October 4 th 217 216 225 AVICENNE ENERGY + 33 1 47 78 46 Presentation Outline The rechargeable battery market in 216 The Li-ion battery value chain xev & ESS battery market Forecasts & conclusions
Tons $/Wh Million Units / year Million Units/Year 216 226 October 4 th, 217 + 33 1 47 78 46 THE BATTERY MARKET IS REALLY DYNAMIC Cellular Phones sold per Year (Million) 3 Li-ion 2 NiMH 1 25 2 15 1 5 2 216 Tons of cathode active materials 7 211 2 216 4 3 2 1 3 2 1 Portable PC sold per Year (Million) Li-ion 195 M Tablets 165 M Portable PCs 2 216 Li-ion 1865 cell price ($/Wh) 2,6,15 2 216 Source: AVICENNE ENERGY, 217 2
MWh 216 226 THE WORLDWIDE BATTERY MARKET 199-216 Lithium Ion Battery: Highest growth & major part of industry investments 12 1 CAGR Li-ion 21-216 : +25% October 4 th, 217 8 6 4 (Flow battery, NAS, ) Li-ion NiMH NiCD 2 + 33 1 47 78 46 Source: AVICENNE ENERGY, 217 199 1995 2 25 21 215 216 3
199 1995 2 25 21 215 216 MWh MWh 216 226 October 4 th, 217 + 33 1 47 78 46 THE WORLDWIDE BATTERY MARKET 199-216 Lithium Ion Battery: Highest growth & major part of the investments Lead acid batteries: By far the most important market (9% market share) 4 35 3 25 2 15 1 5 (Flow battery, NAS, ) Li-ion NiMH NiCD Lead Acid 5 45 4 35 3 25 2 15 1 5 Source: AVICENNE ENERGY, 217 4
199 2 25 21 213 214 215 216 199 2 25 21 213 214 215 216 Billion US $ Billion US$ THE WORLDWIDE BATTERY MARKET 199-216 69 BILLION US$ in 216 Pack level 1 8% AVERAGE GROWTH PER YEAR (26-216) 216 226 October 4 th, 217 8 7 6 5 4 3 2 1 (Flow battery, NAS, ) Li-ion NiMH NiCD Lead Acid 8 7 6 5 4 3 2 1 OTHERS AUTOMOTIVE INDUSTRIAL E-BIKES POWER TOOLS PORTABLE SLI + 33 1 47 78 46 SLI: Start light and ignition batteries for cars, truck, moto, boat etc INDUSTRIAL PORTABLE: concumer electronics (cellular, portable PCs, tablests, MOTIVE: Forklift (95%), others Camera, ), data collection & handy terminals, STATIONARY: Telecom, UPS, Energy Storage System, Medical, (Emergency Lighting, Security, Railroad Signaling,, Diesel Generator POWER Tools: power tools but also gardening tools Starting, Control & Switchgear, AUTOMOTIVE: HEV, P-HEV, EV 1- Pack: cell, cell assembly, BMS, connectors Power electronics (DC OTHERS: Medical: wheelchairs, medical carts, medical devices (surgical power tools, mobile instrumentation (x-ray, ultrasound, EKG/ECG, large oxygen DC converters, invertors ) not included concentrators Source: AVICENNE ENERGY, 217 5
2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 216 M Wh LI-ION IN 216 - MAIN APPLICATIONS 9 MWh - 23 B$ (1) 5 675 M small cells CAGR 26/216 +23 % per year in Volume 216 226 1 9 Li-ion Battery sales, MWh, Worldwide, 2-216 2: < 2GWh Portable Electronics 17% Phones 17% October 4 th, 217 8 7 6 5 4 3 2 1 - Industrial, ESS Auto, E-bus China Auto, e-bus Excl. China Electronic devices Auto, E-bus Excl. China 17% Portable PC 66% 216: 9 GWh Auto, E-bus China 33% + 33 1 47 78 46 (1) Cell level : medical devices, power tools, gardening tools, e-bikes Source: AVICENNE Energy 217 Electronic devices 35% Industrial, ESS 5% 1% 6
25 26 27 28 29 21 211 212 213 214 215 216 25 26 27 28 29 21 211 212 213 214 215 216 M$ M$ LI-ION IN 216 - MAIN APPLICATIONS +9 MWh - 23 B$ (1) 5 675 M small cells CAGR 26/216 +23% per year in Volume Cell: +17% per year in value Pack: +18% per year in value 216 226 25 Li-ion cells M$, Worldwide, 25-216 35 Li-ion Packs M$, Worldwide, 2-216 2 3 25 October 4 th, 217 15 1 5 Industrial, ESS Auto, E-bus China Auto, e-bus Excl. China 2 15 1 5 - Electronic devices - + 33 1 47 78 46 : medical devices, power tools, gardening tools, e-bikes Source: AVICENNE Energy 217 7
LI-ION BATTERY: MARKET SHARE IN 216 WORLDWIDE 216 226 The worldwide Li-ion battery market Company market share in 216 in volume (small cells only) 6,4 B cells 3% 9% 24% The worldwide Li-ion battery market Company market share in 216 in value (1) Estimated at B$ 31 in 216 OTHERS 31% 8% 9% October 4 th, 217 + 33 1 47 78 46 9% 5% 9% 19% for Small cells: Chinese suppliers like Tenpower, DLG (1) LIB battery pack market Source: AVICENNE ENERGY Analyses 217 8% 7% Zhuoneng 2% Optimum 2% A123 Wanxiang 1% CALB 2% Microvast 2% COSLIGHT 1% BYD 7% YUASA 1% AESC 2% First New Energy 3% 5% 4% 4% BAK 1% 8
Production cost 216 226 October 4 th, 217 + 33 1 47 78 46 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% 9
LI-ION VALUE CHAIN MARKET DEMAND CATHODE 211 OOO T in 216 Revenues: 4,75 B$ CAGR 6/16: +14% CELL MANUFACTURERS PACK MANUFACTURERS 216 226 ANODE 14 T Revenues: 1,16 B$ CAGR 6/16: +13% ELECTROLYTE 13 T Revenues: 1,4 B$ CAGR 6/16 : 19% Revenues: 22,5 B$ Gross margin: <1% Revenues: 31 B$ Gross margin: <1% October 4 th, 217 SEPARATOR 1 5 M m² Revenues: 1,6 B$ CAGR 6/16 : 15% ANCILLARY + 33 1 47 78 46 Revenues: 1,5 B$ Sources: AVICENNE ENERGY 217 1
2 25 21 215 22 225 MWh M cells/year 216 226 October 4 th, 217 225 LIB FORECASTS FOR PORTABLE ELECTRONIC DEVICES 2-225 LIB market, MWh, by application (3C) 6 5 4 3 2 1 CAGR 16-25: + 6% Other Portable Electronics Tablets Portable PCs Cellular Phones 2-225 LIB market, M cells, by form factor (3C) 6 5 4 3 2 1 + 33 1 47 78 46 Source: AVICENNE ENERGY Analyses 2 25 21 215 22 225 Li-P Li-ion Pr Li-ion Cyl Takeshita - March 213 (1) (1) Source: Takeshita, Battery Japan 213 BJ-3 conference Slide p 4 11
MWh for Auto & E-buses 216 226 X-EV MARKET Why x-ev? Definition & segmentation X-EV worldwide in 216 By country By car makers 2 18 16 14 12 CAGR 216-225:+ 17% 11 GWh 185 GWh E-buses PHEV & EV in China By battery chemistry 1 EV X-EV forecasts 8 PHEV October 4 th, 217 + 33 1 47 78 46 AVICENNE ENERGY & other analyst forecasts Battery chemistry forecasts Battery cost forecasts X-EV battery forecasts 6 4 2-45 GWh 216 22 225 HEV 12
2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 216 25 26 27 28 29 21 211 212 213 214 215 216 HEV sales per year Gasoline $ / Gallon 2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 216 Million Penetration of HEV 216 226 HEV WORLDWIDE IN 216 1,8 M HEV HEV sold per year, M units, worldwide, 2-216 2, 1,8 1,6 1,4 1,2 TOYOTA OTHERS Penetration of hybrids in the global sales, 2-216 3% 2% 1% % Growth 215-216: +2% From 1,8 M to 1,84 M HEV JAPON USA EUROPE October 4 th, 217 1,,8,6,4,2, Gazoline price impact on HEV market in the US 6 4 3 4 2 2 1 + 33 1 47 78 46 Source: TOYOTA, HONDA, NISSAN, FORD, GM, HYUNDAI, MERCEDES, GM, BMW, VW, PORSCHE Compilation AVICENNE ENERGY Micro hybrid not included 13
21 211 212 213 214 215 216 P-HEV (units) P-HEV (units) PHEV SOLD WORLDWIDE 216 226 October 4 th, 217 + 33 1 47 78 46 World excl. China growth +14% Chinese Growth + 21% 3 +16% OTHERS CHINA SAIC 25 BYD OTHERS 2 AUDI PORSCHE 15 HYUNDAI VOLVO DAIMLER 1 BMW HONDA 5 MITSUBISHI VW FORD TOYOTA GM Source: AVICENNE ENERGY Analysis, 217 China is leading the P-HEV market thanks to high incentives 12 1 8 6 4 2 - CHINA 3% 6% US 24% EUROPE 38% JAPAN 2% 212 213 214 215 216 Europe China USA Japan 14
21 211 212 213 214 215 216 EV (units) EV (units) EV SOLD WORLDWIDE 216 226 October 4 th, 217 + 33 1 47 78 46 World excl. China growth +14% Chinese Growth + 68% 6 5 4 3 2 1 +35% Source: AVICENNE ENERGY Analysis, 217 Other China GAC DongFeng Nissan Chana JMC CHERY JAC Geely BAIC Zhidou Zotye Kandi BYD BOLLORE PSA Honda MITSUBISHI DAIMLER FIAT GM Ford KIA VW SMART BMW Toyota Renault NISSAN China is leading the EV market thanks to high incentives 3 25 2 15 1 5 - CHINA 55% 4% US 16% JAPAN 4% EUROPE 21% 212 213 214 215 216 China Europe USA Japan 15
XEV BUSES MARKET IN CHINA 216 226 October 4 th, 217 xev buses market in China: 132 xev Buses sold in 216 14 12 1 8 88 116 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 216. 24 16 + 33 1 47 78 46 212 213 214 215 216 16
XEV BUSES MARKET IN CHINA 216 226 October 4 th, 217 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% + 33 1 47 78 46 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. 17
LITHIUM ION CELL PRODUCTION Korean companies start to move in Malaysia New production capacity in Europe and US 216 226 October 4 th, 217 $ 5 Bn 35 GWh 217 USA 2% LG Johnson-Controls Enersys SAFT $ 562 M 3-5 GWh 218 $ 562 M $ 36 M 3-5 GWh 2-3 GWh 218 218 EU -<1% SAFT FIAMM BOLLORE $ 6 M 1 GWh 219 $ 1 7 M (1) 25 GWh 225 China 53% BYD GP Lishen COSLIGHT ATL BAK B&K Wanxiang (A123) * 7% SAMSUNG LG Korea 17% SAMSUNG LG SK Kokam Japan 2% Panasonic Sony NEC Maxell PEVE YUASA + 33 1 47 78 46 Source: AVICENNE 217 * OTHERS: Malaysia mostly (1) Government subsidies only 18
$ / kwh $ / kwh 216 226 October 4 th, 217 + 33 1 47 78 46 THE LITHIUM ION BATTERY MARKET FORECASTS 3 major limiters on batteries, for the development of electric vehicle 1- SAFETY IS A SINE-QUA-NON CRITERIA 2- TIME TO MARKET 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. (1) Active material only 3- BATTERY COST Average Cell price 5 4 3 2 1 4 3 2 1 21 216 22 225 Average Pack price Cell Pack Cell Pack CellPack 216 22 225 Pack Cost Margin Warranty Overheads Sales & Adm R&D Energy, utilities Direct labor Depreciation Scraps Separator Electrolyte Anode (1) Cathode (1) Cell Manufacturing Other Materials Separator Electrolyte Anode Cathode 19
Million cars % Li-ion HEV Million cars Million cars kwh / EV HEV, P-HEV, EV 225 FORECASTS HEV manufactured PHEV manufactured EV manufactured 5 1% 1,2 2,5 7 216 226 4,5 4 9% 8% 1 1,5 2 2 6 October 4 th, 217 + 33 1 47 78 46 3,5 3 2,5 2 1,5 1,5 1,1 2,1 World Excl. China 3, 3,9 21 215 22 225 HEV: 1kWh battery / car 7% 6% 5% 4% 3% 2% 1% %,8,6,4,2,35,3,8,65,5,1,8,2 21 215 22 225 PHEV: 12 kwh battery / car World Excl. China China 1,5 1,5,2,45,24,18 1,25,45,8,8 1,2 21 215 22 225 5 World Excl. China China 4 3 2 1 2
M Wh M $ TOTAL BATTERY DEMAND 225 FORECASTS 216 226 Li-ion for EV, HEV & P-HEV Battery needs (MWh) CAGR 216-225: +17% 2 18 16 14 12 Li-ion for EV, HEV & P-HEV Battery needs (M$) CAGR 216-225: +12% 3 25 2 October 4 th, 217 1 8 6 15 1 4 2 5 + 33 1 47 78 46-21 215 22 225 12-48 volts SLI HEV PHEV EV EV & PHEV China E-bus China 21 215 22 225 12-48 volts SLI HEV PHEV EV EV & PHEV China E-bus China 21
M $ M $ 216 226 X-EV BATTERY MARKET 2 225 IN M$ Cell Level Pack Level CAGR 216-225: +12% CAGR 215-225: +11% 3 4 25 35 3 2 25 15 2 October 4 th, 217 + 33 1 47 78 46 1 5 21 215 22 225 12-48 volts SLI HEV PHEV EV EV & PHEV China E-bus China 15 1 5 21 215 22 225 12-48 volts SLI HEV PHEV EV EV & PHEV China E-bus China 22
2 25 21 215 216 GWh THE WORLDWIDE BATTERY MARKET 199-216 In volume (MWh) Lead Acid Batteries 216 +367 GWh for > US $ 33,4 Billion 216 226 October 4 th, 217 (Flow battery, NAS, ) Li-ion NiMH NiCD Lead Acid 5 45 4 35 3 25 2 15 1 5 16% 26% 22% 79% % In volume 8% SLI Telecom UPS Industry, ESS E-bikes medical, marine, others Industrial Batteries Lead acid batteries 58 GWh for US $ 1,4 Billion + 33 1 47 78 46 Source: AVICENNE ENERGY, 217 44% % In volume Other Stationary, ESS Motive 23
THE WORLDWIDE BATTERY MARKET IN 216: US $ 69 BILLION 216 226 October 4 th, 217 + 33 1 47 78 46 EV, E-Bus Portable SLI ESS UPS Telecom Other Motive Forklift Power Tools E-Bikes 8 7 6 5 4 3 2 1 US $ 23 Billion for other applications 1- Pack level: Pack including cells, cells assembly, BMS, connectors Power electronics (DC DC converters, invertors ) not included 14 12 1 8 6 4 2 Lead Acid LIB ESS UPS Telecom Other Motive Forklift Power Tools Source: AVICENNE ENERGY, 217 24 E-Bikes
TOTAL POTENTIAL MARKET (M$, PACK LEVEL 1 ) Application details US$ 22,8 Billion in 216 (1) 216 226 24% E-Bikes 13% Power Tools 8% ESS 13% Forklift 15% October 4 th, 217 Source: AVICENNE ENERGY 216 UPS 12% Telecom 14% Other Motive 1% 1 2 3 4 5 6 7 8 9 1 11 + 33 1 47 78 46 1- 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, 25
2 25 21 215 22 225 M Wh 216 226 October 4 th, 217 + 33 1 47 78 46 LI-ION BATTERY MARKET FORECASTS From 9 GWh in 216 to 3 GWh CAGR 216/225 +15 % per year in Volume 35 3 25 2 15 1 5 - Li-ion Battery sales, MWh, Worldwide, 2-215 : 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 CAGR 15/25 (Realistic) 16% 22% 22% 17% 6% Auto, E-bus Excl. China 13% Auto, E-bus Excl. China 21% 216: 9 GWh Electronic devices 4% 225: 3 GWh Electronic devices 18% Auto, E-bus China 3% Industrial, ESS 6% 11% Auto, E-bus China 43% Industrial, ESS 7% 11% 26
2 25 21 215 22 225 2 25 21 215 22 225 M$ M$ 216 226 October 4 th, 217 LI-ION BATTERY MARKET FORECASTS CAGR 216/225 +13 % per year in Volume Cell: +7% per year in value Pack: +8% per year in value 4 35 3 25 2 15 1 5 - Li-ion cells M$, Worldwide, 2-225 Industrial, ESS Auto, E- bus China Auto, e- bus Excl. China Electronic devices CAGR 15/25 11% 11% 12% 8% % 5 45 4 35 3 25 2 15 1 5 - Li-ion Packs M$, Worldwide, 2-225 + 33 1 47 78 46 : medical devices, power tools, gardening tools, e-bikes Source: AVICENNE Energy 216 27
MWh 216 226 October 4 th, 217 + 33 1 47 78 46 TAKEAWAYS Battery Market 215-225 CAGR = +6% / Li-ion>+1% 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: 15 B$ market in 216-28 B$ in 22 & 38 B$ in 225 with high numbers in China (216: US$ 3,6 Billion for xev and US$ 4,8 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 Lithium battery for other application (ESS, stationary, industrial ) 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 $/kwh RECHARGEABLE BATTERY MARKET WORLDWIDE 2-225 432 GWh 325 GWh 21 GWh 25 21 215 22 225 25B$ (Pack level) 3B$ 43B$ 628 GWh 63 B$ 847GWh 94 B$ (CAGR 216-225) : Automatic handling equipment, forklifts, back-up, UPS, Telecom, medical devices, Residential ESS, Grid ESS, 28 LIB NiMH NiCd Lead Acid > 115 B$ 2,8 17 2 25 21 215 22 225 Lead Acid (+4%) NiCd (-6%) NiMH (-7%) LIB for 3C (+%) LIB for xev (+13%) LIB for * (+12%) 38 1 49
THANK YOU 216 226 AVICENNE ENERGY Phone: +33 1 47 78 46 Mobile: + 33 6 88 82 79 49 October 4 th, 217 + 33 1 47 78 46 29
2 25 21 215 22 225 2 25 21 215 22 225 2 25 21 215 22 225 Tons % of the Global production Tons % of the Global production Tons (LCE) % of the Global production METAL NEEDS FOR RECHARGEABLE BATTERY WILL INCREASE RAPIDLY Cobalt Nickel Lithium 9 6% 16 7,% 3 8,% 216 226 October 4 th, 217 8 7 6 5 4 3 2 1 5% 4% 3% 2% 1% 14 12 1 8 6 4 2 6,% 5,% 4,% 3,% 2,% 1,% 25 2 15 1 5 7,% 6,% 5,% 4,% 3,% 2,% 1,% + 33 1 47 78 46 Sources: AVICENNE ENERGY 217 %,%,% 3