American Reset Explained: Lithium-Ion Batteries
In 1980, physicist John Bannister Goodenough discovered the lithium battery. He found that by sending charged lithium atoms, or ions, through a liquid electrolyte substance, a battery could store energy for later usage.
The lithium-ion battery made all our clunky electronic items portable. It enabled the development of smartphones, electric vehicles and even doorbell cameras. It powers the chips in all our devices and opened the door to mobile companies such as Samsung, Apple and Tesla.
Industries like electric vehicles and solar energy are able to thrive because of lithium-ion batteries.
The Great American Reset is advancing tech more rapidly than we imagined. Developments in battery technology and solar energy are converging to fuel the lithium-ion battery tipping-point trend during the Great American Reset.
Furthermore, as we live in a post-COVID world, we must change how we live. Lithium-ion battery improvements will greatly benefit from this new development.
How Solar Energy Is Improving Lithium-Ion Batteries
In the same way that updated computer chips led to the smartphone era, improved batteries will change how we collect, store and use the energy needed to power our houses and businesses. It’s going to make renewable energy much more efficient.
The same battery technology that powers our phones and cars will be everywhere. And these developments in battery technology are converging with another tech innovation: the rise of low-cost solar energy.
You see, one of the biggest problems with solar energy is that production tops out at midday, when the sun is at its highest point. However, most households’ energy usage peaks in the mornings and evenings. That’s where lithium-ion batteries come in.
Until recently, batteries were too costly and inefficient to store solar energy not used throughout the day. But cheaper, more widely available lithium-ion batteries will solve this problem. Now, homes and businesses will be able to store — and subsequently use — the extra energy their solar panels generate during the day.
Basically, cheaper, better batteries will make renewable energy much more efficient. We are heading to a tipping point where the cost of solar panels combined with a battery pack in the garage is cheaper than buying electricity from the power company.
The price of lithium-ion batteries has dropped 75% in the past six years. Bloomberg analysts expect battery pack prices to fall even further to $62 per kilowatt-hour by 2030. And in just the next few years, global annual lithium-ion battery installations in homes and businesses will grow nearly sixfold, from 3.1 gigawatt-hours in 2018 to 17.89 gigawatt-hours in 2022.
This and other factors have led GTM Research to predict that global lithium-ion battery deployments will grow at an annual rate of 55% over the next five years, as solar energy installations are paired with energy-storing batteries. Statista predicts that the global residential energy storage market will reach $17.5 billion by 2024 from an estimated $6.3 billion in 2019. This represents a compound annual growth rate of 22.88%.
The rapid growth of these installations will alter the performance of electrical systems around the world. Consumers and businesses can store and utilize energy where they reside and work.
The convergence of low-cost solar and energy storage will be a boon for investors willing to play this trend.
How Electric Vehicles Play a Role in the Trend
The battery has come a long way, especially in the development of electric vehicles (EVs). Two decades ago, lithium batteries were too expensive and heavy to power EVs.
For instance, General Motors unveiled its first EV, the EV1, in 2001. The car weighed 3,086 pounds and had a lead-acid battery. It could only travel 60 miles on a charge. What’s more, the battery’s lifespan was a fraction of the lithium-ion batteries used today, so you had to buy a new one every few years.
Nowadays, a fully charged lithium-ion battery can drive a 6,000-pound Tesla Model X over 320 miles on a single charge. It’s no wonder GM sold only a few hundred EV1s.
As technology advances, so does battery development. The race to produce better electric vehicles has led to big developments in battery chemistry. This allows for lighter batteries with higher energy density. This new wave of batteries is not only smaller, but safer and longer lasting.
Prices have dropped 87% over the past decade. Analysts forecast they will decline another 50% through the 2020s. In fact, the cost of the lithium-ion electric vehicle battery is expected to drop 50% by 2025 from today’s prices.
Thanks to recent price declines, batteries that power EV motors (called motive batteries) have boomed in the past decade. In 2018, motive batteries accounted for 53% of the entire lithium-ion battery market. That number has risen 100-fold compared in 2011, accounting for only 2.4% of the world’s total lithium-ion battery output.
Cheaper batteries mean a reduction in EV production costs — and even ownership costs.
In a few short years, the automotive industry will arrive at a crossover point where EVs will be cheaper to produce than traditional gas-guzzlers. What’s more, there are fewer moving parts in an EV, which means maintenance costs over the life of the vehicle are significantly cheaper for EV owners. You’ll never need to change an EV’s engine, oil, coolant, transmission fluid or belts.
This crossover point will lead to a massive jump in electric vehicle sales. The number of EVs is expected to grow nearly 100-fold in the next decade, from 1.45 million in 2018 to 127 million by 2030.
And it won’t just be electric cars switching to lithium-ion batteries. As the production cost plummets, heavy machinery such as forklifts will be able to switch from lead acid batteries — which have a shorter lifespan and don’t recharge as quickly — to lithium-ion, improving work efficiency and speed.
Since the electric vehicle industry is also one of the trends affected by the Great American Reset, the lithium-ion battery market will keep growing.