Batteries are a core technology underpinning the shift to energy decarbonisation and the electrification of transport systems, which could be a game changer in efforts to curb climate change.
Battery-powered electric vehicles (EVs) must climb to a share of around 50% of global car sales by 2030 for the world to get on the path to net-zero carbon emissions by 2050, according to the International Energy Agency.
Historically, portable electronic devices have been the primary driver of growth in the battery market; however, today the growth in demand comes from EVs. Their ever-larger requirements for battery volumes and energy density will continue to lead innovation in the coming years.
Evolving battery technologies
Battery technology is continuing to evolve, as manufacturers look to make vehicles with longer driving ranges to address consumers’ concerns about making the switch to electric.
Battery packs have grown in size and energy density in recent years, from around 30kWh to as much as 90kWh, extending driving ranges from less than 100 miles per charge to around 400 miles. Battery developers have been experimenting with different types of lithium-ion batteries to balance the maximum amount of power with optimal safety.
The rise in production and falling raw material costs has brought down the price of battery packs dramatically in the past decade, making EVs commercially viable. Tesla was the first company to commercialise EVs when it launched its Roadster model in 2008. Up until that point, car manufacturers had made hybrid models here and there, but had rejected EVs because of the high cost of production and expectations of low consumer interest.
The average battery price fell from $1,100 per kilowatt hour in 2010 to $137/kWh in 2020, according to BloombergNEF. Prices were reported below $100/kWh for the first time last year, for e-buses in China, and are forecast to average $100/kWh by 2023.
The battery pack is the most expensive part of an EV, accounting for around 30% of the total production cost. With prices around $100/kWh, EVs become price competitive with petrol cars, which is essential to making them more attractive to consumers.
Consumers have come around to the benefits of EVs and now almost all the major car makers plan to sell electric models.
Innovation in battery technology is not confined to the automotive market. Batteries currently make up the largest part of most electronics, including mobile phones and laptops. New battery technology will see batteries become part of the structure of devices, solving weight and storage issues. The airplanes of the future may have wings and cabins made from the battery technology themselves.
Increasing climate regulation
Governments around the world are stepping up their legislative efforts to deal with climate change. In many cases, they are tying their green initiatives to economic stimulus measures in the wake of the COVID-19 pandemic. The European Union passed a historic recovery package in 2020 for the period to 2027 that allocates 30% of the €1.8 trillion total to fighting climate change.
In the US, President Joe Biden is making batteries a key component of his plans for a low carbon future. The administration’s new target aims to reduce US greenhouse gas emissions by 50-52% from 2005 levels by 2030. Part of that plan includes beefing up the country’s domestic supply chains and positioning the US to export clean energy products including EV batteries. The US is also targeting 100% carbon-free electricity by 2035, which will also involve large-scale installations of batteries in energy storage systems.
China – which accounts for around 28% of annual CO2 emissions, equivalent to the US, EU, and India combined – has pledged to reach peak emissions before 2030 and achieve carbon neutrality before 2060. The country is the world’s largest electric vehicle market, and has the largest installed capacity of both wind and solar energy, with plans to continue scaling up.
Storing power supply in batteries
Energy storage will be key to a sustainable future with reduced CO2 emissions. Batteries will power our homes in the future, collecting electricity from renewable sources of energy and delivering it as consumption requires.
Swiss bank UBS estimates that energy storage costs will fall by 66-80% by 2025 and the global market will grow to as much as $426 billion by 2030. Investment bank Cowen expects that the energy transition and adoption of smart technologies will result in more changes to the electricity grid over the next 10 years than in the past 100 years.
Car makers like Tesla and Volkswagen are developing ways to store energy from solar panels in car batteries to power homes and send excess electricity to the grid during times of peak demand.
We will also see new ways to heat our homes through ground source heat pumps, supplementing old school technology including roof insulation to make our electricity use more efficient.
Building a new circular economy
For all the innovative possibilities, batteries have a carbon footprint of their own that can’t be ignored. Mining the raw materials and transporting them across the world to refineries, and then transporting the components to manufacturers is a source of pollution. In the future we predict there will be a circular economy for batteries, where they have multiple lives.
A battery used in a vehicle must meet high power, high performance requirements. But when it can no longer hold enough charge to run a vehicle it still has uses. A second-hand market will form for applications with lower energy demand, such as home power storage. And some companies are developing ways to recycle batteries to extract the core materials for reuse. This will create a new battery economy and is going to be fascinating to watch develop.
If you need help bringing your battery or electrification technology to market, Blueprint has deep understanding and experience in the marketplace and can assist in building your sales channels. Get in touch with us today.