The Rechargeable Battery Market and Main Trends

Transcription

1 The Rechargeable Battery Market and Main Trends Director, AVICENNE ENERGY Presentation Outline market in 216 The Li-ion battery value chain Li-ion battery material market Forecasts & conclusions

2 AGENDA The market in 216 by technology, applications & battery suppliers Li-ion components market & value chain Raw materials market Supplier / customer relationship Raw material cost New entrants strategy Raw material road map 2-23 xev market in 216 xev forecasts up to 225 Industrial, stationary & ESS applications Rechargeable battery market forecasts up to 225 2

3 Million HEV powered by LIB Number of EV sold worldwide ( Million) AVICENNE ENERGY: RENOWNED TO HAVE REALISTIC FORECASTS HEV powered by Lithium ion battery forecasts from 28 to 216 2,5 2 IIT 27 IIT 28 EV sold, in million units, worldwide, IIT (MARCH 211) DEUTSCHE BANK (212) 1,5 IIT 29 3 IIT (MARCH 21) 1,5 IIT REALITY AVICENNE 27 AAB (28) ROLAND BERGER (211) ROLAND BERGER (212) AVICENNE AAB 215 AAB (212) Source : International Battery Conference, Fort Lauderdale 27, 28, 29, 21 & 211 3

4 Tons $/Wh Million Units / year Million Units/Year THE BATTERY MARKET IS REALLY DYNAMIC Cellular Phones sold per Year (Million) 3 Li-ion 2 NiMH Tons of cathode active materials Portable PC sold per Year (Million) Li-ion 195 M Tablets 165 M Portable PCs Li-ion 1865 cell price ($/Wh) 2,6, Source: AVICENNE ENERGY, : AVICENNE Estimation 4

5 MWh THE WORLDWIDE BATTERY MARKET Lithium Ion Battery: Highest growth & major part of industry investments Others (Flow battery, NAS, ) Li-ion NiMH Source: AVICENNE ENERGY, : AVICENNE Estimation 5 NiCD

6 MWh MWh THE WORLDWIDE BATTERY MARKET Lithium Ion Battery: Highest growth & major part of the investments Lead acid batteries: By far the most important market (9% market share) Others (Flow battery, NAS, ) Li-ion NiMH NiCD Lead Acid Source: AVICENNE ENERGY, : AVICENNE Estimation 6

7 Billion US $ Billion US$ THE WORLDWIDE BATTERY MARKET BILLION US$ in 216 Pack level 1 5% AVERAGE GROWTH PER YEAR (2-216) Others (Flow battery, NAS, ) Li-ion NiMH NiCD Lead Acid OTHERS AUTOMOTIVE INDUSTRIAL E-BIKES POWER TOOLS PORTABLE SLI SLI: Start light and ignition batteries for cars, truck, moto, boat etc PORTABLE: concumer electronics (cellular, portable PCs, tablests, Camera, ), data collection & handy terminals, POWER Tools: power tools but also gardening tools 1- Pack: cell, cell assembly, BMS, connectors Power electronics (DC DC converters, invertors ) not included INDUSTRIAL MOTIVE: Forklift (95%), others STATIONARY: Telecom, UPS, Energy Storage System, Medical, Others (Emergency Lighting, Security, Railroad Signaling,, Diesel Generator Starting, Control & Switchgear, AUTOMOTIVE: HEV, P-HEV, EV OTHERS: Medical: wheelchairs, medical carts, medical devices (surgical power tools, mobile instrumentation (x-ray, ultrasound, EKG/ECG, large oxygen concentrators Source: AVICENNE ENERGY, : AVICENNE Estimation 7

8 THE WORLDWIDE BATTERY MARKET IN 216: US $ 65 BILLION EV, E-Bus Portable SLI Others Marine Medical devices Seismic ESS UPS Telecom Other Motive Forklift Power Tools E-Bikes US $ 22,8 Billion for other applications 1- Pack level: Pack including cells, cells assembly, BMS, connectors Power electronics (DC DC converters, invertors ) not included Lead Acid LIB Others Other Applications Marine Medical devices Seismic ESS UPS Telecom Other Motive Forklift Power Tools Source: AVICENNE ENERGY, : AVICENNE Estimation 8 E-Bikes

9 Million cells WORLDWIDE BATTERY SALES BY CHEMISTRY, UNITS, The worldwide rechargeable battery market, Million cells, Which cell are we talking about? Front Edge Technology, Inc NiCd NiMH Li-ion GS Yuasa International / Lithium Energy Japan Source: AVICENNE ENERGY, : AVICENNE Estimation 9

10 MWh WORLDWIDE BATTERY SALES BY CHEMISTRY, MWH, The worldwide rechargeable battery market, in volume, MWh, (CAGR): +17% NiCd: -3% per year NiMH: +1% per year Li-ion: +22% per year Li-ion NiMH NiCd Source: AVICENNE ENERGY, : AVICENNE Estimation 1

11 M$ WORLDWIDE BATTERY SALES BY CHEMISTRY, M$, The worldwide rechargeable battery market, in value, M$, (1) CAGR):+13% NiCd: - 6% per year NiMH: + 2% per year Li-ion: +16% per year Li-ion NiMH NiCd - (1) Cell level Source: AVICENNE ENERGY, : AVICENNE Estimation 11

12 Lithium-Ion EACH BATTERY TECHNOLOGY HAS ITS SPECIFIC ABSOLUTE ADVANTAGES Advantage...On of... Lead Acid Lead Acid Nickel Cadmium NiCd energy density Operating temperature Self discharge rate Reliability (progressive extinction) Nickel Metal Hydride Lithium-Ion NiMH Conventional Laminate Gravimetric energy density Volumetric energy density Self discharge rate Gravimetric energy density Volumetric energy density Voltage output Self discharge rate Gravimetric energy density Volumetric energy density Self discharge rate Design characteristics Nickel Cadmium NiCd Higher cyclability Voltage output Price Gravimetric energy density Volumetric energy density Gravimetric energy density Volumetric energy density Voltage output Self discharge rate Gravimetric energy density Volumetric energy density Self discharge rate Design characteristics Nickel Metal Hydride NiMH Higher cyclability Voltage output Price Operating temperature range Higher cyclability Self discharge rate Price energy density Operating temperature Higher cyclability Voltage output Self discharge rate Gravimetric energy density Volumetric energy density Operating temperature Self discharge rate Design characteristics Conventional Laminate Absolute advantages Higher cyclability Price Safety Recyclability Higher cyclability Price Higher cyclability Price Operating temperature range Higher cyclability Price Safety Recyclability Operating temperature range Higher cyclability Price Operating temperature range Price Price Safety Discharge rate Recyclability Volumetric energy density Higher cyclability Price Volumetric energy density Operating temperature range Higher cyclability Gravimetric energy density Volumetric energy density Self discharge rate Voltage output Gravimetric energy density Volumetric energy density Design characteristics Safety Price energy density Self discharge rate Voltage output Design characteristics Source: AVICENNE ENERGY, : AVICENNE Estimation 12

13 JAPANESE, CHINESE & KOREAN MARKET SHARE Japanese market share (value) decreasing: from 84 % of the market in 2 to < 3% in 216 9% 8% 7% 6% 5% 4% 3% 2% 1% % Battery (1) market by country Japan Korea China 8% 7% 6% 5% 4% 3% 2% 1% % LIB market by country Japan Korea China (1) Excluding lead acid batteries Source: AVICENNE ENERGY, : AVICENNE Estimation 13

14 NICD BATTERY: MARKET SHARE IN 216 IN VOLUME WORLDWIDE The worldwide NiCd battery market Company market share in 216 in volume 83 M cells In volume In value BYD 36% GOLD PEAK 4% SAFT 6% OTHERS 6% GOLD PEAK 4% SAFT 8% Source: AVICENNE ENERGY, 217 BYD 24% OTHERS 15% SANYO- PANASONIC 39% SANYO- PANASONIC 58% SANYO-PANASONIC is leading Companies the market Million cells SANYO-PANASONIC 32 SAFT 5 GOLD PEAK 4 BYD 3 OTHERS 12 TOTAL 83 Fumio Ohtsubo (Panasonic) & Seiichiro Sano (Sanyo) January 8th, : AVICENNE Estimation 14

15 NICD IN 216 MAIN APPLICATION: POWER TOOLS 83 M cells 225 MWh CAGR 26/ M$ 1-3% per year in volume NiCd by application worldwide, % in value, 215 Security lighting 11% Others 18% Power Tools 71% -6% per year in value All the applications are decreasing Competition with NiMH & Li-ion New application (?) Energy storage Note: 1 Portable applications, power tools and emergency lighting only: industrial application as well as energy storage are excluded Source: AVICENNE ENERGY, 217 ABB Inc., Fairbanks, Alaska, 27 MW/15 minutes 216: AVICENNE Estimation 15

16 NIMH BATTERY: MARKET SHARE IN 216 WORLDWIDE The worldwide NiMH battery market Company market share in 216 in volume 12 M cells OTHERS 1 17% 2% 8% 11% 4% 24% 16% The worldwide NiMH battery market Company market share in 216 in value 115 M$ 4% 5% 8% 12% OTHERS 9% 62% 1 Note: 1 PEVE: Primearth EV Energy (PEVE) The company was known as Panasonic EV Energy Co until 2 June 21. The company was formed in 1996 as a joint venture between Toyota and Panasonic, with Panasonic holding 6% of the capital. Panasonic sold 4.5% of the company to Toyota. PEVE is the supplier of the NiMH battery packs for Toyota s hybrids, as well as for Honda (Civic hybrid and first generation Insight) hybrids. The company also provides the NiMH prismatic battery modules for the General Motors ² Japan's Sanyo Electric Co sold part of its battery operations to FDK Corp a Fujitsu Ltd unit, for 6.4 billion yen ($7 million) to satisfy antitrust regulators ahead of its planned takeover by Panasonic Corp at the end of 29. Source: AVICENNE ENERGY, 216 Note: Market in value at the cell level 1,45 B$ at the pack level 16

17 M$ % of HEV battery in NIMH revenues NIMH IN 216 MAIN APPLICATION: HYBRID VEHICLES 1 2 M cells 2 7 MWh CAGR 26/ B$ (1) +2% per year in Volume NiMH battery market worldwide in value % for HEV application % 7% 6% 5% 4% 3% 2% 1% % +2% per year in value NiMH battery by applications, worldwide, % in value, 216 HEV 7% Portables, retails 3% Others HEV % of HEV in NiMH sales (1) Cell based market 1,45 B$ at the pack level Source: AVICENNE ENERGY,

18 LI-ION BATTERY: MARKET SHARE IN 215/216 WORLDWIDE The worldwide Li-ion battery market Company market share in 216 in volume (small cells only) 5675 M cells 3% The worldwide Li-ion battery market Company market share in 215 in value (1) 18,4 B$ (Estimated at B$ 2,6 in 216) Others Others 9% 13% 19% 24% 5% 9% 5% 9% 19% 8% 7% 6% 9% 6% 13% 16% Others for Small cells: Chinese suppliers like First new Energy, Zhuoneng, Tenpower, DLG For Auto market: CALB, Microvast, Guoxuan, Optimum Nano, Wanxiang, and many others (1) Cell level. LIB battery pack market: > 2 B$ in 215 and 24,4 B$ estimated for 216 Source: AVICENNE ENERGY Analyses

19 Million cells / Year MAJOR LI-ION MANUFACTURERS YEARLY PRODUCTION Samsung SDI & LG Chem are growing very fast SDI LG Chem Panasonic Panasonic acquired Sanyo in Dec 29 Source: AVICENNE ENERGY Analyses 216 BYD SONY COSLIGHT ATL LISHEN BAK 19

20 Million cells CYLINDRICAL LI-ION BATTERY (SMALL CELLS) In 216, TESLA demand represent more than 2% of the Cylindrical cells demand Cylindrical LIB market Company market share in 216 in volume: 233 Million cells (+6%) Others Panasonic for SANYO-PANASONIC, SDI & LG will share the market cells for Portable PC & others 1865 for TESLA Assumptions: TESLA sold 35 kev in 214, 55 kev in 215 and 1 kev in 216 Key success factor Production speed (-> cost) Performances Customer (Portable PCs) access Production Speed: ,8Ah cells PANASONIC SDI LG 2 ppm 1 3 ppm 22 ppm Cylindrical cells (M) by mfg PANASONIC-SANYO PANASONIC - TESLA Sony SDI LG Others Ah / min Note: 1 ppm: piece per minutes Source: Interviews with LG, SAMSUNG, SANYO-PANASONIC, AVICENNE Energy Analyses

21 PRISMATIC LI-ION BATTERY (SMALL CELLS) Prismatic LIB market Company market share in 216 in volume: 98 Million cells (-8%) Prismatic cells (M) by Mfg. : SAMSUNG is leading Others Source: AVICENNE ENERGY Analyses 216 Panasonic-Sanyo SDI LG BYD LISHEN BAK OTHERS 21

22 LI-LAMINATE BATTERY (SMALL CELLS) Laminate battery market Company market share in 216 in volume: 2 35 Million cells (+7%) Pouch cells (M) by Mfg. SONY, ATL and SAMSUNG are leading this market Others 15% 15% % 15 23% 1 15% 17% Source: AVICENNE ENERGY Analyses Panasonic-Sanyo Sony SDI LG BYD LISHEN BAK ATL Others 22

23 M Wh LI-ION IN MAIN APPLICATIONS +78 MWh M$ (1) M small cells CAGR 26/ % per year in Volume 9 8 Li-ion Battery sales, MWh, Worldwide, : < 2GWh Portable Electronics 17% Phones 17% 7 Others (1) Cell level Others: medical devices, power tools, gardening tools, e-bikes Source: AVICENNE Energy 216 Industrial, ESS Auto, E-bus China Auto, e-bus Excl. China Electronic devices Electronic devices 4% Auto, E-bus Excl. China 13% Portable PC 66% 216: 78 GWh Auto, E-bus China 3% Others 11% Industrial, ESS 6% 23

24 M$ M$ LI-ION IN MAIN APPLICATIONS +78 MWh M$ (1) M small cells CAGR 26/ % per year in Volume Cell: +15,5% per year in value Pack: +16% per year in value 25 Li-ion cells M$, Worldwide, Li-ion Packs M$, Worldwide, Others Industrial, ESS Auto, E-bus China Auto, e-bus Excl. China Electronic devices - Others: medical devices, power tools, gardening tools, e-bikes Source: AVICENNE Energy

25 M cellular phones/year CELLULAR PHONES MARKET > 2 M LIB CELLS IN M cell phones sold in 215 (+4% CAGR) NOKIA SAMSUNG APPLE Xiomi MOTOROLA / LENOVO Source: AVICENNE Energy 216 NOKIA LG MOTOROLA / LENOVO LG Huawei SAMSUNG APPLE Huawei Xiomi Samsung Galaxy & I-phone change the game RIM 3% ZTE 4% APPLE 5% M Phones LG 6% Others 28% Lam. 55% 215 > 2 M Phones Huawei 5% Others 44% ZTE 3% APPLE 11% Nokia 28% Samsung 21% Xiaomi 3% LG 4% Pris. 45% LIB cell format (Volume) 215 Motorola 3% Sony- Ericsson 2% Nokia 6% Motorola 4% Samsung 2% 25

26 M cells / Year CELLULAR PHONES/LIB SUPPLIERS RELATIONSHIPS 215 Cellular Phone makers / battery suppliers relation XIAOMI ZTE APPLE LG Chem Samsung Nokia APPLE needs in 215 TOTAL Mac IPad iphone ipod % 2% 4% 6% 8% 1% Panasonic Sony SDI LGC % 2% 4% 6% 8% 1% ATL SDI LG SONY LISHEN PANASONIC Source: AVICENNE Energy 216 M cells Smartphones ie laminate LIB increasing Battery market for cellular phones worldwide, 2-215, in Volume (M cells) LIB La. LIB Pr. NiMH 26

27 % of Portable PC sold M Portable PC/year PORTABLE PC MARKET 96 M LIB CELLS IN M portable PCs sold - 214/215: -5% Market outlook % 3% 2% 1% -1% -2% Note: Excluding Tablets & convertible or hybrid portable PC + tablets Source: AVICENNE Energy 216 % Dell HP Toshiba Acer Lenovo Asus APPLE Others Growth/years Uncertain macro & weakness in both consumer & commercial growth No sign for end-customer demand recovery Decrease due to cannibalization by tablets Small overall decrease only thanks to Emerging market growth Increase of Ultra-thin Portable PCs 1% 8% 6% 4% 2% % Lam. 22% Cyl. 78% LIB cell format (Volume) in 15in 14in 13in 11-12in Netbook 27

28 Average Price (US $) M tablets /year TABLET MARKET > 5 M CELLS IN 215 Tablets sold (Million) - Apple leadership Market Outlook Source: Gartner, IDC, Display search Others 215: Asus 8 M, Lenovo 11 M, Amazon 5,2 M Others Samsung Apple ASP tablets drop From $636 in Q4 21 to < 3 $ in Q Lam. 1% LIB cell format (Volume) 215 Decrease in 215 (-1%), and 216 (-6%) Market driven by mature market (77%) consumer market (9%) Apple (27%), Samsung (17%), Asus (5%), Acer, Lenovo, Amazon are the key competitors Increasing part of convertible (Tablets+PC): 16,6 M in 215 (8 % of the market) Q4 21 Q4 211 Q4 212 Q4 213 Q4 214 Q4 215 ipad Non i-pad Total Source: AVICENNE Energy

29 POWER TOOL MARKET LIB DEMAND IS GROWING Power tools market is growing Power Tools (Million/year) Power tools suppliers Power tools maker market share (215) Metabo 7% OTHERS 3% Sumec 9% TTI 13% B&D 14% Makita 12% Bosch 15% Cyl.; 1% LIB cell format (Volume) 215 Others: Jingding (3.6 M), Panasonic (.5 M), Hitachi (2.4 M), Hilti (2M) LIB penetration in power tools % of power tools equiped with LIB 6% 4% 2% % Source: AVICENNE Energy 216 Power tools maker battery choice HILTI Jingding Sumec TTI Bosch % 2% 4% 6% 8% 1% M power tools NiCd NiMH Li-ion 29

30 M cells /year LIB BATTERY SHORT TERM TRENDS 1865 battery capacity* Cellular phones battery capacity 1% 8% 6% 4% 2% % *1C rate or laptop type 1865 cells Cylindrical/Prismatic/Laminates > 3Ah 2,8Ah 2.6Ah 2.4Ah 2.2Ah 2.Ah 1.8Ah <=1.6Ah Li-ion Cyl Li-ion Pr Laminate Li-ion Cyl excl Tesla Li-ion cylindrical: Tesla impact : 18 M cells in 213, 3M in 214, 43 M in 215 and 6 M cells in 216 (Avicenne Assumptions) 1% 8% 6% 4% 2% % Cylindrical/Prismatic/Laminates in 216 1% 8% 6% 4% 2% % Cylindrical Prismatic Laminates > 18 mah 16 mah 14 mah 12 mah 1 mah 8 mah Source: AVICENNE Energy 216 Others TESLA E-bikes Power Tools Tablets Portable PCs Cellular 3

31 1Q 9 4Q 9 3Q1 2Q 11 1Q 12 4Q 12 3Q13 2Q 14 1Q 15 4Q 15 M cells /month M cells /Year Over supply Ratio BATTERY PRICE IS DECREASING In 1 Years 8% price decreasing despite a fluctuating Co price Source: UMICORE, march 211 Cylindrical Production capacity 9/11: from 15 to 25 M cells/month Source: AVICENNE Energy 216 BAK ATL Lishen E-One LG SDI Average LIB cell price ($/Wh) 1,,8,6,4, oversupply ratio is decreasing thanks to TESLA Cylindrical Prismatic Laminate Standard Demand Production Capacity TESLA Oversupply ratio 5% 4% 3% 2% 1% % 31

32 Production cost LIB: THE BIGGEST PART OF THE COST IS RAW MATERIALS RAW MATERIALS ACCOUNT FOR 5 TO 7% OF LIB CELLS BUSINESS RAW MATERIAL COST IMPACT DRASTICALY ON THE BATTERY MAKERS PROFIT LIB Cost structure for TESLA & 4 Ah EV pouch cell NMC 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Operating profit Proces Yield Depreciation SGA, overhead R&D Utility Labor Material Note: Average mix of cylindrical, prismatic & laminate cells Sources: AVICENNE ENERGY 217 Average cost structure of Li-ion cell in 216 Overheads 3% Sales & Adm 3% R&D 6% Direct labor 4% Energy, utilities 4% Warranty 3% Depreciation 14% Margin 7% Other materials 11% Cell Process Yield, Scraps 4% Cathode cost 22% Separator 7% Anode cost 6% Electrolyte 6% 32

33 LI-ION VALUE CHAIN MARKET DEMAND CATHODE 184 OOO T in 216 Revenues: 4 B$ CAGR 6/16: +22% CELL MANUFACTURERS PACK MANUFACTURERS ANODE >88 T Revenues:,9 B$ CAGR 6/16: +12% ELECTROLYTE >86 T Revenues: 1,1 B$ CAGR 6/16 : 19% Revenues: 2,6 B$ Gross margin: <1% Revenues: >24,4 B$ Gross margin: <1% SEPARATOR 1 3 M m² Revenues: 1,3 B$ CAGR 6/16 : 18% ANCILLARY Revenues: 1,3 B$ Sources: AVICENNE ENERGY

34 $/kg LIB CATHODE MATERIAL Cathode raw materials market (1) M= Fe or Mn LiCoO2 (LCO) LiMn2O4 (LMO) LiMPO4 (1) (LFP) Li[NixMnyCoz]O2 - NMC Li[NixCoyAlz]O2 NCA Source: SANYO, March Ni & Co price Ni Co 5 Source: Mitsubishi, Batteries 212 Nice Source: LME 34

35 Tons CATHODE ACTIVE MATERIALS NEEDS Cathode active materials for LIB in Tons, (Demand) LEADERS: NEW ENTRANTS ON THE FIELD: LFP ( ) LMO NCA NMC LCO Rationales In 216, LCO is used in pouch cells for electronic devices: smartphones, tablets, ultra thin portable PCs NMC is used in other electronic devices & xev NCA is used by 1865 Panasonic cells in Tesla cars and as a blend with LMO in other xev LMO is mostly used as a blend with NMC in xev LFP is used in xev, e-buses in China and for industrial applications 35

36 $ / kg Tons LCO DEMAND: CAGR :+5% LCO demand details LCO Offer in 215 Others Industrials E-bus xev China xev Power Tools, E-bikes Other Electronics Portable PCs Smart Phones, Tablets LCO: Tablets, Smartphones Shan Shan Others 9% 2% Other China 8% PULEAD 9% L&F 15% Internal 2% Nichia 9% Umicore 15% Reshine 15% B&M 1% Easpring 6% LCO Price forecasts Material Others Assumption: : Co price 28$/kg Lithium carbonate 1 $/kg LCO summary of outlook Demand: LCO was used in most of the pouch cell lithium ion batteries for electronic devices like smartphones & tablets. Most OEM (Samsung, Apple, etc..) confirm that LCO will be the first choice for the future. Then, for portable PCs, penetration of LCO will increase thanks to thinner high end portable PC using pouch cells. LCO will not be used in large format cells where NMC is preferred. Price: if the metal price are stable from 216 to 225, small cost decrease thanks to scale economy. Suppliers: Umicore, L&F, and main Chinese (Pulead, ShanShan, Reshine) will keep the lead. Not sure that Nichia will stay at the top. Sources: AVICENNE ENERGY

37 $ / kg Tons NMC DEMAND: CAGR : +15% NMC demand details IND ELEC NMC Offer in 215 Others Industrials E-bus xev China xev Power Tools, E-bikes Other Electronics Portable PCs Smart Phones, Tablets NMC Price forecasts 4 3 NMC: Electronics, EV, others Kelong Easpring 4% 4% Xiamen Tungsten 8% Jinhe 9% Others 12% KLK 2% NMC evolution Tianjiao 3% ShanShan 11% % NMC 532 NMC 622 NMC 811 NMC Assumption: : Co price 28$/kg Lithium carbonate 1 $/kg - Ni 12$/kg NMC summary of outlook OTH AUTO 1% 5% L&F 6% Nichia 9% Umicore 15% Demand: Except xev in China, NMC is driven by xev: Nissan will switch from NCA-LMO to NMC for example. Then, Toyota, Mitsubishi, Honda all choose NMC. From 212 to 216 the clear trend was to switch from LMO-NMC 75/25 to LMO-NMC 25/75. LG, Panasonic and Samsung agreed that NMC will be the 1 st choice for xev first in Japan, US and Europe, and then, in 22 in China. Price will decrease thanks to process manufacturing improvement. Suppliers: Umicore, L&F, and main Chinese (ShanShan) will keep the lead. LG and Samsung will outsource more (Internal part will decrease). As new entrant, BASF try to be on this market since 211. There market share may increase. Internal 17% Sources: AVICENNE ENERGY

38 $ / kg Tons NCA DEMAND: CAGR : +11% ELEC NCA demand details NCA Offer in 215 NCA Price forecasts Others Industrials E-bus xev China xev Power Tools, E-bikes Other Electronics Portable PCs Smart Phones, Tablets NCA evolution Assumption: : Co price 28$/kg Lithium carbonate 1 $/kg - Ni 12$/kg NCA summary of outlook NCA: Tesla OTH IND Material Others AUTO Ecopro 5% Nihon Kagaku Sangyo 13% Others 8% Sumitomo 58% Toda Kogyo 16% Demand: NCA are also used in electronic devices, in prismatic and cylindrical cells. Main NCA users in electronic devices are Panasonic, Sony and Samsung. They will keep using NCA but LCO will stay the first choice. Panasonic and Samsung confirm that they supply more and more power tools mfg with NCA (from 15% in 215 to 25% in 225). Other NCA usage is of course for the TESLA. We do not think TESLA will switch for another technology in the next years. Price decrease thanks to better mfg. process Supplier: Sumitomo will keep the lead thanks to Panasonic / Tesla. Toda Kogyo market share will probably increase thanks to BASF partnership. Sources: AVICENNE ENERGY % 5% % Ni 9% Ni 87% Ni 83%

39 $ / kg Tons LFP DEMAND: CAGR :+8% OTH LFP demand details LFP Offer in 215 Others Industrials E-bus xev China xev Power Tools, E-bikes Other Electronics Portable PCs Smart Phones, Tablets LFP: Industrial, E-Bus 1 IND AUTO E- BUS Tatung 3% Zhuoneng 8% Others 21% INTERNAL 36% Pulead JOHNSON 9% MATTHEY STL ALEEES 8% 8% 7% Internal: BYD, Hefei Guoxuan High Tech Power source (Gxgk), Huanyu Power Source Co., Ltd., LG, A123 (Wanxiang EV Co., Ltd), Hi Power - Others: Hunan Haorun Technology, Henan Tianke, Likai, Tiehu Energy and many others LFP Price forecasts Material Others Assumption: : Lithium carbonate 1 $/kg LFP summary of outlook LFP demand is driven by xev, E-Bus in China, e-bikes and Stationary application. Chinese industrial agreed that E-bikes, e- bus and stationary app will use LFP for the next 1 years. The cost and the life time are the main criteria and Energy density is not so important. Then, Chinese xev mfg. (BYD, Kandi, Zotye, Baic, Chery ) told us that they will switch from LFP to NMC. Price: Process manufacturing cost will decrease. Pulead forecast 11-12$/kg in 225. Suppliers: Pulead will probably increase market share thanks to new contract with BYD and others Chinese battery mfg. Sources: AVICENNE ENERGY

40 $ / kg Tons LMO DEMAND: CAGR :+1% OTH LMO demand details AUTO LMO Offer in 215 Others Industrials E-bus xev China xev Power Tools, E-bikes Other Electronics Portable PCs Smart Phones, Tablets LMO: AUTO IND E- BUS Mitsui 12% POSCO ESM 12% Reshine 9% Others 18% Nichia 5% ShanShan 9% Nippon Denko 4% Qyanyun 14% Yuan Yuan 5% JGC 12% LMO Price forecasts Material Others Assumption: Lithium carbonate price $/kg LMO summary of outlook Demand: LMO is almost never the first choice for Lithium ion cathode. But, LMO is low cost and bring stability to the cathode. LMO is used in power tools and will be used, blended with NMC. So, for the future, LMO demand will be mostly driven by NMC/LMO blended cathode used in EV worldwide, EV in China to replace LFP (22) and later E-bus in China (225). Price: LMO price decreased a lot from 21 to 215. We think we almost achieve the lowest possible level. Suppliers: Most of the supply will stay in China (ShanShan, Qyanyun, ). Sources: AVICENNE ENERGY 217 4

41 Tons CATHODE ACTIVE MATERIAL FORECASTS Cathode active materials Tons % 7% 6% 5% 4% 3% 2% 1% LCO NMC NCA LMO LFP China (%) ASSUMPTIONS: Portable devices: : +6% per year in volume HEV: 4,8 M HEV/year in 22-35% LIB, 6,8 M HEV in 225 9% LIB P-HEV:,4 M P-HEV/year +,5 M in China in 22,,6 M in M in China, 1% LIB EV:,6 M EV/year in M in China, 1M/year + 1,5 M in China in 225, 1% LIB Industrial & stationary: : +16% per year % Cathode active materials in 216 > 18 Tons LFP 36% LMO 8% NCA 9% LCO 21% NMC 26% Cathode active materials in Tons LMO 9% LFP 24% NCA LCO 16% NMC 41% 1% Assumption: Tesla keep NCA chemistry and have a relative success (2 EV sold per year in 225 TESLA forecast 5 ) 41

42 Tons ANODE ACTIVE MATERIALS > 88 TONS IN 216 LIB Anode Materials Source: A. Jossen, IRES 27 LIB Anode Materials 1,5 1,,5, Source: Sanyo, March 213 Source: Hitachi Chemical LIB Anode market, (Tons) LTO Si or Sn Type Amorphous Carbon Artificial Graphite Natural Graphite Sources: AVICENNE ENERGY

43 ANODE FOR LIB IN 216 Natural graphite become a commodity Hard Carbon Soft Carbon Graphite Capacity (/g) 4 mah/g 25 mah/g mah/g Capacity (/cc) ++ + Power ++ + Stability ++ + Cyclability Source: Hitachi Chemical ++ + Carbon for LIB anodes by type (216) Artificial Graphite 43% Natural Graphite 46% Amorphous 7% Si or Sn LTO 2% Type 2% Precursors COST 215->22 Petroleum Pitch, Resin, cellulose, wood, coconuts Petroleum coke Natural or petroleum coke 25 -> 2 $/kg 2->15 $/kg 7-13-> 6-1 $/kg SUPPLIERS KUREHA HITACHI HITACHI BTR LEADERS: NEW ENTRANTS ON THE FIELD: Sources: AVICENNE ENERGY 217 ( ) 43

44 $ / kg Tons NATURAL GRAPHITE: CAGR : +3% Natural Graphite demand details NG Offer in Others POSCO 16% Chemtech 4% Nippon Carbon 4% Mitsubishi 16% HITACHI 11% Shenzhen BTR 49% OTHERS 35% Typical Product D 5 = 16 mm 35 mah/g 5% irreversible cap. BET: 1m²/g CHINA 65% NG Price forecasts Sources: AVICENNE ENERGY 217 NG summary of outlook Demand: small growth because new app. Need artificial Gr. This demand may change if the price decrease is more important for NG compare to AG. Price: The price will decrease fast because the supply is huge. Already over supply in China ( Capacity: BTR 3 Tons, Zichen: 1 Tons, Shinzom: 1 Tons, Sinuo: 8 Tons, Qingdao: 8 Tons, Jianxi Zhentuo: 7 Tons, Kimwan: 5 Tons ). Then, a lot of new projects in China and Canada: Focus Graphite > 4 Tons/year (22*), Northern Graphite > 2 Tons/year (after 218*) Syrah Resources Ltd. > 8 Tons (22*) Suppliers: BTR and new Chinese (Zichen thanks to ATL, - Shinzom thanks to BYD, CATL Sinuo etc ). New entrant like Focus Graphite, Northern Graphite, or Syrah Resources Ltd. May change the market share in the future * Subject to financing 44

45 $ / kg Tons ARTIFICIAL GR.:CAGR : +15% Artificial Graphite demand details Artificial Graphite Offer in Showa Denko 5% JFE 11% Mitsubishi 9% Others 6% Shanshan 38% HITACHI 31% OTHERS 55% CHINA 45% Typical Product D 5 = 2 mm 365 mah/g 1-5% irreversible cap. BET:,5m²/g Artificial Graphite Price forecasts Sources: AVICENNE ENERGY 217 Artificial Graphite summary of outlook Demand: The demand will increase fast thanks to xev market. Long life time requirement involve high level of purity and high consistancy, difficult to achieve with Natural Graphite. Price will decrease fast thanks to better process efficiency, new process Supply: Thanks to the best quality, Hitachi will keep the lead but Chinese main suppliers market share will increase (ShanShan mostly). Production Capacity: Hitachi: 15 Tons, ShanShan: 15 Tons project in Lingang Park (Shanghai) to add 2 Tons/year, Mitsubishi: 7 Tons, JFE: 7 Tons, Showa Denko: 3 Tons 45

46 LIB SEPARATOR MARKET 216 In February 215, ASAHI announced that they will acquire all Polypore shares in the Energy Storage segment: Asahi Kasei to pay around $2.2billion to purchase Polypore s battery separator business LIB separator market, M$ - CAGR 26/216: +13% Supplier, market share in Jinhui 4% W-Scope 6% ASAHI 17% 1 8 Others 19% TORAY 15% Senior 3% Green 3% UBE CELGARD 6% 8% SK 9% ENTEK 4% SUMITOMO 6% Sources: AVICENNE ENERGY 217 M$ Mm² Others: Shanghai Energy, Newmi, JGP, TDK, In house (BYD), Mingzhu, Tianfeng, Yiteng, BNE 46

47 Tons ELECTROLYTE SUPPLIERS/CUSTOMERS > 86 TONS IN 216 LIB electrolyte market, Tons, CAGR 26/216: +26% LIB electrolyte supplier, market share in Portables electronics Power Tools Soulbrain 5% Shanshan 8% Capchem 14% TINCI 6% Jinniu 8% Others 5% Mitsui 3% Ube 4% Mitsubishi 12% Zhangjiagang Guotai- Huarong 15% In-House 9% Tomiyama 3% PANAX-ETEC 8% E-bikes Auto & E-Bus China Sources: AVICENNE ENERGY 217 Automotive (12v, HEV, PHEV, EV) Industrial Note: (1) GTHR: Zhangjiagang Guotai-Huarong 47

48 BATTERY MARKET FORECASTS Applications covered Parameters analysis Portable PCs, net-book, Ultra-book Cellular Phones, Smart-phones Tablets Camcorders Cordless Tools, Gardening tools Digital Camera Games, MP3 Cordless Phones Shavers, Toothbrush, RC Cars E-bikes Power tools Security lighting Vehicles: HEV, P-HEV, EV Industrial motive (forklift) Industrial stationary (UPS, Telecom) Medical Energy Storage (Small / large) Main segment trends Power need trends (volume, weight, capacity, running time) Penetration rate for each Chemistry, each form factor, Forecasts OEM strategies and positions Main drivers & limiters 48

49 PORTABLE ELECTRONIC DEVICES FORECASTS Cellular phones demand (M Units) CAGR : +4% 4 OTHERS INDIA 3 ASIA 2 CHINA JAPAN 1 EUROPE - USA Cellular Phones market Drivers Emergent market Renewal ratio increase Smartphone penetration increase LIB cells demand Polymer penetration: 2% -> 75% 1% 8% 6% 4% 2% % Source: AVICENNE ENERGY Analyses Polymer Prismatic LIB cells for cellular phones trends Laminates ratio increase Increase of Thickness Increase of >14 mah capacity 49

50 PORTABLE ELECTRONIC DEVICES FORECASTS Portable PCs demand (M Units) Almost stable 2 1 Emerging Mature Portable PCs market trends Lam. 24% Cyl. 76% Mature market stable or decreasing Growth driven by Emerging market Ultrabook is increasing ASP decreasing (<499$ Portable PCs increase from 25% in 21 to 4% in 215 Excluding Tablets and convertibles (Tablets + PC) Source: IDC, Gartner, AVICENNE Energy LIB cells demand Polymer penetration: 2% -> 4% 1% 8% 6% 4% 2% % Source: AVICENNE ENERGY Analyses Laminate Prismatic Cylindrical LIB cells for portable PCs trends Thinner cells Pouch cells penetration increasing from 7% in 21 to 4% in 225 > 28 mah for Premium/corporate 2.2 Ah for consumer, emerging market 5

51 MWh M cells/year 225 LIB FORECASTS FOR PORTABLE ELECTRONIC DEVICES LIB market, MWh, by application (3C) CAGR 16-25: + 6% Otherr Portable Electronics Tablets Portable PCs Cellular Phones LIB market, M cells, by form factor (3C) Source: AVICENNE ENERGY Analyses Li-P Li-ion Pr Li-ion Cyl Takeshita - March 213 (1) (1) Source: Takeshita, Battery Japan 213 BJ-3 conference Slide p 4 51

52 X-EV MARKET Why x-ev? Definition & segmentation X-EV worldwide in 215 By country By car makers By battery chemistry X-EV forecasts AVICENNE ENERGY & other analyst forecasts Battery chemistry forecasts Battery cost forecasts X-EV battery forecasts 52

53 CO2 Emission (g/km) Crude Oil Price - $ / Barrel Gasoline Price $/Gallon WHY X-EV? MAJOR DRIVER: CO 2 regulation worldwide: From 213 to 214 Oil price decrease but HEV sales increase by 5%, P-HEV by 3% and EV by 6% Europe USA Japan China Price of the WTI 1 barrel of oil, US $ Petroleum consumption worldwide Million barrel per day ,5 3 2,5 2 1,5 1,5 Source: Source: Energy Information Administration, US Government Note 1 53 WTI: West Texas Intermediate

54 HEV, P-HEV & EV DEFINITION & SEGMENTATION EV & HEV MARKET EV 25 kwh HEV.6-2 kwh batteries P HEV 1 kwh batteries MICRO HEV* MILD HEV MEDIUM HEV FULL HEV CITROEN C2, C3 BMW 3Series Fiat 5 Hyundai i1 Hyudai i3 Kia Smart for2 Toyota Yaris Toyota Auris VW Passat.. GM Saturn Vue GM AURA GM MALIBU HONDA ACCORD HONDA CIVIC INSIGHT MERCEDES S4 Note: Micro HEV are not in the HEV statistics & HEV forecast TOYOTA PRIUS TOYOTA CAMRY FORD ESCAPE FORD FUSION MILAN GM YUKON GM TAHOE NISSAN ALTIMA Fuel saving Vs. Cost EV 1% 5% P-HEV % HEV $ 5 $ 1 $ 15 $ 54

55 HEV sales per year Gasoline $ / Gallon Million Penetration of HEV HEV WORLDWIDE IN 216 1,8 M HEV HEV sold per year, M units, worldwide, , 1,8 1,6 1,4 1,2 TOYOTA OTHERS Penetration of hybrids in the global sales, % 2% 1% % Growth : +2% From 1,8 M to 1,84 M HEV JAPON USA EUROPE 1,,8,6,4,2, Gazoline price impact on HEV market in the US Source: TOYOTA, HONDA, NISSAN, FORD, GM, HYUNDAI, MERCEDES, GM, BMW, VW, PORSCHE Compilation AVICENNE ENERGY Micro hybrid not included 55

56 HEV sold HEV WORLDWIDE IN 216 BY CAR SUPPLIER Total HEV Vehicles 1,8 Million HEV in 216 NISSAN 3% FORD 4% HYUNDAI VW KIA 1% 3% OTHERS 4% HEV sold per year, M units per car manufacturers, TOYOTA HONDA 15% TOYOTA 7% HONDA Others: GM, Porsche, Mercedes, Mazda, Audi, Subaru etc TOYOTA HONDA Source: TOYOTA, HONDA, NISSAN, FORD, GM, HYUNDAI, MERCEDES, GM, BMW, VW, PORSCHE Compilation AVICENNE ENERGY Micro hybrid not included 56

57 HEV sold HEV sold HEV WORLDWIDE IN 216 BY CAR SUPPLIER TOP 2: TOYOTA, HONDA OTHERS: FORD, VW, HYUNDAI, HONDA TOYOTA HYUNDAI FORD NISSAN VW GM TOYOTA HONDA FORD GM HYUNDAI NISSAN VW Source: TOYOTA, HONDA, NISSAN, FORD, GM, HYUNDAI, MERCEDES, GM, BMW, VW, PORSCHE Compilation AVICENNE ENERGY Micro hybrid not included 57

58 HEV WORLDWIDE IN 216 BY COUNTRY Total HEV Vehicles 1,84 M in 216 HEV sold per year, M units per country, OTHERS 9% USA 19% JAPAN JAPAN 54% EUROPE 18% USA EUROPE OTHERS Source: AVICENNE ENERGY Analyses 215 Micro hybrid not included 58

59 P-HEV (units) P-HEV (units) PHEV SOLD WORLDWIDE World excl. China growth +14% Chinese Growth + 26% % Source: AVICENNE ENERGY Analysis, 217 OTHERS CHINA SAIC BYD OTHERS AUDI PORSCHE HYUNDAI VOLVO DAIMLER BMW HONDA MITSUBISHI VW FORD TOYOTA GM China is leading the P-HEV market thanks to high incentives CHINA 3% Others 6% US 24% EUROPE 38% JAPAN 2% Europe China USA Others Japan 59

60 P-HEV (units) P-HEV (units) EV SOLD WORLDWIDE World excl. China growth +15% Chinese Growth + 68% % Source: AVICENNE ENERGY Analysis, 217 Other China GAC DongFeng Nissan Chana JMC CHERY JAC Geely BAIC Zhidou Zotye Kandi BYD Others BOLLORE PSA Honda MITSUBISHI DAIMLER GM Ford KIA VW SMART BMW China is leading the EV market thanks to high incentives CHINA 55% Others 6% US 15% JAPAN 3% EUROPE 21% China Europe USA Others Japan 6

61 PHEV & EV sales (Units) NEV* DEVELOPMENT IN CHINA PHEV & EV sold in PHEV China in % EV 77% PHEV & EV evolution SAIC 4% TESLA 2% Changan 1% JMC 3% CHERY 5% JAC 3% GEELY 4% OTHERS 18% BAIC 14% *NEV=PHEV+EV (New Energy Vehicles) Zotye 15% BYD 29% KANDI 2% Jan Feb Mar Apr May Jun Jul Aou Sep Oct Nov Dec

62 XEV BUSES MARKET IN CHINA xev buses market in China: 132 xev Buses sold in EV Bus 6 PHEV Bus 4 2 Rationales The Chinese government is working on addressing environmental issues. Central and local governments are engaged in subsidy policies to promote EV/PHV/FCV as new energy vehicles. The amount of subsidy for EV/FCV with low environmental impact is set high. As the subsidy policy is announced to be carried out until 22, it is predicted that this market will be on an expansion trend centering on EV. However, due to the occurrence of the case of receiving subsidies illegally in 215, the government has begun to strictly control the production of new energy vehicles after

63 XEV BUSES MARKET IN CHINA xev buses market in China: 112 xev Buses sold in 215 ASIASTAR 1% ANKAI 1% FOTON 3% GOLDEN DRAGON 4% OTHERS 33% DONGFENG 5% YUTONG 18% ZHONGTONG 12% BYD 5% KINGLONG 21% 132 xev Buses sold in 216 OTHERS 53% ASIASTAR 1% ANKAI 4% YUTONG 15% FOTON 3% KINGLONG 6% ZHONGTONG 12% BYD 3% DONGFENG 1% GOLDEN DRAGON 2% The new energy bus market in China is mainly made up of EV with a large amount of subsidy from the government, and there are many cases where older makers also produce PHV. As a result of the illegal receipt of subsidy occurred in 215, publication of the company name and administrative guidance (penalty) from the government were carried out. Consequently, several makers including King Long have significantly reduced their market share in 216, and old makers such as Yutong and Zhong Tong are expanding their market shares. 63

64 LIB FOR AUTOMOTIVE VALUE CHAIN Comments 1 2 The largest share of the value (4%) comes from cell components Cell manufacturers & OEM alliance may be the winning model but comes with high risk if the wrong cell manufacturer is selected 3 Tiers 1- cell manufacturers alliance: most of them disappear (eg. Saft-Johnson Controls, Bosch-Samsung, Enerdel-Delphi ) 4 5 Tiers 1- OEM alliance on Battery are not successful Panasonic and LG Chem, cell manufacturers develop raw - material in-house and make the pack integration for OEM Source: AVICENNE ENERGY On a different scale, Toyota, BYD or BOLLORE are fully integrate 64

65 LIB MANUFACTURING INVESTMENTS B$ WORLDWIDE >5 GWh invest from 211 to 214) > 7 B$ invested from 214 to 217 by TESLA (5), BYD (1,2), ATL (1) Total Investment (M$) made for LIB manufacturing ATL ( ) BYD ( ) TESLA ( ) LiTec GmbH Panasonic EV SK Energy Mitsubishi H.I. NEC Tokin AESC Japon Hitachi Vehicle Energy SAFT SAFT US BAK Lishen Nissan-Renault (Port) Blue Energy Toshiba Nissan - Renault (UK) LG Chem Rusnano-Thunder Sky Lithium Energy Japan Hitachi Vehicle Energy SB Limotive GS YUASA Dow Kokam Nissan-Renault (Fr) Ener1 Sanyo A123 JCI LG Chem BYD Sony NISSAN Motor US PANASONIC (Invest end 216) TESLA, ATL, BYD Investments: 15 $ / kwh Average Investments: 25 $ / kwh M$ TESLA Plant, Nevada, Feb 215 TESLA GIGA FACTORY, Dec 216 Source: AVICENNE ENERGY Analyses

66 TIME TO MARKET FOR NEW MATERIALS IN LIB INDUSTRY The research and development in this industry is very long and time consuming. Time to market to commercialize a new material is long. Remember that the first Li-ion battery was launched by Sony in 1991 with LCO cathode, graphite, LiPF 6 electrolyte & polyolefin membrane. It was 2 years ago. LTO was invented by Matsushita in 1993 (22 years ago) Lithium iron phosphate was invented in 1995 (2 years ago). So, it takes between 1 & 2 years to commercialize a new material in the battery industry. 66

67 BATTERY TECHNOLOGY ROADMAP Batteries take a long time to develop; to reach the automotive market, another 4 to 5 years are needed Source: Avicenne Energy analysis 67

68 TIME TO MARKET FOR NEW MATERIALS Source: AVICENNE ENERGY

69 Aircraft Automotive Mobile Background SAFETY ISSUES Li-ion and LMP are not thermally stable what raises serious safety concerns In the 8 s, lithium metal batteries were put into the markets (Moli Energy). Their further development has for a long time been slow because of a low cycle efficiency and safety issues: High chemical reactivity and a low melting point enable strong chemical reactions, even explosions. In the charging-discharging process, lithium metal can form dendrite and accumulate on electrodes. The growing lithium dendrite could puncture the separator and result in an internal short circuit. Except BOLLORE, all the companies developing Li metal batteries cancelled their projects Li-ion batteries for mobile devices mostly used a Lithium Cobalt Oxide Cathode and liquid electrolyte. In case of overcharging or short-circuit (contact between anode & cathode) a chain reaction starts -> heating & gasing -> fire ( Thermal runaway ) In 26, SONY had to recall millions of portable PCs for total costs of 4 million USD, more than there profit-to-date With new cathode chemistry, most of the automotive today on the markets experienced safety concerns: (1) BYD Taxi in China with a lithium iron phosphate cathode (2) GM Volt in the US with a LG Chemical battery using LMO cathodes (as a result of a crashed tested Chevrolet Volt caught three weeks after the testing!) (3) PRIUS P-HEV in the US (converted from HEV Prius by a local engineering company without any authorisation by Toyota) Boing 787: The fire that burned near the tail of a parked Boeing 787 in Boston was caused by an overheating Lithium ion battery pack. The battery fire could have been hot enough to melt the carbon-fiber reinforced plastic that makes up the plane s shell. CONSEQUENCES: All the 787 worldwide are grounded. Considerable losses for Boing. Source: AVICENNE ENERGY

70 Operating profit/revenue LIB BUSINESS RECALLS SLASH BATTERY PROFIT More & more incidents & accidents All the battery makers and the OEM are concerned Recall cost impact drastically the battery business and the profitability 3% 2% 1% % -1% -2% -3% -4% -5% RECALL SLASH BATTERY PROFIT Sanyo MBI BYD SGS Sony NEC Maxell LGC SDI Average Source: AVICENNE ENERGY 216 7

71 SAFETY IS A SINE-QUA-NON SELECTION CRITERIA FOR BATTERY TECHNOLOGIES Some technologies are already out of the game due to stability issues Source: AVICENNE ENERGY

72 LIB BATTERY COST Costs analysis Battery price in 216 Raw material cost (Co, Mn, Ni, Al, Cu, ) Anode, cathode, Electrolyte, separator, binders, Cu & Al foil, etc cost structure : CAPEX, labor cost, R&D Marketing, Adm, Overhead, margin) Raw material needs / mah Electrode process Yield Assembly Process Yield Cell manufacturing cost Module manufacturing cost Pack assembly cost Source: AVICENNE ENERGY 216 $/kwh LIB 1865 cell LIB EV Cell LIB pack for EV LIB HEV cell LIB pack for HEV 72

73 Cell Pack Cell Pack Cell Pack $ / kwh $ / kwh LI-ION BATTERY COST LIB cell average cost (4 Ah pouch) (EV design ; NMC cathode) (1) Active materials only Source: AVICENNE ENERGY 216 Margin Warranty Overheads Sales & Adm R&D Energy, utilities Direct labor Depreciation Scraps Others Separator Electrolyte Anode (1) Cathode (1) LI-ION BATTERY PACK COST FOR EV * For Production > 1 packs/year Pack Cost Cell Manufacturing Other Materials Separator Electrolyte Anode Cathode 73

74 LIB PRICE FORECASTS Avicenne Energy Source: Rapidly falling costs of battery packs for electric vehicles, Nature Climate Change, March

75 HEV penetration (% of total car sales) Million HEV FORECASTS 2-22 HEV MARKET: <2 M units in 216 2,5 M in 22 3,3 M in 225 3% 25% 2% 15% 1% 5% % USA EUROPE JAPAN OTHERS WORLD USA EUROPE JAPAN OTHERS Micro hybrid not included Source: AVICENNE ENERGY Analyses ,5 3 2,5 2 1,5 1,5

76 Million cars Million cars EV, P-HEV, EV 225 FORECASTS Thanks to very high incentives, China change the game 216 forecasts: HEV, P-HEV & EV market forecasts up to HEV, PHEV, EV & E-Bus 3,5 3 PHEV, EV & E-Bus 3, ,3 2,5 1,8, E-Bus Others E-Bus China EV in China P-HEV in China EV P-HEV HEV 2,5 2 1,5 1,5 1,6, E-Bus Others E-Bus China EV in China P-HEV in China EV P-HEV 76

77 M Wh M $ TOTAL BATTERY DEMAND 225 FORECASTS Li-ion for EV, HEV & P-HEV Battery needs (MWh) CAGR : +14% Li-ion for EV, HEV & P-HEV Battery needs (M$) CAGR : +8% volts SLI HEV PHEV EV EV & PHEV China E-bus China volts SLI HEV PHEV EV EV & PHEV China E-bus China 77

78 M $ M $ X-EV BATTERY MARKET IN M$ Cell Level Pack Level CAGR : +8% CAGR : +8% volts SLI HEV PHEV EV EV & PHEV China E-bus China volts SLI HEV PHEV EV EV & PHEV China E-bus China 78

79 Million 35 MILLION MICRO-HYBRIDS CAR IN 22 Micro-hybrids car market Micro-hybrid car sold per year AVICENNE Optimistic Scenario JD Power Valeo Advantages of micro-hybrid compare to HEV Powered by Advanced lead acid batteries Much more profitable than full HEV: 8 to 1 times less expensive than full HEV to save 5% gasoline instead of 2% (4 times less) Much more impact on CO2 Battery Micro-hybrid Advanced lead acid Full HEV NiMH or LIB Cost ($) 3 3 Fuel saving 5% 2% Million Vehicle sold per year in 22 > 35 2,5 79

80 HEV, P-HEV AND EV REALITY OF THE MARKET WILL BOOST MICRO HYBRID AND ADVANCED LEAD ACID BATTERIES Batteries STANDARD CAR 44% STANDARD CAR 88.5% Standard Lead acid MICRO HYBRIDS 1% Advanced Lead acid MICRO HYBRID 5% MILD HEV.5% NiMH NiMH batteries FULL HEV 1% FULL HEV 2,5% EV P-HEV Li-ion batteries EV P-HEV 1,5% AFTER ULTRA BATTERY Li-ion Li-Air, Li-S, Fuel Cells 8

81 US$ B THE WORLDWIDE BATTERY MARKET Lithium Ion Battery: Highest growth & major part of the investments Lead acid batteries: The most important market (9% market share) Others (Flow battery, NAS, ) Li-ion NiMH NiCD Lead Acid Source: AVICENNE ENERGY, Lead Acid Batteries GWh for > US $ 33 Billion 6% 26% 62% 29% 32% Industrial Batteries 55 GWh for US $ 11 Billion 22% % In value 23% % In value SLI Industry, ESS Others medical, e-bikes Telecom UPS Other Stationary, ESS Motive 81

82 THE WORLDWIDE BATTERY MARKET IN 216: US $ 65 BILLION EV, E-Bus Portable SLI Others Marine Medical devices Seismic ESS UPS Telecom Other Motive Forklift Power Tools E-Bikes US $ 22,8 Billion for other applications 1- Pack level: Pack including cells, cells assembly, BMS, connectors Power electronics (DC DC converters, invertors ) not included Lead Acid LIB Others Other Applications Marine Medical devices Seismic ESS UPS Telecom Other Motive Forklift Power Tools Source: AVICENNE ENERGY, : AVICENNE Estimation 82 E-Bikes

83 TOTAL POTENTIAL MARKET (M$, PACK LEVEL 1 ) Application details US$ 22,8 Billion in 216 (1) E-Bikes Power Tools Seismic 1% Source: AVICENNE ENERGY 216 Marine 2% Others 14% ESS 13% UPS 12% E-Bikes 13% Power Tools 9% Telecom 14% Forklift 13% Other Motive 1% Forklift Telecom ESS Medical devices Others Other Motive UPS Seismic Marine Pack level: Pack including cells, cells assembly, BMS, connectors Power electronics (DC DC converters, invertors ) not included 2- Other App: Military, aerospace, Oil & Gas, Railways, Aviation, Utility metering, 83

84 MARKET SEGMENT SYNTHESIS TEMPLATE Battery market in value 212/225 - CAGR ASP in 212 & 22 LIB market in value 212/225 - CAGR LIB main drivers & limiters LIB market by Area Battery market by Area LIB Penetration in % of total device LIB market in M$ Major competitors Major customers Most important performances characteristic, ASP, Average capacity LIB most valuable improvement LIB form factor Source: AVICENNE ENERGY Analyses 84

85 E-BIKES LIB: FROM US$ 1,8 BILLION IN 216 TO 3,2 IN 22 1 CAGR: +16% Market (US $, Million) CAGR: 11% % % 42% LIB 216 by Area 7% LIB Penetration (% device) 1% China 12% 39% US Europe China Others US, EU, Jap Source: AVICENNE ENERGY Analyses ASP 1 : 212: 6 $/Kwh 22: 4 $/kwh LIB LIB market (M$) ASP : 212: 8 $/kwh 22: 75 $/kwh LIB 22 by Area 2% US 4% 13% Europe 81% China Others CHINA Others Main drivers E-bike in China: Banning of gasoline powered motorcycles in china boost e-bikes: Necessary In US, Europe and Japan, Green image, sport, leisure, transportation: Environment & Health LIB penetration in China from 6 to 14% Competitors BMZ (Germany) AXEON 2 (UK) HITECH (Taiwan) Phylion (China) Battery needs Performances characteristic 1- Cycle life 2-Energy density 3- Low cost Average Capacity:3 Wh Main Limiters In Japan, US and Europe, E-bikes are already equipped by Li-ion In China the only parameter to choose a battery is the cost Chinese E-bike ASP: 32 $/kwh: very difficult to penetrate this market Customers Bosch, Panasonic Bion-X TranX-Z LIB needs Most valuable improvements 1- Price decrease 2- Cycle life 3- Fast charge Form factor: from cylindrical to Laminate No standardization Note: 1- Pack level 2- A Johnson Matthey affiliate + > 5 e-bike mfg. 85

86 POWER TOOLS LIB: FROM US$ 1,4 BILLION IN 216 TO 1,9 B IN 22 1 CAGR:+8% Market (US $, Million) CAGR:+5% LIB Main drivers LIB main Limiters ASP 1 212:56 $/Kwh 22: 39 $/Kwh Li-ion ASP: NICd 212: 335 $/kwh 22: 275 $/kwh Higher voltage NiCd substitution NiCd regulation Cordless power tools & gardening tools market increase (+4% per year) Higher energy density, less weight LIB average sales price Reliability High rate discharge Fast charge Life time Battery 213 by Area >75% of the power tools are made in China But, battery pack could be made on the end-user area (Ex: Bosch Axeon Poland) 8% 6% 4% 2% % LIB Penetration Source: AVICENNE ENERGY Analyses LIB 22 by Area Power tools will be made in China Local demand in Europe, US, next to the end user to increase flexibility & Just in Time mfg LIB market (M$) Competitors Cell/Pack Mfg.: TOP3: Samsung, Panasonic, Sony (> 75%) Pack makers: AXEON (Bosch), Battery needs Important characteristic: 1- Higher power & capacity 2-Fast recharge 212 ASP NiCd: 35 $/kwh 212 ASP LIB: 55 $/kwh Average Capacity: 6 Wh Note: : 1- Pack level Customers Bosch B&D TTI LIB needs Makita Jingding Hilti Most valuable improvements 1- Price decrease 2- Fast charge 3- High rate discharge Form factor: Cylindrical No standardization 86

87 3- MOTIVE INDUSTRIAL: FORKLIFTS 2 LIB: FROM US$ 16 MILLION IN 216 TO 275 IN 22 1 CAGR: 15% Market (US $, Million) CAGR:7% Main drivers Main Limiters Battery 212 by Area Europe largest producer of motive power batteries has higher percentage of electric vs. gas trucks (75%) than in N. America (64%) China: High % of Gas/propane trucks (> 8%) 1% 5% % LIB Penetration Source: AVICENNE ENERGY Analyses LIB 22 by Area 51% 7% 42% ASP 212:55 $/kwh 22: 365 $/kwh LIB Lead Acid ASP 212:15 $/kwh 22: 144 $/kwh LIB market (M$) US Europe Where economies are healthy, they reflect strong motive power production Europe & US got high E-forklift ratio compare to Asia LIB higher life time (* 3 to 5) Multiple shift operation where battery change is required (time consuming) Competitors Lead Acid & LIB: Enersys (35%), Exide (1%), East Penn (1%), Hoppecke (1%), Crown (1%) LIB systems: BMZ, Lithium Balance, Battery needs important characteristic 1-high charge/discharge rates and capacity 2-high life time, range, Average Capacity: 22 kwh Low penetration of E-forklift in Asia High LIB capital price (x 5 compare to lead acid) Safety concerns in two of the lift truck types, sitdown rider and high reach, the counterbalance for the lift truck is supplied mainly by a lead acid battery LIB needs Note: : 1- Pack level 2- Including all kind of Material handling equipment Customers For lead acid, After market represent 6% of the market: lot of different customers (industrials) For LIB, OEM Forklift: TOYOTA, Kion, Jungheinrich, NACCO, Crown, Mitsubishi Caterpillar Most valuable improvements 1- Price 2- Convince customers on total cost of ownership Form factor: large format prismatic size standardization 87

88 STATIONARY: TELECOM MARKET LIB: FROM US$,5 BILLION IN 216 TO 1,1 IN 22 1 CAGR > 2% Market (US $, Million) CAGR: +7% Main drivers main Limiters Battery 212 by Area 8% 14% 16% 28% 14% 2% 2% 1% % LIB Penetration China Europe US India Source: AVICENNE ENERGY Analyses 5% 2% 16% 21% 19% 19% ASP 212: 6 $/kwh 22: 4 $/kwh LIB Lead Acid ASP 212: 2 $/kwh 22: 185 $/kwh Battery 22 by Area China LIB market (M$) Europe US India Others LIB developed for new equipment Increased Bandwidth requirements Wireless Market driving growth Strong Network Growth in China, India, E. Europe & S. America 2G-> 3G -> 4G need new equipment's LIB: Specially in Hot climate Competitors Lead Acid & LIB: Enersys (35%), Exide (1%), and local suppliers in each countries LIB systems: large companies : SAFT, others? Battery needs Most important performances characteristic 1- Hot T C performances 2- Customized for the new Equipment network Average Capacity: 5-1 kwh modules (1 Ah) Note: : 1- Pack level Lead Acid Vs. Li-ion Lead Acid capital cost 5 times cheaper Total cost of ownership could be compare with Lead acid LIB needs Customers Not so many customers; big telecom carriers in each countries Most valuable improvements 1- Capital costs 2- Safety Proof 3- Reliability Customized battery developed for new equipment 88

89 STATIONARY: UPS MARKET LIB: FROM US$,27 BILLION IN 216 TO,55 IN 22 1 CAGR: 19% Market (US $, Million) CAGR: +4% Main drivers main Limiters % 5% % - Battery 212 by Area LIB Penetration China Europe US India Source: AVICENNE ENERGY Analyses ASP 212:6 $/kwh 22: 4 $/kwh LIB LIB market (M$) Lead Acid ASP 212: 2 $/kwh 22: 17 $/kwh Battery 22 by Area China Europe US India Others UPS Drivers: New Data Storage Centers Mobile Society LIB drivers: Less volume, less place > Life time LIB is more needed where data are sensitive Li-ion battery could also help to save electricity during peak time Competitors Lead Acid & LIB: Enersys (35%), Exide (1%), and local suppliers in each countries LIB systems: local companies providing > services Battery needs Most important performances characteristic 1- Back-up at high current 2- weight, volume 3- life time Average Capacity: 3-5 kwh modules Note: UPS: Uninterruptible Power Supply APC: American Power Conversion Safety could be an important issue here Customers Few leaders/many products: Emerson/Liebert, Schneider/APC, Eaton Powerware, Gamatronic, Riello LIB needs Most valuable improvements 1- Convince on Safety 2- Capital Cost 3- Reliability Form factor: Cylindrical New development for new equipment 89

90 ESS SEGMENTATION Services provided by Energy Storage System (ESS) On grid services Regulation Arbitrage Back-up and reserves Source: AVICENNE ENERGY 216 Reconcile momentary differences caused by fluctuations in generation and/ or loads Frequency regulation Voltage support Load following/ ramping support Power quality Store energy when the price of electricity is low and releases it on the grid when prices are high Provide emergency power when utility power is not available UPS (Uninterruptible power supply) Power continuity Reserves to face lose of one generator Black start Investment deferral Grid independent power supply Off grid services Provide an active reserve of power and energy to (re)start power generator Enable deferral of utility investments by using relatively small amounts of storage Congestion relief Avoid infrastructure investment Provide electricity power supply in an area not connected to the grid e.g. Rural community Based stations powered by Solar energy 9

91 ESS SEGMENTATION Source: AVICENNE ENERGY

92 ESS REQUIREMENTS On structuring parameters: discharge time and average power, segments highlight different patterns Source : AVICENNE Energy,

93 ENERGY STORAGE SOLUTIONS Mapped on discharge time and power, technologies will appear suitable for certain segments only Source: AVICENNE Energy,

94 MWH MWH ESS MARKET & FORECASTS From 36 GWh to 65 GWh in 225 ESS excl Telecom & UPS CAGR: +6% CAGR: +13 to 15% Others 48% Li-ion 52% Others 72% Li-ion 28% Generation and T&D segments (1, 2, 3, 4, 5, 6, 7, 8, 9, 1, 11, 12) UPS (18) Power continuity, Telecom (17) ESS End Users (13, 14, 15, 16, 19, 2) Source: AVICENNE Energy, Opt(1) Generation and T&D segments (1, 2, 3, 4, 5, 6, 7, 8, 9, 1, 11, 12) ESS End Users (13, 14, 15, 16, 19, 2) (1) If LIB cost is < 15$/kWh, the market could be much more important 94

95 M Wh LI-ION BATTERY MARKET FORECASTS From 78 GWh in 216 to 21 GWh CAGR 216/ % per year in Volume Li-ion Battery sales, MWh, Worldwide, Others Industrial, ESS CAGR 15/25 16% 17% Auto, E-bus Excl. China 13% 216: 78 GWh Electronic devices 4% Auto, E-bus China 3% Industrial, ESS 6% Others 11% Others: medical devices, power tools, gardening tools, e-bikes Source: AVICENNE Energy 216 Auto, E-bus China Auto, e-bus Excl. China Electronic devices 18% 13% 6% Auto, E-bus Excl. China 15% Electronic devices 26% 225: 21 GWh Auto, E-bus China 35% Others 16% Industrial, ESS 8% 95

96 M$ M$ LI-ION BATTERY MARKET FORECASTS CAGR 216/ % per year in Volume Cell: +7% per year in value Pack: +8% per year in value Li-ion cells M$, Worldwide, Others Industrial, ESS Auto, E- bus China Auto, e- bus Excl. China Electronic devices CAGR 15/25 11% 11% 12% 8% % Li-ion Packs M$, Worldwide, Others: medical devices, power tools, gardening tools, e-bikes Source: AVICENNE Energy

97 MWh TAKEAWAYS Battery Market CAGR = +5% / Li-ion>+8% RECHARGEABLE BATTERY MARKET WORLDWIDE Li-ion battery is driven today by Automotive & Industrial applications In 212, most of the car makers (except Toyota) switch to Liion for HEV P-HEV, EV and E-buses will be powered by Li-ion: 11 B$ market in B$ in 22 & 22 B$ in 225 with high numbers in China (216: US$ 2,8 Billion for xev and US$ 3,7 Billion for xe-buses) EV expectations attract large Chemical companies New materials are needed to meet Automotive standards HEV will account for less than 3% of the auto sales in 22 P-HEV & EV < 2% by 22 Micro-hybrid will achieve >5% in 22/25 Lead acid battery will be the first market in 225 in volume, but Li-ion market will be higher than Lead acid from 22. A very small EV market in the automotive world will represent a huge market for batteries New LIB applications: UPS, Telecom, Forklift, Medical, Residential ESS, Grid ESS: CAGR > 1% in the next 15 years ESS will reach 1 Billion $ market at the pack level in the next 5 years ESS market could be much more important if the price of LIB at the system level is under 15 $/kwh 475 GWh 35 GWh 27 GWh 21 GWh B$ (Pack level) 3B$ 43B$ 61 B$ 61 GWh 8 B$ Others (CAGR ) Others: Automatic handling equipment, forklifts, back-up, UPS, Telecom, medical devices, Residential ESS, Grid ESS, 97 LIB NiMH NiCd Lead Acid > 95 B$ 2, Lead Acid (+3%) NiCd (-6%) NiMH (-7%) LIB for 3C (+%) LIB for xev (+1%) LIB for Others* (+1%)

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