What Drives the Future of Battery Technologies? (Part 1)
When you google “battery technology trends,” 9.5 out of 10 search results focus on battery chemistries. These advancements will help improve battery solutions' energy density, longevity, safety, charging time, and levelized cost of energy (LCOE). However, they only represent one part of the bigger picture.
When choosing battery chemistries, more options aren't always better. The availability of new chemistries doesn’t mean you can immediately benefit from them. When you implement traditional battery solutions, you’re locked into one battery chemistry and cell type once you’ve designed your products and the supply chain around it.
Unless you use software-defined batteries (SDBs), you often need to overhaul your battery pack design and potentially the product/equipment to accommodate new chemistries or cell types.
In fact, SDBs can increase longevity, performance, safety, and TCO using existing chemistries and components without changing the hardware. You can also mix different cell types/chemistries — even ones yet to exist — to meet shifting requirements on the fly, taking one big piece of unknown out of the decision-making equation.
SDBs supported by the Tanktwo Battery Operating System (TBOS) will make worrying about the future of battery chemistry and how it impacts your product design or supply chain processes a thing of the past. Instead, it accommodates the best technology available at any moment to future-proof product design and operations.
If battery chemistries aren’t such a determining factor, what should business leaders focus on when considering their electrification strategy?
The battery value chain: The big picture view
The battery value chain is a multi-stage process that covers all the activities from procuring raw materials to addressing end-of-life products (e.g., recycling and safe disposal). For battery-powered equipment, it involves the following steps:
Mine and extract raw materials like lithium, nickel, cobalt, phosphorous, and copper.
Process the metals and produce battery chemicals.
Assemble components like cathodes, anodes, electrolytes, and separators to make cells.
Design and manufacture equipment parts and manage the supply chain.
Collect and sort used batteries for second-life applications, recycling, or disposal.
The global battery value chain is complex, involving multiple players from many countries. For example, the Democratic Republic of the Congo (DRC) produces most of the world’s cobalt, while South America and Australia have the lion's share of lithium sources.
Meanwhile, China accounts for at least half of battery cell component production and 73% of global lithium battery manufacturing capacity. The U.S., Canada, Japan, South Korea, Germany, and India are involved. We can also expect chip manufacturers in Taiwan to play a role in the rise of smart energy solutions like software-defined batteries (SDBs).
However, the roles and players can change on a dime based on shifts in market demand, policies, new battery technologies, or geopolitical factors. How can organizations navigate this complex landscape and stay resilient under the pressure to electrify their products and operations at an aggressive pace?
Understanding battery value chain challenges
Environmental, social, and governance (ESG) concerns often pose the biggest challenges in the battery value chain:
Environmental: The processes of extracting and refining raw materials and producing cells often have severe environmental impacts. These include land degradation, biodiversity loss, hazardous waste, and water, soil, or air contamination. Meanwhile, unsafe or illegal disposal of used cells may cause severe toxic pollution.
Social: Labor law violations, child and forced labor, discrimination, infringement of indigenous rights, and unsafe working conditions are widespread in developing countries. Organizations that procure raw materials from these sources could experience backlash and reputational damage as public scrutiny mounts.
Governance: Many organizations struggle to achieve transparency in the supply chain and financial reporting when managing the complex battery value chain. They must implement robust audit mechanisms to avoid becoming involved in corruption, bribery, funding armed conflicts, and tax evasion to protect their legal and business interests.
Besides ESG concerns, the battery value chain faces many economic barriers, such as raw material and energy price peaks and volatility, fast-changing national regulations, and incentives, subsidies, or taxes. These factors may affect battery prices, impact the financial viability of initiatives, and delay efforts to accelerate decarbonization.
Business leaders must also consider scalability challenges. These may include constrained or disrupted supply chains, intellectual property protection, technology disruption or uncertainty, material or machinery shortages, and lack of skilled labor.
Organizations are more vulnerable to supply chain disruptions when using traditional battery technology, which locks them into specific cell technologies and form factors. The inflexibility may also increase after-sales, repair, and maintenance costs — making their products less appealing to buyers.
Additionally, the current battery value chain has many inefficiencies and wastages. For example, many operators throw out cells with most of their capacity left because battery management systems (BMSs) lack the capability to collect granular data on the cells’ state of health (SoH) to inform second-life applications.
Meanwhile, operators must throw out the entire battery pack even if only one cell fails, creating massive wastage and inefficiency. The additional costs also make some use cases less economically viable or attractive to buyers. New battery chemistry won’t solve these challenges. Instead, we need new technology to minimize wastage.
So, how can we shape the battery value chain to address current challenges and mitigate risks as global electrification accelerates? Our next installment will delve into the critical components of the future’s battery value chain.
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