Battery Cell Offering for Mid-Market Battery Electric Vehicles

Abstract

The rapid transformation of the automotive industry to electric vehicles is putting immense pressure on not just vehicle manufacturers (OEMs), but the entire battery electric vehicle (BEV) supply chain. This includes lithium-ion battery cells, the current state-of-the-art technology for energy storage in BEVs. The technological development within lithium-ion battery cells, which is greatly driven by the needs of vehicle OEMs, has for the past decade included developing more energy dense battery cells to cater for longer driving ranges as well as cheaper cells to enable electrification of more low-cost segments of passenger vehicles. This thesis has studied the automotive mid-market with the purpose of understanding its needs in relation to a lithium-ion battery cell and what battery chemistries that could satisfy its demand. In addition, the thesis has investigated the outlook for a European premium battery cell producer to be competitive on mid-market cells.

From interviews with industry and academic experts, combined with a literature review of relevant research, this thesis found that automotive OEMs are expected to demand a lower-cost battery cell for the mid-market in comparison to cells currently developed for premium BEVs. With the price of the cell being the most important aspect, OEMs are willing to sacrifice energy density and fast charging capabilities to reach an acceptable price level – which is expected to be around 60-80 USD/kWh on cell level by 2030.

Regarding materials and technology in the battery cell, the most promising path was identified as reducing (or eliminating) the amount of cobalt in the cathode electrode. This in combination with high recycling ambitions and a simplified, large-scale production was found as an efficient way of reaching lower costs while maintaining adequate cell performance.

Lastly, for a European premium battery cell producer to be competitive when diversifying its offering to the structurally attractive market of battery cells to mid- market BEVs, a strategic alignment with prior offering was deemed as a critical, long-term success factor. Furthermore, the thesis found that the greatest chances of reaching this will be to target the high-growth market of upper-mid passenger vehicles.

Abstract (Swedish)

Det snabba skiftet inom bilindustrin mot elektiska fordon sätter stor press på inte bara biltillverkare, utan på hela försörjningskedjan för elbilar. Detta innefattar litiumjonbattericeller som är det mest moderna sättet att lagra energi i elbilar. Den tekniska utvecklingen av litiumjonceller drivs i stor utsträckning av behoven från biltillverkare. Under det senaste årtiondet har det inneburit att både celler med hög energidensitet för att tillgodose behovet av längre räckvidd samt billigare celler för att möjliggöra elektrifiering av fordon inom lågkostnadssegment har utvecklats. Denna masteruppsats har studerat mellansegmentet av bilmarknaden i syfte att förstå mellansegmentets behov i relation till litiumjonbattericeller, samt vilka typer av celler som kan uppfylla detta behov. Masteruppsatsen har även undersökt förutsättningarna för en europeisk premiumproducent av battericeller att vara konkurrenskraftig med celler för mellansegmentet.

Genom intervjuer med experter från industri och akademi, i kombination med en litteraturstudie över relevant forskning, har denna uppsats funnit att biltillverkare förväntas kräva en cell med lägre kostnad för mellansegmentet i relation till de celler som tillverkas för dagens premium-elbilar. Priset på cellen har funnits vara den viktigaste aspekten, och biltillverkare tros vara villiga att offra energidensitet och snabbladdningsmöjligheter for att nå en acceptabel prisnivå – vilket är förväntad att vara runt 60-80 USD/kWh på cellnivå vid 2030.

Angående material och teknologi i battericellen var den mest lovande identifierade vägen framåt reduktion (eller eliminering) av mängden kobolt i katodelektroden. Detta i kombination med höga ambitioner för återvinning och en förenklad, storskalig, produktion ansågs som ett effektivt sätt att minska kostnader samtidigt som tillräcklig cell-prestanda behölls.

Slutligen bedömdes marknaden för battericeller till mellansegmentet av elbilar att vara strukturellt attraktiv. För att en europeisk premium-producent ska vara konkurrenskraftig på sagda marknad, har det bedömts att en strategisk matchning med tidigare erbjudande kommer att vara en kritisk framgångsfaktor. För att uppnå detta fann denna uppsats att företaget bör ha den snabbt växande övre delen av mellansegmentet av elektrifierade personbilar som målgrupp.

Popular Abstract

Conventional passenger cars are increasingly being substituted for battery electric vehicles. For battery producers, the rapid growth in demand for electric vehicles is creating a new market to cater to – the broad mid-class vehicle market. On this promising market, car manufacturers demand reduced prices, but can accept lessened battery performance. However, for producers in Europe, such as Northvolt, large challenges exist in the competition with Asian producers with better prices and more experience.

In recent years the automotive industry has been subject to major changes as traditional combustion engines are being replaced by electric cars. This research has targeted the mid-market of electric vehicles. This means not the fastest, largest SUVs or sports cars – neither the smallest, short-ranged city cars – but the mid-sized cars that constitute the majority of sold passenger vehicles.

The study found that car manufacturers within in the mid-class segment expect lower prices, while accepting reduced range and fast charging capabilities of the batteries compared to batteries placed in premium cars. To obtain such a lower cost battery, three alternatives to the cathode chemistry used in today’s premium batteries were found: (1) using an iron-based cathode popular in Asia, (2) eliminating cobalt from nickel-based cathodes or (3) using older generations of nickel-based cathodes. However, through further examination, a European producer will not be able to compete with Asian producers on the first alternative as no supply chain exists in Europe today. The third alternative was found too expensive – leaving the second option of reducing cobalt as most suitable for a sustainable European battery producer.

The market for batteries to mid-class vehicles was found attractive, with no threat from substitutes, suppliers, or new entrants. Although, being competitive in relation to existing Asian alternatives was found crucial. For a premium producer based in Europe moving into the mid-class market, keeping the unique selling points across offerings is important to be competitive. Since a European producer will have a hard time competing on price, being differentiated – such as valuing sustainability – is key.

For all battery producers, understanding the customers’ needs and requirements is valuable before developing a new product. Additionally, this study provides guidance and advice for premium producers, such as the battery producer Northvolt, looking to enter the mid-class market.

Lastly, accelerating the adoption of sustainable battery electric vehicles is critical to reach the climate goals set in Agenda 2030. Therefore, if battery producers in Europe are successful in providing an affordable, climate-smart alternative to both conventional engines and unsustainable batteries from China, the climate goals may be reached faster.

• author: Bengtsson, Oscar and Markensten, Rebecka
• supervisor: Lars Bengtsson
• organization: Innovation Engineering
• course: INTM01 20221
• year: 2022
• type: H2 - Master's Degree (Two Years)
• subject: Technology and Engineering; Business and Economics
• keywords: lithium-ion battery, BEV, mid-market, low-cost battery
• language: English
• id: 9087624
• date added to LUP: 2022-06-13 08:14:49
• date last changed: 2022-06-13 08:14:49