Losing Batteries’ Energy
Even after decades of utilizing them in electronics—and now EVs—we still do not fully understand lithium-ion batteries. For example, one such issue is the tendency of batteries to self-discharge over time. This is an issue that tends to become larger over time, and a major reason why batteries reach the end of their useful life after 7-10 years in most cases.
Self-discharge is also a problem for battery chemistries that do not use cobalt, limiting their adoption even if cobalt is expensive and produced in conditions that often violate human rights.
Until recently, scientists assumed that self-discharge was linked to lithium-ions (see below for more details). But it appears this was not true.
Researchers recently published their finding that protons (hydrogen nuclei) were actually responsible for self-discharge. This opens the way to new designs and ways to mitigate the problem, potentially significantly improving future batteries.
They published their findings in the prestigious publication Science under the title “Solvent-mediated oxide hydrogenation in layered cathodes”.
This was achieved with a massive collaborative effort bringing together researchers from the University of Colorado, DEVCOM Army Research Laboratory, SLAC National Accelerator Laboratory, Argonne National Laboratory, Pacific Northwest National Laboratory, University of Houston, National Renewable Energy Laboratory, Oregon State University, Stanford University, Lawrence Berkeley National Laboratory, National Taiwan University.
The Previous Paradigm
Lithium batteries work by moving lithium ions from the anode side to the cathode side through an electrolyte. This flow creates an electric current. The process is reversed when charging the battery.
Source: ResearchGate
Until now, the assumption was that self-discharge was linked to lithium ions staying stuck in the cathode, so not returning to the anode when charging, reducing the available ions to generate power.
This has been central to improving lithium-ion designs, with many attempts to optimize the flow of lithium-ion and make their returns to the anode as perfect as possible. It appears, however, that this is not the actual issue.
Hydrogen Taking Lithium Spots
The researchers were able to analyze in-depth battery material using a powerful X-ray machine at the U.S. Department of Energy’s Argonne National Laboratory in Illinois.
By doing so, they discovered that hydrogen molecules from the battery electrolyte would move into the cathode material and take the lithium ions’ spots. This caused a decline in available space for lithium ions, reducing the battery capacity.
This mostly happens in the layered transition metal oxide of the cathode.
Moreover, this process also physically damages the cathode, inducing cracks and accelerating the degradation of the battery.
So not only do the hydrogen protons reduce the battery life by reducing the capacity, but also by causing direct damages that were until now assumed to be caused by lithium-ions.
Direct Potential
Solving EV Limitations
A key limitation in EV adoption & switching to cobalt-free batteries is that alternative chemistries display a relatively lower range. For some drivers, this is an unacceptable limitation compared to fuel cars.
The concern of the battery pack lasting less than the rest of the car, leading to unpredictable extra expenses, is also a major concern blocking many from switching to EVs. Especially as most EV models are still somewhat more expensive to purchase.
This short lifespan is also an ecological concern, as it means more material needs to be mined, more energy is consumed to produce the batteries, and more efforts need to be put into recycling.
Improving Cathodes’ Lifespan
Now that we know hydrogen, not lithium, is to blame for cathode degradation, we are more likely to find effective solutions. The researchers for example discuss the use of a special coating on the cathode that could block the hydrogen molecules.
Another option would be to use different electrolytes that do not generate hydrogen in the first place.
Solid-State Batteries
This is also an encouraging discovery for solid-state batteries. As these designs do not use an electrolyte at all, they might be entirely immune from the problems caused by hydrogen created from the electrolyte.
In itself, this could explain some of the remarkable performance of solid-state batteries.
Investing In Advanced Battery Technologies
Batteries are at the center of the trend of electrification, itself a major multi-trillion-dollar endeavor looking to remove fossil fuels from our power sources. And more reliable, cheaper, or more durable batteries will be at the center of the effort of “greening” our energy system.
You can invest in battery-related companies through many brokers, and you can find here, on securities.io, our recommendations for the best brokers in the USA, Canada, Australia, the UK, as well as many other countries.
If you are not interested in picking specific battery companies, you can also look into battery ETFs like Amplify Lithium & Battery Technology ETF (BATT), Global X’s Lithium & Battery Tech ETF (LIT), or the WisdomTree Battery Solutions UCITS ETF, which will provide a more diversified exposure to capitalize on the growing battery industry.
Or you can look at our article on the “Top 10 Battery Stocks To Invest In” and “Top 10 Battery Metals & Renewable Energy Mining Stocks“.
Advanced Battery Companies
1. CATL (300750.SZ)
We talked already of CATL technological lead. The company is the global leader in battery manufacturing, producing more than half of the global battery volume. It is present at every step of the battery manufacturing supply chain and is a leader in battery technology.
This is true for lithium-ion batteries, where the company has been a long-established leader for a long time. Now it looks small in comparison to the latest announcement.
CATL has also announced in the past impressive progress on multiple other battery types :
Source: CATL
CATL has also invested 3.25B in battery recycling capacities in China. CATL has notably achieved a remarkable recovery rate of 99.6% for nickel, cobalt, manganese, and 91% for lithium.
Thanks to its scale, focus, and R&D achievements, CATL is likely to be at the forefront of battery innovation, manufacturing, and recycling.
This makes it a key partner for EV manufacturers, including Tesla, NIO, Ford, Stellantis, etc, with Hyundai recently added to CATL growing rooster of strategic alliances.
In addition, the lessons learned in one chemistry can be applicable in another, so we might see soon honeycomb or condensed-state sodium-ion batteries for example. The economies of scale in producing half of the world’s batteries are also likely applicable to the whole company, regardless of the specific technology used in an individual product.
2. BYD (BYDDY)
A long-time challenger of Tesla in the EV market, BYD has become a serious competitor not only for Tesla but for virtually all automakers.
The company evolved from its origin as a supplier of lithium-ion phone batteries to selling almost as many EVs as Tesla in China (the world’s largest EV market) and being the best-selling EV in Thailand, Sweden, Australia, New Zealand, Singapore, Israel, and Brazil.
BYD is a large part of why China suddenly became the world’s largest car exporter in 2023, surpassing Japan. The company’s aggressive overseas expansion is also carried by new factories, like in Hungary.
And with the release of $10,000-$12,000 cars like the Seagul, using sodium batteries, a whole new market might open for BYD EVs.
Source: By User3204 – Own work, CC BY-SA 4.0
Still a battery manufacturer at its core, BYD is a serious challenger to CATL in the LFP (lithium iron phosphate) battery market, with a 41.1% market share in China (compared to CATL’s 33.9%).
The “flood” of cheap EVs produced by BYD into the European and American markets is likely to be met with some level of protectionism (even above the recently imposed tariffs), which could hinder BYD’s growth.
But at the same time, cheap Chinese EVs are already a great success in the rest of the world, which does not have incumbents much in the way of domestic automakers to protect, including the entirety of South America, Russia, Africa, the Middle East, and Southeast Asia.
This represents several billion potential customers for BYD, living in countries eager to strike a geopolitical balance and stay on good terms with both the West and China, so it is unlikely to create too strong protectionist barriers.
And even in the EU or the USA, BYD might stay competitive, thanks to the much higher prices of local EV manufacturers compared to prices in China, as well as localization of the production out of China for these markets, like, for example, in Eastern Europe, Mexico, or Turkey.
