The ongoing military conflict between Russia and Ukraine has shone a stark light on existing supply shortages for vital metals for lithium ion batteries, the dominant chemistry in electric vehicles and energy storage systems. Even prior to sanctions against Russia, a key supplier of nickel, prices for the metal have been steadily rising.
Since nickel improves energy density in batteries and therefore the overall driving range of electric vehicles, many automakers have increased the percentage of nickel in battery cathodes in recent years while reducing cobalt. Tesla has been using cathodes with up to 90 percent nickel in some applications. If nickel prices continue their upward trajectory, automakers will be forced to increase the sticker price of EVs which would obviously deter the progress we've seen on EV adoption.
But it's not just cost that's an issue — we could potentially run out of supply. Spurred on by the energy transition, the lithium market to move into deficit by 2025 with cobalt outstripping supply as early as 2024. Likewise, a recent analysis by Rystad Energy indicates that although global nickel supply will continue its steady year-on-year climb, rising demand will lead to a shortage in less than two years.
The automotive industry knows it needs to invest in other alternatives to lithium ion, but the chemistry is widely used for a reason — they charge faster, last longer and have a higher power density. Yet, many automakers including Tesla, Ford and Volkswagen are turning to lithium iron phosphate anyway.
LFP batteries are considered safer due to various chemical and mechanical advantages, and require less shortage-prone and environmentally friendly materials to be produced. No cobalt or nickel is needed. Another huge advantage is that they are cheaper. Due to the nature of the materials and quantities needed, even though the total system beginning of life system integration cost tends to be capped at 15 percent cheaper, LFP batteries can be up to 30 cheaper per kilowatt-hour. Moreover, LFP batteries have a longer lifetime, which lowers the total cost of ownership. Where LFP and other lithium ion chemistries tend to have a useful life range between 3,000 to 5,000 cycles, opportunity charging can increase LFP life cycle count to up to 7,000. Additionally, with increased thermal and chemical stability, LFP batteries are safer and perform better than lithium ion batteries when operating at higher temperatures.
However, when it comes to energy density, which impacts driving range, LFP batteries have some serious drawbacks. LFP batteries offer only 65 to 70 percent of the density that chemistries containing nickel, cobalt and manganese provide. This means that to achieve the same driving range, the physical size of an EV battery would need to be one third bigger — a concern in vehicles where space is at a premium. LFP batteries also suffer from a higher self discharge than other types of lithium ion batteries, which causes battery pack management issues as the batteries age. All of these disadvantages raise concerns about their wider adoption for EVs.
But not all is lost. Advances to battery architecture and cell design show significant promise for unlocking improvements to LFP and solving the energy density problem.
Traditionally, all batteries have a 2D electrode structure composed of a flat metal foil coated with active chemical materials. In contrast, new electrode designs feature a 3D porous metal structure with the active chemical material embedded inside during the coating process. Using 3D design, it is possible to increase the amount of active material and reduce the inactive material, manipulating the two variables causing low energy density and operating voltage. This change also increases the electrical contact between the metal and active material, an essential part of performance improvements in LFP batteries. Recent development projects with 3D electrodes have observed a 20 to 30 percent increase in energy capacity and 50 to 80 percent reduction in internal resistance (which translates to faster charging) compared to conventional LFP batteries.
As geopolitical conflicts, supply shortages and environmental concerns over mining persist, it's critical that the automotive and energy storage industries innovate alternative solutions while keeping both chemistry and physics in mind. LFP holds much promise, but design enhancements will help spur market adoption and keep EV costs down to the benefit of the global energy transition.
