{{r.fundCode}} {{r.fundName}} {{r.series}} {{r.assetClass}}

Welcome to the new RBC iShares digital experience.

Find all things ETFs here: investment strategies, products, insights and more.

by  ​RBC Asian Equity Team Oct 28, 2021

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

View transcript

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.



Get the latest insights from RBC Global Asset Management.

1. International Energy Agency (IEA), Global EV Outlook 2021
2.The Next Best Electric Car Battery Is Here, Cheaper Than Ever, Bloomberg, Sept 2021

Disclosure

This document is provided by RBC Global Asset Management (RBC GAM) for informational purposes only and may not be reproduced, distributed or published without the written consent of RBC GAM or its affiliated entities listed herein. This document does not constitute an offer or a solicitation to buy or to sell any security, product or service in any jurisdiction; nor is it intended to provide investment, financial, legal, accounting, tax, or other advice and such information should not be relied or acted upon for providing such advice. This document is not available for distribution to people in jurisdictions where such distribution would be prohibited.

RBC GAM is the asset management division of Royal Bank of Canada (RBC) which includes RBC Global Asset Management Inc., RBC Global Asset Management (U.S.) Inc., RBC Global Asset Management (UK) Limited, RBC Global Asset Management (Asia) Limited, and BlueBay Asset Management LLP, which are separate, but affiliated subsidiaries of RBC.

In Canada, this document is provided by RBC Global Asset Management Inc. (including PH&N Institutional) which is regulated by each provincial and territorial securities commission with which it is registered. In the United States, this document is provided by RBC Global Asset Management (U.S.) Inc., a federally registered investment adviser. In Europe this document is provided by RBC Global Asset Management (UK) Limited, which is authorised and regulated by the UK Financial Conduct Authority. In Asia, this document is provided by RBC Global Asset Management (Asia) Limited, which is registered with the Securities and Futures Commission (SFC) in Hong Kong.

Additional information about RBC GAM may be found at www.rbcgam.com.

This document has not been reviewed by, and is not registered with any securities or other regulatory authority, and may, where appropriate, be distributed by the above-listed entities in their respective jurisdictions.

Any investment and economic outlook information contained in this document has been compiled by RBC GAM from various sources. Information obtained from third parties is believed to be reliable, but no representation or warranty, express or implied, is made by RBC GAM, its affiliates or any other person as to its accuracy, completeness or correctness. RBC GAM and its affiliates assume no responsibility for any errors or omissions.

Opinions contained herein reflect the judgment and thought leadership of RBC GAM and are subject to change at any time. Such opinions are for informational purposes only and are not intended to be investment or financial advice and should not be relied or acted upon for providing such advice. RBC GAM does not undertake any obligation or responsibility to update such opinions. RBC GAM reserves the right at any time and without notice to change, amend or cease publication of this information. Past performance is not indicative of future results. With all investments there is a risk of loss of all or a portion of the amount invested. Where return estimates are shown, these are provided for illustrative purposes only and should not be construed as a prediction of returns; actual returns may be higher or lower than those shown and may vary substantially, especially over shorter time periods. It is not possible to invest directly in an index.

Some of the statements contained in this document may be considered forward-looking statements which provide current expectations or forecasts of future results or events. Forward-looking statements are not guarantees of future performance or events and involve risks and uncertainties. Do not place undue reliance on these statements because actual results or events may differ materially from those described in such forward-looking statements as a result of various factors. Before making any investment decisions, we encourage you to consider all relevant factors carefully.
® / TM Trademark(s) of Royal Bank of Canada. Used under licence.
© RBC Global Asset Management Inc. 2021
Originally published on October 19, 2021