By Allison Proffitt
February 16, 2024 | In December, the Advanced Automotive Battery Conference welcomed more than 1,600 total participants to San Diego, California, the largest AABC event ever.
In a plenary session, Robert Lee, President for North America and Chief Strategy Officer of LG Energy Solution, addressed the market shifts for electric vehicles in 2023 and the strategic choices LG Energy Solution has made.
“There’s obviously been a lot of volatility recently,” he admitted in opening. But while media headlines have shifted dramatically—he compared headlines over the past year ranging from glowingly positive to alarmingly pessimistic—Lee argued that the truth lies somewhere in the middle. “In retrospect now, if I look at the entire year, things were probably not as good as we thought it was a year ago. But at the same time, things are probably not quite as bad as it sounds in the most recent headlines,” he said.
Electrification is growing globally, Lee said. While he cautioned that market growth will not be linear, and there will still be challenges ahead, the trajectory is only toward more electrification growth. While Lee said the growth of the battery electric vehicle (BEV) market in the top three markets in the world—China, the US, and the top 5 economies in Europe—was slower than predicted in the first three quarters of 2023, he still calculated a 33.3% year over year global average. September 2023, in fact, had record BEV sales, Lee reported. In the United States, September 2023 marked the first time more than 100,000 BEVs were sold in a single month.
“Overall story is that you can be too optimistic, too pessimistic, but I would say the market is expanding,” Lee said. “It’s not expanding as fast as we projected several months ago, but there’s still a tremendous amount of growth in this industry that we all need to work together to execute on.”
Dynamics and Drivers
There have been some changes to dynamics and drivers of the industry over the past year, and Lee explored how some of the different regions’ policies have pushed markets to expand. While he praised the President’s Inflation Reduction Act (IRA) of 2022, saying it makes the US competitive, Lee highlighted China’s aggressive EV policies including limiting parking and driving to EVs in certain areas. The Chinese market is still leading the world, and Lee credited the country’s “holistic strategy they had for a decade in order to get where they are.”
Charging infrastructure is often flagged as a limiting factor to greater BEV uptake, and Lee predicted a need for about 30 million chargers by 2030. But Lee dismisses this as a concern. Two-thirds of those chargers will be in personal garages, Lee predicts; only about 1 million will be needed in public spaces. “I’m very confident that the infrastructure is going to catch up, and we’re not going to be bounded by things like charging stations or power,” he said. Instead, growth will be driven by consumer choices. “It’s really going to be driven by consumer acceptance of EVs and whether we’re making compelling vehicles for consumers to adopt,” Lee said. “I think that’s really the critical piece.”
Chemistries and Pack Format
With his assurance that batteries and charging will not slow the BEV takeover, Lee went on to report LG Energy Solution’s priorities on battery chemistry and design. In late 2023, LG Energy Solution announced that it planned to prioritize mid-nickel NCM chemistries over both high-nickel chemistries or lithium iron phosphate (LFP) batteries. Mid-nickel, cobalt and manganese (NCM) batteries contain less nickel than traditional NCM chemistries, making them cheaper than existing NCM batteries. LG Energy Solution reports mid-nickel battery energy densities nearly as high as traditional high-nickel batteries.
The Mid-Ni NCM chemistry is also price competitive with LFP batteries and has weight advantages, Lee pointed out. High-voltage mid-Ni NCM batteries are lighter than LFP batteries, which makes them more efficient for driving. The mid-Ni chemistry also performs significantly better in lower temperature, Lee added, reporting LG Energy Solution simulation findings.
While mid-Ni batteries are more expensive than LFP batteries, Lee said this additional cost is easily recouped in battery recycling. “With NCM chemistry, it is highly recyclable… Nickel, cobalt, manganese, these are valuable metals that you can recoup. You can reuse parts of the battery in a much more economical way. With LFP, you could technically recycle, but the iron in LFP batteries is not quite as valuable to recoup through recycling.”
Finally, Lee explored the advantages of stacking technology and a pouch configuration. “When you stack the electrodes in a pouch cell, you have very high efficiency utilizing the volumetric space that you’re given. You don’t have any loss in terms of space,” he explained.
LG Energy Solution’s choice is not only technical though. He emphasized that by working with major OEMs over the past 10-15 years, the company has arrived at these format decisions because they reflect market forces. “We can choose to do other formats, but we’ve settled here because we thought that among all the trade-offs to make, these were the best technical decisions to make.”
