Lithium ion batteries: breakdown of materials?

This data-file is a breakdown of lithium ion battery materials and lithium ion battery costs. A typical lithium ion battery has a cell-level energy density around 250 Wh/kg, weighs 380 grams, of which 40% is cathode metals, 25% is anode materials, 20% is current collectors, 15% is electrolyte and separators. Total cost is $150/kWh, half materials, half manufacturing.

This data-file disaggregates the materials used in lithium ion batteries and their costs. The breakdown covers 25 categories (e.g., lithium, nickel, graphite), across 10 different battery chemistries (e.g., NCA, NMC, LFP and others, chart below).

Lithium ion battery materials
Materials Used in Different Lithium Ion Battery Chemistries

Materials costs of lithium ion batteries can be calculated by comparing our mass balances above with the costs of different input commodity prices. Materials were 10% of the cost of a lithium ion battery in 2012, 50% in 2019, and as much as two-thirds during the commodity price spikes of 2022, when 8 of the 14 materials in our build-up rose to new ten year highs. Over the past ten years, the cost of input materials has risen at a 3% pa CAGR.

The chart below shows the material costs of lithium ion batteries compared with the total cost of battery packs, estimated by BNEF. The comparison shows that it may be hard to continue the pace of deflation from the past decade without enormous materials ‘thrifting’, while materials pricing is going to dictate the future trajectory of battery costs.

Lithium ion battery materials
Lithium ion battery costs breakdown between materials and manufacturing

Manufacturing costs of lithium ion batteries include 40% electrode manufacturing (the largest line is coating and drying), 40% cell finishing (the largest line is ageing) and cell assembly (the largest line is generating active material compounds). There is a full build-up across 15-lines in the data-file.

Further deflation is expected in manufacturing costs, to help the industry reach cost-competitiveness with ICEs. But it will be counteracted by potential re-inflation for materials, and another more crucial consideration.

Bottlenecks for lithium ion batteries are widely discussed, but the data-file shows that different battery chemistries can be alternated, depending on which bottlenecks are biting. The amount of nickel in a battery cathode can vary from 0-70 grams/cell. Cobalt can vary from 0-30 grams/cell. Expect thrifting.

Lithium ion battery materials

LFP battery chemistries are a contender that can eliminate the use of nickel, manganese and cobalt. This comes at the expense of c20% lower energy density than NMC cells. It is not that the cells are heavier, but that LFP batteries run at 3.2V, versus others at 3.6V. Although some evidence also suggests LFP cells have lower battery degradation rates.

Future energy density of lithium ion batteries will double in the 2030s and can ultimately quadruple, using heroic assumptions, per our separate data-file here. We have also summarized all of our research into different batteries in the energy transition.

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