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NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-1718 | FAX: 804-360-7259
NanoMarkets, LC PO Box 3840 Glen Allen, VA 23058 Tel: 804-270-1718 Web: www.nanomarkets.net
NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-1718 | FAX: 804-360-7259
www.nanomarkets.net
Entire contents copyright NanoMarkets, LC. The information contained in this report is based
on the best information available to us, but accuracy and completeness cannot be guaranteed.
NanoMarkets, LC and its author(s) shall not stand liable for possible errors of fact or judgment.
The information in this report is for the exclusive use of representative purchasing companies
and may be used only by personnel at the purchasing site per sales agreement terms.
Reproduction in whole or in any part is prohibited, except with the express written permission
of NanoMarkets, LC.
NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-1718 | FAX: 804-360-7259
www.nanomarkets.net
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Table of Contents
Executive Summary
E.1 Summary of Opportunities from New Materials for Lithium-Ion Batteries
E.1.1 Lithium Cobalt Oxide (LCO)
E.1.2 Lithium Manganese Oxide (LMO)
E.1.3 Lithium Iron Phosphate (LFP)
E.1.4 Nickel Cobalt Alumina (NCA) and Nickel Manganese Cobalt (NMC)
E.1.5 Graphite and Its Replacements
E.2 Materials Suppliers to Watch in this Space
E.3 Roadmap for Lithium-Ion Battery Materials and Eight-Year Market Forecast
E.3.1 Features Required for Competitive Benefit
E.4 Concluding Remarks on Market Strategies
Chapter One: Introduction
1.1 Background to Report
1.1.1 The Importance of Electrodes for Lithium Battery Performance Improvement
1.2 Objectives and Scope of this Report
1.3 Methodology of this Report
1.4 Plan of this Report
Chapter Two: Market Requirements and Opportunities for Novel Lithium-Ion Battery
Electrode Materials
2.1 Consumer Electronics, Computing and Communications Applications Trends for Lithium-
Ion Batteries
2.1.1 Impact of Market Trends on Electrode Material Requirements
2.2 Power Tools
2.2.1 Impact of Market Trends on Electrode Material Requirements
2.3 Electric Vehicles and Other Automotive Applications
2.3.1 Impact of Market Trends on Electrode Material Requirements
2.4 Smart Grids
2.4.1 Impact of Market Trends on Electrode Material Requirements
2.5 Military and Aerospace Applications
2.5.1 Impact of Market Trends on Electrode Material Requirements
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2.6 Other Lithium-Ion Battery Applications and their Impact on Electrode Material
Requirements
2.6.1 Medical Markets
2.6.2 Data Communications Markets
2.6.3 Other Applications
2.7 Key Points from this Chapter
Chapter Three: New Materials for the Lithium-Ion Battery Industry
3.1 Why the Lithium-Ion Battery Industry Needs Better Materials
3.1.1 EV and Smart Grid Market Requirements: Nascent Markets
3.1.2 Impact on the Battery and Battery Materials Market
3.2 Anode Materials
3.2.1 The Future of Graphite
3.2.2 Nanostructured Carbon and its Variants
3.2.3 Nanostructured Silicon and Its Variants
3.2.4 Titanates
3.2.5 Vanadium Oxides
3.2.6 Opportunity Analysis
3.2.7 Survey and Assessment of Firms Supplying Novel Anode Materials
3.3 Cathode Materials
3.3.1 Lithium Manganese Spinel
3.3.2 Advanced Lithium Iron Phosphates
3.3.3 Mixed Metal Oxides
3.3.4 Nickel Cobalt Alumina
3.3.5 Opportunity Analysis
3.3.6 Survey and Assessment of Firms Supplying Novel Cathode Materials
3.4 Key Points from this Chapter
Chapter Four: Eight-Year Forecasts
4.1 Forecasting Methodology
4.1.1 Impact of Industry/Application Maturity
4.1.2 Important Industry Sectors
4.1.3 Alternative Scenarios
4.2 Forecast by Application
4.2.1 Consumer Electronics
4.2.2 Power Tools
4.2.3 Electric Vehicles
4.2.4 Smart Grids and Stationary Applications
4.2.5 Military and Aerospace Applications
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4.3 Forecast by Material
Acronyms and Abbreviations Used In this Report
About the Author
List of Exhibits Exhibit E-1: Firms to Watch in the Lithium Battery Industry ......................................................................................... 5
Exhibit E-2: Total Electrode Materials for the Lithium-ion Industry ............................................................................. 7
Exhibit E-3: Total Value of Electrode Materials for Lithium-ion Industry by Application ($ Millions) .......................... 8
Exhibit E-4: Total Electrode Material for Lithium-ion Industry by Application (Metric Tonnes) ................................... 8
Exhibit 4-1: Electrode Materials for the Consumer Electronics Segment ................................................................... 60
Exhibit 4-2: Electrode Materials for the Power Tools Segment ................................................................................... 64
Exhibit 4-3: Electrode Materials for the Electric Vehicles Segment ............................................................................ 67
Exhibit 4-4: Electrode Materials for the Smart Grids and Stationary Applications Segment ...................................... 70
Exhibit 4-5: Electrode Materials for the Military and Aerospace Segment ................................................................ 73
Exhibit 4-6: Electrode Materials for the Lithium-ion Industry ..................................................................................... 76
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Executive Summary
E.1 Summary of Opportunities from New Materials for Lithium-Ion Batteries
There are certain characteristics that the lithium-ion battery brings to the table that have made
it widely used. These batteries have high energy densities at a high operating voltage, providing
significantly longer battery life in smaller form factors than competitive battery chemistries.
They also have low self-discharge rate and low memory effects on recharging after a partial
discharge.
Currently the lithium-ion battery is a well established market standard for use in consumer
devices and various industrial applications, and is a promising candidate for use in electric
vehicles (EVs) and potentially Smart Grids. However, the fact that the lithium-ion battery hasn't
had a strong performance boost in recent years leaves the door open for other battery
chemistries to make strong cases for themselves.
There are inherent trade-offs when attempting to improve the performance of the lithium-ion
battery, and this makes it nearly impossible to find a material improvement that will provide an
improvement on all fronts. Each technology addresses the needs of particular market
segments, and with targeted efforts, material developers will see a real revenue opportunity
from potentially high volume and/or high growth market segments.
NanoMarkets believes that the lithium-ion battery industry is poised to see significant
additional growth over the next decade. One driver for this is that lithium-ion batteries appear
to be slated to serve the needs of a number of rapidly growing end-user segments. But the
lithium-ion battery also has some issues that need to be improved upon:
Lithium ion is conventionally a low-output power chemistry. However, a materials
innovation has already addressed this fact and in fact allowed it to enter higher power
market segments.
Lithium ion is also a comparatively "unsafe" chemistry, susceptible to thermal runaway
leading to explosions. Although this aspect has been addressed through materials
improvements in the past as well as safety circuitry, there is still much room for
improvement, especially if it is to expand into markets with more stringent
requirements.
Lithium ion is also an expensive chemistry (largely driven by the price of the electrode
raw materials used).
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As the lithium-ion battery segment expands, NanoMarkets believes that significant
improvements in performance will be produced through novel electrode materials, and
developers and manufacturers of such materials will therefore see significant new business
revenues going forward.
E.1.1 Lithium Cobalt Oxide (LCO)
Lithium cobalt oxide is currently the cathode material of choice for most portable electronics
(and indeed for any application that requires a high energy density). This material generates by
far the largest revenues of any of the materials considered in this report and despite the fact
that this material is gradually being replaced by other materials, LCO will still generate $2.0
billion in revenues in 2012 growing to twice that amount by the end of the forecasting period.
The fact that LCO is declining slowly as a share of materials consumed by the lithium-ion battery
sector is a testament to the fact that it is quite hard to replace and that the safety of this
material has improved somewhat. And despite the decline, NanoMarkets thinks that there are
still some opportunities to be exploited in this materials sector.
In particular the development of processes that use this material and are focused on increasing
the energy density of the cell, would seem to have some new business potential attached to
them. The combination of a familiar material and improved performance would, we believe, be
very attractive in this market, unless and until next generation materials are fully
commercialized for LCO.
E.1.2 Lithium Manganese Oxide (LMO)
At the present time the only other cathode material that is selling at levels that are likely to
produce respectable short-term revenues for materials firms is lithium-manganese oxide
(LMO). However, with almost $700 million in revenues slated for the final year of the forecast
period, NanoMarkets believes that this material could produce some important opportunities
going forward.
The key point here is that manganese-based cathode materials have enabled the lithium-ion
battery to expand its addressable markets to higher performance applications. Moving to
manganese-based cathodes has already allowed the lithium-ion battery to see quite an increase
in revenue in the power tools segment to the point where it now can claim a sizeable market
share. For example, being able to power a cordless buzz saw was out of the capability of the
lithium-ion battery when it first entered the market because of the limitations inherent to its
cathode material.
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These higher performing segments (EVs and Smart Grids, for example) are exactly where
NanoMarkets expects to see considerable growth for lithium-ion batteries going forward, so
this fact will help define the future opportunities for manganese cathodes. Our projections
suggest that most of the LMO opportunities going forward will be found in the EV segment, so
they are highly dependent on the future of this applications sector.
E.1.3 Lithium Iron Phosphate (LFP)
At the present time, LFP is little more than a research material. However, we believe that by
2015 this material will experience enough demand to make it of considerable interest to firms
selling electrode materials into the battery segment. In the last few years of the forecast period
NanoMarkets sees this material growing fast enough to make it the second largest sector in the
cathode materials market.
LFP is just beginning to pay off after several years of R&D work and is a major rival to LMO
going forward, we believe. While the value proposition of LFP is similar to LMO it is generally
considered to be a safer material; which is obviously a significant selling feature and we think
that this newer material will catch on especially in the EV and power tools market, especially
the former.
E.1.4 Nickel Cobalt Alumina (NCA) and Nickel Manganese Cobalt (NMC)
Composites such as nickel-cobalt-alumina and nickel-manganese-cobalt are essentially less
expensive replacements for lithium cobalt oxide, and an attempt to improve the energy density
of the cell. However, there are limits on how much these materials can be brought down in
cost because they contain cobalt and their safety has been questioned for high-power
applications like electric vehicles.
The biggest opportunity in this sector will emerge for NMC material, which will mostly find a
market in the consumer and (to a much greater extent) in the EV segment. NCA is not going to
see much use until the end of the forecasting period and the main application sector will be in
consumer electronics markets.
E.1.5 Graphite and Its Replacements
Graphite is by far the most important anode material used in lithium-ion batteries in terms of
revenues and these revenues are expected to almost triple by the end of the forecast period;
primarily reflecting the underlying growth in the market for conventional lithium-ion batteries.
Nonetheless, NanoMarkets believes that there is still an opportunity to replace graphite as the
industry standard material, but this opportunity is not likely to produce potential revenue levels
that could be considered high enough to build a sizeable business on until quite late in the
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forecasting period. In our forecasts, we specifically predict the potential revenues for lithium
titanate and silicon.
What researchers are primarily looking for in their search for a replacement to graphite are
materials that have an enhanced ability to hold lithium ions. Silicon, nanostructured carbon and
oxides of titanium and vanadium have been identified as viable alternatives to graphite for this
enhanced ability. Silicon has the highest theoretical capacity for lithium ions, but until recently
has had problems with durability. The silicon anode is a materials technology that is being
pioneered by smaller, early stage companies hoping to make a quick and strong impact in the
industry.
Silicon is expected to make forays into the consumer electronics market segment in the early
portion of the forecast period, mostly backed by large companies like Panasonic. This is a
segment where they know that the improvement to energy density that silicon provides can be
leveraged. It will also allow them to ramp up production and evaluate its viability for other
market segments. Smaller companies developing novel silicon solutions can be expected to
license out their silicon technology in the early phase of this forecast period. This will allow
them to see some early revenue before they can ramp up production to target high-growth
segments like the electric vehicle market.
The other materials that challenge graphite in this context are mainly being developed by larger
companies. Meanwhile, while some new business revenues will be generated by firms who
come up with novel ways to approach graphite processing and structure; this represents the
opportunities in the next couple of years.
One reason why the alternatives to graphite are not likely to emerge until later in the forecast
period is that these new materials appear to be quite challenging in terms of commercial
development and, in any case, many of the companies that are developing novel anode
materials for lithium-ion batteries are still in their infancy.
And, before new anode replacements can become a paying business proposition, the new
anode technology will have to be shown to provide significant performance improvements
while not increasing the manufacturing costs of the anode. Silicon will likely be phased in to
the market in some sense, with silicon carbon composites, and silicon gradually becoming the
dominant material in the composite.
E.2 Materials Suppliers to Watch in this Space
Exhibit E-1 summarizes the firms that we believe should be watched in the lithium battery
space. These firms are certainly not the only firms that are active in this space, but represent
firms that we think have an especially strong value proposition.
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Exhibit E-1 Firms to Watch in the Lithium Battery Industry
Company (Cell/Materials)
Technology/ Materials
Strengths of the technology Market segments targeted
Anode Materials
Panasonic (Cell)
Silicon-carbon composite 18650 cell
30% improvement in energy density. Retains 80% capacity after 500 cycles.
Consumer electronics initially – notebook batteries. Can expand into EV segment in the future, while leveraging present revenue stream at present.
3M (Materials)
Amorphous Silicon
At least 20% improvement in energy density,
Consumer electronics, EV. In the process of development and manufacturing scale-up – pilot scale operation at present.
Amprius (Materials)
Silicon nanowires
Energy density improvements ranging from 1.4x-10x.
EV and consumer electronics. Recently received $25mill in Series B funding – goals are to deploy first commercial product and validate manufacturing process. Relatively longer timeline to market compared to other companies with similar product offerings.
Nexeon (Materials)
Silicon nano-structures
Energy density improvements: First generation – 1000mAh/g Second generation-3600mAh/g Low cost, "drop-in" solution
EV, consumer electronics, grid storage, medical. Materials manufacturers – building IP position and licensing technology to cell manufacturers. Investing in expanding manufacturing capabilities.
Altairnano (Materials)
Lithium Titanate Nano-structure
Safe, fast charging, 80% capacity retention after 1,000,000 partial depth-of-discharge cycles, 16000 cycles with full depth-of-discharge, high output power and temperature stability
EV and stationary applications – specifically remote UPS applications in challenging environments, Phoenix motorcars providing entry into the EV segment. Established manufacturing facilities with the potential to scale up.
Cathode Materials
Hitachi (Cells)
Manganese based composite
Long cycle life, high operating voltage
Grid storage, power tools. Relatively new technology so material is not much further than pilot line, but Hitachi has the resources to rapidly scale up production.
A123 (Cells)
Nano-phosphate (lithium iron phosphate)
Nanostructure improves conductivity, high power, longer cycle life, much improved safety, higher usable energy which addresses questions on energy density.
Transportation, storage and power tools - 90 MW sold for stationary storage, has already entered the power tools segment, entered and tested in EV applications in transit buses, proving applicability in industry. Strong IP position, dispute with Hydro-Quebec settled.
Envia Systems (Materials)
NMC (licensed from Argonne National Labs)
High energy density (twice that of lithium cobalt oxide), high usable capacity and long cycle life, stable at high operating voltages
Electric vehicles (strategic ties with General Motors), consumer electronics, military.
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One takeaway from this Exhibit is that some very large firms are involved in this business. The
ones mentioned here are Panasonic, 3M, Hitachi and Saft. We think this is a measure of the
importance that is being attached to the lithium battery materials segment both in terms of
being a revenue generator and an enabler for the batteries themselves.
The most noticeable aspect of the smaller firms active in this space is that they seem to be
highly focused on nanomaterials. This approach, NanoMarkets believes, provides these firms
with the opportunity to develop relatively strong IP and provide solutions that are highly
distinguishable in the marketplace. Clearly, most of these smaller firms have a few years of
slogging away at R&D before they can be expected to produce large revenues.
E.3 Roadmap for Lithium-Ion Battery Materials and Eight-Year Market Forecast
Exhibit E-2 summarizes the market for lithium-ion battery materials over an eight-year period.
As the Exhibit shows this is already a substantial market, at $2.8 billion, and is expected to grow
to a much larger market, $8.2 billion, by the end of the forecasting period.
Much of that market growth is explained simply by the growth in the direct or indirect
addressable markets. That is to say that both existing markets for lithium-ion batteries
(consumer electronics) are likely to expand and new markets are likely to emerge (EVs).
However, this represents an "opportunity" that is beyond the ability of materials suppliers to
control. We also note that the automotive market for these batteries is highly uncertain and
that "pure" EV products are a very long way from being successful in the market.
The new materials opportunities have largely been explained above and will not be repeated
here. However, our forecasts in the Exhibit suggest that the opportunities presented by new
materials are quite dramatic. Thus at the present time, our forecasts suggest that about 30
percent by value of the materials market discussed in this report are currently represented by
new (i.e., not LCO or graphite) materials. By the end of the forecast period, we see that
number grow to around 50 percent. In money terms what we are talking about here is a new
materials opportunity worth just $257 million this year, but which will reach $2.8 billion in
2019. This is quite a dramatic change!
The roadmap for the lithium-ion battery materials discussed here is very much dependent on
the direction the lithium-ion industry takes in general. While the consumer electronics and
industrial power tools segments are established, steadily growing markets, the electric vehicles
and Smart Grids (and stationary applications) market segments have led to more conjecture,
with some forecasts predicting rapid growth in these segments that will spur materials
innovation and the demand for novel materials; and others being more skeptical.
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E.3.1 Features Required for Competitive Benefit
These revenues will be competed for along a number of dimensions. Safety and costs seem
especially important.
Exhibit E-2 Total Electrode Materials for the Lithium-ion Industry 2012 2013 2014 2015 2016 2017 2018 2019 TOTAL CELLS SOLD Revenue ($ Millions) Cathode LCO LMO LFP NMC NCA TOTAL Anode Graphite LTO Silicon TOTAL