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© 2016 Daramic, LLC. ALL RIGHTS RESERVED Global Lead-Acid Battery Trends And Component Advances - Through The Lens Of A Component Supplier Dr. Pete Smith May 3 rd , 2016
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Global Lead-Acid Battery Trends And Component …...Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery Invented in 1970s/ Performance ComparisonGlobal Battery

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Page 1: Global Lead-Acid Battery Trends And Component …...Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery Invented in 1970s/ Performance ComparisonGlobal Battery

© 2016 Daramic, LLC. ALL RIGHTS RESERVED

Global Lead-Acid Battery Trends And Component Advances

- Through The Lens Of A Component Supplier

Dr. Pete Smith

May 3rd, 2016

Page 2: Global Lead-Acid Battery Trends And Component …...Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery Invented in 1970s/ Performance ComparisonGlobal Battery

© 2016 Daramic, LLC. ALL RIGHTS RESERVED 2

Energy Storage History

Li-ion has Performance Advantages but Lead-acid Retains Significant Share Why the Consternation about the Lead-acid Battery Industry?

Developed in

1970s

Invented in 1967/

commercialized in

1990s

NiMH: Nickel–metal Hydride; Li-ion: Lithium-ion

Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery

Invented in 1970s/

commercialized in

1990s

Performance Comparison

Lead Acid NiMH/Li-ion

Wh/kg 35-40 140-150

Wh/liter 70 400

Charge Efficiency 75% 97%

Deeper Discharge

Tolerance up to 80% up to 100%

Discharge Cycle X 2X

Cost X 3X

Li-ion/NiMH has significant advantages over lead-acid

battery on energy density, charge efficiency, deep cycling

and discharge cycles

MWh

Highest growth in

Li-ion in last decade

Global Battery Market Growth

Source: Avicenne Energy and UltraLife

Invented in 1859

Page 3: Global Lead-Acid Battery Trends And Component …...Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery Invented in 1970s/ Performance ComparisonGlobal Battery

© 2016 Daramic, LLC. ALL RIGHTS RESERVED 3

Lead-acid Attractiveness

Lower Energy Density

Limited Charge Efficiency

Not Very Deep Cycling

Production Environment

Lead-acid Battery

Page 4: Global Lead-Acid Battery Trends And Component …...Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery Invented in 1970s/ Performance ComparisonGlobal Battery

© 2016 Daramic, LLC. ALL RIGHTS RESERVED 4

Capital Investment Examples

– Enterprise Value/EBITDA:

JCI (~10X)

Enersys (~8.3X)

– Private equity sponsor investment

Trojan, Exide Technology, C&D

Capacity expansion

Lead-acid Industry Attractiveness

Continuing Capital Investments and Expanding Capacity in the Lead-acid Industry

Source: Johnson Controls and Enersys 10K, Company official website, Daily Register, BEST magazine, Yahoo Finance

0

2,000

4,000

6,000

8,000

2011 2014 2013 2012

Johnson Controls Enersys

Industry Property, Plant and

Equipment Investment

JCI: announced the investments of $555 million

between 2011 and 2020 to expand capacity –

Johnson Controls Official Website (2015)

$, million

Enersys: announced acquisitions in Australia,

South East Asia, South America and built

plant China in last 5 years (2010-2015))

East Penn looking at $66.8 million dollar

expansion in Oelwein

– Daily Register News (2015)

Significant investment and valuations Significant and sustained investment

Daramic: new capacity expansion in

China and India

Page 5: Global Lead-Acid Battery Trends And Component …...Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery Invented in 1970s/ Performance ComparisonGlobal Battery

© 2016 Daramic, LLC. ALL RIGHTS RESERVED 5

Lead-acid Industry Innovation

Significant Innovation Increases in the Last 10 Years across All Regions

World Wide Patent Filings Related to

Lead-acid Batteries Overview

5,278

1,785

1995-2005

196%

2006-2015

World Wide Patent Filings Related to

Lead-acid Batteries by Region

294

114

276

603

498

592

424

802

Europe

Korea

1,082

2,378

US

China

International

Patent Filling (2006-2015)

Patent Filling (1995-2005)

21

7% 217%

133%

154%

519%

809%

Source: Keyword patent search

Step change increase Global innovation

Page 6: Global Lead-Acid Battery Trends And Component …...Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery Invented in 1970s/ Performance ComparisonGlobal Battery

© 2016 Daramic, LLC. ALL RIGHTS RESERVED 6

Lead-acid Battery Patents

Mix of Conglomerates, Lead-acid manufacturers, Suppliers and Application Owners Invested in Patents

0

5

10

15

20

25

30

35

JOHNSON

CONTROLS

TOSHIBA GS

YUASA

PANASONIC DARAMIC ASAHI KASEI SANYO

ELECTRIC.

IQ POWER LG

CHEM

SHIN KOBE ITM

SEMICONDUC

Top filers in International lead-acid battery category

2005-Present

Li-ion battery makers Separator

maker

Separator

maker

(cross IP)

# of independent

patent

Source: Keyword patent search

Lead-acid

battery makers

Page 7: Global Lead-Acid Battery Trends And Component …...Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery Invented in 1970s/ Performance ComparisonGlobal Battery

© 2016 Daramic, LLC. ALL RIGHTS RESERVED 7

Why Does Innovation Happen Now?

Lead-acid Battery

Large investments in

the industry and highest

patent filing in history

Page 8: Global Lead-Acid Battery Trends And Component …...Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery Invented in 1970s/ Performance ComparisonGlobal Battery

© 2016 Daramic, LLC. ALL RIGHTS RESERVED 8

Start-Stop in Automotive requests

battery always in PSOC

Battery Working Pattern Changes

Both Automotive and Industrial Batteries Evolved with Higher Usage Frequency and Higher Power Output under PSoC*

Automotive

Industrial

Battery working pattern (1995-2005) Battery working pattern (2005-2015)

Battery mainly for starting vehicle

low discharge percentage and

always fully charged

Battery (forklift) operates in an

organized way, enough time in

charging and cooling down

• Forklift battery needs to work more

efficiently with faster charging

• Renewable energy also has limited

time to charge battery

*PSoC: Partial State of Charge

Depth

of

disch

arg

e

Depth

of

disch

arg

e

Page 9: Global Lead-Acid Battery Trends And Component …...Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery Invented in 1970s/ Performance ComparisonGlobal Battery

© 2016 Daramic, LLC. ALL RIGHTS RESERVED 9

Battery Discharge Depth Changes

Wider range of partial state of charge and higher energy output and discharge deeper across automotive and

industrial applications

Battery Working Pattern Changes in All Key Lead-acid Applications

Depth

of

Dis

charg

e %

80%

10%

50%

Fully

charged

Fully

discharged

Auto

Industrial

Motive

Power Stationary

Auto

Industrial

Motive

Power Stationary

Battery working pattern (1995-2005) Battery working pattern (2005-2015)

Page 10: Global Lead-Acid Battery Trends And Component …...Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery Invented in 1970s/ Performance ComparisonGlobal Battery

© 2016 Daramic, LLC. ALL RIGHTS RESERVED 10

What Is The Future And Implication?

Lead-acid Battery

Working pattern changes

will drive battery

performance changes

across applications in

future

Page 11: Global Lead-Acid Battery Trends And Component …...Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery Invented in 1970s/ Performance ComparisonGlobal Battery

© 2016 Daramic, LLC. ALL RIGHTS RESERVED 11

New Insights/Changes in Automotive

Increasing Auto Electrification Requires Lead-acid Improvements of Charge Acceptance, Durability and Power Output

Vehicle Electrification Requirement

Lead-Acid Battery

Li-on / Ni-MH / etc.

Heat

Resistance

Cost

Reduction

Charge

Acceptance

Power

Output Cycling in

PSOC*

*Partial State of Charge

Improvement

Improvement Other Key Component

Battery management system became

critical to impact battery performance/life

Page 12: Global Lead-Acid Battery Trends And Component …...Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery Invented in 1970s/ Performance ComparisonGlobal Battery

© 2016 Daramic, LLC. ALL RIGHTS RESERVED 12

New Insights/Changes in Motive Power

Better Utilization Requires the Improvement of Rechargability and Higher Output while Maintaining Long Life

%

Working hour Working hour

Forklift Traditional Working Pattern

Depth

of

disch

arg

e

%

Forklift New Working Pattern*(Trend)

Lead-Acid Battery

Historical Battery Utilization Requirement

In work

(discharge) Off work

(charge)

In work

(discharge) Off work

(charge)

In work

(discharge) Off work

(charge)

Depth

of

disch

arg

e

Improvement

Longer Life in

faster charge Longer Life with

higher capacity

Other Key Component

Charger needs to deliver more

and impact on battery life

0

50

100

0 5 10 15 20 25

0

50

100

0 5 10 15 20 25

Page 13: Global Lead-Acid Battery Trends And Component …...Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery Invented in 1970s/ Performance ComparisonGlobal Battery

© 2016 Daramic, LLC. ALL RIGHTS RESERVED 13

New Insights/Changes in Stationary

Battery Needs Better Cycling and Lower Maintenance

Telecom Renewable Energy

Telecom and renewable energy – mainly work in remote and hot area - requires no/low maintenance

Renewable energy

– Unstable charge/discharge which leads to PSOC operation

– Deep cycling

Lead-Acid Battery

Improvement

No/Low

maintenance Rechargeability

& deep cycling

0

50

100

150

+10.1%

2018F 2014

Stationary+

Renewable Energy

M, cell

Source: Transparency Market Research & Daramic Internal Analysis

Battery diagnostic system needs

remote tracking on performance

Other Key Component

Page 14: Global Lead-Acid Battery Trends And Component …...Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery Invented in 1970s/ Performance ComparisonGlobal Battery

© 2016 Daramic, LLC. ALL RIGHTS RESERVED 14

Through The Lens Of A Supplier

Lead-acid Battery

Component

Innovation is occurring

in battery operating

cycle, battery design

and battery application.

- What does this imply

for the supply base?

Page 15: Global Lead-Acid Battery Trends And Component …...Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery Invented in 1970s/ Performance ComparisonGlobal Battery

© 2016 Daramic, LLC. ALL RIGHTS RESERVED 15

Evolution Of Lead Usage

Cost efficiency is a major target in Automotive SLI,

especially better utilization of the main

component, lead, which price increased 300% in

last 10 years

Simultaneously, battery life/performance must be

retained while reducing lead quantity

– Especially in the heavy duty applications

Major Cost Component, Lead, Used More Efficiently

Punched

300%+

Lead Price Evolution

Lead p

rice

($)

Better utilization of lead (Cost Efficiency) _

+

Cast Expanded Metal Punch

Source: LEM Lead Price

Page 16: Global Lead-Acid Battery Trends And Component …...Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery Invented in 1970s/ Performance ComparisonGlobal Battery

© 2016 Daramic, LLC. ALL RIGHTS RESERVED 16

Innovation Drivers From BOM

Most of the Bill Of Materials (BOM) are commodities

The Industry has focused on lead

What does drive the future?

– Innovation drivers: separator, battery management system, additives

Categorization of BOM Shows Innovation Opportunities

Battery Bill of Materials/Performance Related Materials

Innovation Drivers

Commodity Materials

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Battery Raw Materials Breakdown

Others

Acid

Separators

Bushings

Hot-melt

PP case/lid

Lead

BOM Categorization

Acid Lead

PP case …

Separator BMS

Additives

(Carbon)

Page 17: Global Lead-Acid Battery Trends And Component …...Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery Invented in 1970s/ Performance ComparisonGlobal Battery

© 2016 Daramic, LLC. ALL RIGHTS RESERVED 17

BOM Innovation vs. Industry Needs

Innovation Drivers can Impact the Requirement Demanded by Emerging Lead-acid Battery Applications

Separator

Additives

(Carbon)

Battery Management

System

Lamination

Poly case

Hot-melt

Acid

Other chemical additives

Plate equipment

Pasting paper Partial State Of

Charge X X

High Power

Output X X

Longer Lifecycle X X

Dynamic Charge

Acceptance X X

No/low

maintenance X

Industry Needs Automotive Industrial

Page 18: Global Lead-Acid Battery Trends And Component …...Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery Invented in 1970s/ Performance ComparisonGlobal Battery

© 2016 Daramic, LLC. ALL RIGHTS RESERVED 18

Length scale

Time scale

10-9 10-6 10-3 100

(nm) (um) (mm) (m)

100 (sec)

10-3 (msec)

10-6 (msec)

10-9 (nsec)

10-12 (psec)

10-15 (fsec)

Fluid dynamics,

Finite element analysis

Charge transfer

Stress Strain

Behavior of Materials

Plate design and

arrangement

Mechanical properties of battery

components

Electrochemistry on battery surfaces

Redox reactions

Separator Phase Engineering

Acid stratification

How Does A BOM Innovation Approach Industry Needs?

Physical/Chemical Phenomena over Wide Length/Time Scale Potential Improvements Represent Industry Opportunities

From atomic scale(nm/fsec) to real life scale (m/sec)

Page 19: Global Lead-Acid Battery Trends And Component …...Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery Invented in 1970s/ Performance ComparisonGlobal Battery

© 2016 Daramic, LLC. ALL RIGHTS RESERVED 19

Molecular Dynamics Simulation

Page 20: Global Lead-Acid Battery Trends And Component …...Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery Invented in 1970s/ Performance ComparisonGlobal Battery

© 2016 Daramic, LLC. ALL RIGHTS RESERVED 20

Summary

After 100+ years as an energy storage technology, lead-acid is still attracting investment, adding

capacity and focusing on innovation.

– Continuous investments and capacity expansion

– Significant innovation (patent) increases in last 10 years

Some of the innovation is a response from the threat from other technologies (e.g. Li-ion)

Some of the innovation comes from use models for lead-acid batteries

Regardless of the history or the technological threats, lead acid industry is attractive and innovative

In the past 10 years, the lead-acid industry has become pioneering with respect to innovation

– With new applications emerging and battery working pattern changes, batteries in both Automotive and Industrial evolved to

higher usage frequencies and to supplying more power output under partial state of charge

– Lead-acid batteries are also required to discharge deeply

Page 21: Global Lead-Acid Battery Trends And Component …...Lead-acid battery VRLA lead-acid battery NiMH battery Lithium-Ion battery Invented in 1970s/ Performance ComparisonGlobal Battery

© 2016 Daramic, LLC. ALL RIGHTS RESERVED 21

Summary (Cont’d)

Technical changes drive the battery performance improvement across applications moving forward

– Better dynamic charge acceptance

– Good capability in partial state of charge

– Longer lifecycle

– High power output

From the supplier/BOM viewpoint

– Lead utilization has been optimized

– Opportunities to meet emerging industry needs reside in the separator, battery management system and additives

To guide supplier development, we think a fundamental approach focused on length scales and time

scales in the battery will yield the most innovative component technology and a more robust and

competitive lead-acid battery and lead-acid battery industry