The current power battery industry landscape is a three-way battle between China, Japan, and South Korea. Benefiting from early policy incentives and subsidies, my country's battery industry has made significant progress, becoming the world's largest exporter of power batteries. Companies like CATL and BYD have risen rapidly and are now technologically on par with foreign companies. However, objectively speaking, my country's overall battery industry still lacks the capacity to fully compete with Japan and South Korea.
A recent news report has sparked new discussion in the battery industry, stating that CATL is expected to launch a new battery using NCM811 (nickel-cobalt-manganese ternary lithium) technology next year. If this plan is successfully implemented, it will have a significant impact on the landscape of the new energy vehicle power battery industry in China and even globally.
NCM811 batteries refer to ternary lithium batteries where the nickel, cobalt, and manganese ratio of the cathode material is 8:1:1, also known as high-nickel batteries. High nickel content means higher energy density and lower cobalt content. Because cobalt is expensive and unstable, high-nickel 811 batteries can increase range while significantly reducing costs. Currently, the most commonly used ternary lithium battery model in China is 523, with a few companies producing 622 model batteries.
According to the Ministry of Industry and Information Technology's "Medium and Long-Term Development Plan for the Automotive Industry," by 2020, the specific energy of single-cell power batteries for new energy vehicles should reach over 300Wh/kg, striving to achieve 350Wh/kg, and the specific energy of the system should strive to reach 260Wh/kg, with costs reduced to below 1 yuan/Wh. By 2025, new energy vehicles will account for more than 20% of automobile production and sales, and the specific energy of power battery systems will reach 350Wh/kg.
Currently, mainstream NCM523 batteries can achieve 160-200Wh/kg, while NCM622 and NCM811 can reach 230Wh/kg and 280Wh/kg, respectively. Therefore, to meet the planned requirements for power battery energy density and driving range, vigorously developing NCM811 batteries has become an inevitable trend.
Rising cobalt prices and the resulting cost pressures acted as a catalyst.
Rising prices of upstream raw materials are putting immense pressure on battery manufacturers, with the most significant cost pressure coming from the increased price of cobalt, a key cathode material. To alleviate this cost pressure, most major domestic battery companies have opted to reduce the proportion of cobalt used through innovation in ternary cathode materials.
Public information shows that companies including BYD, CATL, Guoxuan High-Tech, and Shanshan Energy have all entered the high-nickel 811 battery field. By increasing the proportion of nickel, they improve battery energy density while reducing the use of cobalt, thus mitigating the cost pressure brought by rising prices of ternary materials.
BYD previously stated that it expected to begin using ternary high-nickel 811 batteries in the second half of 2019. Earlier this year, Guoxuan High-Tech announced that it had developed ternary 811 material soft-pack cells with an energy density of 302Wh/kg, and expected to begin small-batch production and supply in 2019.
Chinese companies have limited influence in the high-nickel battery market, and widespread commercialization will take time.
Despite the popularity of 811 ternary materials in the industry, their technological shortcomings pose a real challenge to commercialization.
From a technical perspective, nickel is inherently unstable, and high-nickel battery manufacturing processes are prone to adverse effects such as reduced cycle performance, decreased safety, and reduced charging efficiency. The challenges extend to storage and production processes. High-nickel ternary materials are susceptible to moisture absorption and jelly-like formation during storage and use, making slurry preparation and electrode coating difficult, thus placing extremely high demands on the performance of production equipment.
Furthermore, high-nickel materials must be synthesized in a pure oxygen environment using lithium hydroxide as the lithium source at high temperatures. Therefore, the furnace materials used by cathode material manufacturers must be resistant to oxygen and alkali corrosion, but few domestic manufacturing technologies can meet these standards. Even if the equipment meets the standards, high-nickel 811 power batteries still have issues to resolve, including thermal management systems and supply chain restructuring.
Chinese companies do not have a strong voice in the field of high-nickel ternary lithium batteries. Currently, Panasonic is the best at commercialization in this field. Its 21700 cylindrical battery used in the Tesla Model 3 has achieved a 20% increase in battery energy density by improving the application of high-nickel cathode materials and silicon-carbon anode materials.
Besides Panasonic, South Korean lithium battery giants LG Chem, SKI, and Samsung SDI are also actively preparing for high-nickel 811 batteries. Hyundai's Kona EV pure electric SUV, which was previously released, uses NCM811 cells supplied by LG Chem.
Another South Korean battery company, SKI, also announced last year that it had begun mass production of NCM811 batteries for energy storage systems and would supply batteries for electric vehicles in the third quarter of 2018.
Samsung SDI's main strategic partner is BMW. According to BMW's plan, the i3 will not use NCM622 until 2018, and NCM811 will not be used until 2012, which is relatively conservative.
Latest news indicates that LG Chem and SKINC's M811 battery plans have been delayed. While they cannot supply automakers with large quantities for mass commercialization, the technological reserves of both companies should not be underestimated. Returning to domestic companies, CATL's current new energy vehicle power batteries are mainly NCM523 batteries. Moving directly from NCM523 to NCM811 will require CATL to overcome numerous challenges.
In the long run, existing liquid electrolyte battery systems are unlikely to meet the energy density requirements for power batteries in 2020 and beyond. Solid-state lithium batteries, on the other hand, are expected to become the dominant technology for next-generation automotive power batteries.
Because solid-state batteries eliminate the need for electrolytes and separators, replacing them with solid-state electrolytes, they can be thinner for the same energy density. In terms of weight, using solid-state electrolytes allows graphite anodes to be replaced with lithium metal, reducing the amount of anode material used and significantly reducing the overall battery weight. Furthermore, higher safety and better fast-charging capabilities are advantages over current lithium-ion batteries. When integrated into electric vehicles, solid-state batteries also offer advantages such as compact structure, adjustable scale, and greater design flexibility, facilitating vehicle integration.
In summary, the reduction in material costs and the improvement in battery performance in recent years have been the driving forces behind the development of NCM811. However, due to technological challenges, it will take time for NCM811 to be truly commercialized. At present, Chinese battery companies still need to steadily overcome the technological hurdles step by step.
