The Prosperity of the Electric Vehicle Market and the Development of Power Battery Systems

At present, ordinary automobiles mainly use fossil fuels as their power source, which not only consumes a lot of petroleum resources but is also one of the main culprits of greenhouse gas emissions. In order to cope with the global trend of energy-saving and carbon reduction, many countries have adopted vehicle electrification as an important greenhouse gas reduction measure.

Recent status of electric vehicle power batteries

Pure electric passenger vehicles are now the main focus of development in the electric vehicle market, as they have the potential to surpass traditional fuel vehicles in terms of driving range, environmental adaptability, service life, and purchase cost. A major key to the expansion of the electric vehicle market lies in the ability to manufacture mass quantities of quality and lost cost batteries. In 2019, global battery production in terms of power storage capacity was 260 GWh. With a projected average annual increase of 130 GWh~150 GWh, production capacity is expected to reach 855 GWh by 2023. The price of batteries is declining by about 20% per year. In 2020, with an estimated cost of $35,000 per electric vehicles, the battery cost accounted for about 36% of the entire vehicle cost. In 2025, the battery cost is expected to account for 25% of the entire vehicle cost. The average price of electric vehicles is predicted to be reduced to US$30,000, with the price of a 100 kWh power battery system costing US$10,000 at US$100/kWh,  There will be a turning point around the mid-2020s where pure electric vehicles will surpass the cost efficiency of fuel vehicles.

Electric vehicle battery system development

The battery system is the main core component of the electric vehicle. Components of the system include individual cells, cell packaging forms, Battery Management Systems, temperature processing systems, battery pack housings, auxiliary materials, etc. The reliability of the battery, its energy density, charging speed capability, and battery pack structure all need to be taken into consideration during design and manufacturing. In China’s "Action Plan to Promote the Development of the Automotive Power Battery Industry" announced in 2017, the main goal was to significantly improve product performance. By 2020, battery cell energy density reached ≥300 Wh/kg, with the total battery pack energy density reaching ≥260 Wh/kg. The cost of the battery pack was reduced to ≤ RMB 1/Wh, with an operating environment temperature reaching -30˚C~55˚C, and a charging capacity of 3C. By 2025, the cell energy density is expected to reach 500 Wh/kg, reaching the goals of the battery performance development project.

1. Electric vehicle platform
   If electric vehicles are retrofitted based on traditional fuel vehicles, they are limited by the structural limitations of traditional fuel vehicles and cannot achieve the optimal design of electric vehicles. For example, VW e-Golf, retrofit fuel vehicles make full use of their available space. The total battery power is 35.9 kWh, the highest cruising range is 231 kilometers. To meet the need for a cruising range of more than 400 to 600 kilometers, car manufacturers develop pure electric vehicle platforms, such as Leaf EV platform, ZOE, MEB platform, Tesla EV platform, etc. The platform's battery pack and chassis are an integrated design, where the battery pack structure is used to strengthen the chassis, and the frame of the whole vehicle is used to strengthen the structural protection of the battery pack. The low-height battery modular design can be laid flat on the chassis of the vehicle, and the position of the battery module can be arranged to adjust the center of gravity of the vehicle. Electric motors and other electrical systems are placed at the height of the axle to obtain the maximum available space in the vehicle interior.
2. Endurance mileage
   One way to increase the range of electric vehicles is to increase the battery energy density. Battery materials which can be chosen for their various properties include such combinations as high nickel and low cobalt cathode materials for lithium ternary batteries, cobalt-free cathode materials for lithium iron phosphate batteries, solid-state lithium batteries and high-energy-density lithium-air batteries, etc. Various sizes are used, and shapes can be divided into three forms as seen in Panasonic/Tesla’s NCA811 21700 cylindrical batteries, Ningde’s era NCM811 square batteries, and LG Chem’s laminated soft-pack batteries. Cylindrical batteries have been developed for a long time and have mature manufacturing processes. By 2025, the electric energy density of battery packs is expected to increase to 350 Wh/kg. 

EV Industry development trends

• The market scale is expected to grow rapidly
  As the electric vehicle industry continues to grow, the demand for batteries will increase accordingly. Moreover, the world's major automobile manufacturers and the governments of the United States and China also expect the electric vehicle market to grow rapidly.
• The rise of new service contract models
  The cost of batteries accounts for a very high proportion of the cost structure of electric vehicles (nearly 50%), which affects the price and market popularity of electric vehicles. In order to break through the dilemma of excessive costs, a new service contract model emerged.
• Battery technology will continue to improve
  Patented battery technologies mainly include the research and development of chemical-related compounds and process technologies. As the battery industry continues to develop, manufacturers with key core technologies will be able to lead the development trend of the industry. Therefore, international manufacturers including those the United States, Japan, China, South Korea, etc. will actively invest in research and development to master technologies and enhance their level of competitiveness.
• Government policy support and assistance
    Countries that promote the development of the electric vehicle industry attach great importance to the battery industry. For example, the U.S. and Chinese governments provide electric vehicle purchase subsidies or tax reduction measures to encourage the purchase of electric vehicles. Among them, the Chinese government provides only vehicle purchase subsidies. Regarding commercial transportation vehicles and official vehicles, the US government also provides policy incentives for industry players to encourage the development of high-end battery technology.