Towards higher energy capacity, cost optimization, and greater safety.
The growing electric vehicle (EV) market is the main driver for battery pack applications. The EV market is booming mainly due to the need to significantly reduce the average vehicle fleet’s CO2 emissions, to reduce air pollution in the cities and to match governments’ stringent targets to achieve carbon neutrality. Governments worldwide promote electric vehicles by imposing stricter emission norms and offering incentives when purchasing them.
According to Yole Intelligence’s Battery Pack for Automotive 2023 report, the total annual demand for battery packs for EVs will grow from 450 GWh in 2022 to about 1,500 GWh by 2028. The growth rate for different EV applications varies, as their market dynamics have various drivers. The battery pack demand will be mainly driven by battery electric vehicles (BEVs), representing 90 % of the total demand in GWh by 2028. Plug-in hybrid electric vehicles (PHEVs) enable significant CO2 emission reductions due to their electric engines while keeping long driving ranges thanks to their Internal Combustion Engines (ICEs), and will take second place in the total battery pack demand in GWh by 2028.
The requirement for higher energy capacity, cost optimization, and excellent safety is impacting the technological development of the battery pack
A battery pack is a battery system that is installed in and powers an electric vehicle. It comprises several cells with various control and protection systems, such as battery management systems, thermal management systems, and safety components and housing.
The EV battery packs’ main requirements are high power and energy density, robustness, reliability, cost optimization, downsizing, and safety, which drives the technological innovation in the overall battery pack market. The most common battery cell cathode chemistry for high-range EVs is NMC (~60% market share in 2022). In addition, low-cost cobalt-free LFP, which were initially preferred by Chinese players such as CATL, BYD, and MG Motors, and advanced LFP (e.g., LMFP) batteries, are gaining popularity (~35% market share in 2022 and around 50% by 2028) due to concerns about nickel and cobalt’s long-term supply and easy availability. Today, many car makers, such as Tesla, Hyundai, Ford, and BMW, have already started or are planning to use LFP cells in their EVs. In the case of cells integrated into the vehicle, the most common approach is the modular approach, where cells are integrated into small modules, and the modules are then connected to make the final battery pack. Eliminating modules and building modular-less battery packs from cells inside the housing (so-called cell-to-pack arrangement) could provide potential benefits, such as better space utilization and higher energy density. Today, many battery manufacturers, such as BYD, CATL, and LG Energy Solution, are exploring a cell-to-pack approach. A so-called cell-to-chassis concept is a logical extension of this idea that eliminates the dedicated housing from the battery pack and integrates cells directly into the vehicle chassis. Companies like Tesla, BYD, and Leap Motor plan to integrate cells directly into the vehicle chassis in the coming years.
Lithium-ion cells are sensitive to high and low temperatures. The battery temperature should be controlled within specific limits to avoid thermal issues, improve performance, and improve passengers’ safety. Hence, battery thermal management becomes an essential component of a battery pack. Today, liquid cooling systems are mainly used with BEV, e.g., Tesla Model X, Model S, Model 3, Toyota –iQ, Volvo XC90 T8, and Hyundai Ioniq 5. In addition, the thermally conductive materials improve heat transfer from the cells to the heat sink.
Passenger safety is so crucial that to enhance security, China introduced new legislation under which all EV manufacturers must modify their battery pack design to activate an alert 5 minutes before an internal short-circuit can cause thermal propagation, leading to the thermal runaway of a cell. This could lead to a dangerous situation inside the passenger compartment, such as smoke, fire, or even an explosion. This will give the occupants time to exit the vehicle. Therefore, a better cooling system, enhanced thermal interface materials, and specific cold plates are needed to improve the thermal management system of EV battery packs. Today, almost all key players involved in thermal management systems, such as Henkel, Dow, Parker, DuPont, Saint-Gobain, and 3M, are improving their products to enhance their safety properties.
Another crucial battery pack component is the battery management system (BMS). An EV BMS is an electronic control circuit that monitors and regulates the charging and discharging of the batteries, protects the batteries from deep discharge and over-voltage, and provides a cell balancing function to ensure that the various cells have the same charging and discharging requirements.
Increasing battery packs’ energy capacity and power capability drives the development of highly reliable and fast-reacting circuit protection (safety) components. Although fuses currently represent a preferred protection solution for battery packs due to their low cost, quicker and resettable solutions are increasingly sought to improve safety and reduce maintenance costs. The leading safety components players comprise ABB, Eaton, Mersen and Littelfuse.
Battery recycling is a second source of valuable raw materials.
The Li-ion battery pack is a costly component (about 40% of the total cost) of electric vehicles. It contains many valuable raw materials, such as cobalt, nickel, lithium, graphite, etc. Extracting raw materials from mines is costly and raises environmental, social, and geopolitical concerns. For example, the cobalt market is highly concentrated: more than half of all cobalt is mined in the Democratic Republic of the Congo, and almost half is refined in China. A disruption in the supply of these raw materials can affect the functioning of the Li-ion battery supply chain, resulting in shortages or rapid price increases. The recovery of valuable raw materials from end-of-life batteries via recycling can be considered a second source (a “secondary mining”) of these raw materials. Therefore, battery recycling has become one of the most essential industries in the EV battery market. Many cell makers and car OEMs are becoming increasingly involved in the battery recycling business, mainly through partnerships with battery recyclers (e.g., a collaboration between Li-Cycle and LG Energy Solution, Redwood’s alliance with Volkswagen and Toyota) or in-house recycling facilities. Closed-loop recycling is essential to minimize the battery environmental impact, reduce cell production costs and reliance on imports and mining raw materials. Many car makers, like Volkswagen, Tesla, Toyota, and Ford, want closed-loop recycling for their end-of-life EV batteries. At the same time, second-life batteries for stationary applications provide tremendous value opportunities in the battery value chain. However, many technical, economic, and regulatory challenges prevent companies from implementing an economically viable business model for second-life batteries. Although Li-ion batteries have excellent properties and are used in many applications, including EVs, Li-ion batteries have some obstacles, such as geopolitical issues related to raw material sourcing, safety, and high cost. Therefore, many players are also investigating other types of batteries (beyond traditional Li-ion batteries), such as solid-state and sodium-ion batteries.
With the rapid adoption of electric vehicles, the demand for Li-ion battery packs will grow significantly in the coming decades. The EV battery pack market has experienced much change and exciting innovation in recent years, which shows no sign of slowing down. Today, no “standard” Li-ion battery pack exists. The companies involved have made a variety of technology choices for battery pack components, including cell chemistry, size, thermal management system, battery management system, etc. Today, battery recycling is the core of strategic planning for an increasing number of battery cell manufacturers and car OEMs to minimize the battery environmental impact and to recover valuable raw materials from end-of-life batteries.
About the authors
Shalu Agarwal, Ph.D., is a Senior Analyst in Power Electronics and Batteries at Yole Intelligence, part of Yole Group, within the Power & Wireless division. Based in India, Shalu is engaged in the development of technology & market reports as well as the production of custom consulting studies.
Shalu has more than 12 years experience in Electronic Material Chemistry. Before joining Yole, she worked as a project manager and research professor in the fields of electronic materials, batteries, and inorganic chemistry.
Shalu Agarwal received her master’s and Ph.D. in Chemistry from the Indian Institute of Technology (IIT) in Roorkee (India).