Comparing Li-ion to Lead-Acid Batteries & Other Storage Options: Future Predictions AVICENNE ENERGY US Presentation Outline The rechargeable battery market in 217 The Li-ion battery value chain Li-ion battery material market Forecasts & conclusions #AdvMfgExpo
AVICENNE PROFILE Information for Growth - Powering your company s market strategy with in-depth research Creation: 1992, by Ali MADANI Headquarter: Paris Liaison Office: Japan, USA, China AVICENNE Energy Director: Christophe Pillot 4 consultants A Madani C Pillot JP Salvat A Yassari 2 Senior advisors X Zhang M. Sanders Database: >2 contacts in the battery value chain The Rechargeable Battery market 26th Edition Information for Growth - Powering your company s market strategy with in-depth research Energy Storage Systems Grid to Behind the Meter Customized survey 2
Tons $/Wh Million Units / year Million Units/Year THE BATTERY MARKET IS REALLY DYNAMIC Cellular Phones sold per Year (Million) 3 Li-ion 2 NiMH 1 3 2 217 Tons of cathode active materials > 26 4 3 2 1 3 Portable PC sold per Year (Million) 165 M Tablets 165 M Portable PCs 2 217 Li-ion 1865 cell price ($/Wh) 2.6 2 1 2 1 7 2 217 <,15 2 217 Source: AVICENNE ENERGY, 218 3
MWh THE WORLDWIDE BATTERY MARKET 199-217 Lithium Ion Battery: Highest growth & major part of industry investments 14, 12, CAGR Li-ion 21-217 : +26% 1, 8, 6, 4, 2, Others (Flow battery, NAS, ) Li-ion NiMH NiCD Source: AVICENNE ENERGY, 218 199 1995 2 25 21 215 216 217 4
199 1995 2 25 21 215 216 217 199 1995 2 25 21 215 216 217 MWh MWh THE WORLDWIDE BATTERY MARKET 199-217 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, Others (Flow battery, NAS, ) Li-ion NiMH NiCD Lead Acid 6, 5, 4, 3, 2, 1, Source: AVICENNE ENERGY, 218 5
199 2 25 21 213 214 215 216 217 199 2 25 21 213 214 215 216 217 Billion US $ Billion US$ THE WORLDWIDE BATTERY MARKET 199-217 >75 BILLION US$ in 217 Pack level 1 9% AVERAGE GROWTH PER YEAR (21-217) 8 7 6 5 4 3 2 1 35.7 36.5 Others (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: 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, Others (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, drones, Light Electric Vehicles, Hoverboard, Source: AVICENNE ENERGY, 218 6 SLI
THE LEAD ACID BATTERY MARKET BY APPLICATION AND TECHNOLOGY IN 216 Lead acid battery market in 216: 367 GWH 7% 4%1% 9% 1% 3% 4% 22% 79% SLI Stationary Motive E-bikes Others Lead acid battery market in 216: US $ 33 Billions 61% Lead acid battery market in 216: 367 GWH 16% Flooded Lead acid battery market in 216: US $ 33 Billions 25% 84% VRLA 75% SLI Stationary Motive E-bikes Others Source: AVICENNE ENERGY, 217 Flooded VRLA 7
2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 216 217 M Wh LI-ION IN 217 - MAIN APPLICATIONS >12 MWh - 27 B$ (1) CAGR 27/217 +25 % per year in Volume 14, 12, 1, 8, 6, 4, 2, - Li-ion Battery sales, MWh, Worldwide, 2-216 (1) Cell level Others: medical devices, power tools, gardening tools, e-bikes Source: AVICENNE Energy 218 Others Industrial, ESS Auto, E-bus China Auto, e-bus Excl. China Electronic devices Auto, E-bus Excl. China 2% Portable Electronics 17% Electronic devices 26% 2: < 2GWh Portable PC 66% Phones 17% 217: >12 GWh Auto, E-bus China 37% Others 12% Industrial, ESS 5% 8
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 Overheads 3% Sales & Adm 3% R&D 6% Energy, utilities 4% Direct labor 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 > 26 OOO T in 217 Revenues: 6,8 B$ CAGR 7/17: +12% ANODE 13 T Revenues: 1,4 B$ CAGR 7/17: +15% CELL MANUFACTURERS Revenues: 27 B$ Margin: < % (!) PACK MANUFACTURERS Revenues: 36 B$ ELECTROLYTE 14 T Revenues: 1,8 B$ CAGR 7/17 : 23% SEPARATOR 2 M m² Revenues: 1,9 B$ CAGR 7/17 : 15% ANCILLARY Revenues: 2,6 B$ Sources: AVICENNE ENERGY 218 1
THE MAIN TRENDS Economical trends Price decreases, Investment, Technical trends new technologies, higher capacities, improving performances for raw materials, Regulation trends Products banned, cyclability, Applications trends xev, ESS, Stationary, Mobile - Portable PC - Digital Cameras - PDA - Power Tools - Toys - Cordless Phones - Home Appliances - Camcorders - Security systems - RC Cars Drones Geographic Area US - Western Europe - Japan - China - Latin America - Eastern Europe - Asia Pacific - Middle East - Row & SAFETY 11
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 12
$/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 211 15 1 Ni & Co price 23-217 Ni Co 5 Source: Mitsubishi, Batteries 212 Nice 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 Source: LME 13
21 211 212 213 214 215 216 217 Tons CATHODE ACTIVE MATERIALS NEEDS Cathode active materials for LIB in Tons, 21-217 (Demand) 3, 25, 2, 15, 1, 5, - LEADERS: 67 NEW ENTRANTS ON THE FIELD: > 27 LFP ( ) LMO NCA NMC LCO Rationales In 217, 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 14
$ / kg Tons NMC DEMAND: CAGR 216-225: +21% NMC demand details ELEC NMC Offer in 216/217 NMC Price forecasts 4 3 2 Others Industrials E-bus xev China xev Power Tools, E-bikes Other Electronics Portable PCs Smart Phones, Tablets NMC: Electronics, EV, others 7, 6, 5, 4, 3, 2, 1, 21215 21722225 NMC evolution 1 21 212 214 216 218 22 222 224 % NMC 532 NMC 622 NMC 811 NMC 111 21 215 217 22 225 Assumption: 216-225 : Co price stable @ 6$/kg Lithium carbonate stable @ 13$/kg Lithium hydroxide stable @ 16 $/kg - Ni stable @ 12$/kg NMC summary of outlook IND OTH E-Bus AUTO 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. Tianjiao 6% 1% 5% Dahua 2% Easpring 8% Kelong 2% Pulead 1% Internal 12% Others 4% L&F Xiamen 9% Tungsten 1% UMICORE 18% NICHIA 9% ShanShan 12% Jinhe 7% OTHERS 48% Sources: AVICENNE ENERGY 218 CHINA 52% 811 622 532 111 15
Tons CATHODE ACTIVE MATERIAL FORECASTS 2-225 Cathode active materials 2-225 - Tons 9, 8, 7, 6, 5, 4, 3, 2, 1, - 8% 7% 6% 5% 4% 3% 2% 1% LCO NMC NCA LMO LFP China (%) ASSUMPTIONS: Portable devices: 217-225: +5-6% per year in volume HEV: 3 M HEV/year in 22, 4,2 M HEV in 225 P-HEV:,65 M P-HEV/year in 22, 1,4 M in 225 EV: 1,9 M EV/year in 22 (1,3 M in China) / 4 M/year in 225 (2,8 M in China) 1% LIB Industrial, stationary & other applications 216-225: +16% per year % Cathode active materials in 216 > 27 Tons LFP 38% LMO 8% NCA 9% LCO 14% NMC 31% Cathode active materials in 225 85 Tons LMO 1% NCA 1% LFP 15% LCO 6% NMC 68% Assumption: Tesla keep NCA chemistry and have a relative success (+35 EV sold per year in 225 TESLA forecast 5 ) Sources: AVICENNE ENERGY 218 16
27 28 29 21 211 212 213 214 215 216 217 Tons ANODE ACTIVE MATERIALS 13 TONS IN 217 LIB Anode Materials Source: A. Jossen, IRES 27 Source: Hitachi Chemical LIB Anode Materials LIB Anode market, (Tons) 1.5 1. 15 1 Others LTO Si Composite.5. 5 1 15 2 25 Source: Sanyo, March 213 5 Amorphous Artificial Graphite Natural Graphite Sources: AVICENNE ENERGY 218 17
$ / kg Tons NATURAL GRAPHITE: CAGR 217-225: +6% Natural Graphite demand details NG Offer in 216 12, 1, 8, 6, 4, 2, 5 111 25 21 215 217 22 225 Shinzoom 9% POSCO Chemtech 4% Nippon Carbon 4% Sinuo 3% Mitsubishi 15% Others 1% HITACHI 1% Shenzhen BTR 4% ShanShan 5% OTHERS 3% CHINA 7% Typical Product D 5 = 16 mm 35 mah/g 5% irreversible cap. BET: 1m²/g NG Price forecasts 16 14 12 1 8 6 14 4 8 2 7 6 5 21 215 217 22 225 Sources: AVICENNE ENERGY 217 NG summary of outlook Demand: smaller growth because new app. Need artificial Gr and Chinese LIB choose mostly 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 18
$ / kg Tons ARTIFICIAL GR.:CAGR 217-225: +8% Artificial Graphite demand details Artificial Graphite Offer in 216 2, 15, 1, 5, 7 176 25 21 215 217 22 225 Showa Denko 2% JFE 5% Shinzoom 4% Mitsubishi 4% Zichen 15% Sinuo 2% ShanShan 21% BTR 16% Others 6% HITACHI 7% OTHERS 18% CHINA 82% Typical Product D 5 = 2 mm 365 mah/g 1-5% irreversible cap. BET:,5m²/g Artificial Graphite Price forecasts Artificial Graphite summary of outlook 25 2 15 1 5 19 14 12 11 9 Demand: The demand will increase fast thanks to xev market and Chinese 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 21 215 217 22 225 Sources: AVICENNE ENERGY 217 19
2 25 21 215 217 22 225 MWh M cells/year 225 LIB FORECASTS FOR PORTABLE ELECTRONIC DEVICES 2-225 LIB market, MWh, by application (3C) 6 5 4 3 2 1 CAGR 17-25: + 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 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 2
MWh for Auto & E-buses X-EV MARKET Why x-ev? 4, CAGR 217-225:+ 23% 37 GWh Definition & segmentation 35, X-EV worldwide in 217 3, E-buses By country By car makers 25, PHEV & EV in China EV By battery chemistry X-EV forecasts AVICENNE ENERGY & other analyst forecasts Battery chemistry forecasts 2, 15, 1, 5, 7 GWh 16 GWh PHEV HEV Micro HEV Battery cost forecasts X-EV battery forecasts - 217 22 225 21
LIB MANUFACTURING INVESTMENTS 29-217 1-12 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 (214-217) BYD (213-215) TESLA (214-217) 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) 214 217 TESLA, ATL, BYD Investments: 15 $ / kwh Average 212-214 Investments: 25 $ / kwh M$ 1 2 3 4 5 6 TESLA Plant, Nevada, Feb 215 TESLA GIGA FACTORY, Dec 216 Source: AVICENNE ENERGY Analyses 217 22
Prod. Capacity MWh LITHIUM ION CELL PRODUCTION Korean companies start to move in Malaysia New production capacity in Europe and US $ 5 Bn 35 GWh 217 USA 2% LG Johnson-Controls Enersys SAFT $ 562 M 3-5 GWh 218 $ 562 M 3-5 GWh 218 $ 36 M 2-3 GWh 218 EU -<1% SAFT FIAMM BOLLORE $ 5 M(2) 34 GWh 228 $ 1 7 M (1) 25 GWh 225 $ 5 M (2) 32 GWh 223 China 6% BYD GP Lishen COSLIGHT ATL BAK B&K Wanxiang (A123) Others* 5% SAMSUNG LG Korea 15% SAMSUNG LG SK Kokam Japan 17% Panasonic Sony NEC Maxell PEVE YUASA 4 3 Source: AVICENNE 217 * OTHERS: Malaysia mostly (1) Government subsidies only (2) AVICENNE Estimation 2 1 38 323 268 131 176 28 215 216 217 218 219 22 23
$ / kwh $ / kwh 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 5 4 3 2 1 4 3 2 1 Average Cell price 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 Others Separator Electrolyte Anode (1) Cathode (1) Cell Manufacturing Other Materials Separator Electrolyte Anode Cathode 24
LIB PRICE FORECASTS Avicenne Energy Source: Rapidly falling costs of battery packs for electric vehicles, Nature Climate Change, March 215 25
21 215 217 22 225 21 215 217 22 225 21 215 217 22 225 Million cars % Li-ion HEV Million cars Million cars kwh / EV HEV, P-HEV, EV 225 FORECASTS HEV manufactured PHEV manufactured EV manufactured 5 4.5 4 1% 9% 8% 1.8 1.6 1.4 1,6 6 5 4,9 7 6 3.5 3 2.5 2 1.5 1.5 1.1 2.2 2.8 World Excl. China 3.6 5. HEV: 1kWh battery / car 7% 6% 5% 4% 3% 2% 1% % 1.2 1 1.3,8.8.6,44.6.4.3.2.3.3.8.1.2 PHEV: 12 kwh battery / car World Excl. China China 4 3 2 1.24.18 1.37 1.6.6 1,6 1.5.65 3.4 5 World Excl. China China 4 3 2 1 26
M Wh M $ TOTAL BATTERY DEMAND 225 FORECASTS Li-ion for EV, HEV & P-HEV Battery needs (MWh) CAGR 217-225: +23% 4 35 Li-ion for EV, HEV & P-HEV Battery needs (M$) CAGR 217-225: +17% 7 6 3 5 25 2 15 1 4 3 2 5 1 21 215 22 225 12-48 volts SLI HEV PHEV EV EV & PHEV China E-bus China E-bus excl. China 21 215 22 225 12-48 volts SLI HEV PHEV EV EV & PHEV China E-bus China E-Bus excl. China 27
2 25 21 215 22 225 M Wh LI-ION BATTERY MARKET FORECASTS From 12 GWh in 217 to 49 GWh CAGR 217/225 +19 % per year in Volume 6, 5, 4, 3, Li-ion Battery sales, MWh, Worldwide, 2-225 Others Industrial, ESS CAGR 15/25 (Realistic) 16% 22% Auto, E-bus Excl. China 2% 217: >12 GWh Electronic devices 26% Auto, E-bus China 37% Industrial, ESS 5% Others 12% 2, 1, - Others: medical devices, power tools, gardening tools, e-bikes Source: AVICENNE Energy 218 Auto, E-bus China Auto, e-bus Excl. China Electronic devices 3% 25% 5% Auto, E-bus Excl. China 24% 225: 49 GWh Electronic devices 1% Auto, E-bus China 52% Others 9% Industrial, ESS 5% 28
2 25 21 215 217 22 225 2 25 21 215 217 22 225 2 25 21 215 217 22 225 Tons % of the Global production Tons % of the Global production Tons (LCE) % of the Global production METAL NEEDS FOR RECHARGEABLE BATTERY WILL INCREASE RAPIDLY Cobalt Nickel Lithium 14 7% 3 12% 4 8% 12 1 8 6% 5% 4% 25 2 11% 1% 9% 8% 7% 35 3 25 7% 6% 5% 15 6% 2 4% 6 4 2 3% 2% 1% 1 5 5% 4% 3% 2% 1% 15 1 5 3% 2% 1% Sources: AVICENNE ENERGY 218 % % % 29
TIME TO MARKET FOR NEW MATERIALS Source: AVICENNE ENERGY 216 3
MWh TAKEAWAYS Battery Market 215-225 - CAGR = +9% / Li-ion>+13% Li-ion battery is driven today by Automotive & Industrial applications In 212, most of the car makers (except Toyota) switch to Li-ion for HEV P-HEV, EV and E-buses will be powered by Li-ion: 18 B$ market in 217-34 B$ in 22 & 65 B$ in 225 with high numbers in China (217: US$6 Billion for xev and US$ 5 Billion for xe-buses) EV expectations attract large Chemical companies New materials are needed to meet Automotive standards HEV will account for 3% of the auto sales in 22 P-HEV & EV for 2% to 3% 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 in value from 218. 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, hoverboard, drones: 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 $/kwh RECHARGEABLE BATTERY MARKET WORLDWIDE 2-225 73 GWh 44 GWh 325 GWh 21 GWh 25 21 215 22 225 25B$ (Pack level) 3B$ 43B$ > 1 GWh 65 B$ 1 B$ Others Others: Automatic handling equipment, robots, forklifts, back-up, UPS, Telecom, medical devices, Residential ESS, Grid ESS, drones, Hoverboard 31 LIB NiMH NiCd Lead Acid 15 B$ 3 2 2 25 21 215 22 225 Lead Acid (+5%) NiCd (-6%) NiMH (-7%) LIB for 3C (-1%) LIB for xev (+19%) LIB for Others* (+12%) (CAGR 215-225) 65 9 52
Christophe PILLOT AVICENNE ENERGY c.pillot@avicenne.com Phone: +33 1 47 78 46 Mobile: + 33 78 46 6 88 82 79 49 Thank You AVICENNE ENERGY US Mobile: #AdvMfgExpo 32