Contemporary Amperex Technology Co. Limited (CATL) is a Chinese battery manufacturer, HQ’ed in Fusian, founded in 2011, with >30,000 employees. It may produce as many as one-third of all the lithium ion batteries in the world. This data-file assesses whether it has made a breakthrough in sodium ion batteries.
Lithium shortages. Our review finds that CATL has been vocally warning of lithium shortages since 2016. Lithium demand rises 30x in the energy transition, per our own models here, while there are also challenges ahead for next-generation lithium extraction technologies.
However sodium comprises 2.7% of the Earth’s crust, versus Lithium’s 0.006%. In principle, sodium ion batteries can achieve comparable energy densities than lithium ion batteries, c80-90% round-trip efficiencies, similar temperature ranges and better safety. Hence in 2021, CATL announced it would be bringing a sodium-ion battery to market by 2023.
Technical challenges for sodium ion batteries are nicely illustrated in this data-file, which has simply reviewed a subset of CATL’s sodium ion battery patents. A core challenge recolves around innovating new anode and cathode materials that are adapted to sodium’s c30% wider diameter than lithium.
There are undoubtedly some exciting innovations in this patent library, especially around cathode materials. So can we de-risk the CATL sodium ion battery? If this was a standalone patent library, we might not be able to de-risk CATL’s 2023 target to produce sodium ion batteries at commercial scale.
This data-file approximates the production costs of battery-grade lithium from brines, both via traditional salars, and via the emerging technology of direct lithium extraction.
Costs are c40-60% lower than mined lithium production in ($/ton of lithium carbonate equivalent). CO2 intensity is 50-80% lower (in kg/kg).
The data-file is informed by capex and opex disclosures from companies, and data from technical papers, which also cover the ionic composition of different brines.
Note: compared to other models we have constructed, there are more uncertainties and rounding in this model, because precise chemistries vary brine by brine, and because direct lithium extraction techniques are still not fully mature. Hence we have only attempted a high-level model.
Global graphite volumes grow 6x in the energy transition, mostly driven by electric vehicles, while marginal pricing also doubles. We see the industry moving away from China’s near-exclusive control. The future favors a handful of Western producers, integrated from mine to anode, with CO2 intensity below 10kg/kg. This 10-page note concisely outlines the opportunity.
This data-file captures simplified economics for producing battery-grade graphite (i.e., 99.9% pure, coated, spheronized graphite) in an integrated facility, from mine to packaged output.
Marginal costis estimated at around $10,000/ton for a 10% IRR. CO2 intensity is highly variable and debatable. Input assumptions come from technical papers, company disclosures and one detailed feasibility study (see below).
Numbers are more uncertain than other models we have constructed. However, you can nevertheless stress test the impact of changing graphite prices, electricity prices, CO2 prices, capex costs, wage rates, ore grades, processing efficiency and tax rates.
This data-file is a very simple model, aiming to break down the sales price of a typical mass-market automobile. Our numbers are informed by a survey of typical numbers for specific auto-plants in Europe and the US.
In typical times, a vehicle’s cost is estimated around $30k, of which c25% accrues to suppliers, c20% is sales taxes, c20% is dealer costs and logistics, c10% employees, c10% material inputs, c10% O&M, 1% electricity and c5% auto-maker margins. Numbers and calculations are in the data-file.
Amidst energy and industrial shortages, it is likely that the same vehicle could cost closer to $50k, representing c40% inflation, mostly due higher costs of materials and bottlenecks in supply chains.
This data-file screens companies that make power-MOSFETs, especially for EV charging and new energies applications. These are the transistors used to convert AC inputs into safe, fault-free and high-power DC charging outputs.
The screencovers six of the leading public companies, each with 5-25% market share, making the industry relatively concentrated. We also profile the leading public producer of silicon carbide input materials.
In each case, we outline the company’s size, geography, focus, patents, market share and key notes on EV fast-charging MOSFETs.
This 14-page note compares the economics of EV charging stations with conventional fuel retail stations. They are fundamentally different. Our main question is whether EV chargers will ultimately get over-built, as retailers look to improve their footfall and accelerate the energy transition. This means prospects may be best for charging equipment and component manufacturers.
Aspen Aerogels was founded in 2001 and went public in 2014, manufacturing aerogels at a plant in Rhode Island, with c300 employees, $100M revenues (in 2020) and an installed base of $1bn of materials.
Its products are aerogels, with thermal conductivities that are 30-80% below conventional insulators. Target markets include preventing thermal runaway in electric vehicle batteries and cryogenic industrial processes (e.g., LNG).
We have reviewed Aspen’s recent patents in this data-file. This data-file notes some challenges, using our usual patent review framework.
There are around 50,000 giant mining trucks in operation globally. The largest examples are around 16m long, 10m wide, 8m high, can carry around 350-450 tons and reach top speeds of 40mph.
This data-file captures the economics of a mine haul truck. A 10% IRR requires a charge of $10/ton of material, if it is transported 100-miles from the mine to processing facility. Assumptions can be stress-tested overleaf.
Fuel consumption is large, around 40bpd, or 0.3mpg, comprising around 30% of total mine truck costs at c$1.5-2/gal diesel prices. Some lower carbon fuels are c5x more expensive, and would thus inflate mined commodity costs.
High utilization rates are also crucial to economics, to defray fixed costs, which are c50% of total costs, as our numbers assume each truck will cover an average of 500 miles per day for c20-25 years.
ChargePoint went public via SPAC in March-2021, via a combination with Switchback Energy, valued at $2.4bn. This made it the first listed EV charging company in the US. It aims to be one of the world’s largest suppliers of charging services amidst the electrification of mobility and freight.
Our review finds a library of simple, clear, specific and easy-to-understand patents that are heavily focused on operational aspects of running EV charging networks, especially the customer and EVSE provider experience. Many also cover the look-and-feel of charging stations and their components. But whether there is a pure ‘technology edge’ is more debatable.
A controversyfor the future is how aggressively ChargePoint and other EV charging companies will enforce against almost inevitable patent infringements, especially if competition intensifies in this sector.
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