After a decade of rapid growth, electric vehicles (EV) represented 4.6% of vehicle sales globally in 2020. It’s projected that EV sales could reach 10% of all road vehicle sales by 2025 given lower cost, improved charging infrastructure and policy support.1 Selina Lu discusses the two main solutions which are currently available to make improvements to EV batteries - Sodium-ion and Solid-state. As the unique advantages of both these options are explored it is thought that they could cost almost 30% to 50% less than the cheapest electric car battery options currently available.2 This would result not only in an overall reduction in costs for EV but also lead to improvements in terms of usage and would potentially make EV more accessible globally, supporting Asia’s decarbonization efforts.
Watch time: 4 minutes 30 seconds
Hi. I’m Selina Lu from the RBC Asian Equity Team.
Last time, we discussed Asian decarbonisation movement. As we continue our journey, we’ll focus on how Asia and China are leading R&D and investment in EV battery technology.
After a decade of rapid growth, the global electric car sales share rose to 4.6% in 2020. It’s projected that EV sales could reach 10% of all road vehicle sales by 2025. Given lower cost, improve the charging infrastructure, and policies have worked, EV battery pack is the most expensive part of an electric vehicle, accounting 30% of the total cost to consumers.
It is also one of the most important components in determining the performance, safety, and lifespan of an EV.
EV have been identified as a key part of global efforts to reach net zero-carbon emissions. Demand is set to grow tenfold over the next decade.
The ECM ion battery manufacturing today is dominated by East Asia, with Japan, China, South Korea all playing a significant role. But there are also other advanced battery technologies on the horizon as companies raise their game to gain shares in this growing market.
Two notable innovations are sodium-ion and solid-state batteries. The world’s largest battery manufacturer is a Chinese company who recently announced the application of sodium-ion batteries this year.
Sodium-ion batteries are unique and advantageous in low-temperature performance, fast charging, and the environmental adaptability. Most importantly, the sodium-ion battery solution could potentially bring down energy storage cost.
Sodium-ion batteries could cost almost 30% to 50% less than the cheapest EV battery options currently available. The price of sodium is less sensitive than ECM, and it’s more common and more evenly distributed. Sodium-ion batteries currently have a relatively lower energy density, but they run better at cooler temperatures and have longer life span, making them good long-term investments.
With government support, Chinese government have started to build new supply chains for sodium-ion batteries scheduled to go live by 2023.
In order to significantly boost energy density and increase driving range, solid-state technology is the ultimate solution. Replacing liquid electrolytes in sodium-ion batteries with solid-state materials will lower the chance of the battery catching fire, and this larger electrochemical window will also allow high-voltage cathode materials and high-energy density lithium metal anodes to be applied.
Solid-state batteries can push the energy density higher, while also being safer and longer lasting, a true game changer.
There are three Japanese companies that are leading the world in related patents. One of those companies has almost tripled the number of patents compared to closest competitor, and the company is aiming to prototype the car this year with a commercial release in 2025.
We’re also starting to see investments into this area from other players in China and South Korea that are studying this technology and [will not] not far behind. We believe solid-state batteries will become popular after 2025.
In summary, Asian companies are not only leading the current EV battery supply chain; they’re setting the stage to advance their market share by developing new technologies for EV batteries.
We expect investment opportunities to emerge from a number of areas; for example, companies that are leading the way in new materials, components, systems, and manufacturing methods.
Thank you so much for listening. And stay tuned for our next topic on decarbonisation.