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Large lithium-ion battery demand will drive shortage as e-vehicles and ESS popularity grows

Fri, 05/27/2016 - 10:02 -- Paul Crompton
Large lithium-ion battery demand will drive shortage as e-vehicles and ESS popularity grows

Demand for electric vehicles and energy storage systems will create a shortage of lithium-ion batteries within a few years, according to a report by IDTechEX.

The market for large-scale batteries in emerging applications such as electric vessels, grid-scale and residential ESSs and China’s rapidly growing e-bus market will hasten the shortage, said the report.

The supply shortfall will come, despite more than 200 lithium-ion battery manufacturers currently in operation, and Tesla ‘Gigafactory’ due to open in 2017, because these applications demand 100+kWh batteries.

Unlike cars with 30kWh (Nissan Leaf) and 85kWh (Tesla Model S) drivetrains, buses require battery packs between 74kWh (fast charging) to more than 300kWh (slow charging), while electric vehicles and ESSs are in the MWh+ range.

China is due to lead the rise in sales of pure electric buses as policies, such as a suggested halt on hybrid subsidies, will favour pure electric powertrains.

The Lithium-ion Batteries for Electric Buses 2016-2026 report predicts the e-bus market will to grow to $30 billion by 2026 following a 54.6% rise from 2014 to 2015, with China accounting for a significant proportion of production and sales.

Dr Victoria Adesanya-Aworinde, technology analyst and author of the report, wrote: “We see a real risk of shortage of large lithium-ion batteries, which few can make satisfactorily, in the coming years aggravated by new applications for grid and residential energy storage systems.”

China, aware of the issue, is reportedly set to remove subsidies for nickel manganese cobalt oxide (NMC), which is produced exclusively outside the country.

Instead the country aims to retain the entire value chain of electric vehicles and lithium iron phosphate (LFP) batteries— the most common chemistry manufactured in China and used in Chinese e-buses, the report states.