Perspective by The Townsend Company
...Probably not the battery that you want to put on your vehicle, but that seems to be the battery that most people are trying to buy. It has unfortunately become the cliché that whenever a battery buyer approaches a battery company the first statement heard is, “Don’t tell me anything about how special your battery is, just tell me the dollar per kilowatt hour ($/kWh) price.”
Now although it’s a useful metric, if it’s taken on its own without context it becomes a distracter as lithium battery chemistries remain different and despite much effort, are not quite ready for commoditization yet. Finding a common yardstick to compare Lithium-ion batteries against is not a simplistic task and is one that leads to great frustration as no two batteries nor customer applications are the same. The $/kWh metric has unfortunately become overused as industry bodies and governments have tried to establish targets of $250/kWh to drive the battery industry towards greater competitiveness.
Most battery companies will claim they are able to achieve this. The question becomes at what level—cell, module or pack—and when will it be validated for actual commercial use and not just sampled for proof of evidence. If a battery user approaches an application and purchase with this knowledge then they will quickly be able to downselect their battery choices and formulate a value proposition for their best purchase. To quote Sy Syms from the 1980’s, “An educated consumer is our best customer,” and this remains very true today, especially in the world of Lithium-ion batteries.
There are a number of factors that must be considered when evaluating a battery’s competitiveness. These begin with an assessment of the specific chemistries suitability for the desired application—EV, PHEV or HEV [electric, plug-in hybrid electric or hybrid electric vehicle]—and its energy and power requirement. Once that is determined, a commercial comparison metric can then be established that considers the energy and/or power that is required, the specific vehicle application, desired vehicle use and targeted life requirement. $/kWh fails to do this as it’s simply a ratio of the price of the battery and the day one advertised energy.
The more appropriate metrics that should be used for commercial and performance comparison are based on the energy or power that can actually be used and how long they can be used in an application based on use and time.
Considering this proposition for the three distinct uses of batteries in the automotive market—EV, PHEV and HEV—each one needs to be considered independently as each of their applications demand a different performance attribute.
EV applications require an energy solution in order to achieve a desired mileage range, typically 100 miles. A battery with a large amount of energy ( kWh/kg or kWh/liter), characteristically is the foundation of an EV vehicle battery. However, the purchaser then needs to understand how much of the batteries’ energy can actually be used, the usable energy, as different chemistries have different state of charge (SOC) windows that can limit the nameplate or advertised batteries’ energy from 60-95 percent. Therefore, the more appropriate commercial performance metric would be “$/kWh of usable energy.”
However, there are a number of secondary factors that have significant effect on the battery, specifically its size. Firstly, the environment the battery will be subjected to temperature extremes; charging rates; and drive cycle applications. Secondly, the vehicle’s system, specifically mechanical packaging and power train voltage. Last but by no means least, the expected life of the battery. These factors combined may require the used SOC window to be further reduced to achieve the expected life as temperature and drive cycle factors are considered. This could potentially lead to an “over sizing”, or increase in the size of the battery pack, in order to obtain a life rather than an initial range goal.
When these factors are considered, $/kWh of usable energy still falls short of providing a true measure of value that includes a life perspective. Therefore, the most pertinent performance metric becomes “$/kWh of usable energy per mile.”
For example, at a cell level we may have $350/kWh, translating to a battery pack level of $500/kWh with a chemistry that has a 70 percent SOC, leading to a $710/kWh usable energy. When based over life (8 yrs. 12,000 miles a year) there is a 96k miles requirement, resulting in a $710/kWh/96k = $7.40/kWh of usable energy per mile.
PHEV applications require a combination of both energy and power, with current applications targeting approximately 40 miles of EV range followed by HEV cycling. The ratio of the desired electric range to hybrid drive will determine the most applicable commercial performance metric. With the power requirement factor of the drive cycle becoming more prominent than in a pure EV ruling out high energy low power chemistries in favor for more balanced energy to power solutions.
As the EV range will typically determine a battery’s size the $/kWh usable energy per mile commercial performance metric is still be the most appropriate, although the $/W throughput cost should also be considered.
HEV applications are power applications, rather than energy applications, transferring watts of power over a targeted drive cycle, usually compromising acceleration and regeneration events. An HEV pack will undergo hundreds of thousands of these cycles, which to a great extent, are not related to the number of miles the vehicle is driven as typically power will only be delivered during acceleration events.
Therefore, for a power battery the $/kWh usable energy per mile metric is not a relevant metric for a HEV pack. The appropriate commercial and performance metric should be a measurement of power, to a required drive cycle, targeted life and price of the battery. The appropriate commercial metric for a HEV pack should be $/MWh of throughput, where throughput is the number of cycles required to reach the batteries targeted end of life requirement.
For example: A 100 kW HEV pack is priced at $6,000. It is required to have a 120 MWh of throughput in order to reach an 8-year life and still be capable of a minimum of 40 kW of power (in a 260V system). The drive cycle, end of life power and thermal management requirement will size the pack and specifically the number of parallel strings and battery cost. Therefore the $/Mwh of throughput would be $6,000/120 MWh = $50/MWh throughput.
About The Townsend Company
The Townsend Company LLC was founded in 2010 as a consultation and business development practice to help companies wanting to enter, grow or become more profitable in the alternative energy market. Prior to founding the company, Glynne Townsend, President and CEO, led the revenue growth for A123 Systems in the automotive and grid markets and is a leading commercial authority on Lithium-ion batteries. For more information please contact: firstname.lastname@example.org