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In the What's Next series, Goldman Sachs talks about the development of the technology behind the energy density of batteries, which will be a key factor in determining the range and cost of electric vehicles. In this 5th edition of a series on the future of electric vehicles, the firm delves deeper into the energy density competition in car batteries, highlighting the leading innovators in the field. Tesla (NASDAQ: TSLA) has been recognized as an innovation leader for its expertise with a broad range of related technologies.
The energy density of today’s lithium-ion batteries (LiBs) has reached 300 Wh/kg. Over the next five years, Goldman Sachs anticipates technological breakthroughs in the anode material space (Si anode or graphene anode), in addition to advances in cathode materials. Medium term, the firm sees manufacturers stepping up efforts to bring energy density to 400-500 Wh/kg, through the development of all-solid-state batteries (ASSBs).
The aim of ASSB technology is to replace liquid electrolytes with solid electrolytes which can improve safety and, if using a lithium metal anode, also improve energy density.
Now factoring in the scope for improvement in energy density and CATL/BYD capacity expansion, Goldman Sachs lowers their automotive battery price forecasts to $75/kWh for 2030 (from $85) and to $58/kWh for 2040 (from $69). The firm believes lower battery costs have the potential to further accelerate EV penetration.
Over the two decades between 2020 and 2040, Goldman Sachs look for EV sales volume to increase at a CAGR of 19% (30X growth from 1.8M units to 56.3M units). The firm estimates cost weightings for key battery materials (2020 basis) at 18% for cathode materials, 6% for anode materials, 10% for separators, 8% for electrolytes, and 10% for other materials (binders, laminators, conductive auxiliary agents, and all other materials). Goldman Sachs sees growth in EV sales helping to expand the total market for these five materials by nearly fivefold, from $13.3B in 2020 to $37.9B in 2025, and $61.3B in 2040.
Among the leading innovation companies working with existing lithium-ion batteries, Goldman Sachs highlights with Buy ratings Umicore and Tesla, recognizing their expertise with a broad range of related technologies.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.