Week 28: The All Electric Future & Battery Technology

GM recently announced strategic plans to convert its entire product line into electric vehicles by 2035. For context, GM sold 6.8m new vehicles last year out of 78.5m total, making them one of the largest vehicle manufacturers in the world. It’s a bold, but necessary move to create a sustainable and environmentally aware future. Given our increasingly electrified world, battery technology will become significantly more important over the next decade.

Transportation and battery power

Energy density is going to become a really interesting topic as battery technology advances. Transportation accounts for 2/3rds of petroleum consumption in the US. When designing a power system for something that moves, weight and volume are critical constraints. Even the best battery technology, lithium-ion, is not particularly weight or volume efficient when compared to traditional gasoline or diesel.

The gasoline that burns in your car produces 12,800 Wh per kilogram. On average more than 60% of that energy is wasted through excess heat, but gasoline is so energy-dense that the thermal efficiency doesn’t impact our ability to drive when and where we want. A lithium-ion battery produces just 250 Wh per kilogram, which is why the Tesla battery pack is and weighs 1,200 lbs (540kg).

By comparison, liquid hydrogen can produce 39,405 Wh per kilogram which means that it is dramatically more dangerous. There are hydrogen fuel cell cars, but hydrogen is considered by many to be too dangerous for practical use. GM is planning on building a 2nd battery production facility, a 2.3m sq ft plant in Tennessee that should be online by late 2023.

Much of the Tesla fanfare to date has been centered around their battery technology, which has prompted many investors to stop calling them a “car” company and start calling them an “energy” company.

Economics are a primary driver of the shift to electric today

Europe is known for its leadership in clean energy innovation. One reason could be their more socially-minded culture. A more likely reason is that oil and gas historically have been more expensive in Europe, which creates significant incentives in favor of renewable energy. Effectively renewable energy requires significant battery capabilities to store and deliver consistent energy when the wind is not blowing or the sun is not shining.

Fortunately, the cost of Lithium-Ion batteries has fallen 98% over the past 30 years, faster and further than was originally predicted. Battery technology is far from over. Battery enabled flight is one of the next major milestones.

What about electric flight?

If you’re looking for an entertaining and informative read on the history of rocket fuel, the book Ignition! details the hazards of working with the world’s most volatile and explosive materials in order to achieve liftoff. The SpaceX Falcon 9 rocket weighs roughly 1.2m pounds and uses a mixture of liquid oxygen and RP-1 fuel, which is just slightly less explosive (safer) than liquid hydrogen, in order to achieve flight.

In order for electric planes to become a reality, we will need lithium batteries capable of outperforming jet fuel in terms of weight and economics. The golden number for battery powered flight is anticipated to be 400 Wh/kg. There are some lab tests that have achieved a 400 Wh/kg but they haven’t been able to recharge more than a few times. Batteries must be able to recharge hundreds if not thousands of times in order for them to be economically viable. Unfortunately, today’s batteries wear out fairly quickly, are sensitive to depth of use between charging sessions, and can be weaker in more extreme environments.

Once a century shift

The petroleum industry may be going through a bit of a goldilocks period at the moment. Following a period of underinvestment and pent-up demand due to Covid, the price of oil is back above $70/barrel which is at the highest end of the last seven years. Given that battery technology and renewables technology isn’t quite there yet, many US oil companies are confidently plowing forward with their petrochemical businesses.

There are many newer business models that can benefit from the growth in battery adoption from energy grid software businesses like Stem, to battery recycling businesses like Li-Cycle. Mining and supply chains will also be critical to the success of battery adoption. We feel that it’s likely the battery revolution will continue and new breakthroughs will come sooner than expected. GM’s commitment is another bold step towards an all-electric future.

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