The evolution of EV battery technology reflects a combination
of historical developments, emerging innovations, and market
demands.
The lithium-ion battery — now synonymous with electric
vehicles (EVs) and available commercially since 1981 — took a
while to catch on in automotive circles. The first EV had a lead
acid battery and was developed a full 100 years earlier by Gustav
Trouvé in 1881.
Indeed, by 1900, of the 4,192 vehicles produced in the US that
year, 1,575 (38%) were electric. Vehicle speeds were low at that
time and a lead acid battery was sufficient to give 100 miles of
range. However, as vehicle speeds increased and requirements
changed, the lead acid battery was no longer sufficient. EVs
quickly fell by the wayside as the internal combustion engine (ICE)
dominated.
Then in 1996, General Motors (GM) — acting upon a California
Air Resources Board (CARB) mandate for zero-emission vehicles
(ZEVs) — introduced its first generation EV1. This vehicle
again had a lead acid battery. Like its EV counterparts earlier in
the century, the EV1 could not stand toe-to-toe with ICE
competitors as the lead acid battery lacked the energy density
(volumetric and gravimetric) to compete. Even the second generation
EV1, this time with a more energy-packed nickel metal hydride
battery, could not compete with the ICE.
These developments took place with lithium-ion as a bystander,
even though it provides up to three times the energy density
(volumetric and gravimetric) of lead acid and approximately two
times the density of nickel metal hydride.
At the same time as GM was tinkering with the EV1, in Japan
Nissan launched the Altra EV in 1998 to little fanfare. The Altra
is significant in that it was the first EV equipped with a
lithium-ion battery. It never caught on. It was not until the
lithium-ion-equipped Tesla Roadster was launched in 2008 that a
fire was lit under the EV market and lithium-ion became
mainstream.
The main lithium-ion battery chemistries
That is not where the story ends with lithium-ion. The phrase
“lithium-ion” is actually catchall for various cathode (a battery's
positive electrode) chemistries involving lithium. Material for the
anode (the negative electrode) is pretty set, with graphite
universally accepted as the material of choice, albeit with silicon
increasingly added to the mix to improve energy density at the cost
of a reduced cell cycle life.
In the first applications of lithium-ion, the cathode chemistry
choice was between lithium in combination with oxides of nickel,
cobalt or manganese. Nickel was favored for its energy density,
cobalt for its reversibility, and manganese for its safety. Now, in
lithium-ion batteries of this type, a cathode combining all three
in varying ratios — NCM — is favored because of the
attribute trade-offs noted above.
Until relatively recently, the NCM ratio was mainly 1:1:1.
However, with the desire to reduce cost and improve sustainability
(due to environmental concerns over cobalt mining) and energy
density, the nickel ratio has been increased to the point that NCM
811 (8:1:1) has reached near ubiquity in the NCM type. The graph
below shows the market makeup and forecast for the various NCM
combinations.
The NCM811 combination holds sway over the market and will
progressively increase its share. The so-called NCM90+, NCMA and HV
NCM60 chemistries are also of note. NCM90+ denotes cathodes where
the cobalt and manganese content is cut further (typical ratios can
be 9:0.5:0.5 hence the 0 in the nomenclature) to improve energy
density. NCMA batteries take the basis of the NCM battery and add
aluminum to the mix for greater energy density.
All the above mostly relates to lithium-ion batteries of the NCM
type (with a passing mention of NCA – nickel, cobalt, aluminum).
Adding further complexity has been the advent of LFP (lithium iron
phosphate) lithium-ion batteries, much favored by Chinese OEMs for
their lower cost, enhanced thermal stability and the widespread
availability of iron phosphate cathode materials. These attributes,
together with the expiration of patents for LFP batteries in 2022,
have seen heightened interest in the chemistry outside of Mainland
China with European and North American-based OEMs building LFP
supply chains.
As of now, LFP and NCM — in their various guises —
dominate EV lithium-ion battery chemistries. In 2024, they are
forecast to account for 94% of light vehicle EVs produced
globally.
The following chart demonstrates the attribute trade-off between
all the main competing cathode types for lithium-ion batteries.
Writ large are the advantages that LFP has over competing
chemistries. However, it falls short in energy density on both
gravimetric and volumetric measures, meaning that larger LFP
batteries are required to achieve the same range, particularly when
compared with NCM and NCA types.
This shortcoming makes LFP batteries more suitable for light
vehicles in smaller segments and in those vehicles where
performance is less of an identifiable brand attribute. However,
these shortfalls should not detract from the overall contribution
that LFP batteries will make in electrifying light vehicle fleets,
and they will be — and have been — a crucial factor in
building momentum in more price-sensitive areas of the market.
What of sodium-ion and solid-state
batteries?
As sales growth rates for EVs have recently stalled in major
markets, attention is shifting to two emerging battery technologies
— sodium-ion batteries (SIBs) and solid-state batteries (SSBs)
— that may help revitalize the industry and address limitations
of current technologies.
Due to the abundance of sodium compared with lithium, SIBs
present a potentially cheaper alternative to lithium-ion batteries,
including lithium iron phosphate (LFP) types. They avoid the
complex supply chains required for lithium-ion mass production.
Initially, SIBs were seen as suitable only for energy storage
systems or low-performance two-wheelers. Although these segments
will be where SIBs will be primarily used, recent developments
suggest there is a niche within light vehicles that SIBs can cater
to.
SIBs are likely to compete with LFP batteries, as their energy
density is approximately 160 Wh/kg, compared to around 200 Wh/kg
for LFP. This lower energy density, alongside a shorter life cycle,
limits SIBs primarily to low-cost, entry-level vehicles.
Nonetheless, several factors could drive greater adoption of
SIBs in the light-vehicle sector. Technologically, SIBs are safer,
being less prone to thermal runaway, which can lead to fires.
Sodium's lower reactivity reduces dendrite formation, a common
failure mode in lithium-ion cells. Moreover, SIBs can operate
efficiently over a wider temperature range, providing better
performance in cooler conditions.
The primary advantages of SIBs lie in their material costs.
According to S&P Global Mobility research, the material cost
for SIBs is about 28% lower than LFP batteries. Additionally, SIB
manufacturing processes are nearly identical to those of
lithium-ion cells, meaning that suppliers can transition with
minimal investment.
Despite their promise, SIB technology is still in its infancy
within the light vehicle market. While limited production began in
Mainland China this year, forecasts suggest SIBs will achieve only
low single-digit market penetration by 2030.
The second technology worth considering is solid-state batteries
(SSBs), which fundamentally alter lithium-ion battery design by
replacing liquid electrolytes with solid ones. This transition is
complex, with interim solutions involving semi-solid and
almost-solid electrolytes also considered for development.
SSBs offer three significant benefits. First, they enhance
safety; existing liquid and gel electrolytes are highly flammable,
especially when used with high-nickel cathodes, which are less
thermally stable.
Second, when paired with lithium metal anodes, SSBs can achieve
energy densities 50%-80% higher than traditional high-nickel
lithium-ion cells, allowing for greater vehicle range. For example,
Nio recently launched its ES8 with a 150-kWh semi-SSB, boasting an
energy density of 360 Wh/kg and a range of 930 km on the Chinese
test cycle — about 20% more than the best current lithium-ion
battery.
However, SSBs are not entirely risk-free; they can still suffer
thermal runaway under extreme conditions or damage, and the melting
point of lithium (180°C) poses challenges.
Despite these advantages, several hurdles exist for SSB
adoption. The use of lithium metal anodes, which can lead to uneven
plating and dendrite formation, poses risks to battery integrity.
Additionally, solid electrolytes are less conductive, potentially
limiting power output, especially in colder conditions. In some
cases, external heating is necessary, particularly with polymer
electrolytes.
Moreover, existing gigafactories designed for lithium-ion
battery production will require significant re-investment to
accommodate SSB manufacturing, complicating the transition. S&P
Global Mobility estimates that by 2025, SSB costs will be around
$500 per kWh — over five times the cost of lithium-ion
batteries. This means that SSB packs will initially be more
expensive even with higher energy density.
While some research indicates potential cost advantages for
SSBs, they will remain pricier than lithium-ion batteries in the
short- to medium-term. S&P Global Mobility forecasts that
initial SSB applications will be in premium battery-electric and
hybrid vehicles, where the greater range promised by SSBs is a
significant selling point. Greater China and Europe will lead SSB
production, accounting for over 73% of the forecasted 2.3 million
SSB vehicles by 2034, with major automotive brands like
Mercedes-Benz and BMW dominating the output.
Finally, as has been seen in this review of battery chemistries,
cost is a major parameter in the decision-making tradeoffs OEMs and
suppliers have to make in their pursuit of the right battery
chemistry for their use case. Cost is also one of the main drivers
of EV adoption. It was often held that EV sales would only take off
once EV batteries achieved cost parity with the ICE. This level was
deemed to be at the US$100 per kWh price point for the battery
pack. Several chemistries are now at that level according to the
cost model developed by S&P Global Mobility.
Conclusion
The evolution of EV battery technology reflects a combination of
historical developments, emerging innovations, and market demands.
Ultimately, the continued evolution of battery technology will be
pivotal in driving the adoption of electric vehicles, making them
more accessible and appealing to consumers while contributing to a
more sustainable automotive landscape. The ongoing pursuit of
cost-effective, high-performance batteries will not only influence
the trajectory of the EV market but also play a crucial role in
addressing global energy and environmental challenges.
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