Li-ion Batteries and How Cheap Beat Cool in the Chevy Volt

Since November of last year, I’ve argued that cheap will beat cool when it comes to the commercialization of battery chemistries. As details on the design and construction of the Chevy Volt battery pack emerge and are publicized on sites like Green Car Congress and Popular Science, it’s clear that cheap Li-ion chemistry has already beaten cool Li-ion chemistry and many of the concerns I’ve expressed about using Li-ion batteries in cars have been considered and resolved by thoughtful automotive design engineers. It bodes well for the introduction of PHEVs as long as the tax incentives remain in place, but the long-term impact on developers of high-cost Li-phosphate and Li-titanate chemistries may be devastating.

Battery Cost The Chevy Volt will use Li-polymer batteries manufactured by Korea’s LG Chem. While Li-polymer batteries have had a spotty safety record in cell phones and laptops and do not begin to approach the extreme cycle-life of Li-phosphate and Li-titanate chemistries, they are far and away the cheapest variety of Li-ion batteries with prices in the $600 to $700 per kWh range as opposed to the $1,300 to $2,000 per kWh range.

Passenger Safety To resolve the basic safety issues associated with Li-ion batteries, GM has designed a T-shaped battery pack that sits in front of the rear axle and runs forward through the space that used to be taken up by the driveshaft. At first glance, the battery pack looks like it comes out of a battle tank instead of a passenger car.

The topside of the battery pack looks far stronger than the bottom side of the battery pack and it’s clear that the basic geometry has been designed to deflect the potentially explosive force of a battery failure down and away from the passenger compartment. The absence of any visible deformation in the 35 mph crash test photos of the battery pack confirm that GM thinks armor plate is more cost-effective than exotic chemistry. Overall, GM’s battery pack design is a cheap but effective way to avoid potential personal injury risks.

Cycle Life Performance Li-polymer batteries are not renowned for the extreme cycle-life of their more glamorous and expensive cousins like Li-phosphate and Li-titanate. To optimize the cycle life of the batteries in the Volt, GM has chosen to install a 16 kWh battery pack in the Volt but only use 55% of the theoretical capacity to power the car. By limiting the maximum state of charge to 85% and switching to internal combustion when the state of charge falls to 30%, GM believes it can get a 10-year life out of batteries that would die much more quickly with a wider cycling range. Once again, GM has chosen a cheap but cost-effective way to balance battery capacity and cycle life.

Weight and Energy Density The final weight of the Volt battery pack is about 175 Kg. This works out to an energy density of roughly 50 Wh/Kg for useful battery capacity, about the same value as a high quality lead-acid battery.

Recycling While the Chevy Volt battery pack will be built to European recycling standards, those standards only relate to safe disposal of potentially toxic materials and do not get into issues like recovering materials of sufficient purity that they can be used to make new batteries. This is good from a pure disposal perspective, but suboptimal if one’s environmental sensitivities extend beyond landfills to include the environmental damage caused by mining and other resource extraction activities.

In the Chevy Volt, cheap has already beaten cool like I predicted it would. Since GM has established battery cost reduction as a primary goal for future generations of PHEVs, I would not be at all surprised to see GM and other auto makers paying particular attention to advanced lead-acid and lead-carbon chemistries over the next few years because the widely heralded energy density and size advantages of Li-ion chemistry evaporate when the technology is reduced to safe commercial practice.

For investors, I think the lesson of the Chevy Volt is that premium priced energy storage stocks like Ener1 (HEV) and Valence Technology (VLNC) are likely to see lower market valuations while bargain basement energy storage stocks like Axion Power International (AXPW.OB) Exide Technologies (XIDE), Enersys (ENS) and C&D Technologies (CHP) are likely to see higher market valuations.

Disclosure: Author holds a large long position in Axion Power International (AXPW.OB) and small long positions in Active Power (ACPW), Exide (XIDE), Enersys (ENS) and ZBB Energy (ZBB).

Comments

[renim:]

around Christmas last year, I received a quote from a chinese LiPO4 battery producer (HiPower) of around $3600 for a 7.2 kWH battery (actually 24 x 100Ah units) but I have not pursued it further. Sure there can be lots of quality questions, but i will assume that the indicative price is not unreasonable for product from China.
Having said that, the Pb Carbon batteries appear very promising,
www.furukawadenchi.co....

Mar 31 08:21 AM

[jkessler:]

John - We use two to three 1.7 kWh batteries with one BMS. One BMS can support a 24 kWh battery configuration similar to the one used by the smallest van built by Smith Electric Vehicle. Like I have been trying to say all along, Valence has some really cool stuff that works. Smith is building a plant in the US with Ford as a partner and they will be using Lithium Phosphate as their battery of choice. The market potential for delivery vans and trucks, taxis and buses is not a small market to start with.


On Mar 31 03:36 AM John Petersen wrote:

> jkessler, without more data detail on the complexity of your battery
> packs as compared with the complexity of the Smith battery packs
> it's dangerous to assume a level price across the board. But I have
> no problem using a $1,000 figure instead of the DOE's $1,333. I have
> a much harder time with assumptions about future cost reductions
> because the numbers are so far out of line with industry norms and
> I don't know what they're based on. So I'll remain a skeptic until
> somebody shows me how it can happen.
>
> I'm a fan of li-ion for applications like yours that truly need the
> cycling capacity because of constant customer turnover. I also think
> li-ion makes sense in delivery trucks, buses and taxis that are on
> the road for eight or more hours per day and put tremendous strains
> on their batteries. A personal car that gets driven to and from work
> and spends most of its time in a parking lot or garage is an entirely
> different economic proposition. I agree that the car you describe
> would be very cool, but I'm the only person who attended my last
> family reunion that would even consider such a purchase.

Mar 31 09:33 AM

[John Petersen:]

renim, I'm real comfortable ordering over the Internet from Amazon. That level of comfort falls off rapidly when I leave Europe or the U.S. If they quoted you a price, I'm sure they'll honor it. Beyond that I don't have an opinion.

Lead-carbon is very interesting for high-cycling applications that need lots of power (like HEVs with recuperative braking) but it's pretty bulky for plug-in transportation unless space is not an issue. The big issue with the lead-carbon is that Axion won't be in first stage production until later this year and Furukawa is looking at a 2010 introduction in Japan. So they are not readily available yet.

jkessler, if Valence can nail down a customer that has substantial sales, get to a position where it can earn a gross profit on sales and trim its SG&A, there may indeed be a solid business that will only improve as they reduce production costs.

Mar 31 09:40 AM

[Mayascribe:]

John! Confirmed! You and I were correct in that it was Tontine's unwinding that pushed Exide's shares way down back on March 6th.

Next up? Watch what the Mark-to-Mark "loosening" I talked about on the very same March 6th does to the financials this Thursday. POW! I'm in. Hope you are!

Mar 31 11:33 AM

[John Petersen:]

$1.90

Mar 31 11:53 AM

[NorthernPiker:]

“I have a much harder time with assumptions about future cost reductions because the numbers are so far out of line with industry norms and I don't know what they're based on. So I'll remain a skeptic until somebody shows me how it can happen..”

John, learning curves have been observed and documented for many industrial products. Batteries will be no different – the costs will go down a certain percent (about 15%, according to RMI) as cumulative production doubles. Here’s a presentation on learning curves as applied to photovoltaic modules that cites various studies on learning, a.k.a. experience, curves.

hdgc.epp.cmu.edu/maili... Curves and Photovoltaic Technology Policy

As for your comment that you “think li-ion makes sense in delivery trucks, buses and taxis that are on the road for eight or more hours per day”, I agree but, for now, only in Europe, where current petrol prices are 3x those in the US and where fees for vehicle registration, parking and access charges are often waived for EVs. Your comment is equally applicable to personal cars which deplete almost all of their battery charge more than 250 days per year.

Mar 31 04:48 PM

[Advill:]

well, it is what it is, still Prius is having a decent product, to my knowledge there are no claims of batteries, and that are "old fashion" ones, Volt will be a good car...period, but when this things arise in american analysis it always seems that "one size fits all", and you expect that a new car must be able of anything from going to Walmart for cookies to haul a 6000 pounds boat...and then you buy a V8 SUV, 4X4 just in case you could face a snow storm in TX......

Volt, as a utility car will be a good one it will be the Boing 747 of GM but GM problems are too big to be solved by this.

Regards


On Mar 27 02:17 PM musik199 wrote:

> I am a battery scientist with PhD degree in electrochemistry. I am
> very familiar with LiFePO4 and other chemistry (I have publised >10
> papers). Last year, during an ECS meeting in Phoenix (May 20th, around
> 1:50PM) , I asked Dr. Abbas Nazri, (which is from GM) " 50% SOC swing
> is very demanding and how could GM ensure the battery last 10y/100K
> miles?" He replied this to me: "People will have to get used to the
> idea of buying a second battery for the Chevy Volt". Later I questioned
> this on gm-volt.com, both GM and Dr. Nazri denied this, obviously
> for fear of bad PR in anticipation of huge bail-out money. I have
> a feeling that they use the Volt program to beg money from Obama,
> (whose team has no clue of battery technology) and Volt is likely
> to fail because of high cost and battery longevity problem.

Mar 31 05:35 PM

[Mayascribe:]

Dang you! $1.91

Also, April 2nd, quite possibly, watch the geothermal stocks get a pop. I put a toe into the hot water today. We'll see....

Mar 31 07:16 PM

[John Petersen:]

Northern, I'm well aware of how learning curves but expecting a 5% learning curve to suddenly become much steeper is not logical. The EPRI interview you quoted in an earlier comment said 50% by 2015 and I already agreed that's a reasonable target. Anything beyond that is baseless assumption.

250 charges a day on a 4,000 to 5,000 cycle battery gives a useful life of 15 to 20 years. By the time you factor in the time value of money on the purchase cost, the economics cannot work without a massive increase in gas prices. That's the problem with too much cycle life - it's wasted by underuse. I've heard the thinking about re-tasking batteries after ten years in a car but remain convinced that over the next 10 years something better than either lead or lithium is likely to be developed. If that expectation is right, they'll be trying to sell 10 year old obsolete products for salvage.

Advill, the Prius is still using NiMH, although there is talk of Li-ion in the future. The fascinating part is that Toyota plans to use lithium-cobalt-oxide because it doesn't have enough experience with the newer flavors.

www.technologyreview.c.../

Mar 31 08:39 PM

[NorthernPiker:]

John, to what 5% learning curve are you referring? Rocky Mountain Institute projected an 85% experience (learning) curve for li-ion batteries in a 2008 presentation – Slide #14 from the following previously cited link. Just to clarify learning curve terminology, an 85% learning curve for large format, i.e., EV-type, li-ion batteries means that the battery costs will go down 15% each time cumulative production doubles. So, when cumulative production increases by a factor of 16, equivalent to doubling 4 times, the battery costs would drop by 48%, to 52% of the original costs.

www.its.berkeley.edu/s...


From a European perspective, a $1,000 per kWh battery with 2,000 deep discharge cycle capability is economic, a 4,000 to 5,000 cycle capability would merely make it more economic.

An EV would displace1/6 of a gallon (~$1.00) of diesel fuel for each kWh (10¢) for an economic gain of over 85¢ for every kWh of charge. 250 charges a year at 1 kWh per charge would save $212.50 a year just on energy costs, which would pay off a $1,000 loan at 8% in 6 years, i.e. after 1,500 cycles, even without factoring in the EV’s further savings over a conventional vehicle on brake jobs (at least half), oil changes (none), access charges (waived), registration fees (waived) and parking (free). The other 500 (or 2,500, or 3,500) cycles represent sheer gravy.

Apr 01 03:54 PM

[John Petersen:]

NorthernPiker, I understand that you find forecasts about future cost savings and learning curves clear and convincing proof. I do not. It all goes back to the undisputed fact that 75% of battery costs are eaten up in materials that trade on organized commodity markets and I don't care how much you learn about a technology, in a commodity constrained world it is impossible to cut materials costs by 50% unless you are visited by the Commodity Price Fairy.

One of us will be wrong. If it's me, I'll not hesitate to admit that my opinions about the pricing practices of global commodity markets were wrong.

Please don't misunderstand my position on cars with plugs. I don't believe they are competitive under current market conditions. That may change in the future, but even with the $5 a gallon I regularly pay for gas, I would rather invest my capital for a better return.

By the way, the only diesels that are limited to 24 mpg are the big SUVs. A modest sized car does about 50% better.

Apr 01 04:54 PM

[NorthernPiker:]

John, you claim that 75% of the cost of a battery is due to commodities implies that $750 of the current $1,000 cost of a 1 kWh li-ion battery is attributable to raw materials. Such a battery would weigh about 10 kg and the marked up price of the commodities averages $75 /kg, which implies a manufacturer’s cost around $30 to $40 per kilogram. Maybe, the ¼ kg of lithium costs that much in a tight market but nothing in the other 97.5% of an EV li-ion battery – cathode materials (iron, phosphate, manganese), graphite anode, electrolyte, separator, case, … - costs near that much. Some, like iron, are dirt cheap. The 75% factor that you quote as an “undisputed fact” must be applicable to very mature lead-acid battery technology, or you slipped a decimal point; if otherwise, I would appreciate a reference.

As for diesel mileage, a 6-speed Jetta Diesel is rated at 30 mpg for city driving. Comparably sized PHEVs, converted Priuses and Volt mules, get about 5 miles per kWh, presumably in mixed city-highway driving. So, I conclude that, for an urban delivery van or an urban bus driving cycle, 1 kWh of electricity would displace at least 1/6 of a gallon of diesel.

www.fueleconomy.gov/fe...

I would like to follow up on your comment, “...but even with the $5 a gallon I regularly pay for gas, I would rather invest my capital …” It summarizes the market risk for would-be purveyors of PHEVs – the reluctance of people to pay an up front premium in return for a promise of future savings. If there are minimal sales, then prices will creep down the learning curve and our quibbles about whether li-ion batteries will follow an 85% or 95% learning curve are moot.

Apr 01 09:42 PM

[John Petersen:]

Northern, the following article is a little dated, but it shows what the component costs were for lithium-cobalt cells in 2000.

www.tms.org/pubs/journ...

If the actual learning curve and pricing parameters were anywhere close to the "industry consensus" that served as the basis for the impressive learning curve graph in the Berkeley Labs report, we wouldn't be having this discussion because 8 years of progress would have cut Li-co prices to about $0.41.

I'd like you to take another look at slide 14 from the Berkeley Labs presentation.

www.its.berkeley.edu/s...

Li-ion and NiMH were developed within a couple years of each other. Far more time and effort has gone into Li-ion technology than NiMH and their use is far more prevalent because of all the electronic devices that use them. The graphs that show Li-ion falling by 2/3 when NiMH could only achieve 1/4 are based on "industry consensus." What that consensus is based on is anybody's guess. If the industry hasn't done it yet what makes you think it will be able to do so in the future?

Li-ion producers know the products will not be economic unless they are cost competitive with lead. Admitting "we'll never be able to drive the price down that far" is the equivalent of deciding to leave the industry and go to work flipping burgers. So the consensus will always be "we can drive the price down." With this dynamic and history in place, I'm not willing to accept the consensus unless somebody can show me exactly where the savings will come from, and nobody's even tried to do that yet.

I'm delighted to change my opinion when presented with new facts. But supposition and consensus are not facts. Bills of materials like they presented in the first article are facts.

Where I come from, the Jetta is considered a pretty big car, as is my Audi A6. But even the Jetta number is half-way between your starting point of 24 mpg and my starting point of 36.

Apr 02 12:32 AM

[NorthernPiker:]

John, lithium-cobalt cells are not germane to an EV discussion due to safety and the cost of cobalt, notwithstanding any comments from Toyota. However, lithium-iron and lithium-manganese cells are germane. These latter li-ion technologies are very early in their development, unlike NiMH and lithium-cobalt technologies. The li-ion learning curve is from Rocky Mountain Institute and is fairly consistent with the price projection from Mark Duvall of EPRI for EV batteries.

Your comment, “Li-ion producers know the products will not be economic unless they are cost competitive with lead” is overly simplistic since, depending on the application, many different costs, e.g., $ per kW, and different requirements, e.g., cycle life, will be weighed in the purchase decision.

The EPA rating for a 6-speed 2009 Jetta diesel is 30 mpg for city driving. I chose the Jetta diesel since its curb weight of 3,230 lb. is between that of a 2004 Prius converted to a PHEV (3,100 lb.) and Volt mules (3,350 lb.), both of which get 5 miles per kWh., or 30 miles for 6 kWh. So, for my EV economics calculations, I assumed that, for similarly sized vehicles, one kWh would displace 1/6 a gallon of diesel, regardless if the diesel vehicle gets 10, 20, or 30 mpg in city driving.

Apr 03 12:11 AM

[John Petersen:]

NorthernPiker, your ability to discard unpleasant facts in favor of unsubstantiated speculation astounds me. So rather than continuing the speculation, why don't you show me where you think 50% to 60% manufacturing cost reductions will come from. Remember, at core I'm a bean counter; so show me the numbers just like they did in the article that you discounted as irrelevant.

Apr 03 12:53 AM

[Road Runner:]

Thanks John for the explanation.

So basically they built an armor plated housing for the battery in the Volt so they could use the unstable Li-ion polymer (non phosphate) chemistry. I'm scratching my head. I could never own, or let anyone I know own, a car that has a Lithium Polymer battery in it, no matter how armor plated it is. If you don't know why, check out some Lithium battery fire videos on YouTube. Then, picture a fire 500 times that size under your car. Nasty doesn't describe it.

Apr 08 04:42 PM

[carbonates:]

You already heard from one and you don't believe me. I am a geologist and engineer who has studied the lithium industry and visited the lithium mining operations of Chile and Bolivia. I know what I am writing about: lithium is not abundant enough at present prices to meet the supply that would be needed to convert any significant proportion of the auto fleet to lithium batteries.


On Mar 28 08:39 PM NorthernPiker wrote:

> John, I share somewhat your lack of qualifications to speak to mining
> costs.
>
> Based on the USGS 1994 Yearbook, “Production of lithium carbonate
> from brine in Nevada (and the Andes, I assume) is much less energy
> intensive (and simpler) than the production from the spodumene” (the
> ore type found in North Carolina).
>
> minerals.usgs.gov/mine...
>
>
> As for what mining production costs are, I have only a press release
> from Western Lithium Corporation on drilling results for one of the
> five deposits (lenses) at its King’s Valley hectorite clay property
> in Nevada. (Yeah, it’s not even spodumene but it is an ore.)
>
> “The PCD lens contains Indicated Resources of 48.1 million tonnes
> grading 0.27% lithium, or the lithium carbonate equivalent (seekingalpha.com/symbo...)
> of 688,000 tonnes LCE and Inferred Resources of 42.3 million tonnes
> grading 0.27% lithium, for an equivalent of 606,000 tonnes LCE, both
> at a cut-off grade of 0.20% Lithium.”
>
> “Economic assumptions for base-case cutoff grade (high-lighted),
> $3.50 Lithium Carbonate USD/lb, 60% metallurgical recovery; $45 USD/ton
> processing, $2 USD/ton Mining; Rounding errors may exist”
>
> finance.yahoo.com/news...
>
>
>
> Below a price of $4.50 per lb. or $10/kg (seekingalpha.com/symbo...),
> this ore body seems somewhat marginal when one considers capital
> needs, the ongoing drilling costs and risks – market pricing, energy
> cost escalation, … However, they may be able to tap into battery
> stimulus money to improve the project economics. The development
> of this significant lithium ore body would help to prevent the pricing
> of LCE from going absolutely silly.
>
> John, I agree that it would be good to hear from some mining engineers.
>

Apr 16 02:09 PM

[carbonates:]

From a geologist:

The brine operation in Nevada still operates, but it does not sell lithium on the open market. The operator consumes all of its own production.

The USGS report from 1994 is completely out-of-date, obsolete and irrelevant. You really need to read some recent references.

Unless lithium prices rise enough for hard rock mines to be economic I will stick to my point. The brine-resources are not large enough to supply an automotive lithium battery market as well as the electronics market they already supply. If lithium were to rise in price to hundreds of dollars per lb. for battery grade, then the hard rock miners might come back into the market. However, that is unlikely to be in the US because the regulatory environment makes US hard rock mining uncompetitive. How do the economics for car battery packs work at $100 per lb? $200/lb? $500/lb?


On Mar 28 01:23 PM NorthernPiker wrote:

> carbonates, lithium is not a rare metal. It is marginally more abundant
> than lead in the earth’s crust and vastly more abundant than lead
> in seawater. Based, on the 1994 domestic US price of $4.41 per kilogram
> (up from $4.21 in ’93), it can be mined economically; however, mining
> cannot compete with a cheaper brine operation.
>
> Prior to 1997, the major producer of lithium was the US, from two
> sources – a brine operation in Nevada and a mining operation in North
> Carolina. The NC mine shut down in 1997 because it could not compete
> with the growing brine operations in Chili. This blog claims that
> North Carolina has reserves of 2.6 million tons of lithium, ½ the
> reserves of Bolivia.
>
> www.nicholas.duke.edu/...
>
>
>
> From the USGS 1994 yearbook:
> “The United States has been the largest producer and consumer of
> lithium and the two U.S. companies have been the leading lithium
> carbonate producers in the world for many years.” …
>
> “Lithium carbonate, … Truckload lots, delivered $2.00 (per/ lb)”
>
>
>
> minerals.usgs.gov/mine...
>
>

Apr 16 02:19 PM

[John Petersen:]

carbonates, thanks so much for joining this debate and confirming facts that I could only suspect based on my prior experience with clients in the hard rock mining business. I've already checked with my in-laws (both PhD chemists) who confirmed that Lithium metal is one of the nastiest elements on the periodic table to work with, but it's great to have a professional perspective from somebody who knows more than I do.

Apr 16 05:12 PM

[John Petersen:]

The manganese spinel chemistries are a far sight cheaper than either the Li-Ti chemistries or the Li-FePO4 chemistries the supermodels of the battery industry are promoting. Their big problem is end of life performance specs and to resolve that problem GM is using about 60% more batteries than the PHEV advocates say a vehicle will need. But all this discussion of battery costs will be irrelevant when the automakers learn that nobody is going to pay $40,000 to $50,000 for a limited utility vehicle that is little more than eco-bling.

Jul 20 10:53 PM