EV Inventory: Best Battery Technology Driving EV Inventory Revolution

0

[Editor’s note: “This Little-Known EV Battery Technology Will Drive the EV Revolution” was previously published in July 2022. It has since been updated to include the most relevant information available.]

You might think you know all about battery innovation, especially as innovation students. But a secret EV battery technology you’ve probably never heard of could be a key driving force in the next chapter of the electric vehicle revolution.

Source: Illus_man/Shutterstock

Here’s the thing about electric vehicles. Everyone wants to drive one these days. But despite all the talk about lower prices, they’re still incredibly expensive.

The battery I am talking about will solve this problem.

This battery is the key to making an electric car under $20,000, which could fundamentally accelerate the electric vehicle revolution. Anyone who wants to drive an electric vehicle could finally afford one.

Indeed, this battery completely changes the situation.

And it’s not just a concept or a science project stuck in research labs. This battery is already used in cars today.

He’s ready to change the world in 2022, not 2023, 2024 or 2025. He’s ready to change the world at present.

I’m talking about LFP — lithium iron phosphate batteries.

Battery Chemistry 101

Your typical battery consists of three elements: an anode, an electrolyte, and a cathode. Batteries work by promoting the flow of ions from the anode, through the electrolyte and to the cathode when in use. When batteries charge, ions flow back through the electrolyte to the anode.

EV batteries – which are most often lithium-ion batteries – work the same way.

Lithium ions are stored in the anode. When the car is driven, lithium ions flow through the car battery’s electrolyte and into the cathode. When the car is charged, these same lithium ions flow back from the cathode to the anode.

How Batteries Work

Given this chemistry, we can easily understand why so many resources are spent on cathode innovations. The cathode is where lithium ions flow when an electric vehicle is running. Thus, the more the cathode “absorbs” these lithium ions, the longer the battery will last and the longer the electric vehicle will run.

In other words, the absorption properties of the cathode determine the autonomy of an electric vehicle. Higher cathodic absorption leads to longer driving ranges. Lower cathodic absorption leads to shorter driving distances.

Therefore, one of the most critical issues in EV battery science is optimize the absorption properties of the cathode. The best way to do this is to change the composition of various metals in the cathode.

Decades of research have seen every metal composition tested in the cathode. And it is concluded that there are two dominant cathode composition types that produce the best types of lithium-ion batteries.

We talk all the time about one of these compositions. The other is rarely mentioned. Yet the underrated holds the revolutionary breakthrough that my analysis suggests is the key to making an electric car under $20,000.

The two main types of EV batteries

The two main types of lithium-ion battery chemistries are nickel manganese cobalt (NMC) and lithium iron phosphate (LFP) Battery.

Both are very similar. Both work by promoting the flow of lithium ions. Both have graphite anodes. And both have the same electrolyte solutions.

The difference between LFP and NMC batteries lies in the composition of the cathode. NMC batteries use a combination of nickel, magnesium and cobalt in the cathode. LFP cathodes are a mixture of iron and phosphorus.

NMC and LFP batteries

For various chemical engineering reasons, NMC batteries have higher absorption properties than LFP batteries. In short, NMC cathodes absorb lithium ions better than LFP cathodes. And therefore, NMC batteries are significantly denser. Specifically, they are about 30% more energy dense.

This essentially means that electric vehicles equipped with NMC batteries weigh less, can drive further and recharge faster than electric vehicles equipped with LFP batteries. In short, when it comes to electric vehicles, NMC batteries have superior performance compared to LFPs.

For this reason, NMC batteries have become the benchmark for electric vehicles. For years, ranges, charging times and car weight have been huge limiting factors for electric vehicles. So companies like You’re here (TSLA) have used NMC batteries to solve these problems. Today, more than 80% of all electric vehicle batteries are NMC or NMC-related batteries. LFP batteries represent less than 15% of total EV batteries today.

However, as you can see below, LFPs are expected to significantly increase the EV battery market share over the next five years. Why?

Battery cathode chemistry

NMC batteries have their own drawbacks. And they are strained in today’s global economic environment where supply is limited and costs are high.

As a result, LFP batteries – not NMCs – will be the big driver of the next wave of the EV revolution. This has huge investment implications.

The LFP is ready to change the world

In short, NMC batteries are absurdly expensive. And in an inflationary environment, consumers optimize for cost rather than performance. Thus, car manufacturers are switching from NMC batteries to LFP batteries.

The science here is quite simple.

There “VS” in NMC is cobalt, which is a rare earth metal. By definition, there is not a lot of cobalt on the planet. Our research suggests that there are less than 10 million tons of cobalt in the world. And half comes from the Congo. In many cases, cobalt recovery requires costly effort, deforestation, habitat destabilization, etc. As a result, cobalt is absurdly expensive (over $30,000 per ton). And it’s subject to volatile supply disruptions, making NMC batteries inherently expensive and supply limited.

World cobalt production

LFP batteries do not have these problems.

There “F” in LFP batteries means the iron. Unlike cobalt, iron is abundant. About 5% of the earth’s crust is made up of iron. There are 180 billion tons of iron on the planet. And while there are particularly high concentrations in places like Australia, there is some iron everywhere. As a result, iron prices are a small fraction of cobalt prices at just $90 per ton.

In other words, LFP batteries can have a lower energy density than NMCs. But they are also much cheaper — about 40 to 50% cheaper.

The affordability factor

In 2018 and 2019, electric vehicles were getting less than 200 miles of range per charge. There were very few charging stations on the roads. Inflation was below 2%. And consumers wanted high-performance EVs.

In 2022, the situation is completely different. Electric cars (even those powered by LFP) get over 250 miles of range per charge. EV charging stations are everywhere. And inflation is running close to 10%.

In this world, consumers don’t really care about high-performance EVs. They want affordable ones.

LFP batteries are the key to inexpensive electric vehicles.

That’s why nearly every major EV manufacturer has been exploring ways to use more LFP batteries in their EVs over the past year.

This does not mean that LFP batteries will kill NMCs. But we are now entering a new era of LFP and NMC coexistence. The former serves as the de facto battery for economy EVs, and the latter serves the premium EV market.

The investment opportunity here is quite simple.

When you look at big EV inventory today – Tesla, Lucid (LCID), Rivian (SHORE), etc. – they all make high-end electric vehicles. But the next wave of the electric vehicle revolution will be driven by inexpensive electric vehicles. Who is going to make all these affordable cars?

The answer: Find the company that masters LFP battery technology.

The final word on an EV battery breakthrough

I believe the company that will master LFP battery technology and sell the most popular affordable electric car on the market hasn’t even made an electric vehicle yet. In fact, it hasn’t even announced a VE yet.

I’m talking about Apple (AAPL).

Yes, this apple — the maker of the iPhone, iPad, Mac and Apple Watch.

Apple has reportedly been working on an electric Apple Car for years now. The company hasn’t announced anything official yet. But over the past couple of years, the rumor mill has picked up speed considerably. Now, many analysts, investors and enthusiasts feel it’s a done deal that Apple will launch its EV by 2024.

Considering Apple’s success with almost every product it has released in its 40-year history – and the amount of resources it would have devoted to this project – I think there are chances are the Apple Car will be a huge hit.

So what’s the connection with LFP batteries?

Well, one of the rumors going around about the Apple Car is that Apple will use LFP batteries to power it. The company wants to make an electric vehicle that, like the iPhone, is cheap enough to be ubiquitous.

The only way to do this? LFP batteries.

That’s why I think the company that will drive the next stage of the EV revolution is the one that hasn’t even made an EV yet: Apple. And that will be the main reason we go from around 10% EV penetration to 50% and beyond.

This is exciting news. But that’s not all…

I discovered a small stock of $3 that my analysis suggests might be the most critical technology provider for the Apple car.

If I’m right in saying that the Apple Car is a huge success, it could climb up to 40 times from current levels.

We discuss the catalyst for this action in depth in my newsletter Investment in hypergrowthwhere you can find out how to invest in this revolutionary stock.

As of the date of publication, Luke Lango had (neither directly nor indirectly) any position in the securities mentioned in this article.

Share.

About Author

Comments are closed.