(benzinga.com) – The market for electric transportation is broad and varied, though many investors don’t give much thought to opportunities beyond industry behemoths like Tesla IncTSLA 0.55%. In recent months, however, a growing number of investors and observers have seen past the recognizable names and are justifiably excited about the emerging opportunities they see in e-transportation and e-mobility.
For example, shares of BYD Co LtdBYDDY 0.22%, for which I was the first investor in 1995, have gained a hefty 300% in the past six months on heightened awareness. If you’re familiar with BYD – whose largest equity holder is now Berkshire Hathaway (NYSE: BRK-B) – you know the company as a maker of electric buses or industrial equipment such as forklifts and trucks.
What you may not know is that BYD began as a battery company, and that despite being the world’s largest maker of electric vehicles in 2016, it still primarily views itself as a battery maker. In fact, just two years ago, BYD was in the process of building the largest battery factory in the world. That breakneck growth has continued and shows little signs of slowing down. In fact, last month BYD Co Ltd raised $3.86 billion from an upsized sale of its Hong Kong-listed shares, capitalizing on growing demand for its new-energy vehicles.
Automakers that view their core operation as a battery company are common; people in the e-mobility market know they are in the battery business first and the car or shipping business second. In 2015, Elon Musk said exactly the same thing. Five years later, Social Capital CEO Chamath Palihapitiya echoed the same sentiment when he told CNBC Tesla’s growth is much more than about electric cars: its renewable energy components could be worth trillions.
Still, while many investors see spin-off opportunities in electric vehicles (EV), they likely miss that EVs themselves are spin-offs of battery technologies. In this market, just as with the cars and buses themselves, the batteries (no pun intended) are the drivers.
Take robotics as another example. Privately held UBTech, the world’s most valuable consumer robotics company (valued at about $10 billion), for which I am an investor and serve as board member, is also driven by advancements in battery technology. In robotics, a battery’s weight, energy density and ability to safely charge and discharge is everything.
That’s another reason why investors looking long term would be wise to source opportunities in batteries and battery-related technologies. By betting on batteries, you’re not only betting on Tesla, or Volkswagen, but also on robotics and satellite tech, shipping and grid-level energy storage, and mass transit. Even consumer electronics such as laptops, mobile phones and AR/VR headsets run on – you guessed it – batteries.
KULR takes space proven technology to make lithium battery systems cooler, lighter and safer for consumers. You can see why, in the battery world, that’s a big deal. They have been working on this technology for many years with NASA. Now they are deploying it to EV, energy storage and many other commercial applications. The market opportunity is huge for what they do.
Generally speaking, backing battery companies may feel like placing a wager on a very specific technology. But it’s really like investing in multiple, high-growth, high-return markets at once. If a single advancement in battery technology works, it doesn’t just work for a confined vertical – it works everywhere.
So, if you’re following car makers or e-mobility, or feel as though you may have missed early investment opportunities there, it may be a good time to see them differently — to see them as battery companies. That’s what most of them really are.
Xia Zuoquan is a founding investor and director of BYD Co Ltd, a maker of electric buses and plug-in electric cars and batteries. Xia founded investment firm Zhengxuan Capital in 2004, with an estimated $1.5 billion in assets.
WASHINGTON (Reuters) – Volkswagen AG (OTC:VWAGY) late Friday called itself an “unintended victim” in a battle between two battery suppliers and urged the U.S. government to extend a reprieve to buy batteries key to its planned U.S. electric vehicle production.
The U.S. International Trade Commission (ITC) on Wednesday sided with LG Chem in a trade secrets case, but permitted SK Innovation to import components for domestic production of lithium ion batteries for Ford Motor (NYSE:F) Co’s EV F-150 program for four years, and for Volkswagen (DE:VOWG_p) of America’s electric vehicle line for two years.
VW said Friday it will request its carve out be “extended to at least four years to give an adequate transition period. Ultimately, however, it is our hope the two suppliers will settle this dispute outside of the courtroom.”
The German automaker has invested $800 million to build electric vehicles in Tennessee and hiring hundreds of employees. “Volkswagen will take all necessary steps to allow us to fulfill our commitment to provide skilled jobs to proud Tennessee workers,” the automaker said.
On Thursday, Ford Chief Executive Jim Farley publicly encouraged LG Chem and SK Innovation to reach a settlement. VW and Ford previously warned the dispute could disrupt supplies of the key EV parts and cost U.S. jobs during the COVID-19 pandemic.
Georgia Governor Brian Kemp on Friday called on President Joe Biden to overturn the ITC ruling, warning the long-term prospects for the $2.6 billion SK Innovation battery plant in Jackson County, Georgia, would be “harmed significantly.” The plant will eventually build batteries for Volkswagen and Ford.
The White House and SK Innovation declined comment.
LG Energy Solution counsel Dave Callahan said the company “remains committed to negotiating a fair settlement for the theft of its trade secrets” and said the Georgia plant will be able to operate.
“The only obstacle to resolving this matter and securing the plant’s long-term future is (SK Innovation’s) refusal to acknowledge its wrongdoing and make amends,” he added.
(wsj.com) – Rechargeable lithium-ion batteries were first commercially used in hand-held camcorders in 1991. Laptops soon followed. A decade later, batteries enabled the rise of tech titans such as Apple Inc. by powering smartphones and wearable devices, then made their way into electric vehicles. The basic technology throughout remained pretty much the same: Lithium ions move through a liquid from the cathode to the anode, and back again.
This, however, was just the beginning. After a decade of rapidly falling costs, the battery has reached a tipping point. No longer just for consumer products, it is poised to transform the way the world uses power.
In the energy sector, affordable batteries are making it possible for companies to store electricity and harvest renewable power. In the auto industry, they are set to challenge the gas-powered engine’s centurylong domination. Costs have come down so far and so fast that most car makers expect that electric vehicles, which are currently more expensive than their gas-powered counterparts, will cost the same amount to build within the next five years.
The gains are likely to continue. Electric vehicles are currently the main source of demand for battery cells. As demand grows and costs fall further, batteries will become even more disruptive across industries. Batteries recently scored a win at General Motors Co., which said it hoped to phase out gasoline- and diesel-powered vehicles from its showrooms world-wide by 2035.
The battery boom could erode demand for crude oil and byproducts such as gasoline—as well as for natural gas, which is primarily used in power plants. While mining materials and manufacturing batteries produce some greenhouse gas emissions, analysts believe shifting to batteries in the auto and energy sectors would reduce emissions overall, boosting efforts to tackle climate change.
U.S. power plants alone produce about a quarter of the country’s emissions, while light-duty vehicles such as cars and vans contribute another 17%.
The rise of rechargeable batteries is now a matter of national security and industrial policy. Control of the minerals and manufacturing processes needed to make lithium-ion batteries is the 21st-century version of oil security.
The flow of batteries is currently dominated by Asian countries and companies. Nearly 65% of lithium-ion batteries come from China. By comparison, no single country produces more than 20% of global crude oil output.
Employees assemble lithium-ion batteries at a factory in Huaibei, China, last year.PHOTO: WAN SHANCHAO/VCG/GETTY IMAGES
Companies are working on new configurations—such as solid-state batteries, which don’t transfer ions through liquid—that could significantly enhance the power and further lower battery prices. The value of such a breakthrough could be measured in the billions of dollars, if not trillions.
“There’s still a huge amount of innovation to come,” says Christina Lampe-Onnerud, chief executive at Connecticut-based battery startup Cadenza Innovation Inc. Her company envisions that buildings could someday have their own batteries, giving them reserves of electricity they could use during peak hours to reduce costs.
The first commercially available electric vehicle that ran off lithium-ion batteries came in 2008, with the Tesla Roadster. One of Tesla Inc.’s early advantages came from figuring out that it could use readily-available laptop battery cells to power its cars. It initially purchased off-the-shelf battery cells manufactured in Asia intended for laptops, which at the time used between six and 12 cells. The two-seater Roadster needed nearly 7,000.
Now, more than two-thirds of the world’s lithium-ion batteries are used in vehicles, a figure expected to reach three-quarters before 2030, according to Benchmark Mineral Intelligence, a London-based firm that tracks battery prices and industry developments.
The same batteries are being deployed on the power grid in growing numbers. Construction began in January on a battery in Florida that will use 2.5 million lithium-ion cells—similar in chemistry to Tesla cells, only larger. Florida Power & Light, part of NextEra Energy Inc., said the battery will be capable of powering Disney World for seven hours.
Used automotive batteries, slightly degraded from years of filling up and discharging, are finding new life as storage projects. Amsterdam’s Johan Cruijff Arena has a three-megawatt “super battery” made from 148 Nissan Leaf battery packs, many of them recycled, storing electricity generated by rooftop solar panels and helping balance the stadium’s energy usage.
To meet expected demand, global output of lithium, a silvery metal also used to make nuclear bombs and treat bipolar disorder, has nearly tripled in the past decade, according to Benchmark. Lithium is mostly mined in Australia and Chile, where it is found in underground brine deposits, although efforts to increase U.S. output from mines in Nevada and North Carolina are gaining attention from investors.
An aerial view of the brine pools and processing areas of a lithium mine in northern Chile.PHOTO: IVAN ALVARADO/REUTERS
In recent years, prices have fallen more quickly than expected due to demand from auto makers. Electric vehicle battery packs and motors currently cost about $4,000 more to manufacture than a comparable fossil fuel-burning midsize sedan engine. By 2022, the difference will be $1,900—and will disappear by mid-decade, according to investment bank UBS Group AG .
Ken Morris, the head of electric vehicles at GM, said in September he expects cost parity in five years. Auto makers such as Volkswagen AG, Tesla Inc. and GM are pushing battery prices down further as they race to lock up the giant capacity needed to power millions of EVs. The rise of electric transportation is also drawing in some of the biggest tech companies, including Apple and Amazon.com Inc.
1991Lithium-ion batteries appear in first commercial product: a Sony camcorder. PHOTO: YOSHIKAZU TSUNO/GAMMA-RAPHO/GETTY IMAGES
1994Dell releases the Latitude XP, the first mainstream laptop computer with a lithium-ion battery.
2007Apple introduces the iPhone, powered by a lithium-ion battery.
2008Tesla begins selling the Roadster, which uses 7,000 glued-together lithium-ion cells. PHOTO: JUSTIN SULLIVAN/GETTY IMAGES
2017After summertime blackouts, Tesla builds the world’s largest battery to store renewable energy in Australia.
Globally, battery-powered electric cars made up around 4% of all new cars sold last year in the world’s largest markets—the U.S., Europe and China—up from around 1% in 2017, according to data from Deutsche Bank. In 2025, the bank expects that share of the market to be 22%.
In the energy sector, power grids have been built around just-in-time electricity generation for more than a century. Every second of the day, the supply of electrons needed to match demand to keep the lights from going out, because there was no way to store energy for use at another time.
To get around that problem, demand during the hottest and coldest days in recent decades has been met by on-call natural gas-burning plants known as “peakers” that were fired up for a few select hours when needed.
Large installations of lithium-ion batteries have begun replacing peakers in parts of the U.S. These batteries—which often draw energy from solar farms, though they can be set up to draw cheap power from the grid—tend to bank electricity during the day. They discharge power as needed for a couple of hours in the evening when power demand rises, along with prices, after the sun sets.
Developers and utilities are looking at another evolutionary step in the industry: building batteries to harvest and dispatch inexpensive and clean power from wind and solar farms, and not just for a couple of hours after sunset.
That threatens not only peakers, but many traditional power plants financed under the assumption that they would be able to competitively sell electricity at all hours of the day for decades.
Batteries “are right on the precipice of being highly disruptive,” said Chris McKissack, chief executive of GlidePath Power Solutions LLC, an Illinois-based company that builds renewable energy generation. He estimates there are well more than 100 gigawatts of gas- and coal-fired power plants—out of a total 800 gigawatts plants that burn these fuels—that could be immediately rendered uneconomic and unnecessary. “This presents a massive opportunity for battery storage,” he said.
Construction of a GlidePath project south of Houston in 2019.PHOTO: GLIDEPATH
In Texas, which has a competitive power market, economic forces are driving a boom in batteries on the grid. At the end of 2020, installed batteries had the capacity to deliver 215 megawatts of electricity. The grid operator expected nearly 2,000 megawatts worth of batteries by the end of 2023, about 4% or 5% of average electricity demand for the state’s main power grid this time of year.
California and New York have introduced mandates for utilities to install more batteries, to increase grid reliability and smooth out price volatility as well as to incorporate more renewable energy.
Last year, two California firms that procure electricity for nearly 700,000 customers expanded an existing deal to acquire the output of a large solar and battery-storage project north of Bakersfield. The companies, Silicon Valley Clean Energy and Central Coast Community Energy, said the batteries would allow them to deliver renewable energy without price spikes.
A lithium-ion battery storage project in Ottawa.PHOTO: RECURRENT ENERGY
“I am thinking about the grid in an entirely different way,” said Girish Balachandran, chief executive of Silicon Valley Clean Energy, who expects that natural gas will be a smaller part of the company’s portfolio in California as more wind and solar power is stored in batteries.
He said he is envisioning new ways to deploy batteries as prices continue to fall, to ensure reliable grid operation.
Prices have come down a long way since January 2010, when Boston Consulting Group estimated battery costs at between $1,000 and $1,200 per kilowatt-hour. It said getting to $250—a level car makers were targeting—“is unlikely to be achieved unless there is a major breakthrough in battery chemistry.”
Today, battery prices are about $125 per kilowatt-hour, after big increases in manufacturing capacity lowered costs, and tweaks to chemistry and design yielded further savings.
Battery costs are widely expected to fall further, said Venkat Viswanathan, an associate professor of mechanical engineering at Carnegie Mellon University. He expects them to go as low as $80 per kilowatt-hour in two to three years before bottoming out.
Gene Berdichevsky, the former battery systems architect for the Tesla Roadster and now founder and chief executive of Sila Nanotechnologies Inc., an Alameda, Calif.-based company working to improve battery technology, said lowering the cost of storage to $50 per kilowatt-hour could be worth half a trillion dollars. “There’s going to be an immense amount of scientific ingenuity applied to it,” he said.
Gene Berdichevsky of Sila Nanotechnologies holds a jar of black powder-like material, an ingredient that’s part of Sila’s quest to improve battery technology.PHOTO: STEPHEN LAM FOR THE WALL STREET JOURNAL
Last year, the U.S. established a consortium of agencies to promote a domestic battery industry, citing the role the industry plays in consumer electronics and national defense. It also used the Defense Production Act to speed development of mines for rare-earth elements.
During her Senate confirmation hearing to become Energy Secretary last month, Jennifer Granholm signaled her interest in domestic production, saying, “We can buy electric car batteries from Asia or we can make them in America.”
The European Union is using industrial policy to foster the development of a regional battery sector. Peter Altmaier, the German minister for economic affairs and energy, recently said the EU wants a “closed value chain for battery cells to be created in Europe” from processing raw materials through recycling used batteries.
Growing demand for batteries could tax supplies of vital minerals. And powering all those car batteries would increase demand for electricity, straining supplies.
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Another challenge: Though battery safety has improved, lithium-ion cells have a history of catching fire, which has already resulted in recalls for companies including GM, Hyundai Motor Co. and BMW AG .
A shortage of charging stations could discourage EV customers. San Francisco estimates it could need more than 5,100 EV charging outlets by 2030, up from 834 in 2019. Filling up those batteries may also require 7% more electricity than the city currently consumes, according to an analysis co-written by two city officials.
Still, car experts believe battery-powered models—which are mechanically much simpler than those with gasoline engines, with fewer moving parts—will ultimately prevail.
The internal combustion engine, or ICE, has been engineered to near-perfection over a century, said Sandy Munro, an auto-industry consultant who takes apart about two dozen cars a year, stripping them to their parts to study the materials, technology and assembly. The innovation of the battery-powered EV, by contrast, has barely begun.
“Right now, we’re basically scratching the surface,” he said. “The ICE age is coming to an end.”
Investing.com — Electric-car battery developer Quantumscape Corp (NYSE:QS)’s shares plunged as much as 40% on Monday, the largest drop in its short life.
QuantumScape, for those who don’t know, was until now an almost $50 billion market cap company after shares had surged more than 250% since its Nov. 27 merger with a blank-check company. That valuation put it above the likes of Ford Motor Company (NYSE:F) and Fiat Chrysler Automobiles NV (NYSE:FCAU) and within range of General Motors (NYSE:GM), for comparison.
The firm is backed by Volkswagen AG (OTC:VWAGY) and Bill Gates, among others. The billionaire Microsoft (NASDAQ:MSFT) founder earlier this year said in a blog post that QuantumScape’s technology — solid-state batteries — are a key making EVs a “realistic option for every car owner.”
There wasn’t much in the way of news explaining the drop, save for a post on Seeking Alpha from Brian Morin, who identifies himself as the chief executive officer of apparent rival Soteria Battery Innovation Group. He notes that while QuantumScape’s science is “very good,” their batteries are unproven and will likely never achieve the performance they claim.
Only one analyst covers the stock, according to Dow Jones, and Bernstein’s Mark Newman has a price target of $28 on the stock.
(Market Watch) – Shares of electric car-battery developer QuantumScape Corp. fell the most ever on Monday, a day that saw stocks of EV makers soaring on sales news.
QuantumScape QS, -40.26% shares were down nearly 39% at last check, poised for their lowest close since Dec. 7 and suffering their worst one-day percentage loss on record.
QuantumScape went public in November after a merger with a blank-check company, a path that many companies, including EV- and alternative-energy ones, have taken in recent months. .
Monday’s losses extend the stock’s down trajectory to a fourth session, with the shares losing 55% over the period. QuantumScape shares are down 61% from its record closing high of $131.67 on Dec. 22.
Lithium-ion batteries presently in use in electric vehicles as well as tools and gadgets rely on liquid electrolyte solutions. Higher energy-density, cheaper-to-make solid-state batteries are expected to further increase range and shorten charging times for EVs in the future.
In addition to QuantumScape and other companies such as Samsung SDI Co. Ltd 006400, +6.85%, research and development units of several auto makers, including Toyota Corp.’s TM, -1.00%, are focusing on solid-state batteries for EVs.
Japanese chemist Akira Yoshino files patent for lithium-ion battery.PHOTO: ASAHI KASEI CORPORATION
Lithium-ion batteries appear in first commercial product: a Sony camcorder. PHOTO: YOSHIKAZU TSUNO/GAMMA-RAPHO/GETTY IMAGES
Tesla begins selling the Roadster, which uses 7,000 glued-together lithium-ion cells. PHOTO: JUSTIN SULLIVAN/GETTY IMAGES
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