The 2019 edition of The Battery Show is underway this week in Novi, Michigan. On Tuesday, September 10, Michael Sanders, Avicenne Energy Senior Advisor, will moderate a panel discussion, “Is Innovation Valued in the Fast Growing xEV Battery Market?“ Enovix Chief Operating Officer, Cameron (Cam) Dales, will join fellow panelists Subhash Dhar, American Battery Solutions, Inc. Chariman & CEO, and Tal Skolklapper, Voltaiq CEO, to share their views on the topic. For those of you who cannot attend, here is a summary of Cam’s answers to the three discussion questions.
Q: What are the key drivers for innovation—cost, safety, durability, other?
A: The key drivers for innovation are cost, cost and cost. Safety and durability are important, but present levels are sufficient to reach large-scale market adoption, while cost is preventing it. One estimate of EV characteristics that will drive large-scale adoption in the U.S. is a compact SUV that costs about $30,000 and travels 350 to 400 miles between charges. According to McKinsey, batteries are 35% to 45% of an EVs total cost. Therefore, significantly reducing the cost of batteries while maintaining present levels of safety and durability is paramount.
EV battery costs have been on a downward trend the past decade driven largely by increasing production capacity, improving processes and a decreasing cost of materials. But it’s unlikely that the deflationary trend can continue at its present pace. A recent Wall Street Journal article states that, “Betting on ongoing declines seems a risky strategy for car makers.” For example, materials represent about 65% of a batteries total cost. While material costs fell significantly in 2018, the same Wall Street Journal article states that the cost of materials is unlikely to fall at a similar rate going forward, and they very possibly could increase.
Therefore, it’s unlikely that batteries can hit the cost target for large-scale EV adoption without innovation.
Q: How is value created in innovation, and are there market dynamics that limit the potential?
A: The value equation for an EV battery is cost per watt-hour of energy. At Enovix, we are working to increase energy and decrease cost. Next year we will enter the mobile device market with a smartphone-size battery that will increase energy density by over 35%, over that of a conventional lithium-ion battery. We are entering the mobile device market first because it’s where increased energy density commands a premium price.
Our production process is very similar to the one used for producing today’s lithium-ion batteries. The difference is we replace the electrode winding and flattening process with our proprietary high-speed stacking process. Not only will our new production lines be largely the same as today’s, but existing lithium-ion production lines can be retro-fitted to produce our silicon-based battery.
As I previously noted, materials represent about 65% of a batteries total cost. In 2017, the Mobility and Automotive Technology Research Centre published a study titled, “Cost Projection of State-of-the-Art Lithium-ion Batteries for Electric Vehicles Up to 2030.” The study concludes that using silicon-based batteries can achieve a cost reduction of 30% per kilowatt-hour, and that the price reduction will aide in the mass adoption of EVs.
Our significant increase in energy density, reduced cost of materials and comparable production cost will enable EV producers to use fewer, less expensive battery packs to achieve a 350- to 400-mile range between charges. This innovation has the potential to reduce EV battery cost by over 30%.
Q: What are the significant hurdles that innovation needs to overcome to capture value?
A: To date, we have produced prototype smartphone cells with 900 Wh/l of energy density at over 500 cycle life to 80% capacity. We will commercialize these cells next year, and we expect to improve performance to 1,260 Wh/l and over 1,000 cycle life within the next couple of years. This will represent an over 70% increase in energy density versus that of a conventional lithium-ion battery.
Today it takes about 10,000 smartphone batteries to match the capacity required for an EV. Therefore, our most significant hurdle will be increasing the size of our battery pack to meet EV requirements. We’ve just completed phase one of a proof-of-concept study with a major international automotive manufacturer. The results indicate that our silicon anode can be paired with an NMC cathode in our patented 3D architecture to achieve a gravimetric energy density of 325 Wh/kg. But we are in the early stages of EV battery research and development.
The second hurdle will be reaching production volume sufficient to achieve a cost below $100 per kilowatt-hour. We recently signed a joint development agreement with a major Asian lithium-ion battery manufacturer, and we are negotiating a JDA with a second. While we are presently equipping our own full-scale, fully automated facility to produce batteries for mobile devices in 2020, we will leverage our partnerships to scale for the EV market. An advantage of our production process is that it can be retrofitted to an existing manufacturing line by replacing the electrode winding and flattening process with our high-speed stack process. Otherwise the manufacturing process is the same as that for today’s lithium-ion batteries.
We estimate that, with the help of our partners, we will achieve the size and volume to address the EV battery market with a material performance-to-price advantage by 2024.