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Breakthrough Batteries: Feedback Loops Are Accelerating the Battery Market

Originally posted by Charlie Bloch & Madeline Tyson | January 8, 2020 | ACTNews | Original Article

Rocky Mountain Institute, in the recent report Breakthrough Batteries, shows how recent and rapid improvements in lithium-ion (Li-ion) battery costs and performance, coupled with growing electric vehicle (EV) adoption targets and demand in an increasing number of markets, have unlocked enormous investment into the advanced battery technology ecosystem. While a number of startups are charting their path to significant battery improvements, more telling is large scale of investment into both manufacturing capacity and research and development programs. Total manufacturing investment, previous and planned until 2023, represents $150 billion, or close to $20 for every person in the world. This is poised to dramatically shift how we power and organize our lives and energy systems over the next decade.

Compounding Improvements

Industry observers have suggested that the market development path for Li-ion batteries will follow that of solar photovoltaics (PV), wherein a single technology (crystalline silicon) quickly dominated other technologies by driving down costs through economies of scale. This is crucially different from the battery market, where performance differentiation and improvements are inherently more important and are key factors driving increased market growth.

Li-ion batteries are already differentiated in terms of their component parts due to the divergent operational and design needs of various battery use cases. In other words, companies will optimize Li-ion batteries with substantially different components and performance attributes for applications such as EVs, scooters, laptops, or grid-scale batteries. This means that the innovation space for batteries is diverse. And more battery demand is eliciting not only improvements of economies of scale, but also resulting in superior batteries and non-linear market growth, as better and cheaper batteries open new market segments.

No One Battery Chemistry Is Likely to Rule Them All

While batteries continue to diversify and improve in many directions, the history of batteries is one of tradeoffs. The cheapest battery is unlikely to be the safest; the battery with the highest energy density is unlikely to have the longest lifetime. While much of the industry moves toward the Li-ion cathode chemistry NMC (nickel manganese cobalt), other types include LFP (lithium iron phosphate), NCA (lithium nickel cobalt aluminum oxide), LTO (lithium-titanate), and LCO (lithium-cobalt oxide). The composition and qualities of the NMC cathode itself is undergoing intense innovation and investment, largely to reduce the amount of cobalt content due to supply volatility and human rights concerns. No single battery chemistry is likely to be a silver bullet on all attributes, keeping the door open for other energy storage technologies to play complementary roles in additional applications and market segments.

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