Jabil's Global Mechanicals Intelligence Archive

Global Mechanicals Intelligence

Q4 2024 | OCTOBER - DECEMBER

MARKET DYNAMICS

• New battery technology, such as solid-state batteries, will improve energy density, reduce costs, and enhance safety features, driving market growth.
• Electric vehicles are the primary drivers of the battery market, and the growth of renewable energy sources like wind and solar has created a need for efficient energy storage solutions.  Batteries are crucial in storing this energy.
• Portable electronic devices like smartphones, tablets, and laptops require high-performance batteries with longer life spans, contributing to the overall demand for advanced battery technologies.
• More suppliers are establishing manufacturing facilities outside China.  For example, EVE is expanding its production capacity in Hungary and Malaysia, VDL is constructing a new factory in Vietnam, and COSMX is setting up new factories in Mexico.

TECHNOLOGY OVERVIEW

SOLID-STATE BATTERIES

• Solid-state batteries (SSBs) are a promising next-generation battery technology that replaces the liquid or gel electrolyte found in traditional lithium-ion batteries with a solid material.
• These batteries replace traditional lithium-ion batteries' liquid or gel electrolyte with a solid material.  This advancement promises increased energy density, faster charging times, improved safety, and longer lifespans, making them particularly attractive for electric vehicles and portable electronics.

Key Advantages of Solid-State Batteries

• Higher Energy Density: SSBs can potentially store significantly more energy in the same space or weight than LIBs, leading to longer-lasting devices and increased range for electric vehicles.  
• Enhanced Safety: A non-flammable solid electrolyte eliminates the risk of leakage and significantly reduces the chances of fire, making them safer than LIBs.  
• Faster Charging: SSBs can potentially charge much faster than LIBs due to improved ion conductivity in the solid electrolyte, offering greater convenience for users.  
• Longer Lifespan: SSBs are expected to have a longer lifespan than LIBs due to reduced side reactions and degradation in the solid electrolyte.  

Key Challenges of Solid-State Batteries

• High Cost: The manufacturing of SSBs is complex and expensive, limiting their widespread adoption.  
• Technology Maturity: SSBs are still in the early stages of development, with many technical challenges to overcome before they can be mass-produced and commercialized.  
• Interface Issues: Ensuring stable and efficient interfaces between the solid electrolyte and the electrodes is crucial for optimal performance and longevity and remains an active area of research.

SODIUM-ION BATTERIES

• Sodium-ion batteries (NIBs) are rechargeable batteries that use sodium ions (Na+) as charge carriers, similar to how lithium-ion batteries (LIBs) use lithium ions (Li+).
• They are emerging as a potential alternative to LIBs, particularly for large-scale energy storage and applications where cost is a significant factor. According to BloombergNEF, by 2030, sodium-ion batteries could account for 23% of the stationary storage market, translating into more than 50 GWh. 
• Utilizing abundant and inexpensive sodium instead of lithium, sodium-ion batteries offer a more sustainable and cost-effective alternative, especially for large-scale energy storage applications and grid integration of renewable sources.

Key Advantages of Sodium-ion Batteries

• Abundance and Cost: Sodium is abundant and readily available, making NIBs potentially more cost-effective than LIBs, especially as lithium demand increases.  
• Safety: NIBs are generally considered safer than LIBs, with a lower risk of thermal runaway and fire.  
• Fast Charging: NIBs exhibit faster charging capabilities, which could benefit electric vehicles and other applications requiring quick charging.  
• Wide Operating Temperature Range: NIBs can operate effectively at a broader range of temperatures, particularly in cold conditions, expanding their potential applications.    

Key Challenges of Sodium-ion Batteries

• Lower Energy Density: NIBs currently have lower energy density than LIBs, which means they can store less energy for a given weight or volume. This can limit their use in applications where space and weight are critical, like portable electronics.    
• Technology Maturity: NIB technology is still in its early stages of development, with limited commercial availability and ongoing research to improve performance and address challenges.  

LITHIUM-SULFUR BATTERIES

• Lithium-sulfur batteries represent an emerging technology in energy storage. They utilize a lithium metal anode and a sulfur cathode, offering significant potential advantages over traditional lithium-ion batteries.
• With a theoretical energy density several times higher than lithium-ion batteries, lithium-sulfur batteries hold the potential to revolutionize electric vehicles and aviation, enabling longer ranges and lighter designs.

Key Advantages of Li-S Batteries

• High Energy Density: Li-S batteries offer a significantly higher theoretical and practical energy density than LIBs, potentially enabling longer ranges for electric vehicles and extended flight times for drones.
• Lower Cost: Sulfur is an abundant and inexpensive material, making Li-S batteries potentially more cost-effective than LIBs.  
• Environmental Friendliness: Using sulfur as the cathode material reduces reliance on critical materials like cobalt, which has environmental and ethical concerns associated with mining.  

Key Challenges of Li-S Batteries

• Cycle Life: The "polysulfide shuttle effect" leads to the degradation of the sulfur cathode during charge-discharge cycles, resulting in a shorter lifespan compared to LIBs.  
• Safety: Using lithium metal anodes poses safety risks due to dendrite formation, which can cause short circuits and potential fires.  
• Technology Maturity: Li-S batteries are still in the research and development phase, and several technical challenges must be overcome before they become commercially viable.

RECENT DEVELOPMENTS

Source: Press releases & company websites

DEMAND/SUPPLY OVERVIEW

DEMAND COMMENTARY

• Global electric vehicle sales in Q2 2024 increased by 50% year-on-year. Emerging markets in Western Europe, North America, and Asia mainly drive this growth. Tesla ranked first with a 20% market share during this period, and its market share increased by 4% compared to last year. Chinese brands have shown outstanding performance, accounting for 56% of global electric vehicle sales.
• Many consumer electronics companies will release their next-generation products in the fourth quarter, expecting increased demand due to the holiday season. However, the uncertainty of feedback from end users on these new products directly affects their future market demand.
• Sweeping US tariffs and trade barriers from the EU raised uncertainty over China’s ability to offset slowing EV demand with higher exports

SUPPLY ANALYSIS

• EVE reports that they are fully running at the capacity of 18650 cells for ESS application.
• Overall lead times have not significantly changed; keep flat at 30-45 days for lithium metal batteries and 45–60 days for lithium rechargeable batteries.
• The supply base remains stable, with no signs of suppliers exiting the market — lower supply risk for this commodity in the foreseeable future.

PRICING SITUATION

• Lithium carbonate prices fell to 80,000 CNY/T (~ 11,200 USD/T)  in August, the lowest in over three years, amid increasing oversupply concerns. Lithium miners and producers continued expanding capacity and hunting for new reserves, with market players expecting global supply to soar by nearly 50% this year. Cobalt decreased to 18,700 CNY/T (~ 2,635 USD/T) or 9.04% since the beginning of 2024. Lithium carbonate prices change every 10,000 CNY/T (~ 1,400 USD/T), impacting the cost of lithium rechargeable cells by about 1%.
• Cathode material (Li, Ni, Co, Mn) contributes 50% of cell cost, and Anode material (C) contributes another 12%; with raw materials prices dropping and demand softening, battery prices are anticipated to continue to be downtrend in Q4 2024.
• There are some opportunities for cost reduction in 1H CY2025.

KEY TAKEAWAYS

• There will be continued competition among different battery types (e.g., lithium-ion, solid-state, sodium-ion), each with advantages and challenges.
• Efforts to repurpose spent batteries from EVs and other applications will gain traction, providing a secondary battery market and reducing waste.
• Major manufacturers are expanding their global production capacities further to meet future growing demand, with new manufacturing plants coming online in various regions.