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China manufactures nearly two-thirds of the world’s lithium-ion batteries, having invested heavily in mining rare earth minerals. Electric vehicles are expensive as 40% of the cost is attributed to its battery.  (Photo: Bloomberg)
China manufactures nearly two-thirds of the world’s lithium-ion batteries, having invested heavily in mining rare earth minerals. Electric vehicles are expensive as 40% of the cost is attributed to its battery. (Photo: Bloomberg)

Startups look to reduce dependence on lithium from China

As for alternatives to lithium, startups are experimenting with materials that are more readily available. An Indian startup, backed by Mumbai Angels, is experimenting with a composite material using derivatives of abundantly available carbon

The coronavirus pandemic has brought into stark focus the over-dependence of global supply chains on China. Nations around the world are now more desperate than ever for alternatives, but it’s a tough ask to replace Chinese supplies.

One of the areas where China dominates the world is in the production of lithium-ion batteries which power our smartphones, laptops and electric vehicles. It has invested heavily in mining lithium and rare earth minerals that go into these batteries—both within its own country as well as mines in Latin America, Africa and Australia. It manufactures nearly two-thirds of the world’s lithium-ion batteries, according to Benchmark Mineral Intelligence.

The dependence on China for lithium affects the electric vehicle ecosystem even more than other sector. That’s because 40% of the cost of an electric vehicle is attributed to its battery.

There are two ways out of this conundrum. One is to find sources of lithium, cobalt, nickel and manganese elsewhere, then invest in mining them, which is an expensive proposition. China has drawn on its vast state resources to gain the lion’s share of both raw materials and manufacturing, which is hard for other nations or companies to match. US electric car maker Tesla is investing billions of dollars in lithium ion battery factories, but that will barely make a dent in China’s market share.

Alternative sources

The second option is to find alternatives to lithium for batteries that go into electronic products and EVs. But breakthroughs in battery innovation that scale commercially have been few and far between. The lead acid batteries in internal combustion engines of vehicles that run on fossil fuels are from the 19th century. The lithium ion breakthrough came from academic research in the West, which Sony in Japan first commercialized for use in electronic products three decades ago.

Since then, the technology has evolved incrementally to improve the form, safety and performance of lithium-based batteries, while dropping their cost with economies of scale. BloombergNEF research shows that their price fell 85% in the last decade and is likely to fall another 35% by 2024 to below $100/kwh.

The main aim of battery innovators is to increase the life of batteries and the time that each charge lasts. This is crucial for electric vehicles—a longer life extends the time until an expensive battery replacement, and a longer-lasting charge extends the vehicle’s range before the next charge.

Reuters recently reported that Tesla, in partnership with a Chinese manufacturer, is readying a “million-mile" battery to bring electric vehicle costs on par with fuel-driven cars. Million miles refers to how far the car will run before the battery needs replacement. The cost per kilowatt hour is expected to be below $100. This battery will remain lithium-based, but will use less cobalt, which is expensive. Cobalt is used as a stabilizer in lithium-ion batteries.

As for alternatives to lithium, startups are experimenting with materials that are more readily available. For example, UK startup Faradion is developing sodium-ion battery technology that could use salt. Calcium is another candidate for the energy storage potential that made lithium hot.

An Indian startup, backed by Mumbai Angels, is experimenting with a composite material using derivatives of abundantly available carbon. “We’re using a multi-ion technology for our battery," says Jubin Varghese, co-founder of Mumbai-based Gegadyne.

He doesn’t go into details of Gegadyne’s “black box", but claims initial tests with partners were encouraging. The cost per kilowatt hour is double that of a lithium-ion battery, but Varghese expects that to drop once the battery comes out of the lab.

Multiple uses

Gegadyne’s commercialization strategy extends beyond electric vehicles to other uses for stored energy, such as in telecom towers. “The hockey stick moment for electric vehicles has been pushed to 2023 or 2024 because of the covid impact on the auto industry," says Varghese. “At this point, a low hanging fruit is the stationary energy storage market."

People are using diesel generators instead of backing up power at peak time, he points out. Besides, for solar and wind energy, “lead acid batteries cannot absorb all the peak power that needs to be captured when the sun is shining and the wind is blowing."

Deployment of Gegadyne’s battery for such uses could provide field tests required to develop a proven alternative to lithium-ion batteries for electric vehicles. That’s still a long way off as the startup takes baby steps towards commercialization. Battery manufacture is a capex heavy business, so Gegadyne would need a partner that buys into the technology.

Malavika Velayanikal is a consulting editor with Mint. She tweets @vmalu.

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