal transportation was built on the premise that batteries would get cheaper. For many years, this was the case as the cost of batteries fell from $1,000kW/h over a decade ago, for the first models, to around $130 in 2021. However, current conflicts, stretched supply chains and commodities skyrocketing have led to the cost of key raw materials for battery manufacturing to increase. Indeed, 2022 saw battery pack prices increase for the first time to an average of $151/kWh, a 7% increase from 2021 and the first one since BloombergNEF started tracking the market in 2010.
As a result, the cost to produce EVs is expected to surge over the next four years. Indeed, battery cell prices could go up by 22% from 2023 to 2026, and reach highs of $138kW/h before they steadily decline through 2031.This could cause the price of EVs sold in 2026 to increase by $1,500 to $3,000 per vehicle and the amount of sales to decrease by up to 10%. Consequently, as the prices of lithium, nickel and cobalt, all needed for batteries, have risen, for a 60kW/h battery, the price rose from $1,395 a year ago to more than $7,400 in early March.
With even LFP battery packs that suffered from increases due to supply chain disruptions, their price rose by 27% between 2021 and 2022. Similarly, cobalt has also suffered from increases in prices with it surpassing $50,000/t in 2021 and 2022. As a result, many OEMs and battery manufacturers are trying to reduce the amount of cobalt they use in an effort to cut costs. However, with NMC remaining one of the dominant chemistries for the foreseeable future, demand linked to EV-related cobalt will continue to speed up over the next few years. This, despite cobalt being at times over 2.4 times more expensive than other common battery materials including nickel, which also soared to a multi-year high and surpassed the $100,000/t mark before going back down. Therefore, with price spikes in materials, increasing demand and an unreliable supply chain, ways to tackle increasing costs must be found.
Reducing Costs with 3D Design
Many efforts to reduce costs are being made in the industry. They are being made through improved manufacturing processes combined with new technologies, emerging and next-generation battery chemistries, advanced battery design, and new battery architecture, which is rapidly being adopted in the industry. New battery designs focus on a relatively overlooked solution of improving battery and electrode structure rather than only addressing the chemistry, and finding more efficient ways to use the electrodes, a very similar improvement process to that of electronic chips. Some of the most significant methodologies of how new battery design technologies improve battery performance and cost are:
Improving the Efficiency of Battery Production
While traditional 2D electrodes have a smooth surface, 3D electrodes have a porous structure, which allows the active material to be embedded and distributed evenly. Indeed, fewer electrode layers are needed to achieve a given energy density. This means that fewer pairs of anodes and cathodes, in addition to the separators required for each pair are required. Moreover, this enables the reduction of expensive inactive materials needed per cell. What is more, Addionics’ manufacturing process is a drop-in solution that can be seamlessly integrated into any production line. Consequently, with the cost of separators amounting to over 7% of the total cell cost, the reduction of layers needed in Addionics 3D batteries lead to direct cost savings.
AI-Based Advanced Battery Design
Another way that the industry is working to reduce costs is by enhancing battery design with AI. Indeed, with advanced machine learning algorithms, the best structure can be predicted and determined according to application requirements. This can increase battery performance optimization by increasing the energy density at the cell level. Furthermore, AI can suggest possibilities based on emerging chemistries and technologies before they mature, offering savings in value and cost.
Slimmed Down Processing Times
3D design also leads to reduced manufacturing costs as fewer layers means that processing steps including coating, drying, calendering and slitting need to be done less times. As each layer comes with a certain amount of yield loss, more layers equate to more yield loss. Having fewer layers allows production yield to be increased, which in turn leads to cost reductions on a per kWh basis. Moreover, less binder material is required and a cheaper binder can be used thanks to the better adhesion between the electrode material and the current collector.
Less Costs with Addionics
With less materials needed, reduced processing times and AI software, Addionics 3D Electrodes can reduce the cost to produce batteries. Additionally, Addionics 3D Electrodes makes the need for frequent part replacements less frequent, further lowering overall costs. What is more, their design optimizes the internal structure of batteries, making it possible to improve performance and extend their lifespan.
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