Asia’s path to a greener future
EV BATTERIES ---------------
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“Applications in a moving vehicle are restricted by the size, volume and weight, which makes it hard at the moment to give a competitive replacement to Li-ion batteries.” Alok Jain, Chief Executive Officer, Trans Consult; Expert Member, Council for Decarbonizing Transport in Asia Batteries are central to the electrification of transport. They increasingly require innovations to ensure range and price competitiveness against traditional fuel combustion vehicles. 43,44 A variety of battery chemistries are used to run EVs such as nickel metal hydride batteries, lead acid batteries and ultracapacitors. 45 The most popular is lithium-ion (Li- ion), which accounts for more than 70% of the rechargeable battery market. 46 Li-ion batteries have high energy density, are recyclable and exhibit good performance even at high temperatures. In addition, they last around 1,000 charge cycles. 47 The average price of a Li-ion EV battery pack rose for the first time in 2022 after falling from US$1,200 per kilowatt-hour (kWh) a decade ago to just US$132/kWh in 2021. 48 This price increase reflects rising demand for energy storage and electric mobility globally. Furthermore, the battery is composed of minerals such as lithium, nickel and manganese, which are prone to market fluctuations and supply chain disruptions. 49,50 Besides costs, extracting lithium poses its own set of social and environmental challenges, such as soil degradation and air contamination. 51 The process also puts pressure on resources like water and has been linked to human rights violations and abuse. 52
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Limitations to using lithium are driving battery innovation. While there are innovations, such as graphene and sodium ion batteries, and supercapacitors, none of them offer a viable replacement solution yet, states Alok Jain, CEO of Trans Consult and an expert member of the Council for Decarbonizing Transport in Asia. He says that “applications in a moving vehicle are restricted by the size, volume and weight, which makes it hard at the moment to give a competitive replacement to Li-ion batteries.” He highlights solid state batteries as a potential alternative but recognises that they are still a decade away from full development. 53 Asia has a strong regulatory framework for adopting and rolling out EVs in a bid to decarbonise their transport sectors. But specific policies for EV batteries are limited in the region, according to our research. Nevertheless, the world’s largest EV battery manufacturers are all headquartered in Asia. EV batteries attract the largest investments out of the technologies covered in this research—with a total of US$4.4bn. 54 China is the leader on this front, as it has an abundance of the rare earth materials used in battery manufacturing. In 2021 China possessed 1.5m tonnes of lithium, accounting for 6.8% of the market size globally. Chinese companies also hold large shares in the world’s largest lithium mines, which are concentrated in South America and Australia. Meanwhile, China’s homegrown battery company CATL accounts for a 35% market share among the world’s top EV battery manufacturers. 55 Problems associated with lithium extraction call for greater regulatory support to develop alternatives to Li-ion batteries that are sustainable and scalable. In the shorter term, greater visibility in existing supply chains and policies to liberalise global lithium trade would help stabilise access, and address existing environmental and social concerns.
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