By Steve Hoenstine
The electric car market used to be dominated by two types of lithium-ion batteries: nickel manganese cobalt (NMC) batteries and nickel cobalt aluminum (NCA) batteries. As the names suggest, both of these types of lithium-ion batteries require nickel and cobalt.
For the last few years, the EV industry has recognized that the supply of nickel and cobalt could pose a potentially fatal choke point in the EV supply chain. The industry was already pouring money into battery R&D in the hopes of finding a technical solution when, in March, the price of nickel doubled in a single week, only to crash a week later. Though a downward trend appears to have emerged more recently, the price of nickel today is still nearly 50% higher than it was 12 months ago. Similarly, the price of cobalt is over 70% higher than it was 12 months ago. Perhaps in response to these swings and shortages, in late March President Biden invoked the Defense Production Act with respect to certain raw materials, including lithium, nickel, cobalt, graphite, and manganese. Biden’s order requires the U.S. Department of Defense to examine how the USA might secure a domestic supply of crucial battery materials by 1) using environmentally responsible mining/processing techniques; 2) recycling and reusing certain materials; and 3) recovering useful material from unconventional sources, like mine waste.
The industry’s R&D appears to have paid off in the form of improvements on an old technology: lithium iron phosphate (LFP) batteries. Unlike NMC batteries and NCA batteries, LFP batteries require neither nickel nor cobalt. LFPs are also superior to NMCs and NCAs in that they tend to be cheaper to produce, safer to use, and longer lasting. However, until recently, NCA batteries were viewed as unacceptable for usage in EVs because they are not as energy-dense, meaning they have less range when used in EVs. That changed in March 2020, when BYD, a Chinese automaker, announced its new LFP battery design. BYD claimed its new LFP battery—dubbed “the Blade”—could achieve an EV range comparable to those of NMCs and NCAs.
In July 2020, BYD began putting LFPs into all of its new EVs. Soon thereafter, American automaker Tesla began installing LFPs in all of its entry-level EVs, explaining that the industry- leading efficiency of its drivetrain enables its LFP-based EVs to achieve a range of about 250 miles. Following Tesla’s lead, American automakers Rivian and Ford now seem set on incorporating LFPs into at least some of their EV models.
As the industry forges ahead on improving LFPs and searching for other battery technologies that might one day make LFPs obsolete, the federal Infrastructure Investment and Jobs Act will provide $3.1 billion worth of grants into projects that support the domestic battery supply chain—manufacturing demonstrations, battery recycling programs and techniques, and the construction, renovation, and expansion of production facilities. The U.S. Department of Energy (DOE), which will oversee the grants, anticipates making 17-34 awards worth between $50 million and $400 million each. DOE is also planning to grant an additional $60 million on “second-life applications for batteries once used to power EVs, as well as new processes for recycling materials back into the battery supply chain.” Grant applicants are required to submit a Letter of Intent by May 27, 2022, and a full application by July 1, 2022.
