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Lithium ion battery supply chain in an energy storage revolution
University of Oxford, UK Guest Lecture, 11 May 2017
Simon Moores | Managing Director Benchmark Mineral Intelligence, UK
o www.benchmarkminerals.como @sdmoores o [email protected]
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What is Benchmark?
Subscriptions
Events
Lithium Graphite
Cobalt
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Nickel
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Where do we operate in the supply chain?
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Upstream Downstream
RawMaterials Semiprocessed
products
Batteries Battery
Packs
Mobile/
EV/Utility
LithiumGraphiteCobalt
AnodeCathodeSeparators
CellsVariousformfactors(18650)
4-7Wh7-10kWh40-85kWh>500kWh
SmartphoneHomeEVsCommercial
How do we do this?
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• Firsthanddatacollection…PaloAlto,California,USHeilongjiang,NorthernChina Hirschau,Germany
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Convergence of three multi billion dollar industries: Auto, Tech, Energy
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Batteries
2017: The Era of the Semi Mass Market EV begins…
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Bolt(60kWhlithiumion)Model3(60-65kWhlithiumion)
LEAF2017(60kWhlithiumion)
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Emergence of the pure EV
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• BatterySizeIncreases4x • Salesfrom10,000sto100,000s
ToyotaPrius(1997)
1.3kWh(NMHHybrid)NissanLEAF (2010)
24kWh(LithiumionNCM)
TeslaModelS(2012)
85kWh(LithiumionNCA)2017:
TeslaModel3,
ChevroletBolt
NissanLEAFIII
60-65kWh(Lithiumion)
Niche/Luxury Semi-massmarket
Rate of adoption is changing
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Source:BlackRock,LithiumAmericas
UStechnologyadoptionratesfrom10%to90%
Car:75years
PC:30yearsCell:13years
Smartphone:8years
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Rate of adoption is changing: Smartphone
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Source:Nokia,Apple, BenchmarkMineral Intelligence
0 50 100 150 200 250 300 350 400
2005:NokiaN70
2007:AppleiPhone
2014:AppleiPhone 6
Daysto1mhandset sales
1year
72Days
7.2hours
180,000
8,000
300
0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000
2016:Model3
2015:ModelX
2012:ModelS
Teslareservationsinfirst24hours
$68,000to$94,000
$110,000to$144,000*$35,000
Rate of adoption is changing: Tesla EVs
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Source:BenchmarkMineral Intelligence,*pricenotdisclosed onfirstdayof reservations
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WhichbatterytypeswillwintheEVrace?
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Source:BenchmarkMineral Intelligence
1969 Late-1990s 200620072010
Watches
CarsCellphones
Powertools
Personalmusic
Smartphones
Tablets
Laptops
Hybridcars
FullElectricvehicles
Utility/Stationary
storage
Lithium-ion/NiMH Lithium-ion
I II III IV
NiMH/Lithium-ionMercuryLeadacid
Today: Fourth phase of battery commercialisation…
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There is more than one type of lithium ion battery…
Lithium Cobalt Oxide (LCO)
Nickel Cobalt Manganese (NCM)
Nickel Cobalt Aluminium (NCA)
Lithium Iron Phosphate (LFP)
Lithium Manganese Oxide (LMO)
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Battery technology: where are we going?
Source:Panasonic, reproducedbyBenchmarkMineral Intelligence
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Manufacturing cost profile of a lithium ion battery and pack
Source:BenchmarkMineral Intelligence
BillofMaterials,60%
Labour,Manufacturing,
Energy,Other
Margin
LITHIUMIONCELL
CellCost,40%
EnergyManagement
System
Other(incllabour)
Margin
BATTERYPACK
Whatbatterydemandcanweexpect?
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0 100 200 300 400 500 600
2016
70-75%EVs
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Lithium ion battery demand expectations by 2025 (GWh)
Benchmark’s 2025 lithium demand based on battery forecasts
0 100,000 200,000 300,000 400,000 500,000
2016 2020
Tonnes
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0 100000 200000 300000 400000 500000 600000 700000
Benchmark’s 2025 graphite demand based on battery forecasts
2016 2020
TonnesGuestLecture|11May2017|UniversityofOxford 19
0 50000 100000 150000 200000
Benchmark’s 2025 cobalt demand based on battery forecasts
2016 2020
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Riseofthelithiumionbatterymegafactory
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Rise of the lithium ion megafactories continues…
0
20000
40000
60000
80000
100000
120000
Annual Cap 2016 (MWh) Expanded Capacity (MWh) 100GWh
35GWh
20GWh
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0% 10% 20% 30% 40% 50% 60% 70%
China
US
As ia (ex-China)
Europe
Thenewlithium
ionindustryisa
Chinastory
Teslaisstill
important– business
strategy/vertical
integration
Newplantsstill
beingconstructedin
Japan/Korea,but
focusonChina
Europeisslow
Megafactories by region
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Megafactories to watch: Gigafactory, Nevada, US
• H12017EstCellProductionCapacity:4GWh
• End-2020EstCellProductionCapacity:35GWh
• =3,200tonnesLithiumHydroxide• =4,800tonnesGraphiteAnode• =600tonnesCobalt
• =28,000tonnesLithiumHydroxide• =42,000tonnesGraphiteAnode• =5,250tonnesCobalt
Chemistry:NickelCobaltAluminium(NCA)Chemistry:NickelCobaltAluminium(NCA)
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Megafactories to watch: Dalian, China
• H12017EstCellProductionCapacity:3GWh
• End-2020EstCellProductionCapacity:9GWh
• =2,400tonnesLithiumHydroxide• =3,600tonnesGraphiteAnode• =450tonnesCobalt
• =7,200tonnesLithiumHydroxide• =10,800tonnesGraphiteAnode• =1,350tonnesCobalt
Chemistry:NickelCobaltAluminium(NCA)
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Megafactories to watch: NingDe, China
• H12017EstCellProductionCapacity:5GWh
• End-2020EstCellProductionCapacity:100GWh
• =~3,500tonnesLithiumCarbonate• =~6,000tonnesGraphiteAnode• =~1,700tonnesCobalt
• =~75,000tonnesLithiumCarbonate• =~120,000tonnesGraphiteAnode• =~11,000tonnesCobalt
Chemistry:NickelCobaltManganese(NCM)
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0
500
1000
1500
2000
2500
3000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020High Low
Lithiumioncellcosts($/perkWh)
2016-2020:15-20%ayear
2000to2015:12-14%ayear
The result? Battery cell costs continue decline…
Isthereenoughlithium?
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Battery raw materials have hit the headlines
$12,313/tonne (March 2017) $17,000/tonne (March 2017)
LithiumHydroxideLithiumCarbonate
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Why has lithium hit the headlines?
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-40%
-20%
0%
20%
40%
60%
80%
100%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017(f)
Lithium Carbonate (ex-China) Price Trend: Average Y-O-Y
1Yearwherepricesdeclinedinadecade
Source: Benchmark Mineral Intelligence Data, Lithium Price Assessments
Lithium Price Performance Year by Year
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Is there enough lithium?
WorldLithiumResources(LCE)
210mtonnes
WorldLithiumReserves(LCE)
14mtonnes
Argentina55mtonnes(26%)Chile50mtonnes(24%)Bolivia32mtonnes(15%)Australia30mtonnes(14%)China15mtonnes(7%)
Source:USGS
WorldLithiumProduction(LCE)
180,000tonnes
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Is there enough lithium?
94,976,569
CarsandCommercialVehiclessoldin2016
22,871,134Commercialvehicles
72,105,435
Cars
3,430GWh(150kWhav)
5,047GWh(70kWhav)
2.74mtonnesLCE
4mtonnesLCE
6.74m
tonnesLCE
Source:OICA Source:OICA Source:BenchmarkMineral Intelligence
Lithiumion
battery
production
>12,000%
Lithium
production
up3,735%
=50%globalreserves
=3%globalresources
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How much investment is needed?
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2005200620072008200920102011201220132014201520162017
Lithium Carbonate Low Lithium Carbonate High Lithium Hydroxide Low Lithium Hydroxide High
$1bnraised
$520mraised
$/tonne
• =20,000tonnesLCE• Shouldhave=50,000tpa• 1expensivebankruptcy• 2failedchemicalplants• 40%misallocatedcapital
• =25,000tonnes• Moretocome• Investorsmorecautiousbut
furtherdowneducationpath
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What investment is needed?
Source:HouseMountainPartners,BenchmarkMineralIntelligence
~$500m~$400m
BrineMine
25,000tpa
BatteryGradeLithiumPlant
HardRockMine
Concentrator=
25,000tpaoffeedstock thatneedschemicalconversion
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What investment is needed?
2020 = 100,000tonnesLCE=
2025=150,000tonnesLCE=
IncrementalLithiumNeeded
$2.5bn0%allocatedbyend2017
$1.7bn50%allocatedbyend2017
Source:HouseMountainPartners,BenchmarkMineralIntelligence
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Where will the most profitable sit?
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Upstream Downstream
RawMaterials BatteryGrade
Materials
Batteries Battery
Packs
Mobile/
EV/Utility
LithiumGraphiteCobalt
AnodeCathodeSeparators
CellsVariousformfactors(18650)
4-7Wh7-10kWh40-85kWh>500kWh
SmartphoneHomeEVsCommercial
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Othertrendstowatch
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Othertrendstowatch
Corporate Social Responsibility
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Othertrendstowatch
Corporate Social Responsibility
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Othertrendstowatch
Recycling
• Tesla seeking torecycleitsbatteriespost2020• Gigafactorycellswillnothavesecondlifeinutilitystoragepost80%capacity• Nomajorplansinplaceyet, justaninitiativeforspentbatteries
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Othertrendstowatch
Recycling
• Recyclingabout responsiblydisposingofbatteries• Extractinghazardouswaste• Forcingcompaniestothinkaboutmanufacturing
• Notlikelytobeaboutrawmaterialsupply• Cobaltopportunity• Nickelopportunity• Lithium&Graphiteunlikelybefore2023(economics)
Credit:Bloomberg
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