The July 18, 2019 issue of The Wall Street Journal includes an article, The Big Obstacle on the Road to Electric Vehicles (you may need a WSJ subscription to access the full article). The article’s thesis is that, “Batteries may not follow the same deflationary cost path as consumer electronics and solar panels, weakening a central pillar of the global auto industry’s emissions strategy.”

A central premise of the article is that, “Cutting the cost of batteries is arguably the industry’s most urgent challenge. They account for a huge chunk of the cost of an electric car—between 35% and 45%, according to McKinsey. Unless costs fall, most consumers will continue to prefer cheaper traditionally powered cars…”

The article says that the cost of key lithium battery materials—such as cobalt, lithium and nickel—fell last year. But it also warns that the industry should not depend on this trend. “It is usually assumed that the pattern of deflation will continue, following the example of the consumer electronics and solar industries. But batteries are a different kind of product. Betting on ongoing declines seems a risky strategy for car makers. One problem is that, whereas solar cells are made of abundant silicon, batteries contain volatile commodities.”

This last statement, regarding “abundant silicon,” reminded me of an academic article I read several months ago, Cost Projection of State of the Art Lithium-Ion Batteries for Electric Vehicles Up to 2030. The article investigates, in part, the effect of using silicon as an active material (anode) in a lithium-ion battery. Significant detail is provided regarding assumptions and cost models, with the following conclusion:

“Material costs represent the majority of costs in a battery pack (66%) of which the active material, responsible for the intercalation of li-ions, is the most costly component. By using silicon based batteries a cost reduction per kWh of 30% [can be achieved]. The limit of 100 Dollar/kWh will be reached in 2020–2025 for silicon based batteries… This low price will have a significant impact on the overall price of an electric vehicles [sic] since the battery represents the largest cost. This price reduction will aide in the mass adoption of electric vehicles.”

The Enovix production strategy has always been to initially focus on the mobile device market where increased energy density and improved safety of the battery are primary drivers for adoption. We are on schedule to commercialize our 3D Silicon Lithium-ion Battery next year for wearables, smartphones, and notebook/laptop computers. As we scale production and reduce unit cost, we will then enter markets where price is a primary driver for adoption.

In 2017, we began proof-of-concept research on a 100% silicon-anode battery for electrical vehicles. As our research continues to confirm our approach, we are confident that a combination of increased energy density, improved safety, and reduced materials cost will enable us to contribute to the mainstream adoption of electrical vehicles by 2024.