E-cars need millions of batteries – this is how investors benefit from the boom

E-mobility: Numerous new factories for car batteries are being built in Europe. How investors can benefit from new technologies and the recycling of electricity storage systems.

Germany’s carmakers are rapidly catching up – in a race that was already thought to be lost: A few years ago, for example, VW lacked any plan for electromobility, but the Wolfsburg-based company is now attacking the pole position of the electric car leader Tesla. In 2020, the group brands moved together in global new registrations past the Chinese SAIC to second place.

The car company not only wants to double sales of the electric VW models in the current year. He is also investing billions in the future of electromobility. VW is planning to build six battery factories in Europe. These are to produce car batteries for around four million fully electric vehicles per year by 2030

Insufficient production capacity

The battery offensive is necessary because there are still too few production facilities for the expected boom in electromobility. According to EU data, all factories worldwide could currently produce batteries with around 200 million kilowatt hours (kWh) of storage capacity. But most of it is in China – and manufacturers are paying for their supremacy. It is true that the cost of lithium battery cells has fallen by 90 percent over the past 20 years. At the same time, they can store five times more energy today than they did then. Nevertheless, the current level of around 100 euros per kWh of capacity is generous. This means that the standard battery in the Tesla 3 costs around 5,000 euros.

In order to further reduce costs, the industry is relying on innovation. For example, VW wants to standardize the battery cells, similar to Tesla in its planned gigafactory near Berlin. New process steps are used here. However, battery researcher Markus Hölzle, head of the Stuttgart Center for Solar Energy and Hydrogen Research (ZSW), sees no alternative to lithium as a central raw material. “In terms of its electrochemical properties, there is no better element for batteries than lithium,” he says. There are new developments such as sodium chloride batteries, of which the first prototypes are available. But these store significantly less energy and are more for stationary use. Further concepts based on magnesium and calcium are “still very far away”.

Even the most promising new battery development at the moment will continue to rely on lithium: In solid-state batteries, a solid ceramic replaces the liquid electrolyte. In addition, graphite can be dispensed with and a thin film made of lithium metal is used instead. Such batteries can store 20 to 30 percent more energy. For cars this means: less weight and more range. In addition, solid batteries are less flammable than liquid electrolyte. VW is already investing in the alternative and has entered into a joint venture with the US company Quantumscape. Quantumscape is to supply solid-state batteries for future VW models. In the end, however, the decisive question is likely to be whether the new battery technology will be competitive.

Own access to raw materials

Because the mass production of classic lithium-ion batteries is making rapid progress. In Germany there are currently a dozen or so planned or already working factories. In addition to industry giants such as Tesla, VW and the Chinese CATL, newcomers such as the Swiss Blackstone Resources can also be found here. It plans to manufacture lithium batteries using 3D printing in Döbeln, Saxony, starting this summer. By printing the individual metals, the material efficiency and thus the energy density of the batteries will improve by 20 percent, promises the company listed on the Swiss stock exchange. It aims to offer energy storage systems for less than 80 euros per kilowatt hour in the future. Production of 500,000 kWh should already start this year.
The Swiss are also working on solid-state batteries. Unlike most battery manufacturers, Blackstone has access to its own raw materials. The company has stakes in mines for key battery metals such as cobalt, lithium, manganese and nickel.
The example could catch on. Elon Musk also recently brought Tesla’s stake in its own raw material facilities into play. Because the demand is enormous and should increase the demand for nickel alone by a factor of 30 in the next 20 years. There are also humanitarian and environmental problems such as the Congolese cobalt.

Lithium remains the most important substance for battery and energy storage systems. For this reason, investors around the world want to take advantage of this rising trend and are now more interested to trade lithium on regulated options brokers and dealers that offer such products.

A good 90,000 tons are currently being extracted in mines. In principle, there is sufficient raw material available worldwide to ensure the electrification of car traffic, says scientist Hölzle. “But in the medium term the world has to build recycling capacities.” Recycling is still hardly economical, and the amount of battery raw material has been low to date. According to the ZSW, only around 50 percent of lithium is currently recycled worldwide. It is 80 percent for nickel. To change that, the Belgian recycling specialist Umicore is currently building one of the largest plants. And Volkswagen is also involved in this business: In Salzgitter, the company put a pilot plant for recycling lithium car batteries into operation in January.

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