A look inside the world of batteries

30Dec 2019

Whether related to the stock market, presidential elections or climate, December is the month to make predictions for the coming year and decade. So what battery trends should we expect for the upcoming 2020-2030 decade?

1.Lithium-ion batteries will power more applications — electrification of everything:  The 2019 Nobel Prize in Chemistry highlights the progress lithium-ion batteries achieved in the past four decades. From a laboratory experiment in the 1970s, they are now ubiquitous in consumer devices. Increasingly, they are making inroads in transportation and grid storage applications. 

There is no question that the 2020s are the decade of electrification of transportation, from electric vehicles to buses and trucks. The number of available electric-vehicle (EV) models jumped from about ten in 2015 to over 75 in 2020, including categories of sports cars, sedans, SUVs and light trucks. Automotive companies and their supply chain are inexorably transforming. This will not be an easy transformation — there will be winners and losers. Car manufacturers and Tier-1 suppliers that will not adapt in the next couple of years risk becoming irrelevant. The nature of skilled labor in transportation is also transforming. Labor unions are taking notice but much training is needed for this new labor force.

Electric utilities will implement more energy storage projects on their grids — partly driven by regulations as well as the proliferation of clean-energy grids with distributed wind and solar generation. 

Industrial applications with historically smaller unit volumes will benefit from the increased proliferation of lithium-ion batteries. As communities seek cleaner air, we will see local regulations banning just about anything powered by fossil fuel, from forklifts to lawnmowers.

2. Batteries will deliver better performance but with optimized compromises:

Bill Gates’ famous quote in 1981 “640KB ought to be enough [memory] for everybody” stands as a stark reminder that there is not enough of a good thing. Just like computers flourished with more computational power and memory, mobility will continue to thrive with more available battery capacity. Next-generation 5G wireless smartphones require more battery capacity. Electric vehicle drivers require longer driving ranges (300+ miles). More battery capacity means a continued drive to look for newer materials with higher energy density. 

The public will become more discerning and expecting better battery warranties. Longer cycle life (lifespan) while fast charging will become a standard of performance especially in transportation.

But at what cost? Manufacturers will learn to optimize the battery’s capacity, size, cycle life and charging time to the target application or user case. Electric vehicles in fleets will have  vastly different battery designs than those for, say, residential commuters. Backup batteries used in conjunction with solar power will be even more different. Buyers of electric vehicles will learn how to make informed choices based on the battery. Much like buyers historically learned to understand the difference between 4- and 8-cylinder engines, they will become more literate in understanding the differences between kWh-ratings.

3. Battery prices will continue to decline, but at a slower pace:

The cost of lithium-ion batteries declined in the past decade from over $1,100 per kWh to $150 per kWh in 2019. Forecasters expect this figure to drop below $100 in 2023. At such levels, electric vehicles will reach cost parity with traditional vehicles using internal combustion engines (ICE) — without government buyer incentives. Driven by scale, increased volumes, and a dominant battery manufacturing based in China, standard batteries are increasingly become commoditized. Supply chains are becoming more specialized in addressing the commoditization of batteries. In an effort to improve the profitability of EV models, auto manufacturers will increasingly apply traditional cost disciplines to their battery supply chain, spanning improved manufacturing efficiencies to hedging. A few select applications in need of higher performance will benefit from new developments in advanced materials, e.g., providing higher energy density, albeit at a higher cost, but probably with limited penetration.

The risk of trade tensions with China will continue to loom over the battery supply chain. Even as lithium-ion battery manufacturing facilities come online in other parts of Asia and Europe, China will continue to dominate the lithium-ion battery supply chain, from sourcing raw materials to final assembly. The United States federal and state governments will need to formulate clear policies to address the rapid transition to a battery-centric transportation system — or risk escalating trade tensions with China around battery technologies and manufacturing.

4. Batteries will become safer in the field:

Smartphones routinely catch fire in many parts of Asia — and it’s not even headline news. That will change. That must change. The expected standard of battery safety must improve substantially, especially as larger battery capacities become available (in electric vehicles or electric grids). Efficient inspection methods at the manufacturing site and intelligent battery management systems in the field can improve battery safety by orders of magnitude. 

Yet, it is sadly inevitable that battery fires will become headline news in the future before the industry invests heavily in improving battery safety, possibly even with intervention of some governments.

5. Governments will step in to regulate the recycling of lithium-ion batteries:

The industry will recognize that the recycling of lithium-ion batteries is existential to its future growth. The impact of lithium-ion batteries on the environment, from mining raw materials to disposal of depleted batteries, will be devastating if economic recycling methods are not put in place. For example, lead acid batteries are the no. 1 recycled consumer item in the United States with a recycling rate in excess of 99%. Unfortunately, history shows that governments will need to step in and regulate certain recycling targets for lithium-ion batteries. 

09Oct 2019

I was beaming with delight when I read that John Goodenough, Stanley Wittingham and Akira Yoshino received the 2019 Nobel Prize in Chemistry for the “development of lithium-ion batteries.”

Wittingham’s initial work on batteries dates back to the 1970s while at Exxon. Goodenough’s seminal work on LCO cathodes at Oxford was published in 1980. Yoshino’s contributions on the graphite anode came in 1980s at Asahi Kasei in Japan. Sony converted their ideas into the first commercial lithium-ion battery product in 1991.

courtesy: The Royal Swedish Academy of Sciences

So it is about time that these scientists are recognized for their contributions and for initiating a revolution in energy storage. The award shines the light on the contributions of thousands of scientists and engineers who have diligently worked in the past decades to make lithium-ion batteries ubiquitous in our lives. Just imagine your modern digital life, your iPhone, or your Tesla vehicle, without a lithium-ion battery. You simply can’t!

With today’s Nobel award, lithium-ion batteries join the ranks of great inventions such as the transistor or polymerase chain reaction (PCR). The invention of the silicon transistor in 1951 became the catalyst that led to modern-day Silicon Valley. Kari Mullis’ discovery of PCR technique in 1983 set in motion a vast industry in biochemistry and drug discovery.

Nearly 30 years have passed since Sony manufactured the first lithium-ion battery. Over these three decades, the lithium-ion battery went from powering early models of consumer camcorders to transforming transportation. Nonetheless, the industry remains in its early days with many more challenges to overcome and discoveries to be made. 

As the adoption of electric vehicles accelerates in the coming years, the lithium-ion battery takes a fundamental role in our economy no less than that assumed by the combustion engine in the early part of the 20th century. Challenges in battery performance, safety, manufacturing, cost, integration with complex electronic systems, all must be resolved….challenges also mean opportunities for innovation, and opportunities for scientists and engineers to make lasting contributions.

In an era where the meaning of “tech,” especially here in the San Francisco Bay Area, has become synonymous with the creation of new gadgets or new business models, we should not lose sight that science remains the engine that powers technology.

19Aug 2019

New menu settings inside Apple’s iPhones display a warning sign if the device’s battery is not recognized as authentic. Other smartphone manufacturers are curbing users and unauthorized repair shops from replacing the battery.

Why it matters: Smartphone manufacturers and Apple say that their actions guarantee the integrity and safety of the batteries by preventing the possible use of counterfeit batteries. Some users have objected citing a right to repair.

Users perceive batteries as consumable:

  • Historically, smartphones had externally removable batteries.
  • After the introduction of the iPhone, all smartphone OEMs followed Apple by making the battery non-removable.
  • This design change was necessary to make smartphones thin and light.
  • Batteries are sophisticated components inside a precision-engineered smartphone. Much like other internal components, such as memory or display, they are increasingly difficult and expensive to replace. 
  • A botched battery replacement can lead to a fire.
  • The historical perception of batteries as consumables is no longer true. 

Why fake batteries are a real problem: 

  • Fake replica batteries are inexpensive counterfeits largely from China, made by manufacturers with limited control on quality.
  • Statistics show that counterfeit batteries have a much higher prevalence of fires than authentic batteries.
  • Detecting counterfeit batteries is not easy without the use of battery intelligence.

Why smartphone OEMs do not sell batteries:

  • Replacing the battery inside a smartphone is a complex operation with risk of damage to the battery. 
  • Recall the Samsung Note 7 fires were connected to the mechanical sizing of the battery inside the smartphone causing a mechanical dent in the battery.
  • To be safe, smartphone manufacturers direct users to qualified repair shops.

What smartphone owners can do:

  • Take actions to ensure that your battery outlasts the rest of your smartphone. Avoid super fast charging if you can. Avoid charging overnight to 100%. Avoid hot temperatures.
  • If you ever have to get your battery replaced, get it done at an authorized repair shop where the battery can be traced to a trusted manufacturing source.
24Jun 2019

You are an entrepreneur. You understand that batteries are powering the future. You think present battery technology falls short of market demands. You invented a new battery technology. You may even have some early prototypes that show some exceptional promise. So you start a new company to commercialize your new technology. Welcome to the Battery Gold Rush, ca. 21st century.

In the first Gold Rush, ca. 1849, many made fortunes, and many others lost riches. The new Battery Gold Rush will not be much different. So what factors should you be thinking about in your pursuit of the battery holy grail?

I will assume here that your battery technology is exceptional.You have tested it. It works in the laboratory. What I will address here is whether you and your investors will make money in this endeavor.

Five factors require consideration.

  • Are the economics of the battery market in your favor?

As a young graduate student several years back, I was constantly advised to move my thesis work away from silicon to gallium arsenide (GaAs). Known as III-V compounds for their position in the periodic table of elements, these new materials offered immensely better performance than silicon integrated circuits. Yet today, silicon dominates the semiconductor landscape simply because its economics far outweighed the economics of any other competing material system. There is a lesson here for emerging battery technologies to be economically viable from the get go.

As batteries increasingly become the energy source powering everything from smartphones to electric cars, one key economic metric to pay attention to is $/kWh: the cost per unit of energy stored within the battery. For the big manufacturers in Japan, Korea and China, the cost metric stands today somewhere between $100 and $150 per kWh.  It is forecasted to drop below $100 by 2025 at which point the cost of an electric car is equal to that of a traditional combustion engine vehicle. 

If your technology increases this cost, or your business model is based on a significant premium, then you are at risk of serious commercial headwinds. It does not mean that you will fail, but it means that the adoption of your products may be limited to niche markets, or that the rate of adoption may be too slow for your company to reach profitability.

  • Are you sure you have a working business model?

Most battery startup companies are exploring a wide variety of business models. Some favor building the entire battery. Others feel that manufacturing the materials are sufficient. A few others are content developing the technology and selling its underlying intellectual property. Which one is better? You will need to quickly validate the business model for yourself. 

If you choose to build the entire battery, will you be able to scale your manufacturing and distribution fast enough? Will you have the investment capital required to compete with the incumbents? Ramping up a battery manufacturing operation could cost in the billions of dollars. History has not been kind to battery startups. The rise and fall of A123 Systems is a business case worthy of serious study.

If, instead, you decide to build your business model on selling materials, your customers are now the battery manufacturers, the  vast majority of whom are based in Asia. Your technology may be differentiated but your customers are also your competitors. How will you protect your intellectual property? Will they pay you what you think is the value of your innovation? History also has not been kind here too. You will need to think out of the box to experiment and identify a working solution to the business model dilemma.

  • Will your product scale?

I have seen many amazing demonstrations in the laboratory of innovative battery materials. It is truly exciting to see this degree of innovation. But I am not aware that any of these recent battery material ideas have made it to volume production, at least not yet. As companies begin to ramp up manufacturing, many problems rear their ugly head. Uniformity of manufacturing across lots; meeting specifications on larger batteries; cost overruns; scarcity of available capital; investor fatigue are only a few examples of headwinds.

  • Do you understand your “exit” opportunities?

Your capital comes from investors who have an expectation of returns. A return of 5X or more is considered good; 10X or more is considered great.  So if you company requires $200 million to $500 million of capital to reach some degree of scaled operation (and hopefully profitability), then the expected “exit” valuation of your company is in the range of $1 billion to $5 billion. Congratulations if you achieved these valuations in your recent fundraising round. Very few companies can achieve this milestone. But will a potential buyer pay these valuations to acquire your company? Most incumbent battery companies in Asia have shown serious hesitation paying such valuations. You might, instead, choose to take the path of an initial public offering (IPO). A123 is such an example. But be careful, public markets have not been kind to company valuations with poor margins and tepid growth trajectories. In any case, the “exit” path — i.e., how you and your investor will turn your shares in the company into cash — is not well charted for battery companies. There are no easy precedents to follow and the path is fraught with incumbents who might choose to wait for you to reach desperation.

  • What about the Dragon?

China is rapidly becoming the battery manufacturing powerhouse. It means that Chinese battery manufacturers will likely be customers or partners of your company, or even potentially acquirers. Given the geopolitical tensions between the USA and China, it is difficult that the US Government will authorize the transfer of your technology or products to China under the export reform rules of the Defense Authorization Act of 2018. Will you choose to build your company anywhere else, may be in Europe or other geographies that will allow you to work with China? If so, you will need to figure that out early on in your endeavor.

My intent here is not to scare you off. The battery industry is in need of innovators. But innovation alone is not sufficient. Reaching financial success is essential to you, your employees and your investors. 

08Apr 2019

Let’s say you love to ride your bicycle and that you want to measure speed without using fancy computers and GPS. What would you do?

High-school physics to the rescue! All we need is the circumference of the wheel then count the number of rotations the wheel makes in a certain amount of time that we can measure with our stopwatch. The speed, v, is calculated as the number of rotations, N, multiplied by the circumference, L — that’s the total distance traveled by the wheel — divided by the measured time, T. Put in one simple equation:

We replace the circumference with the radius, R, because it is easier to measure the radius of the wheel:

The speed equation becomes:

Therefore, measure the wheel radius, then count the number of rotations, and clock them with a watch…et voila, you can measure speed.

You quickly realize that you have an approximation of speed because it fails to take into account other factors that can introduce errors, for example temperature. On a hot day, the wheel expands a little making the radius longer.  Then you realize that the thickness of the rubber tire is not exact — it varies across manufacturers. With aging, the rubber gets worn out. It becomes thinner and consequently the radius is a little smaller. You may think these are small effects but if you are racing, they can make the difference between winning and losing.

So what is the relevance of a bicycle wheel to a battery?

Scientists understand the electrochemistry inside a battery.  They represent this science with many complex equations — like Fick’s law, Tafel’s equation, and several other mathematical forms. Yet, these equations remain insufficient to describe batteries in real life. 

Much like the wheel, there are significant variations in manufacturing across batteries from the same manufacturer or from different manufacturers. Temperature dependence, aging, presence of defects…etc. are significant additional considerations that impact the performance and safety of the battery.

Capturing these “real-life” considerations is what makes a model of the battery useful.  By “model” I mean a sufficiently accurate representation of the battery that one can use to make meaningful conclusions. For example, a good model can be used to predict the end of life of the battery. It can be used to identify counterfeit batteries or find defective batteries before they become a fire hazard.

Developing the model entails collecting data — millions of measurements — to capture manufacturing variations, temperature dependence, defects…etc. It takes a long time to collect statistically meaningful data across different types of batteries, from different manufacturers and across a board range of operating conditions.

The battery model is not static — it must improve over time or it becomes obsolete. One must keep updating it so it learns and adapts to newer battery materials, newer battery designs and manufacturing processes. This learning process can be in the test lab, or it can be in the field — in other words, intelligent algorithms can learn from batteries deployed in smartphones or other devices already in the hands of users.

Possessing intelligent algorithms and useful battery models is a powerful combination to make key predictions about the battery’s health and safety…that can make the difference between a safe battery and a fire.