The lithium-ion batteries’ market is evolving constantly. Electric vehicle (EV) manufacturers and particularly carmakers are continuously changing their preferences depending on cathodes’ attributes in terms of energy density, safety, cost, life and stability.
Total consumption of lithium carbonate equivalent in the world is on track to reach 1Mt by 2025 from levels of around 300,000t in 2018. But what kind of lithium is the world going to need? And what other metals will see demand rise for manufacturing batteries?
Lithium-ion batteries with higher nickel content will predominate in the coming years as the industry seeks greater energy density, experts agreed during Fastmarket’s 11th lithium supply and markets conference in Santiago, Chile.
Nickel-cobalt-manganese (NCM) cathodes will become more popular due to their higher density compared to lithium ferrophosphate (LFP) cathodes, according to Yuan Gao, CEO at Pulead Technology Industry.
“NCM will maintain a 50% growth rate after a super high growth rate period in 2014-2015 from nothing. Its market share keeps climbing and has already surpassed that of LFP, despite a sharp increase in the cobalt price,” Gao said.
LFP cathodes are better suited for short-range vehicles such as buses and small cars (for distances of up to 100km) and NCM cathodes for medium ranges (250km-350km) and high range (500km upward) EVs.
“Cathodes with 50% [nickel] such as the NCM523 will continue to dominate the market in China [the world biggest consumer of lithium],” he said.
Nickel demand is expected to grow to 3.36Mt in 2030 compared to 2.19Mt in 2017, said Ken Hoffman, the co-head of McKinsey’s EV battery materials research group. On the other hand, supply will reach 2.47Mt by 2025, up from 2.09Mt in 2017.
“The rapid growth in nickel demand post 2025 could put the nickel market into shortage by 2030,” said Hoffman.
HIGHER DEMAND FOR LITHIUM HYDROXIDE
The demand for NCM811 cathodes – which contain 80% nickel, 10% cobalt and 10% manganese – will also grow for higher-range vehicles, according to various speakers.
These types of cathodes have a longer lifespan and allow EVs to go further on a single charge. However, their use requires lengthier treatment to ensure safety and durability. They are also more expensive and have higher production costs than NCMs with medium nickel content.
Batteries with nickel content above 60% use lithium hydroxide in their cathodes instead of lithium carbonate in those with lower nickel.
“This is because lithium hydroxide is more soluble and nickel doesn’t like to be heated for a long period of time,” Hoffman told BNamericas.
So the question that lithium producers, cathode producers and battery manufacturers are asking themselves is: due to this higher nickel demand, is demand for lithium hydroxide going to overtake that for lithium carbonate?
“I think that carbonate will still account for more than 50% of the market. Demand for lithium hydroxide will grow but it’s not going to takeover,” Gao told BNamericas.
“The market is going to need both. Demand for lithium will grow a lot, and that demand will be seen in both carbonate and hydroxide,” Emilio Bunel, a professor from Chile’s Universidad Católica, told BNamericas.
Chile currently produces much more lithium carbonate than lithium hydroxide because the main lithium producers, SQM and Albemarle, focus their production on lithium carbonate from brines in the salt flats.
Meanwhile, Australia and the US mainly produce lithium from spodumene, which can be transformed more easily into lithium hydroxide.
“Chile is not going to lose competitiveness because the amount of carbonate is going to be large anyway. The demand is going to be so big that even if we don’t produce as much hydroxide here, still the world is going to buy the carbonate that we produce,” said Bunel.
“Over time we expect supply to shift to hydroxide. We see that migration will taking place in three to five years,” David Ryan, VP corporate strategy at Albemarle said, although he added that lithium carbonate will always be a large part of the company’s portfolio.
In this uncertain scenario, the key is flexibility to produce either carbonate or hydroxide, agreed the executives from SQM, Albemarle and Tianqi during the event.
“The growth is there, the demand is there. You have uncertainties: different applications, different chemistries, different uses. You need to consider multiple futures to adapt yourself. The key here is flexibility, if you don’t have this flexibility in a market that’s rapidly changing, you’re dumb,” said Pablo Altamiras, VP of lithium and iodine business for SQM.
Lithium and potassium operations in the Salar de Atacama, Chile. Credit: SQM.
MOVING AWAY FROM COBALT
Social and supply concerns are encouraging the lithium-ion battery sector to look at reducing its cobalt consumption. The main concern is that almost two-thirds (66%) of global cobalt supply comes from the politically unstable Democratic Republic of Congo, according to US geological data.
Cobalt is rarer than other metals used in batteries such as lithium and graphite and it is typically produced as a byproduct, meaning it generally comes from nickel or copper mining.
“The industry is getting a lot of pressure from end-users after child labor in the Democratic Republic of Congo was exposed,” Gao said.
This social awareness has not only led important companies to perform due diligence procedures as regards responsible sourcing, it has also driven the development of new chemistry in li-ion batteries.
Higher nickel content batteries are already seen as the next step to lowering cobalt content. For example, NCM811 cathodes are slowly growing in popularity.
“The more nickel I put in, the more energy dense I get. The more cobalt I take out, the less expensive it is. There’s every incentive in the world to take cobalt out. You get a better battery, you get less of a cobalt risk. The best in the class is Tesla with batteries with 2.8% cobalt,” Hoffman told BNamericas.
Tesla has said repeatedly that its NCA batteries, produced by Panasonic, have been drastically reducing dependence on cobalt.
While lithium demand growth will more than triple over the next six years, cobalt usage in batteries will grow at a slower pace, to 110,000t in 2025 from the current 50,000t, according to Pulead’s estimates.
The other problem with cobalt is that it is still the most expensive material in batteries.
“Nickel costs US$11,000/t, cobalt costs US$35,000/t and was at US$100,000/t. So you really don’t want the cobalt around,” said Hoffman.
Manganese could be a good substitute, Hoffman added. “Manganese will probably be the metal that they will try to use, with the manganese market being 10 times greater than the nickel market,” said Hoffman.
SOLID STATE BATTERIES
Solid state batteries are seen as the Holy Grail in the lithium-ion battery industry.
In a solid state battery, the liquid electrolyte is removed and replaced by a solid electrolyte. When you remove the liquid electrolyte, it is safe to take out the graphite anode and replace it with a lithium metal anode.
Solid state batteries need fewer safety precautions and they are denser, thus improving energy and power densities. Their technology is also believed to allow faster recharging of electric cars.
“We are firm believers that solid sate batteries will change the world. Solid state batteries, in which the liquid is replaced by solid electrolytes, are the leading candidate to become the next technology,” Hoffman told BNamericas.
Lithium metal anodes have an unbeatable theoretical capacity, said Chloe Holzinger, a research associate at Lux Research. However, lithium metal has its challenges, she said. “Dendritic growth on the anode surface is a problem as it limits cycle life and can even short-circuit in the battery and developers are seeking to resolve this by adding protective layers on the surface or by pairing the anodes with solid electrolytes,” Holzinger said.
There is also a higher cost to build solid state batteries. “Lithium metal is significantly more expensive than graphite and a scalable supply chain does not yet exist,” she said.
Where is the lithium metal going to come from? “It will come mostly from lithium chloride from brines. You will use precipitation and electrolysis processes. The dream is to have large solar processes in the Atacama and electrolysis processes that will precipitate lithium chloride,” said Hoffman.