By Venkat Rajaraman, CEO and Founder, Cygni
Lithium-ion battery picked up pace in the mid-1980s where three professors, John B. Goodenough, along with Stanley Whittingham and Akira Yoshio got Nobel Prize for inventing the lithium-ion battery. Basically, there are two predominant cell chemistries. One is LFP (Lithium Ferro Phosphate) and the other is NMC (Nickel, Manganese Cobalt) cell. Both of them have their own advantages and disadvantages. The battery itself is a trade-off among various parameters. Typically, the tradeoff happens across multiple verticals. And you do the tradeoff between the energy density, the safety, the long life, faster charging, and all of them. This is a tradeoff.
Battery technology is progressing on several fronts. On the Energy Cost, the trend is moving away from Cobalt, due to cost and safe mining concerns. Removing C (Cobalt) from NMC (Nickel-Manganese-Cobalt) chemistry has been a main focus of research. The energy density is also improving with NMC111 to NMC532 to NMC811. The numbers indicate the percentage of Nickel, Manganese and Cobalt in the cell, for e.g., NMC811 indicates 80% Nickel, 10% Manganese, and 10% Cobalt. On the Safety front, Solid-state electrolytes are replacing the flammable electrolytes and significantly improves the safety. On the Energy Density (Wh/Kg) front, Silicon anodes, Lithium metal anodes are key to improving energy density. On the Cycle Life, there is a move towards of abundant materials with higher cycle life, is resulting in resurgence of LFP chemistry
LFP is known to be safer than NCM chemistry and there is a resurgence of LFP chemistry in recent times because this is something that has been tried and tested for a long time now. There are also a lot of new research which is happening in terms of metal anodes, based on Silicon anode, Lithium anode and so on. And there is another set of research that is happening in terms of solid-state batteries. Solid State Batteries have a solid-state electrolyte which are inherently safer.
We are at least few years away before the lithium batteries based on metal anodes or solid-state electrolytes see commercial adoption and the basic chemistries such as LFP, NMC, NCA are here to stay for few more years. Currently, the lithium-ion production capacity is around 700 to 800 GWh globally. But by 2030 this capacity is expected to be ramped up to over 2500 GWh or 2.5 Terra-Watt-Hour.
Worldwide there are about 130+ Giga factories currently being set up. India has embarked on the Advanced Cell Chemistry (ACC) PLI scheme where there is a mandate to set up about 50 giga-watt-hour of cell manufacturing. The results of the ACC-PLI scheme recently got published where four players have been selected, two players for 20 giga-watt-hour each and two players with five giga-watt-hour each. The advantage with the ACC PLI scheme in India is that it is directly promoting better cycle life and higher energy density. So the incentive on the battery pack is directly proportional to the technological innovation in terms of better cycle life and higher energy density.
And the India opportunity itself, it is expected where the application is in a predominant application is going to be EV. India predominantly moves on two-wheelers and three-wheelers. Lithium battery demand for Two wheelers and three wheelers is the highest today. We also have a large use case for stationary applications as well. That includes the telecom towers, distributed rooftop solar, diesel generator offset, data centers and so on. Lithium battery market is expected to be about 80 giga-watt-hour by 2030 and it is expected to be about 25 gigawatt hour in the next three to four years. In an optimistic scenario the projected demand could be as high as 150 giga-watt-hour by 2030 and so it presents a huge opportunity for India.
Today lot of battery packs come with Chinese Battery Management System (BMS) which are predominantly hardware BMS or protection boards. Many of the key features that are required for India are not available including cell balancing, high number of temperature sensors including a proper association which is a state of charge computation including a state of health determination and so on and so forth. What India needs is a Battery Management System which has all the smart battery safety features. Cell balancing is very critical because cells typically are electrochemical devices, and no two cells are the same. Many times, as the cells goes through a charge discharge cycle, one cell becomes weak so the cell balancing makes sure that it balances the cell out so that all the cells are equally balanced at the same level of health. So this is one and second many times what happens Indian conditions need handling of what is called the pre-charge and pre discharge path especially if you want to handle the high surge current when the motor controller is used and similarly when the battery pack is in deep discharge we need to have charge it with a higher current but the pre discharge and pre-charge path will have to come into pictures so that the life of the battery can be improved. Another most important aspect of BMS is dynamic cut-off requirements, where the safety related cut-offs have to be dynamic in nature with respect to the life of the battery, the health of the battery, the geography with which the battery is deployed, the temperature condition under which it is operated and so on. The temperature dependent cut-offs are also very critical. Especially during peak summer or peak winter it is better to throttle the output current to a lower value so that the life of the battery can be enhanced and these are all can be done only with smart BMS.
And then how do we see the adoption of this lithium-ion battery?
Prices of Lithium-ion batteries have been continuously falling, following what is now known as “Wrights Law”. As Moore’s Law determines the Semiconductor density, Wright’s Law is for price prediction. Wright’s Law says that for every doubling of the production capacity all over the world, the cost of the lithium-ion battery would fall by a certain percentage. In this particular case of Lithium cells, it falls by about 28% for every doubling of the capacity. And though there has been some recent short-term volatility, this trend has proven itself for over ten years and we have seen the Lithium cell prices falling from $1,000 per kilo-watt-hour to about $110 per kilo-watt-hour. And we believe that this tend will continue as the capacity increases and in the next few years we expect that the prices to fall below the $100 per kilo-watt-hour mark and that is going to augur well for the Indian EV industry.
The Indian EV opportunity has been published by many think-tanks in their several reports. As per the CEEW estimate, EV is expected to be over a 200 billion dollar opportunity. Niti-Aayog predicts that that there will be about 80% adoption in EV-2W and EV-3W.
In summary, lithium ion technology has been around for a long time. So clearly the electric vehicle inflection point is right here. EV inflection in India and around the globe is already happening as we speak. The electric two wheelers and commercial electric three wheelers are on the fastest mode of adoption. India needs a customized and differentiated solution than what is designed for Western countries. Also the goal has to be 100% safety and all other parameters can take a backseat. The main one in this particular one is the design of a smart battery pack which has all the features which are India specific one. There is a huge opportunity for big data and analytics in the electric vehicles and all smart connected vehicles and connectivity in e-mobility will be disrupting mobility in a way that we haven’t imagined.
