Elec­tri­fy­ing ev­ery­thing

Af­ter electric cars, what more will it take for bat­ter­ies to change the face of en­ergy?

The Ukrainian Week - - ECONOMICS -

About three-quar­ters of the way along one of the snaking pro­duc­tion lines in Nis­san’s Sunderland plant, a worker bolts fuel tanks into the chas­sis of count­less Qashqais— the “ur­ban cross­over” SUVs which are the bulk of the fac­tory’s out­put. But ev­ery so of­ten some­thing else passes along the line: an electric ve­hi­cle called a Leaf. The fu­eltank bolter changes his rhythm to add a set of lithium-ion bat­tery packs to the floor of the Leaf. His move­ments are so well chore­ographed with the swish­ing ro­botic arms around him that he makes the shift from the in­ter­nal com­bus­tion en­gine to the bat­tery-charged electric ve­hi­cle look al­most seam­less.

Un­til re­cently, it was a tran­si­tion that many found un­think­able. The in­ter­nal com­bus­tion en­gine has been the main way of pow­er­ing ve­hi­cles on land and at sea for most of the past cen­tury. That is quite the head start. Though Leafs are the world’s big­gest-sell­ing electric ve­hi­cle, the Sunderland plant, Bri­tain’s big­gest car fac­tory, only made 17,500 of them last year. It made 310,000 Qashqais. And the Qashqais, un­like the Leafs, were prof­itable. Nis­san has so far lost money on ev­ery Leaf it has made.

There were 750,000 electric ve­hi­cles sold world­wide last year, less than 1% of the new-car mar­ket. In 2011 Car­los Ghosn, boss of the Re­nault-Nis­san al­liance, sug­gested that his two com­pa­nies alone would be sell­ing twice that num­ber by 2016, one of many boos­t­er­ish pre­dic­tions that have proved well wide of the mark. But if the tim­ing of their take-off has proved un­cer­tain, the be­lief that electric ve­hi­cles are go­ing to be a big busi­ness very soon is ever more widely held. Mass-mar­ket ve­hi­cles with driv­ing ranges close to that of­fered by a full tank of petrol, such as Tesla’s Model 3 and GM’s Chevro­let Bolt, have re­cently hit the mar­ket; a re­vamped Leaf will be un­veiled in Septem­ber. The abil­ity to make such cars on the same pro­duc­tion lines as fos­sil-fuel burn­ers, as in Sunderland, means that they can spread more eas­ily through the in­dus­try as pro­duc­tion ramps up.


Many fore­cast­ers reckon that the life­time costs of own­ing and driv­ing an electric car will be com­pa­ra­ble to those for a fuel burner within a few years, lead­ing sales of the electric cars to soar in the 2020s and to claim the ma­jor­ity some­time dur­ing the 2030s. China, which ac­counted for roughly half the electric ve­hi­cles sold last year, wants to see 2m electric and plug-in hy­brid cars on its roads by 2020, and 7m within a decade. Bloomberg New En­ergy Fi­nance (BNEF), a con­sul­tancy, notes that fore­casts from oil com­pa­nies have a lot more electric ve­hi­cles in them than they did a few years ago; OPEC now ex­pects 266m such ve­hi­cles to be on the street by 2040 (see The com­ing oil cri­sis). Bri­tain and France have both said that, by that time, new cars com­pletely re­liant on in­ter­nal com­bus­tion en­gines will be il­le­gal.

That this is even con­ceiv­able is a trib­ute to the re­mark­able ex­pan­sion of the lithium-ion bat­tery busi­ness—and to the be­lief that it is set to get much big­ger. The first such bat­ter­ies went on sale just 26 years ago, in Sony’s CCD-TR1 cam­corder. The prod­uct was a hit: the bat­ter­ies even more so, spread­ing to com­put­ers, phones, cord­less power tools, e-cig­a­rettes and be­yond. The more gad­gets the world has be­come hooked on, the more lithium-ion bat­ter­ies it has needed. Last year con­sumer prod­ucts ac­counted for the pro­duc­tion of lithium-ion bat­ter­ies with a to­tal stor­age ca­pac­ity of about 45 gi­gawatt-hours (GWh). To put that in con­text, if all those bat­ter­ies were charged up they could pro­vide Bri­tain, which uses on av­er­age about 34GW of elec­tric­ity, with about an hour and 20 min­utes of juice.

In the same year pro­duc­tion of lithium-ion bat­ter­ies for electric ve­hi­cles reached just over half that ca­pac­ity: 25GWh. But Sam Jaffe of Cairn ERA, a bat­tery con­sul­tancy, ex­pects de­mand for ve­hi­cle bat­ter­ies to over­take that from con­sumer elec­tron­ics as early as next year, mark­ing a piv­otal mo­ment for the in­dus­try. Huge ex­pan­sion is un­der way. The top five man­u­fac­tur­ers—Ja­pan’s Pana­sonic, South Korea’s LG Chem and Sam­sung SDI, and China’s BYD and CATL—are ramp­ing up cap­i­tal ex­pen­di­ture with a view to al­most tripling ca­pac­ity by 2020 (see Electric dreams). The vast $5bn gi­gafac­tory Tesla is build­ing with Pana­sonic in Ne­vada is thought to al­ready be pro­duc­ing about 4GWh a year. Tesla says it will pro­duce 35GWh in 2018. Just four years ago, that would have been enough for all ap­pli­ca­tions across the whole world.

The gi­gafac­tory is not just for cars. Hear­ing of elec­tric­ity black­outs in South Aus­tralia, Elon Musk, Tesla’s founder, tweeted to the state’s premier in March that by the end of the year Tesla could pro­vide enough bat­tery stor­age to make sure that the grid never fell over again. At the gi­gafac­tory they are now hard at work cram­ming 129 megawatt-hours (MWh) of ca­pac­ity into a fa­cil­ity de­signed to keep their boss’s word. When in­stalled on the other side of the Pa­cific, it will be the big­gest such grid-based sys­tem in the world; but many more are on the way. In­dus­tri­alscale lithium-ion bat­tery packs—es­sen­tially lots of the bat­tery packs used in cars wired to­gether, their chem­istry and elec­tron­ics tweaked to sup­port quicker charg­ing and dis­charg­ing—are in­creas­ingly pop­u­lar with grid op­er­a­tors look­ing for ways to smooth out the ef­fects of in­ter­mit­tent power sup­plies such as so­lar and wind. Smaller bat­tery packs are be­ing bought by con­sumers who want in­de­pen­dence from the grid—or, in­deed, to store the elec­tric­ity they pro­duce for them­selves so that it can be sold into the grid at the most lu­cra­tive time of day or night. Bat­ter­ies are be­com­ing an in­te­gral part of the low-emis­sions fu­ture.


The fun­da­men­tal op­er­at­ing prin­ci­ples of the lithi­u­mion bat­tery are eas­ily un­der­stood. When the bat­tery is charg­ing an electric po­ten­tial pulls lithium ions into the re­cesses of a graphite-based elec­trode; when it is in use th­ese ions mi­grate back through a liq­uid elec­trolyte to a much more com­plex elec­trode made of com­pounds con­tain­ing lithium and other me­tals—the cath­ode. The fun­da­men­tal op­er­at­ing prin­ci­ples of the bat­tery busi­ness, on the other hand, are con­sid­er­ably more opaque, thanks to an al­most para­noid taste for se­crecy among sup­pli­ers and the baf­fling eco­nomics of the Asian con­glom­er­ates that lead the mar­ket.

All the big producers are adding ca­pac­ity in part be­cause it drives down unit costs, as the past few years have shown (see Watt next?). Lithium-ion cells (the ba­sic com­po­nents of bat­ter­ies) cost over $1,000 a kilo­watt-hour (kWh) in 2010; last year they were in the $130-200 range. GM says it is pay­ing $145 per kWh to LG Chem for the cells that make up the 60kWh bat­tery for the Bolt (the pack, thanks to labour, ma­te­ri­als and elec­tron­ics, costs more than the sum of its cells). Tesla says that cells for the Model 3 are cheaper. Lower costs are not the only im­prove­ments; large amounts of R&D in­vest­ment have led to bet­ter power den­sity (more stor­age per kilo­gram) and bet­ter dura­bil­ity (more dis­charge-then-recharge cy­cles). The Bolt comes with a bat­tery war­ranty of eight years.

There were 750,000 electric ve­hi­cles sold world­wide last year, less than 1% of the new-car mar­ket. But if the tim­ing of their take-off has proved un­cer­tain, the be­lief that electric ve­hi­cles are go­ing to be a big busi­ness very soon is ever more widely held

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