Fortune Minerals : Cobalt News

Financial Times - August 28, 2023

Designed to look like its lithium-ion cells, CATL's headquarters towers over its surroundings in Ningde, eastern China.The group's low-cost ...

Designed to look like its lithium-ion cells, CATL's headquarters towers over its surroundings in Ningde, eastern China. The group's low-cost batteries, which power one in three electric vehicles worldwide, have made the coastal city a must-visit destination for any auto executive thinking about affordable next-generation cars. Its 18,000 research staff, along with an R&D budget that doubled last year to more than $2bn, show how hard it will be for rivals to catch up…The company and Shenzhen-based BYD have raced ahead of battery rivals in South Korea and Japan, leaving the US and Europe contemplating how to stoke an electric car industry without relying on China for the most important and costly piece of the puzzle…"What we've discovered in China is that electrification, and the democratisation of the EV, prioritises consumer affordability. By making it cheaper, China wins."…As the dominant battery forces in the world's largest EV market and with local supply chains, CATL and BYD have managed to lower the capital costs at their factories to less than $60mn per gigawatt hour of batteries produced, according to Bernstein analysts, against $88mn/GWh for LG and SK, the two biggest Korean groups, and $103mn/GWh for Japan's Panasonic…The most immediate challenge comes from South Korea's LG Energy Solution, SK On and Samsung SDI, which all specialise in lithium-ion batteries using NMC cathodes composed of lithium, nickel, manganese and cobalt…The technology, used in the majority of electric vehicles sold outside China, offers longer range and higher performance than the lithium iron phosphate (LFP) cathode chemistry in which CATL specialises. But it is more expensive, has a shorter lifespan and has a history of causing fire…"The average Chinese EV consumer is making short trips within a large city with much greater charging infrastructure," said Bush. "That is totally different to a consumer in North America who would think nothing of driving 500 miles in a single weekend." He added that if nickel prices start to come down as projected when large Indonesian projects come online over the next decade, the gap in cost between NMC and LFP batteries would narrow substantially. Japan's Panasonic hopes it can compete by targeting high-end batteries and concentrating investments in the US, where it is planning to build at least two plants to quadruple its battery capacity by 2030. The company is betting the higher energy density of its nickel-rich batteries, which proponents say also offer advantages in charging time, safety and recyclability, will give it an advantage over CATL's LFP cells…Among other nascent technologies with disruptive potential is the solid-state battery, which holds the prospect of huge improvements in capacity and charging time while eliminating use of volatile, flammable liquid electrolytes… Asim Hussain, chief marketing officer at Volkswagen-backed US solid-state developer QuantumScape, said the technology would be vital if the US is to take a battery lead over China rather than merely catching up… "What's going to be interesting is what the effect of sodium-ion batteries is going to be on LFP. Sodium is such a reasonable drop-in technology,"…Solid-state and sodium-ion batteries are likely to take market share from different directions: sodium-ion for battery storage and entry-level cars, and solid-state for expensive, high-performance vehicles…The question of whether anyone can beat the Chinese battery industry may also be decided by factors beyond technology, performance or price. President Joe Biden's Inflation Reduction Act is likely to play a defining role in shaping the industry's winners and losers, at least on US soil.