Tesla Is Reviving Old School Battery Technology

In the vast majority of cases, technological innovations lead to new, cheaper and more efficient designs than their predecessors. But from time to time technological progress shifts to reverse gear when progress turns out to be a turbocharged regression.

And that seems to be happening in the world of EV batteries.

Considered a leader in the EV space, Tesla Inc. (NASDAQ: TSLA) is returning to battery chemistry, which was about to become obsolete: cobalt-free batteries that use lithium iron phosphate chemistry (LFP).

During a presentation to investors last year, Tesla revealed that this is so battery switching chemistry for all standard 3 and Y models from nickel-cobalt-aluminum (NCA) chemistry to an alternative, older technology that uses lithium-iron-phosphate (LFP) chemistry.

Cobalt-free batteries

Experts have predicted that metals could become solid if the energy transition is in full swing more valuable than oilif prices for copper, nickel, cobalt and lithium must reach historic peaks over an unprecedented long period in a zero-emission scenario, with total production costs more than quadrupled by 2040, this is because clean energy technologies require more metals than their fossil fuel-based counterparts.

Unfortunately, in the armor of this quartet of “supermetals”, which provides an energy transition, there is a gap: cobalt.

Lithium-ion batteries contain various elements, including lithium, nickel, aluminum, iron, manganese and cobalt. Of these metals, cobalt is the most expensive, with the average cost of blue metal exceeding the cost of all other metal batteries combined over the past four years. EV batteries can contain up to 20 kg of cobalt in each package with a capacity of 100 kilowatt-hours (kWh), with cobalt accounting for up to 20% of the cathode weight in EV lithium-ion batteries.

And this is bad news, because cobalt is considered to be the highest risk of the supply chain of materials for electric vehicles in both the short and medium term. In addition, cobalt is produced as a by-product of copper or nickel mining and is therefore affected by demand and prices for these metals.

Even more worrying, apart from its price, is that cobalt mining also requires huge human costs: about 60% is accounted for by the Democratic Republic of the Congo, where cobalt mining is linked to child labor and death.

Shortages, price and human rights issues have made the elimination of cobalt from EV batteries very important for the EV transition.

«For mass electrification to take place, there are many sentiments that cobalt needs to be eliminated or minimized. ” Chibuez Amanchukwu, Professor of Molecular Engineering at the University of Chicago, said CNBC.

Fortunately, the industry has recognized the risks of cobalt dependence, and many battery manufacturers and end users have set themselves ambitious goals to switch to low or no cathodes.

LFP batteries

LFP technology is commonly used in simpler, less demanding devices such as golf carts and home backup power systems. But LFP batteries are unlikely to remain a hallmark in electric vehicles because they have traditionally been considered a less efficient option. Their biggest drawback is their reduced range due to the fact that the material used in iron-based batteries has a lower energy density and provides a shorter range of a single charge at the same weight compared to widely used lithium-ion batteries. nickel based. Because of this, almost all automakers outside China have switched to the latter type, which uses nickel, cobalt and manganese as base materials.

But LFP batteries have a key appeal that turns out to be too powerful to ignore: cost.

LFP cells not only have a much longer lifespan, but are also cheaper than NCA or Nickel-Manganese-Cobalt (NMC) cells. LFP batteries are about 30% cheaper than their nickel-rich counterparts and are able to compensate for their low energy density by dramatically reducing thermal acceleration in the event of an accident, meaning that the LFP battery requires much less volume to cool and protect the structure. so that the cells are divided.

Many electric buses in China already use LFP batteries. Two years ago, Tesla introduced LFP batteries in China in its standard Model 3s range and reduced the starting price from 309,900 yuan ($ 48,080) to 249,900 yuan ($ 38,773). CEO Elon Musk has revealed that increasing the energy density of LFP batteries now allows the use of cheaper cobalt-free batteries in their lower-end cars to free up more stocks of lithium-ion chemical elements for other Tesla models.

So far, restrictions on intellectual property have kept LFP cells mostly in China. But now Tesla will be able to deploy them in its key U.S. market after receiving permission from the Chinese government to start using LFP batteries in Chinese BEVs in 2020. Indeed, Tesla is making the transition to LFP mandatory in all its markets after a positive reception in the US

Last December, Bloomberg NEF, a study of clean energy, which, among other things, tracked the cost of the battery, announced that the cost of the battery for the first time fell below the threshold of $ 100 per kWh. A crucial milestone has been reached for batteries designed for electric buses in China.

In the electric vehicle industry, a battery cost of $ 100 per kWh is commonly seen as the Holy Grail, crucial for the wider distribution of electric vehicles, making them competitive in price stickers, which remains an important psychological barrier for many potential buyers. Power transmission is usually more than 70% of the cost of EV. The Tesla LFP switch not only means increased margins, but can also quickly track a company in a race for up to $ 100 per kWh, giving longer runways growth.

Although nickel-based lithium-ion batteries currently occupy 88% of the market for EV batteries outside of China, the current trajectory suggests that it is only a matter of time before the old LFP format becomes fully mainstream.

Written by Alex Kimani for Oilprice.com

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