16 ms·

The economics of cheaper batteries

225 points by vanburen 6y ago

baybal2 6y ago
Not sure where Boomberg is getting its digits. Wholesale price for LFP cells in China has been stably below $100 per kwh for like 5 years. The only problem is getting to those wholesale quantities. All major LFP cell makers seem to run a cartel to cut off small distributors from preferential pricing. Anything you can buy in small wholesale is at least 2x the price of what companies making EVs are getting. Once upon a time good offers like these https://item.taobao.com/item.htm?id=599076665397 https://item.taobao.com/item.htm?id=599076665397 come up, and then vanish.
- LeifCarrotson 6y ago
  I think the problem may stem from the economics of winding machines. They're a huge investment, and require comparable investments in clean room space, and it's hard to increase capacity. If Dell or Tesla is going to commit to a large number of cells per quarter, Panasonic or Samsung or whoever can install and operate that many winding machines (or, in Tesla's case, install an entire factory). If somebody wants less, they're buying excess stock that's not earmarked and it makes sense to pay more for that.
  - baybal2 6y ago
    > I think the problem may stem from the economics of winding machines. They're a huge investment, and require comparable investments in clean room space, and it's hard to increase capacity. Biggest LFP cell makers have many factories the size of Elon's ones, and they all quietly omit their output figures for non-consumer cell businesses because... taxmen. LFP manufacturing has been ridiculously profitable from 2010 to 2015, so even hand made cell shops were making millionaires. Now, the party is over. Big manufacturers have crashed the margins using giant state handouts. You could get a turnkey LFP cell line running in a garage for around $2600k-$3000k, but the time of good margins is over. To make LFP under $100 per kwh, and still make money, you need 20-30+ lines, but with such volumes the only buyers will be EV companies, and we are back to square one with this. You can still operate on garage scale, and try push your cells on online auctions, like many, many small makers still do, and live off small bites of distributor margins. But you will be doing this knowing that you truly live in the shadow of biggest manufacturers, who, or whose distributors will start poaching your clients once you get big enough for them to get wind of you.
- luckylion 6y ago
  > All major LFP cell makers seem to run a cartel to cut off small distributors from preferential pricing. Anything you can buy in small wholesale/retail is at least 2x the price of what companies making EVs are getting. That sounds like an easy way to make money. Buy large quantities, sell them in smaller batches at only 1.5x the price.
  - baybal2 6y ago
    > That sounds like an easy way to make money. Buy large quantities, sell them in smaller batches at only 1.5x the price. They will figure out who you are, and you say bye bye to your EV business.
    - eru 6y ago
      Why would they do that? What's the incentive? You could even pay them slightly larger prices and still make a profit.
      - baybal2 6y ago
        They want to keep small wholesale prices high. The whole non-EV battery market is still quite, quite sizeable.
        eru 6y ago
        There's more than one producer. Wouldn't any one of them benefit from breaking rank?
- mtgx 6y ago
  You seem to be talking about battery cell price and the article is talking about battery pack price, which last I checked tends to be at least 30%-50% higher. For EVs it might be more if they also add cutting edge cooling systems, etc.
  - syncsynchalt 6y ago
    This was my read too; cell price has long been under $100, pack price not yet.
- Someone 6y ago
  I don’t see why that requires a cartel. Even business-to-business, the administrative/legal overhead of smaller orders implies that, for fixed per unit profits, prices of smaller orders go up. Business-to-consumer, order size gets smaller, and consumer protection laws come into the picture, further increasing prices. Is there even _anything_ that you can get in small wholesale/retail at prices lower than double of what companies ordering by the shipload pay? Edit: consumer electronics might be an exception.
  - baybal2 6y ago
    I heard plenty of first party accounts. A salesman from the cell company comes to the maker of electric busses/trucks/LSEVs and says "resales of cells is strictly, strictly, strictly forbidden," and that they will unleash all torts imaginable if they found out. And this is the prime reason why good offers popping on online auctions don't last long. In comparison to margins of wholesale distributors of just any other industrial commodities in China, margins of large battery cell sellers look unbelievable. In comparison, 18650 cells can be easily found in retail at under 125% of the wholesale price in China.
    - akiselev 6y ago
      > A salesman from the cell company comes to the maker of electric busses/trucks/LSEVs and says "resales of cells is strictly, strictly, strictly forbidden," and that they will unleash all torts imaginable if they found out. Because what invariably happens is the automaker rebins the cells based on their own QA and sells the crappy cells as automotive grade instead of sending back to the manufacturer. Next thing you know, Joe Hacker's total electric conversion uses all the imperfect cells in one poorly balanced battery and burns down a city block. I don't know if it has resulted in anything dramatic like that yet but most of the surplus cells I've bought on eBay that looked like they came from automotive stock were subtly out of spec, enough to be dangerous in high power/capacity configurations. > In comparison, 18650 cells can be easily found in retail at under 125% of the wholesale price in China. China doesn't have much in the way of consumer protections or a tort system that's as accessible to the general public as in the US/EU.
- jillesvangurp 6y ago
  It's not a cartel or conspiracy but a simple matter of demand being consistently larger than the available production capacity. Right now owning a battery factory is a good business because there are a lot of manufacturers that are not able to secure batteries. Several car manufacturers are being blocked by this or have reduced their production ambitions because of this. I think people are also confusing manufacturing cost vs. price here. Obviously, those are not the same. The article is mostly talking cost. The packaged products that e.g. Tesla sells (cars, battery packs for domestic/grid usage, etc.) include more than just the battery cells. In any case, Bloomberg is being a bit vague. On one hand, they are predicting mid 2020s for the cost to drop below 100$ and on the other hand you have people guestimating that Tesla is close to that right now. You could of course argue average price, i.e. other manufacturers are not there yet. Demand for batteries is going to continue to increase for a while. Tesla is talking about TW factories now. The giga in giga factory used to refer to GW. That's a good indication of what they are planning to do. At that scale, the average industry cost and their cost are going to be very similar unless others also grow production capacity at the same pace.
  - deleted 6y ago
    [deleted]
  - Ajedi32 6y ago
    > The giga in giga factory used to refer to GW. That's a good indication of what they are planning to do. Haha, I never thought about that. That's actually a really clever way of quantifying the output of a battery factory. Battery capacity can be measured in watt-hours, so battery factory output could be measured in watt-hours of battery capacity produced over time, and power*time/time just reduces back to power (measured in watts). Therefore, you could say that a factory which produces an average of 1 Gigawatt-hours of battery capacity every hour is producing 1 Gigawatt of battery capacity. I like it. And yeah, a TW factory sounds like it'd be operating on a pretty ridiculous scale if it lives up to its name.
    - sandworm101 6y ago
      Another way to look at it would be to ask "how much power would the factory need to charge all the batteriers as it produces them?" A gigawat factory would need a gigawatt electical connection dedicated to charging. That logic suggests that the largest factories will most certainly not be charging thier batteries.
- pjc50 6y ago
  I'm not clear why this should be? Effectively 50% discounts for the largest customers? Market share acquisition strategy?
  - baybal2 6y ago
    Where have you ever seen a 50% discount for an industrial commodity?
    - pjc50 6y ago
      If the open wholesale price is 2X and the few big customers are paying X, that's equivalent to the ""true"" open market price being 2X and the favoured customers getting a 50% discount. This isn't unusual in enterprise software sales, but it does seem odd for industrial commodities. What I'm asking is why, if supply is so tight, the favoured customers get favourable prices rather than all prices creeping up.
      - bluGill 6y ago
        There are several reasons to give big discounts. If a customer commits to buying enough over that you expect to break even over the next N years after paying for equipment, labor and other expenses I'll give them that price because I know for sure that I have a factor for N years. I can make a lot of money now selling any extra batteries I make at market price. Even if I can't sell in any more for a profit next year, I keep my employees paid for all of N years (giving me opportunities to find new markets) which is worth a lot in itself. If I know a customer is well known I might give them a discount just to advertise to others they are my customer. If a customer is large enough that them leaving would affect my bottom line they get a discount to ensure they stay with me. If they provide me something other than money in return they get a discount. Auto makers sometimes extend employee discounts to their suppliers employees. Auto makers often do supply management tasks many levels down (my materials are certified not coming from slave labor, and GM did the research to prove it, GM will do it anyway so it isn't a big deal to let me know). If I expect someone to be a bigger customer I will give them a discount now to ensure they can develop there. If batteries never come down in price from 20 years ago electric cars are non viable so I'll give a discount now because the volume cars represent on a small profit is worth more than all profit at volumes of 20 years ago. That is just a few honest reasons I can think of now. There are also dishonest reasons that I'll ignore, but sometimes they are real.
- woodandsteel 6y ago
  You're confusing the cost for cells with the cost for packs.
- AtlasBarfed 6y ago
  Pack or cell? These days the $100/KWhr target typically refers to pack level costs, which is also what is supposed to enable price parity with ICE cars.
zpeti 6y ago
As far as I know so far most of the lithium used has been from existing copper mines, where there's a lot of lithium, so that's made pinpointing it and extract it fairly cheap. I remember reading there's 5-10 years worth of lithium left in these mines. It will be interesting to see what happens once we need to start looking for new sources again.
- baybal2 6y ago
  The cathode material is pretty much the sole contributor to material cost. Plastic, anode, casing, current collector plates/terminals all make less than a quarter of the price. Main contributor to the cathode powder price is cobalt, and its unpredictable price: bad weather in Congo? Prepare to see the price increase n-fold within few weeks. Nickel comes second, to much lesser extent. LFP cells use radically different cathode chemistry from common cell types, and use no cobalt, or nickel at all, hence the low price. We dump phosphates on in the fields by gigatonnes after all.
  - eru 6y ago
    Cobalt futures are traded on the LME. So factories can lock in fixed prices for cobalt in advance.
    - eigenvalue 6y ago
      This is not a deep market, with daily value traded in the millions of dollar (not hundreds of millions or billions).
      - eru 6y ago
        You can also go to your bank and have them sell you a derivative over the counter. It won't help your average price (just the opposite), but it can take the unpredictability out.
- Tade0 6y ago
  There's an abundance of lithium in the oceans, but it's heavily diluted, so currently there's no large scale process in place to obtain it. But it is possible in principle, just expensive using the technology of today.
npongratz 6y ago
Higher demand causes lower prices? From the article: > "But a battery electric car needs so much battery capacity—40 to 100 kWh, thousands of times more than a smartphone—that they've significantly increased the global demand for lithium-ion batteries. That has helped drive additional price declines, which have started to make it cost-effective to use batteries to improve the electric grid." You need to know both demand and supply to forecast price effects when either or both change. The simplistic assertion that higher demand leads to lower prices is wrong on its face. I'm no expert, nor an economist, but I think it'd be more correct to say that higher demand inspired investments that resulted in more supply, which grew faster than demand, thus driving price declines. EDIT: Another inconsistency that bugs me: > "Frith told Ars that a common battery technology in the last decade was "NMC 111" batteries with equal parts nickel, magnesium, and cobalt. Now companies are starting to move to NMC ratios of 811—with eight times as much nickel as manganese or cobalt. Nickel is two to five times cheaper than manganese or cobalt, so a formula with more nickel is cheaper to produce per kg." So does the "M" in NMC refer to magnesium (as stated first), or manganese (as stated second)?
- IpV8 6y ago
  I'd say higher demand led to more R&D. Supply alone wouldn't drive the price declines, as it used to cost too much to produce high battery capacity so there was a price floor. As demand increased, justifying the R&D helped break down that floor. That and government dollars.
- crazygringo 6y ago
  Over the long run, higher demand can absolutely lower prices. In the short-term, obviously higher demand increases prices if production is held constant. But if there's no obvious constraint on production (e.g. on resources/land/employees/etc.) then yes, over the long-term higher demand usually generates larger-scale businesses/factories which can invest in more efficient production and produce lower prices, and pay off initial investments. Of course, this won't apply if there aren't further economies of scale or investments to recoup. The article seems to be quite clear that this is what it's talking about. I don't think it's making the "simplistic assertion" you're assuming it is -- it's just referring to the concept of economy of scale which most people are familiar with.
gandalfian 6y ago
I'd say home storage is about $750 a kWh in the UK. Plus installation. What do you think, is the future a domestic 50kwh battery in every house or will they be fewer giant ones owned and run by the power company out of sight?
- ksec 6y ago
  I still think it is far better to have a sort of semi centralise place for these Battery just for safety concern. Rather than having a massive battery in every flat. I would guess battery for house in rural area would work. But definitely not for cities.
- marvin 6y ago
  Well, Tesla currently sells a 50kWh battery that also happens to have a really nice car attached to it for $35000. That’s $700 per kWh. It stands to reason that home charging systems will soon come down in price, even if they don’t end up largely being eaten by BEVs with bidirectional charging ;)
  - briffle 6y ago
    They sell a 13Kwh powerwall for $6500. That is down to $500 per kWh. Still not great.
- Someone 6y ago
  Third option: a mid size one in every neighborhood, charged by the neighborhood’s solar and wind (could be either owned by a power company or by the neighborhood) That gives some economies of scale, and keeps the amount of wiring lower.
- pjc50 6y ago
  I can't see a good case for the domestic batteries. Space is expensive. It exacerbates fire risks. It requires maintenance and replacement. Extra complications for renting. And the grid is already there. The smaller the "unit" of storage, the more you need. Doing it at grid level makes it easier to be incorporated into grid stability systems too, collecting payments for "fast frequency response". (Possible exceptions for crofters and islanders)
csours 6y ago
A kilowatt hour of car battery pack costs ~$150 now. I was looking at battery powered lawn mowers last night, and noticed that a 0.42 kWh battery pack costs $350[0]. I know that power tool batteries have different requirements than car battery packs, but that base .42 kWh should still be under $100. I feel like this is the printer/razor model, where you sell the base item for cheap, but the consumables cost are extreme. Although, for long lasting durable goods, you have to make money somewhere, as a good battery mower may last a very long time. 0: https://community.egopowerplus.com/ego/topics/kilowatt-hours-kwh-required-to-fully-charge-the-5-ah-battery?topic-reply-list[settings][filter_by]=all&topic-reply-list[settings][reply_id]=20372921#reply_20372921 https://community.egopowerplus.com/ego/topics/kilowatt-hours...
- bengale 6y ago
  This is something I read a lot when I was looking at getting some Ryobi One+ tools. It ended up being that buying the tools bare was quite reasonable, but getting batteries was extortionate. I ended up getting knock off batteries for a third of the price and they've held up brilliantly. Did bring back memories of knockoff printer ink, I wonder if the tools will start having chips to detect knock offs before long.
- xxs 6y ago
  No idea which lawnmower battery pack you meant. All of them are 18650 elements with the good ones (3A/h, 30A) like 5$/€ retail price. One of them is ~11Wh (say 3.7V) - to get 420Wh you need 38. So the price looks decent retail one - building it yourself with quality elements would be another 25-30 for housing (pref. some polycarbonate composite) and pcb (quality/balancing charger, etc.) LiIon is a lot more expensive and more energy dense than lead/acid combo commonly found in car batteries. Drag racer may drop the entire car battery, replacing it super capacitors to reduce weight.
  - skt5 6y ago
    It's most likely an 56 volt Ego 7.5 Ah battery. I bought mine a few years ago on eBay for $200.
mattbk1 6y ago
> Batteries have already gotten six times cheaper within the last decade, Pedant here:, but you can't get "six times cheaper." You can get one-sixth as expensive, but "six times cheaper" implies some sort of relative comparison being made about rates, not absolute values. The same issue is apparent in the HN title ("costs fell six-fold."
- X6S1x6Okd1st 6y ago
  IMO In colloquial English six times cheaper means 1/6th the price. What a phrase means is very much dependent on how the speaker and the listener interpret it.
dmix 6y ago
Vandium Redox Batteries [1] sound like they have a bright future, I recently came across a startup building home kits which have a significantly longer lifespan than Tesla Powerpacks (allegedly): https://www.startengine.com/storen-technologies https://www.startengine.com/storen-technologies There's a huge plant being built in Dalian, China with 200MW/800MWh with Vanadium (for comparison Tesla Australia plant is 129MW/100MWh with Lithium-ion with plans to double scale this year, but currently only powers 30k homes which isn't much) https://electrek.co/2017/12/21/worlds-largest-battery-200mw-800mwh-vanadium-flow-battery-rongke-power/ https://electrek.co/2017/12/21/worlds-largest-battery-200mw-... Wikipedia has a nice list of largest battery deployments in the world: https://en.wikipedia.org/wiki/List_of_energy_storage_projects https://en.wikipedia.org/wiki/List_of_energy_storage_project... https://en.wikipedia.org/wiki/Vanadium_redox_battery https://en.wikipedia.org/wiki/Vanadium_redox_battery
- gandalfian 6y ago
  Redflow of australia actually makes zinc bromide flow batteries now. It has not been a financial success to put it mildly... Much as I like the idea of flow batteries I think their window of opportunity may be closing.
  - syedkarim 6y ago
    How much are the batteries? Why do you think the window is closing?
    - gandalfian 6y ago
      Because if lithium becomes established as cheap and good enough then there will less incentive to develope other technologies. Redflow I believe costs as much as a lithium battery but claims to degrade less and be able to be 100% discharged. In practice they have proven hard to manufacture reliably or competively. They seemed better when they stayed theoretical. Share price is down about 95%...
      - woodandsteel 6y ago
WalterBright 6y ago
60 Minutes once did a segment on batteries made from seawater and dirt. They were large (low power density), but very cheap, and perfect for grid storage. Haven't heard anything about that since.
- pengaru 6y ago
  Neither seawater or dirt sound like they address the anode or cathode, which seem to be pretty major challenges when it comes to rechargeable batteries. BTW, speaking of seawater and dirt forming a battery, I recently needed a way to measure underground corrosion of buried copper pipe, and it went down a great little rabbit hole uncovering documents such as this [0]. It was fun to go put a voltmeter across various ground-coupled conductors in my home to see what, if any, voltages were present, with the earth serving as part of a battery. [0] https://archive.org/details/CAT78694105 https://archive.org/details/CAT78694105
- Meandering 6y ago
  I think you are refering to Aquion Energy. The company sputtered and was sold to a Chinese equity firm. The product looks like it is dead in the water but, it still was a great idea. The intention was to use the cheapest, safest, and most abundent materials to create a battery. It had low power density and output but, they had a solid lifespan and were environmental sound. https://en.wikipedia.org/wiki/Aquion_Energy https://en.wikipedia.org/wiki/Aquion_Energy
tuatoru 6y ago
Somewhat surprisingly, perhaps, there is still potential in lead-acid battery technology. Ecoult [1] is combining them with supercapacitors to try to get the best of both technologies for grid-scale storage. [1] https://www.ecoult.com/ https://www.ecoult.com/
lcam84 6y ago
We have a systemic problem, our economic system is based on productivity and that is a opposite goal to efficiency. Every time we gain efficiency we have a choice of keep our consumption and pay less for electricity but we choose to increase consumption, for instance any improvement in phone batteries is counter by more powerful chips. Home appliances have improved but we choose to have more appliances instead of less energy consumption. This is called jevons paradox [1] and it needs to happen otherwise there is no profit or job creation. [1] https://en.wikipedia.org/wiki/Jevons_paradox https://en.wikipedia.org/wiki/Jevons_paradox
cinquemb 6y ago
Li-ion… meh
AtlasBarfed 6y ago
That article was somewhat disappointing, but maybe I've been watching too much Tesla battery investor day hype. Between the tabless design patent, the maxwell dry electrode, and other chemistry improvements, I'm interested to see what the battery presentation boils down to in terms of improved density from the dry cathode and cost improvements from tabless and the various chemistries discussed. That million mile reliability is nice, but I'm really hoping for under 100$/KWhr at pack level with improved density to enable 400+ mile ranges. The Tesla prototype around the Nurburgring had me speculating about really dense batteries that enabled a much lighter racing car than what the Taycan was limited by.
- _ph_ 6y ago
  For cars, price and density are very important, and Tesla will certainly improve in those specs too. But for energy storage, longer durability directly translates into an effectively lower price. As power companies often invest in the scales of several decades - a power plant often can be run for 5 decades - the costs are calculated over those time spans.
  - AtlasBarfed 6y ago
    Reuters is predicting an $80/KWhr pack cost announcement. Probably the cobalt-free ones that don't have great density, but still, for the 200 mile range car that's doable.
peter_d_sherman 6y ago
>"In 2010, a lithium-ion battery pack with 1 kWh of capacity—enough to power an electric car for three or four miles—cost more than $1,000. By 2019, the figure had fallen to $156 [...] Forecasters project the average cost of a kilowatt-hour of lithium-ion battery capacity to fall below $100 by the mid-2020s."
raphaelj 6y ago
Is the durability of batteries also improving? Having a significant improvement in this area would have a magnificent effect on some industries. Making batteries last twice as long (e.g. from 2000 cycles to 4000) would basically reduce battery cost by a factor of 2 for trucks, public transport or grid energy storage (6y to 12y lifespan if cycled once per day).

225 points by vanburen 6y ago

Not sure where Boomberg is getting its digits. Wholesale price for LFP cells in China has been stably below $100 per kwh for like 5 years. The only problem is getting to those wholesale quantities. All major LFP cell makers seem to run a cartel to cut off small distributors from preferential pricing. Anything you can buy in small wholesale is at least 2x the price of what companies making EVs are getting. Once upon a time good offers like these https://item.taobao.com/item.htm?id=599076665397 https://item.taobao.com/item.htm?id=599076665397 come up, and then vanish.

LeifCarrotson 6y ago
I think the problem may stem from the economics of winding machines. They're a huge investment, and require comparable investments in clean room space, and it's hard to increase capacity. If Dell or Tesla is going to commit to a large number of cells per quarter, Panasonic or Samsung or whoever can install and operate that many winding machines (or, in Tesla's case, install an entire factory). If somebody wants less, they're buying excess stock that's not earmarked and it makes sense to pay more for that.
- baybal2 6y ago
  > I think the problem may stem from the economics of winding machines. They're a huge investment, and require comparable investments in clean room space, and it's hard to increase capacity. Biggest LFP cell makers have many factories the size of Elon's ones, and they all quietly omit their output figures for non-consumer cell businesses because... taxmen. LFP manufacturing has been ridiculously profitable from 2010 to 2015, so even hand made cell shops were making millionaires. Now, the party is over. Big manufacturers have crashed the margins using giant state handouts. You could get a turnkey LFP cell line running in a garage for around $2600k-$3000k, but the time of good margins is over. To make LFP under $100 per kwh, and still make money, you need 20-30+ lines, but with such volumes the only buyers will be EV companies, and we are back to square one with this. You can still operate on garage scale, and try push your cells on online auctions, like many, many small makers still do, and live off small bites of distributor margins. But you will be doing this knowing that you truly live in the shadow of biggest manufacturers, who, or whose distributors will start poaching your clients once you get big enough for them to get wind of you.
luckylion 6y ago
> All major LFP cell makers seem to run a cartel to cut off small distributors from preferential pricing. Anything you can buy in small wholesale/retail is at least 2x the price of what companies making EVs are getting. That sounds like an easy way to make money. Buy large quantities, sell them in smaller batches at only 1.5x the price.
- baybal2 6y ago
  > That sounds like an easy way to make money. Buy large quantities, sell them in smaller batches at only 1.5x the price. They will figure out who you are, and you say bye bye to your EV business.
  - eru 6y ago
    Why would they do that? What's the incentive? You could even pay them slightly larger prices and still make a profit.
    - baybal2 6y ago
      They want to keep small wholesale prices high. The whole non-EV battery market is still quite, quite sizeable.
      - eru 6y ago
        There's more than one producer. Wouldn't any one of them benefit from breaking rank?
mtgx 6y ago
You seem to be talking about battery cell price and the article is talking about battery pack price, which last I checked tends to be at least 30%-50% higher. For EVs it might be more if they also add cutting edge cooling systems, etc.
- syncsynchalt 6y ago
  This was my read too; cell price has long been under $100, pack price not yet.
Someone 6y ago
I don’t see why that requires a cartel. Even business-to-business, the administrative/legal overhead of smaller orders implies that, for fixed per unit profits, prices of smaller orders go up. Business-to-consumer, order size gets smaller, and consumer protection laws come into the picture, further increasing prices. Is there even _anything_ that you can get in small wholesale/retail at prices lower than double of what companies ordering by the shipload pay? Edit: consumer electronics might be an exception.
- baybal2 6y ago
  I heard plenty of first party accounts. A salesman from the cell company comes to the maker of electric busses/trucks/LSEVs and says "resales of cells is strictly, strictly, strictly forbidden," and that they will unleash all torts imaginable if they found out. And this is the prime reason why good offers popping on online auctions don't last long. In comparison to margins of wholesale distributors of just any other industrial commodities in China, margins of large battery cell sellers look unbelievable. In comparison, 18650 cells can be easily found in retail at under 125% of the wholesale price in China.
  - akiselev 6y ago
    > A salesman from the cell company comes to the maker of electric busses/trucks/LSEVs and says "resales of cells is strictly, strictly, strictly forbidden," and that they will unleash all torts imaginable if they found out. Because what invariably happens is the automaker rebins the cells based on their own QA and sells the crappy cells as automotive grade instead of sending back to the manufacturer. Next thing you know, Joe Hacker's total electric conversion uses all the imperfect cells in one poorly balanced battery and burns down a city block. I don't know if it has resulted in anything dramatic like that yet but most of the surplus cells I've bought on eBay that looked like they came from automotive stock were subtly out of spec, enough to be dangerous in high power/capacity configurations. > In comparison, 18650 cells can be easily found in retail at under 125% of the wholesale price in China. China doesn't have much in the way of consumer protections or a tort system that's as accessible to the general public as in the US/EU.
jillesvangurp 6y ago
It's not a cartel or conspiracy but a simple matter of demand being consistently larger than the available production capacity. Right now owning a battery factory is a good business because there are a lot of manufacturers that are not able to secure batteries. Several car manufacturers are being blocked by this or have reduced their production ambitions because of this. I think people are also confusing manufacturing cost vs. price here. Obviously, those are not the same. The article is mostly talking cost. The packaged products that e.g. Tesla sells (cars, battery packs for domestic/grid usage, etc.) include more than just the battery cells. In any case, Bloomberg is being a bit vague. On one hand, they are predicting mid 2020s for the cost to drop below 100$ and on the other hand you have people guestimating that Tesla is close to that right now. You could of course argue average price, i.e. other manufacturers are not there yet. Demand for batteries is going to continue to increase for a while. Tesla is talking about TW factories now. The giga in giga factory used to refer to GW. That's a good indication of what they are planning to do. At that scale, the average industry cost and their cost are going to be very similar unless others also grow production capacity at the same pace.
- deleted 6y ago
  [deleted]
- Ajedi32 6y ago
  > The giga in giga factory used to refer to GW. That's a good indication of what they are planning to do. Haha, I never thought about that. That's actually a really clever way of quantifying the output of a battery factory. Battery capacity can be measured in watt-hours, so battery factory output could be measured in watt-hours of battery capacity produced over time, and power*time/time just reduces back to power (measured in watts). Therefore, you could say that a factory which produces an average of 1 Gigawatt-hours of battery capacity every hour is producing 1 Gigawatt of battery capacity. I like it. And yeah, a TW factory sounds like it'd be operating on a pretty ridiculous scale if it lives up to its name.
  - sandworm101 6y ago
    Another way to look at it would be to ask "how much power would the factory need to charge all the batteriers as it produces them?" A gigawat factory would need a gigawatt electical connection dedicated to charging. That logic suggests that the largest factories will most certainly not be charging thier batteries.
pjc50 6y ago
I'm not clear why this should be? Effectively 50% discounts for the largest customers? Market share acquisition strategy?
- baybal2 6y ago
  Where have you ever seen a 50% discount for an industrial commodity?
  - pjc50 6y ago
    If the open wholesale price is 2X and the few big customers are paying X, that's equivalent to the ""true"" open market price being 2X and the favoured customers getting a 50% discount. This isn't unusual in enterprise software sales, but it does seem odd for industrial commodities. What I'm asking is why, if supply is so tight, the favoured customers get favourable prices rather than all prices creeping up.
    - bluGill 6y ago
      There are several reasons to give big discounts. If a customer commits to buying enough over that you expect to break even over the next N years after paying for equipment, labor and other expenses I'll give them that price because I know for sure that I have a factor for N years. I can make a lot of money now selling any extra batteries I make at market price. Even if I can't sell in any more for a profit next year, I keep my employees paid for all of N years (giving me opportunities to find new markets) which is worth a lot in itself. If I know a customer is well known I might give them a discount just to advertise to others they are my customer. If a customer is large enough that them leaving would affect my bottom line they get a discount to ensure they stay with me. If they provide me something other than money in return they get a discount. Auto makers sometimes extend employee discounts to their suppliers employees. Auto makers often do supply management tasks many levels down (my materials are certified not coming from slave labor, and GM did the research to prove it, GM will do it anyway so it isn't a big deal to let me know). If I expect someone to be a bigger customer I will give them a discount now to ensure they can develop there. If batteries never come down in price from 20 years ago electric cars are non viable so I'll give a discount now because the volume cars represent on a small profit is worth more than all profit at volumes of 20 years ago. That is just a few honest reasons I can think of now. There are also dishonest reasons that I'll ignore, but sometimes they are real.
woodandsteel 6y ago
You're confusing the cost for cells with the cost for packs.
AtlasBarfed 6y ago
Pack or cell? These days the $100/KWhr target typically refers to pack level costs, which is also what is supposed to enable price parity with ICE cars.

zpeti 6y ago

As far as I know so far most of the lithium used has been from existing copper mines, where there's a lot of lithium, so that's made pinpointing it and extract it fairly cheap. I remember reading there's 5-10 years worth of lithium left in these mines. It will be interesting to see what happens once we need to start looking for new sources again.

baybal2 6y ago
The cathode material is pretty much the sole contributor to material cost. Plastic, anode, casing, current collector plates/terminals all make less than a quarter of the price. Main contributor to the cathode powder price is cobalt, and its unpredictable price: bad weather in Congo? Prepare to see the price increase n-fold within few weeks. Nickel comes second, to much lesser extent. LFP cells use radically different cathode chemistry from common cell types, and use no cobalt, or nickel at all, hence the low price. We dump phosphates on in the fields by gigatonnes after all.
- eru 6y ago
  Cobalt futures are traded on the LME. So factories can lock in fixed prices for cobalt in advance.
  - eigenvalue 6y ago
    This is not a deep market, with daily value traded in the millions of dollar (not hundreds of millions or billions).
    - eru 6y ago
      You can also go to your bank and have them sell you a derivative over the counter. It won't help your average price (just the opposite), but it can take the unpredictability out.
Tade0 6y ago
There's an abundance of lithium in the oceans, but it's heavily diluted, so currently there's no large scale process in place to obtain it. But it is possible in principle, just expensive using the technology of today.

npongratz 6y ago

Higher demand causes lower prices? From the article: > "But a battery electric car needs so much battery capacity—40 to 100 kWh, thousands of times more than a smartphone—that they've significantly increased the global demand for lithium-ion batteries. That has helped drive additional price declines, which have started to make it cost-effective to use batteries to improve the electric grid." You need to know both demand and supply to forecast price effects when either or both change. The simplistic assertion that higher demand leads to lower prices is wrong on its face. I'm no expert, nor an economist, but I think it'd be more correct to say that higher demand inspired investments that resulted in more supply, which grew faster than demand, thus driving price declines. EDIT: Another inconsistency that bugs me: > "Frith told Ars that a common battery technology in the last decade was "NMC 111" batteries with equal parts nickel, magnesium, and cobalt. Now companies are starting to move to NMC ratios of 811—with eight times as much nickel as manganese or cobalt. Nickel is two to five times cheaper than manganese or cobalt, so a formula with more nickel is cheaper to produce per kg." So does the "M" in NMC refer to magnesium (as stated first), or manganese (as stated second)?

IpV8 6y ago
I'd say higher demand led to more R&D. Supply alone wouldn't drive the price declines, as it used to cost too much to produce high battery capacity so there was a price floor. As demand increased, justifying the R&D helped break down that floor. That and government dollars.
crazygringo 6y ago
Over the long run, higher demand can absolutely lower prices. In the short-term, obviously higher demand increases prices if production is held constant. But if there's no obvious constraint on production (e.g. on resources/land/employees/etc.) then yes, over the long-term higher demand usually generates larger-scale businesses/factories which can invest in more efficient production and produce lower prices, and pay off initial investments. Of course, this won't apply if there aren't further economies of scale or investments to recoup. The article seems to be quite clear that this is what it's talking about. I don't think it's making the "simplistic assertion" you're assuming it is -- it's just referring to the concept of economy of scale which most people are familiar with.

gandalfian 6y ago

I'd say home storage is about $750 a kWh in the UK. Plus installation. What do you think, is the future a domestic 50kwh battery in every house or will they be fewer giant ones owned and run by the power company out of sight?

ksec 6y ago
I still think it is far better to have a sort of semi centralise place for these Battery just for safety concern. Rather than having a massive battery in every flat. I would guess battery for house in rural area would work. But definitely not for cities.
marvin 6y ago
Well, Tesla currently sells a 50kWh battery that also happens to have a really nice car attached to it for $35000. That’s $700 per kWh. It stands to reason that home charging systems will soon come down in price, even if they don’t end up largely being eaten by BEVs with bidirectional charging ;)
- briffle 6y ago
  They sell a 13Kwh powerwall for $6500. That is down to $500 per kWh. Still not great.
Someone 6y ago
Third option: a mid size one in every neighborhood, charged by the neighborhood’s solar and wind (could be either owned by a power company or by the neighborhood) That gives some economies of scale, and keeps the amount of wiring lower.
pjc50 6y ago
I can't see a good case for the domestic batteries. Space is expensive. It exacerbates fire risks. It requires maintenance and replacement. Extra complications for renting. And the grid is already there. The smaller the "unit" of storage, the more you need. Doing it at grid level makes it easier to be incorporated into grid stability systems too, collecting payments for "fast frequency response". (Possible exceptions for crofters and islanders)

csours 6y ago

A kilowatt hour of car battery pack costs ~$150 now. I was looking at battery powered lawn mowers last night, and noticed that a 0.42 kWh battery pack costs $350[0]. I know that power tool batteries have different requirements than car battery packs, but that base .42 kWh should still be under $100. I feel like this is the printer/razor model, where you sell the base item for cheap, but the consumables cost are extreme. Although, for long lasting durable goods, you have to make money somewhere, as a good battery mower may last a very long time. 0: https://community.egopowerplus.com/ego/topics/kilowatt-hours-kwh-required-to-fully-charge-the-5-ah-battery?topic-reply-list[settings][filter_by]=all&topic-reply-list[settings][reply_id]=20372921#reply_20372921 https://community.egopowerplus.com/ego/topics/kilowatt-hours...

bengale 6y ago
This is something I read a lot when I was looking at getting some Ryobi One+ tools. It ended up being that buying the tools bare was quite reasonable, but getting batteries was extortionate. I ended up getting knock off batteries for a third of the price and they've held up brilliantly. Did bring back memories of knockoff printer ink, I wonder if the tools will start having chips to detect knock offs before long.
xxs 6y ago
No idea which lawnmower battery pack you meant. All of them are 18650 elements with the good ones (3A/h, 30A) like 5$/€ retail price. One of them is ~11Wh (say 3.7V) - to get 420Wh you need 38. So the price looks decent retail one - building it yourself with quality elements would be another 25-30 for housing (pref. some polycarbonate composite) and pcb (quality/balancing charger, etc.) LiIon is a lot more expensive and more energy dense than lead/acid combo commonly found in car batteries. Drag racer may drop the entire car battery, replacing it super capacitors to reduce weight.
- skt5 6y ago
  It's most likely an 56 volt Ego 7.5 Ah battery. I bought mine a few years ago on eBay for $200.

mattbk1 6y ago

> Batteries have already gotten six times cheaper within the last decade, Pedant here:, but you can't get "six times cheaper." You can get one-sixth as expensive, but "six times cheaper" implies some sort of relative comparison being made about rates, not absolute values. The same issue is apparent in the HN title ("costs fell six-fold."

X6S1x6Okd1st 6y ago
IMO In colloquial English six times cheaper means 1/6th the price. What a phrase means is very much dependent on how the speaker and the listener interpret it.

dmix 6y ago

Vandium Redox Batteries [1] sound like they have a bright future, I recently came across a startup building home kits which have a significantly longer lifespan than Tesla Powerpacks (allegedly): https://www.startengine.com/storen-technologies https://www.startengine.com/storen-technologies There's a huge plant being built in Dalian, China with 200MW/800MWh with Vanadium (for comparison Tesla Australia plant is 129MW/100MWh with Lithium-ion with plans to double scale this year, but currently only powers 30k homes which isn't much) https://electrek.co/2017/12/21/worlds-largest-battery-200mw-800mwh-vanadium-flow-battery-rongke-power/ https://electrek.co/2017/12/21/worlds-largest-battery-200mw-... Wikipedia has a nice list of largest battery deployments in the world: https://en.wikipedia.org/wiki/List_of_energy_storage_projects https://en.wikipedia.org/wiki/List_of_energy_storage_project... https://en.wikipedia.org/wiki/Vanadium_redox_battery https://en.wikipedia.org/wiki/Vanadium_redox_battery

gandalfian 6y ago
Redflow of australia actually makes zinc bromide flow batteries now. It has not been a financial success to put it mildly... Much as I like the idea of flow batteries I think their window of opportunity may be closing.
- syedkarim 6y ago
  How much are the batteries? Why do you think the window is closing?
  - gandalfian 6y ago
    Because if lithium becomes established as cheap and good enough then there will less incentive to develope other technologies. Redflow I believe costs as much as a lithium battery but claims to degrade less and be able to be 100% discharged. In practice they have proven hard to manufacture reliably or competively. They seemed better when they stayed theoretical. Share price is down about 95%...
    - woodandsteel 6y ago

WalterBright 6y ago

60 Minutes once did a segment on batteries made from seawater and dirt. They were large (low power density), but very cheap, and perfect for grid storage. Haven't heard anything about that since.

pengaru 6y ago
Neither seawater or dirt sound like they address the anode or cathode, which seem to be pretty major challenges when it comes to rechargeable batteries. BTW, speaking of seawater and dirt forming a battery, I recently needed a way to measure underground corrosion of buried copper pipe, and it went down a great little rabbit hole uncovering documents such as this [0]. It was fun to go put a voltmeter across various ground-coupled conductors in my home to see what, if any, voltages were present, with the earth serving as part of a battery. [0] https://archive.org/details/CAT78694105 https://archive.org/details/CAT78694105
Meandering 6y ago
I think you are refering to Aquion Energy. The company sputtered and was sold to a Chinese equity firm. The product looks like it is dead in the water but, it still was a great idea. The intention was to use the cheapest, safest, and most abundent materials to create a battery. It had low power density and output but, they had a solid lifespan and were environmental sound. https://en.wikipedia.org/wiki/Aquion_Energy https://en.wikipedia.org/wiki/Aquion_Energy

tuatoru 6y ago

Somewhat surprisingly, perhaps, there is still potential in lead-acid battery technology. Ecoult [1] is combining them with supercapacitors to try to get the best of both technologies for grid-scale storage. [1] https://www.ecoult.com/ https://www.ecoult.com/

lcam84 6y ago

We have a systemic problem, our economic system is based on productivity and that is a opposite goal to efficiency. Every time we gain efficiency we have a choice of keep our consumption and pay less for electricity but we choose to increase consumption, for instance any improvement in phone batteries is counter by more powerful chips. Home appliances have improved but we choose to have more appliances instead of less energy consumption. This is called jevons paradox [1] and it needs to happen otherwise there is no profit or job creation. [1] https://en.wikipedia.org/wiki/Jevons_paradox https://en.wikipedia.org/wiki/Jevons_paradox

cinquemb 6y ago

Li-ion… meh

AtlasBarfed 6y ago

That article was somewhat disappointing, but maybe I've been watching too much Tesla battery investor day hype. Between the tabless design patent, the maxwell dry electrode, and other chemistry improvements, I'm interested to see what the battery presentation boils down to in terms of improved density from the dry cathode and cost improvements from tabless and the various chemistries discussed. That million mile reliability is nice, but I'm really hoping for under 100$/KWhr at pack level with improved density to enable 400+ mile ranges. The Tesla prototype around the Nurburgring had me speculating about really dense batteries that enabled a much lighter racing car than what the Taycan was limited by.

_ph_ 6y ago
For cars, price and density are very important, and Tesla will certainly improve in those specs too. But for energy storage, longer durability directly translates into an effectively lower price. As power companies often invest in the scales of several decades - a power plant often can be run for 5 decades - the costs are calculated over those time spans.
- AtlasBarfed 6y ago
  Reuters is predicting an $80/KWhr pack cost announcement. Probably the cobalt-free ones that don't have great density, but still, for the 200 mile range car that's doable.

peter_d_sherman 6y ago

>"In 2010, a lithium-ion battery pack with 1 kWh of capacity—enough to power an electric car for three or four miles—cost more than $1,000. By 2019, the figure had fallen to $156 [...] Forecasters project the average cost of a kilowatt-hour of lithium-ion battery capacity to fall below $100 by the mid-2020s."

raphaelj 6y ago

Is the durability of batteries also improving? Having a significant improvement in this area would have a magnificent effect on some industries. Making batteries last twice as long (e.g. from 2000 cycles to 4000) would basically reduce battery cost by a factor of 2 for trucks, public transport or grid energy storage (6y to 12y lifespan if cycled once per day).