Portable Batteries: Part 2

In part one of this piece, we introduced lithium ion as the leading chemistry in high-performance battery applications. Below is an overview of the battery manufacturing process.

Manufacturing Costs

Battery manufacturing is a very capital-intensive undertaking, and very sensitive to economies of scale. For this reason, massive battery plants (so called mega- or giga-factories) have arisen to address this ever-expanding market that is forecasted to grow 1000% between 2018 and 2030. There are over 90 of these megafactories in operation today, with the five largest producers being LG, CATL, BYD, Panasonic, and Tesla.

Assembled lithium battery cells can take many shapes, but the most common form factors are cylindrical, button, prismatic and pouch cells. Each has its own advantages and limitations in terms of cost to produce and specific energy density due to overall shape and enclosure mechanics. Also of concern is how easily each can be integrated into a device compartment and how to prevent heat buildup in and around the battery pack.

Cost of production (expressed in $/kWh) is a major consideration in evaluating any new battery technology. If a new chemistry, electrode material, or cell construction doesn’t lend itself to factory automation then the new performance gains may not be good enough to justify the increased cost of production.

Most of today’s batteries are constructed from layered/laminated materials, often stacked, cut, and conveyed using conventional roll-to-roll processes and equipment adapted from the paper-making industry. So if a new anode or separator material cannot be handled by existing factory equipment (for example if made thinner and thus more prone to tearing) then it might require specialized equipment to be invented and retrofitted onto a production line at great cost to the manufacturer. This is especially true when a new technology will compete with battery cells produced in so-called megafactories, where massive economies of scale and infrastructure investment have already driven the production costs (and margins) to rock-bottom levels.

A new technology either needs to be compatible with this existing infrastructure, or provide such massive improvement that it justifies building or retrofitting a megafactory to build that specific battery type.

However, in these low-margin operations, it becomes very difficult to justify amortizing the large R&D costs necessary for major battery breakthroughs. What we are seeing instead is an incremental evolution of battery materials funded by modest R&D investments. But the number of players pursuing this approach is staggering, with both the major manufacturers and small materials startups seeking to carve out small single % returns in this crowded market.

This is the primary reason that the battery industry has shown such poor returns to investors in the last decade. Dozens of electrically-superior battery technologies have arisen and died because they couldn’t stay ahead of the falling price of existing Lithium-ion battery production. In fact, most of the development work today is aimed at improving the manufacturing processes. It is said that one engineer working to improve the manufacturing process is worth 10 engineers working to improve the battery chemistry technology.

Industry Terms to Know:

• BOL: Beginning of Life, when a battery enters service and the capacity can be assumed to be near 100% of the nameplate spec.
• EOL: End of Life, is defined when the battery degrades to a point where only 70–80% of Beginning-of-Life (BOL) capacity is remaining under nameplate conditions.
• DOD: Depth of Discharge. Referring to the amount of energy cycled out of a battery on a given discharge cycle, expressed as % of total capacity (100% = empty, 0% = full)
• SOC: State of Charge. The compliment to DOD, indicating the present amount of energy remaining in a battery, expressed as % of total capacity (0% = empty, 100% = full)
• C-rate: Charge or discharge. The ratio of current (in Amps, A) into/out of a battery cell as compared to the overall Capacity (in Amp Hours, Ah). A battery being charged at 1C will fully charge from 0 to 100% in 1 hour. At 4C the same battery will charge in 15 minutes. At 0.1C the battery will charge/discharge in 10 hours. Higher C-rates will cause elevated temperature, which can dramatically reduce the lifetime of the cell.
• Cycle Life: the total number of charge/discharge cycles a cell can undergo before its total charge capacity degrades to some percent (typically 80%, see EOL above) of the nominal nameplate capacity. Essentially the number of charge/discharge cycles between BOL and EOL.
• Primary Cell: a single-use battery (not rechargeable), e.g. AAA batteries
• Secondary Cell: a multiple-use battery (can be recharged), e.g. cell phone and laptop batteries
• BMS: Battery Management System. Electronic circuitry built into nearly all battery packs that monitors individual cells, monitors and controls charge-rates, prevents over-charging, and acts to prevent thermal run-away events.

Conclusion

In part one and part two of this piece, we have introduced the basics of battery technology and how batteries are manufactured. We have also identified a critical factor for evaluating new battery technologies; their ability to fit into the existing manufacturing infrastructure. In parts three and four we will cover the current state of the art and what we see coming in the future.

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