France will offer about 8 billion euros ($9 billion) to its auto industry to bolster support for EVs; Germany’s stimulus package includes about 5.6 billion euros for the sector and will require gas stations to install charging units.
“This is a historic plan to confront a historic situation,” French President Emmanuel Macron said on May 26.
There are other sources of optimism. Volkswagen Group on June 16 announced an additional investment of $200 million in QuantumScape Corp., a battery technology startup founded by former Stanford University researchers, after committing $100 million in 2018. In May, the carmaker became the biggest shareholder of Chinese battery producer Guoxuan High-Tech Co.
“The train’s left the station on both renewable power generation and electric vehicles, and no one is going to put that train in reverse,” said Jeff Chamberlain, CEO of Volta Energy Technologies, a Chicago-based fund focused on energy investments. Chamberlain previously led energy storage initiatives at the Argonne National Laboratory, the U.S. government facility seen as having been pivotal in the transfer of battery technology from academia to the auto sector.
Battery makers also are quickly making progress on three key fronts: battery life, power and cost. CATL recently announced it will soon begin production on a battery that can operate for 2 million kilometers (1.2 million miles), or about 16 years. The capability puts it far ahead of any of the batteries on the market today, which typically are under warranty for about 150,000 miles, Zeng said.
Tesla and GM are each developing batteries that can last a million miles. Neither have yet said exactly when they’ll be ready. GM is “almost kind of there on longer life,” Doug Parks, an executive vice president, said at a May 19 Citigroup Inc. event. The carmaker is “experiencing nearly that in some of our products today,” Parks said.
Combustion engine vehicles are currently scrapped in the U.S. after about 200,000 miles, Tesla said in a June 8 report, meaning a longer-life battery pack could dramatically extend a car’s lifespan, particularly useful for taxis or delivery trucks. More important, a million-mile pack could be resold by a consumer to be deployed in a second vehicle, offsetting some of the initial purchase price.
Tesla is planning to provide further details on its battery innovations in the coming weeks at what it’s billing as a “battery day” investor seminar. It had tentatively been scheduled for April but was delayed on account of COVID-19 travel concerns and restrictions.
One critical update investors are expecting: the average cost of batteries used in Tesla’s various models. The carmaker’s numbers typically set the standard for others to catch up to, and the car battery still accounts for about 30 percent of the total cost of an EV. Better technology and rapid growth in manufacturing capacity has already sent the price of lithium ion batteries tumbling, down from more than $1,000 a kilowatt hour to an average of $156/kWh at the end of 2019, according to BNEF.
Lower costs
An industry average battery price of $100/kWh, should be achieved in 2024, BNEF analyst James Frith said at a seminar in May, leading to price parity between EVs and combustion engine vehicles. Additional savings through 2030 will lower costs further, though they’ll prove harder to achieve and will depend on additional advancements and new technology, according to Frith.
Every battery has three key components: two electrodes, cathode and anode, with an electrolyte — usually a liquid — to allow the battery to charge and discharge.
A key, pending breakthrough will be the addition of silicon into battery anodes in place of graphite. California’s Sila Nanotechnology Inc., which counts Daimler among its investors, says the silicon will help make a single charge last at least 20 percent longer.
