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EV batteries are one-third of the world, competing in the next-generation car market

As the automotive industry shifts to all-electric vehicles, automotive batteries and power-related components will play an important role in the future. In September 20201, South Korea’s SNE Research released an analysis report showing that the world’s largest supplier of EV (Electric Vehicle) batteries is still China’s CATL New Energy Technology (CATL), with a growth of 6.9%. 30.3% leads the pack, and the second-ranked player is South Korea’s LG Energy Solution, which has a market share of 24.5%, which has also grown by 1.5% over last year. China’s BYD ranked fourth with a market share of 7.7% with a growth of 1.9%. In addition, Japan’s PANASONIC and South Korea’s SDI ranked the third and sixth suppliers with -7.5% (13.3%) and -1.7% (4.9%) respectively. South Korea’s SK On ranked fifth, with a growth rate of 0%. It can be seen from this that Korean players are catching up with Chinese battery players by devouring the PANASONIC market.

The Three Kingdoms of EV batteries compete for the top spot

Lithium-ion batteries were developed by Akira Yoshino, who won the Nobel Prize in Chemistry. In the past, Japan was the main leader in research and development. However, with the rapid increase in global electric vehicle (EV) sales and the increasingly fierce competition in the automotive battery market, China has become the largest producer of lithium-ion batteries. Although Chinese companies have the largest market share at this stage, the three major battery companies in South Korea are actively robbing the market while maintaining their market size, while Japanese companies are constantly losing the market under the pressure of double enemies (Figure 1). ).

 EV batteries are one-third of the world, competing in the next-generation car market

Figure 1: Global market supply of EV batteries from January to August 2021. South Korean players are catching up and threatening China’s dominance. (Source: South Korea SNE Research; CTIMES collated)

According to data from SNE Research, the total amount of electric vehicle batteries from January to August 2009 was 162.0GWh, an increase of approximately 2.4 times over the previous year. However, due to strong sales from Chinese and Korean players, PANASONIC’s market share performance has not grown relatively, on the contrary, it has gone from bad to worse. PANASONIC analyzed the situation and found that under the global rush to invest in EV vehicles, TESAL is no longer the leader, and the era of monopolizing the electric vehicle market is over. In addition, Chinese and Korean battery manufacturers can quickly grasp this change and actively expand sales force. The performance is very eye-catching, but PANASONIC has not fully grasped this wave, making the market steadily retreating.

On the other hand, Prime Planet Energy & Solutions, a joint venture between PANASONIC and Toyota, plans to reduce the production cost of EV batteries by 50% in 2022 to increase its market share. Toyota also invests 1.5 trillion yen, which is expected in 2030. Developed and produced batteries for EVs by itself before the end of the year.

Among them, 1 trillion yen of investment is used to build battery production lines. By 2025, Toyota will add 10 new lithium-ion battery production lines. In addition, it is expected that by 2030, the number of production lines will be gradually increased at a rate of 10 or more per year. At the same time, it is also cooperating with battery manufacturers to establish a production system. It is estimated that there will be a total of 70 battery production lines, with an annual output of more than 200GWh.

In terms of development, Toyota plans to achieve the goal of reducing battery production costs by more than 50% by 2030 through two efforts. include:

1. Reduce battery cost by more than 30%: use the development of low-cost battery materials and mass production technology.

2. Improve the electricity efficiency (power consumption) of EV vehicles by 30%, thereby reducing the cost of battery capacity by 30%.

3. The integrated development of EV vehicles and batteries: including mechanical efforts such as reducing driving resistance, reducing weight, improving aerodynamics, avoiding brake loss, and adopting more efficient power components and power management. .

Therefore, while improving the basic characteristics of EV vehicles, a new generation of high-efficiency batteries will also be adopted. Provide electric vehicles at a more competitive price (Figure 2).

  EV batteries are one-third of the world, competing in the next-generation car market

Figure 2: Through the integrated development of EV vehicles and batteries, the goal of reducing battery costs is achieved (source: Toyota; CTIMES finishing)

The outside world is not optimistic about such a plan, because South Korean companies have begun to invest in research and development to reduce battery production costs, and Korean media generally believe that PANASONIC has only focused on dealings with TESLA and Toyota for a long time, and has not been too concerned about the outside world of electric vehicles. Great interest, so I question whether PANASONIC can really increase its market share.

Actively develop vehicle battery materials other than lithium ion

For car batteries, lithium is almost irreplaceable today. As a result, the production and usage of lithium-ion battery raw materials have increased sharply, and prices have also soared, causing car manufacturers and battery manufacturers to use their best efforts to find newer battery materials and processes. method.

The global lithium reserves are about 111 million tons, and they are only distributed in a few countries, 40% in Chile, 20% in Australia, and less than 10% in China and Argentina. The distribution is quite uneven (Figure 3).

  EV batteries are one-third of the world, competing in the next-generation car market

Figure 3: The distribution of the reserves of lithium materials in the main producing countries, with a total storage of about 111 million tons. (Source: U.S. Geological Survey; compiled by CTIMES)

The global annual output of lithium was about 300,000 tons in 2017, about 400,000 tons in 2018, and the output steadily expanded to about 450,000 tons in 2019. However, due to the impact of COVID-19 in 2020, the output will be roughly the same as in 2019. 433,000 tons. Australia is currently the world’s most important producer of lithium, accounting for about 50%, and Chile accounting for about 20%. Together with China and Argentina, these four countries have already included more than 90% of production. It is estimated that China’s future production may increase somewhat, because some salt lakes in China can obtain lithium, and some lithium ore can be mined. In addition, low-quality ore that has not been explored before is also being planned (Figure 4).

 EV batteries are one-third of the world, competing in the next-generation car market

Figure 4: Major producers of lithium materials, with an annual output of about 433,000 tons in 2020. (Source: U.S. Geological Survey; compiled by CTIMES)

In terms of prices, since 2016, the surge in procurement from China has pushed prices up to around US$18,000 per ton. It was approximately US$12,000 in mid-2018, although it was down to approximately US$5,000 at the end of 2020. Due to the increase in Chinese demand, it has now risen again to US$10,000.

There are currently two ways to produce lithium materials: it can be obtained from ore mining or using brine reaction. Production from ore is estimated to cost approximately US$6,000 per ton; the price of US$5,000 in 2020 is already lower than the production cost. The cost of using brine reaction to obtain lithium is lower than that of mining, about US$4,000. Regardless of whether it is ore mining or the use of brine reaction, the price of US$5,000 is very difficult for producers.

LG and SK changed their strategies and started producing low-cost LFP

As mentioned above, South Korean companies have already begun to develop low-cost car batteries. For example, LG Energy Solutions and SK on have changed their traditional strategies and started to use lithium iron phosphate (LFP) as a material to develop a new generation of car batteries. In the past, these three Korean battery manufacturers were not interested in LFP. Basically, most of the battery materials that use LFP are Chinese companies. Because they do not need to use cobalt and nickel, they are cheaper than lithium-ion batteries in terms of cost, but they have disadvantages. The cruising range is shorter than that of lithium-ion batteries.

In addition, the fire risk of LFP is much lower than that of lithium-ion batteries, and the most important point is that electric vehicles have begun to develop towards lower prices, and the demand for LFP is increasing. In such an environment, South Korean companies feel that technological capabilities alone cannot bring advantages, and price competition must be adjusted. On the basis that the patent of LFP will expire on April 27, 2022, LG Energy Solutions and SK on start to change their strategies and start to produce cheaper car batteries at a lower cost.

Adjust NCMA’s cobalt-nickel ratio to reduce material costs

LG Energy Solutions plans to produce and provide Lamination NCMA long batteries (580mm X 113mm) for GM heavy-duty electric trucks in South Korea from October to December 2021. The battery currently used by GM heavy-duty electric trucks is NCM622 (Nickel 6: Cobalt). 2: Manganese 2). Because the proportion of cobalt material used in the new Lamination-type NCMA long battery is reduced by about 15%, compared with NCM622, the cost is reduced a lot.

As for Ultium Cells LLC, a joint venture between GM and LG Chem, production will begin in 2022. Ultium Cells LLC has signed a contract to purchase battery raw materials such as nickel, cobalt, lithium and graphite with Li-Cycle, a North American battery recycler, to reuse materials to reduce costs. LG Energy Solutions has also established a joint venture with Hyundai Motor in Indonesia to establish NCMA batteries with an annual output of 10GWh. Since Indonesia is the country with the largest nickel reserves in the world, it is expected to reduce raw materials by 30% to 40% by setting up factories in the local area to obtain nickel raw materials. purchase cost.

SK on also plans to start producing low-cost NCM batteries at its Georgia plant in the United States in 2023, using a material ratio of 90% nickel, 5% cobalt and 5% manganese. It is expected that NCM batteries containing 94% nickel will be further developed in 2025. In addition, SK on also reduces greenhouse gas emissions through its patented technology of extracting high-purity lithium hydroxide from waste batteries.

Offshore factories respond to trade protectionism

According to market forecasts, starting from 2023, the shortage of EV batteries will become more serious. Coupled with the impact of trade protectionism, China, the United States and Europe have adopted policies that are beneficial to their own electric vehicles and car batteries. Therefore, the three Korean battery companies are actively setting up production plants overseas to reduce the impact of trade protectionism, especially actively setting up factories in North America. For example, LG Energy Solutions has 4 factories and SK on has 5 factories. Samsung SDI is also actively planning to set up factories overseas.

In terms of annual production capacity, LG Energy Solutions expects to reach 155GWh by the end of 2021 and increase to 430GWh in 2025. SK on’s goal is to increase to 40GWh in 2021, 220GWh in 2025, and further to reach the world’s leading 500GWh in 2030. At the end of 2020, Samsung SDI’s annual battery production capacity has reached 30GWh.

All-solid-state batteries suitable for HEV begin to attract attention

In view of the characteristics of different models of HEV, PHEV and EV, Toyota is also actively developing the most suitable batteries. For example, HEV focuses on instantaneous power. In addition to the nickel-metal hydride batteries and lithium-ion batteries currently used, the bipolar nickel-metal hydride batteries that have been used earlier are also actively improving. PHEV and EV emphasize battery endurance. The battery development goal required for these two types of cars is that the new car can maintain a battery capacity retention rate of 90% after 10 years. Toyota believes that the key to achieving a long life is how to reduce the deterioration of the negative electrode surface of the battery. In this regard, various methods such as surface treatment to suppress deterioration, reduction of water content in materials during production, uniform cooling structure, and control system to reduce battery load can be adopted to maintain the capacity retention rate (Figure 5).

  EV batteries are one-third of the world, competing in the next-generation car market

Figure 5: Development focus of next-generation lithium-ion batteries (source: Toyota; CTIMES finishing)

Although the high-power characteristics of all-solid-state batteries can be applied to hybrid vehicles (Table 1), the service life is not long, so they are more suitable for use in HEVs rather than EVs. The reason for the low lifespan is that during the use of all solid-state batteries, there is a gap between the solid electrolyte and the anode active material. Toyota is also working hard to develop materials that can prevent this situation from happening, hoping that after overcoming the problem, it can be further applied to EV vehicles.

At the same time, Hitachi Zosen announced in March 2021 that it would develop the world’s largest capacity 1000mAh all-solid-state battery, which is about 7 times that of previous products. This new battery can operate in harsh environments ranging from -40°C to 100°C, meeting the needs of industrial machinery and environments in special environments.

Table 1: The difference between all-solid-state batteries and lithium-ion batteries (source: Nikken Total Sourcing; intelligent finishing)

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  EV batteries are one-third of the world, competing in the next-generation car market

Samsung SDI, which mainly produces cylindrical and prismatic batteries, is developing new all-solid-state batteries. It is expected to be put on the market in 2027, and it has also begun mass production of high-nickel NCA batteries-Gen5, with a nickel content of more than 88% and a cobalt content of less than 5%. The production cost per kWh is about 20% lower than that of traditional products, and the energy density is quite high. It can travel 600 kilometers with a single charge. It is rumored that BMW’s iX electric SUV (multifunctional sports car) and i4 sedan will use this battery. The next-generation Gen6 battery, which is actively being developed, is expected to use more than 90% nickel production technology.

SiC pushes EV power management to a new level

Claire Trodec, director of power and wireless at French market research company Yole Developpement, said that if SiC power semiconductors are effectively used, there is an opportunity to reduce the cost of EV batteries by US$750. “SiC technology is the power behind the next generation of power semiconductors” is already a universally recognized trend in the industry, but SiC power semiconductors are the driving force leading the development of automotive EVs. Therefore, all compound semiconductor companies around the world are fully committed to this. Development in the technical field (Figure 6).

 EV batteries are one-third of the world, competing in the next-generation car market

Figure 6: Silicon carbide technology will play an important role in all-electric vehicles. (Source: ROHM semiconductor; CTIMES finishing)

In the past, Cree has demonstrated compound semiconductor process capabilities in the LED field. Therefore, after selling the LED business, it put all its energy on SiC power semiconductors and changed its name to Wolfspeed. Its CEO Gregg Lowe said: Silicon carbide technology will promote the development of next-generation power semiconductors. In fact, Wolfspeed has been expanding its SiC capacity for many years. There is still an expectation of a global semiconductor shortage, so ST Micro expects that the IC supply chain will not be able to recover quickly. At the same time, it is optimistic about the strong demand for SiC components in electric vehicles in the future. Take the supply relationship between ST Micro and TESLA as an example, TESLA’s model 3 In 2018, it was the first to use ST Micro’s SiC-MOSFET as an important part of the power module in Traction Motor. Prompted ST Micro to extend the cooperation with Wolfspeed, the total amount of 150mm bare chip (Bare Chip) and SiC epitaxial supply contract of 800 million US dollars.

It is not only ST Micro that has a pessimistic view on the possibility of a balance between supply and demand of compound semiconductors in the future. After Infineon failed to acquire Cree’s Wolfspeed business in 2017, in addition to signing a multi-year SiC wafer supply contract with Cree, because of concerns that the supply and demand of compound semiconductors will continue to be severe in the future, Infineon predicts that the SiC power semiconductor market will be in the next five years. Will grow at a rate of 40%. In fact, SiC power semiconductors have been widely used in 400-800V and above systems, which prompted the signing of SiC materials and epitaxial technology contracts with Japanese wafer manufacturer Showa Denko.

The shortage of semiconductors in 2021 will have a serious impact on the supply chain of automakers. However, TESLA signed a supply contract with ST Micro a few years ago, and shipments have been fairly stable. So far, it has not been seen that TESLA has suffered too much.

In other words, in the future, the power supply design of electric vehicles is inseparable from SiC components. In addition to Traction Motors, SiC components are also widely used in on-board chargers (OBC) and DC-DC converters. For example, ST Micro not only provides long-term SiC components required by TESLA, but also enters strategic alliances with Renault, Nissan, and Mitsubishi Motors, and provides SiC power components required by BYD in OBC.

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