SimonMoores - Oxford Energy Network · • Battery Size Increases 4x • Sales from 10,000s to...

12/05/2017

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Lithium ion battery supply chain in an energy storage revolution

University of Oxford, UK Guest Lecture, 11 May 2017

Simon Moores | Managing Director Benchmark Mineral Intelligence, UK

o www.benchmarkminerals.como @sdmoores o [email protected]

GuestLecture|11May2017|UniversityofOxford 1

What is Benchmark?

Subscriptions

Events

Lithium Graphite

Cobalt


Nickel

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Where do we operate in the supply chain?


Upstream Downstream

RawMaterials Semiprocessed

products

Batteries Battery

Packs

Mobile/

EV/Utility

LithiumGraphiteCobalt

AnodeCathodeSeparators

CellsVariousformfactors(18650)

4-7Wh7-10kWh40-85kWh>500kWh

SmartphoneHomeEVsCommercial

How do we do this?


• Firsthanddatacollection…PaloAlto,California,USHeilongjiang,NorthernChina Hirschau,Germany

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Convergence of three multi billion dollar industries: Auto, Tech, Energy


Batteries

2017: The Era of the Semi Mass Market EV begins…


Bolt(60kWhlithiumion)Model3(60-65kWhlithiumion)

LEAF2017(60kWhlithiumion)

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Emergence of the pure EV


• BatterySizeIncreases4x • Salesfrom10,000sto100,000s

ToyotaPrius(1997)

1.3kWh(NMHHybrid)NissanLEAF (2010)

24kWh(LithiumionNCM)

TeslaModelS(2012)

85kWh(LithiumionNCA)2017:

TeslaModel3,

ChevroletBolt

NissanLEAFIII

60-65kWh(Lithiumion)

Niche/Luxury Semi-massmarket

Rate of adoption is changing


Source:BlackRock,LithiumAmericas

UStechnologyadoptionratesfrom10%to90%

Car:75years

PC:30yearsCell:13years

Smartphone:8years

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Rate of adoption is changing: Smartphone


Source:Nokia,Apple, BenchmarkMineral Intelligence

0 50 100 150 200 250 300 350 400

2005:NokiaN70

2007:AppleiPhone

2014:AppleiPhone 6

Daysto1mhandset sales

1year

72Days

7.2hours

180,000

8,000

300

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000

2016:Model3

2015:ModelX

2012:ModelS

Teslareservationsinfirst24hours

$68,000to$94,000

$110,000to$144,000*$35,000

Rate of adoption is changing: Tesla EVs


Source:BenchmarkMineral Intelligence,*pricenotdisclosed onfirstdayof reservations

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WhichbatterytypeswillwintheEVrace?



Source:BenchmarkMineral Intelligence

1969 Late-1990s 200620072010

Watches

CarsCellphones

Powertools

Personalmusic

Smartphones

Tablets

Laptops

Hybridcars

FullElectricvehicles

Utility/Stationary

storage

Lithium-ion/NiMH Lithium-ion

I II III IV

NiMH/Lithium-ionMercuryLeadacid

Today: Fourth phase of battery commercialisation…

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There is more than one type of lithium ion battery…

Lithium Cobalt Oxide (LCO)

Nickel Cobalt Manganese (NCM)

Nickel Cobalt Aluminium (NCA)

Lithium Iron Phosphate (LFP)

Lithium Manganese Oxide (LMO)


Battery technology: where are we going?

Source:Panasonic, reproducedbyBenchmarkMineral Intelligence

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Manufacturing cost profile of a lithium ion battery and pack

Source:BenchmarkMineral Intelligence

BillofMaterials,60%

Labour,Manufacturing,

Energy,Other

Margin

LITHIUMIONCELL

CellCost,40%

EnergyManagement

System

Other(incllabour)

Margin

BATTERYPACK

Whatbatterydemandcanweexpect?


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0 100 200 300 400 500 600

2016

70-75%EVs


Lithium ion battery demand expectations by 2025 (GWh)

Benchmark’s 2025 lithium demand based on battery forecasts

0 100,000 200,000 300,000 400,000 500,000

2016 2020

Tonnes


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0 100000 200000 300000 400000 500000 600000 700000

Benchmark’s 2025 graphite demand based on battery forecasts

2016 2020

TonnesGuestLecture|11May2017|UniversityofOxford 19

0 50000 100000 150000 200000

Benchmark’s 2025 cobalt demand based on battery forecasts

2016 2020

TonnesGuestLecture|11May2017|UniversityofOxford 20

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Riseofthelithiumionbatterymegafactory


Rise of the lithium ion megafactories continues…

0

20000

40000

60000

80000

100000

120000

Annual Cap 2016 (MWh) Expanded Capacity (MWh) 100GWh

35GWh

20GWh


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0% 10% 20% 30% 40% 50% 60% 70%

China

US

As ia (ex-China)

Europe

Thenewlithium

ionindustryisa

Chinastory

Teslaisstill

important– business

strategy/vertical

integration

Newplantsstill

beingconstructedin

Japan/Korea,but

focusonChina

Europeisslow

Megafactories by region


Megafactories to watch: Gigafactory, Nevada, US

• H12017EstCellProductionCapacity:4GWh

• End-2020EstCellProductionCapacity:35GWh

• =3,200tonnesLithiumHydroxide• =4,800tonnesGraphiteAnode• =600tonnesCobalt

• =28,000tonnesLithiumHydroxide• =42,000tonnesGraphiteAnode• =5,250tonnesCobalt

Chemistry:NickelCobaltAluminium(NCA)Chemistry:NickelCobaltAluminium(NCA)


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Megafactories to watch: Dalian, China



• =2,400tonnesLithiumHydroxide• =3,600tonnesGraphiteAnode• =450tonnesCobalt

• =7,200tonnesLithiumHydroxide• =10,800tonnesGraphiteAnode• =1,350tonnesCobalt

Chemistry:NickelCobaltAluminium(NCA)


Megafactories to watch: NingDe, China



• =~3,500tonnesLithiumCarbonate• =~6,000tonnesGraphiteAnode• =~1,700tonnesCobalt

• =~75,000tonnesLithiumCarbonate• =~120,000tonnesGraphiteAnode• =~11,000tonnesCobalt

Chemistry:NickelCobaltManganese(NCM)


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0

500

1000

1500

2000

2500

3000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020High Low

Lithiumioncellcosts($/perkWh)

2016-2020:15-20%ayear

2000to2015:12-14%ayear

The result? Battery cell costs continue decline…

Isthereenoughlithium?


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Battery raw materials have hit the headlines

$12,313/tonne (March 2017) $17,000/tonne (March 2017)

LithiumHydroxideLithiumCarbonate


Why has lithium hit the headlines?

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-40%

-20%

0%

20%

40%

60%

80%

100%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017(f)

Lithium Carbonate (ex-China) Price Trend: Average Y-O-Y

1Yearwherepricesdeclinedinadecade

Source: Benchmark Mineral Intelligence Data, Lithium Price Assessments

Lithium Price Performance Year by Year



Is there enough lithium?

WorldLithiumResources(LCE)

210mtonnes

WorldLithiumReserves(LCE)

14mtonnes

Argentina55mtonnes(26%)Chile50mtonnes(24%)Bolivia32mtonnes(15%)Australia30mtonnes(14%)China15mtonnes(7%)

Source:USGS

WorldLithiumProduction(LCE)

180,000tonnes

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Is there enough lithium?

94,976,569

CarsandCommercialVehiclessoldin2016

22,871,134Commercialvehicles

72,105,435

Cars

3,430GWh(150kWhav)

5,047GWh(70kWhav)

2.74mtonnesLCE

4mtonnesLCE

6.74m

tonnesLCE

Source:OICA Source:OICA Source:BenchmarkMineral Intelligence

Lithiumion

battery

production

>12,000%

Lithium

production

up3,735%

=50%globalreserves

=3%globalresources


How much investment is needed?

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2005200620072008200920102011201220132014201520162017

Lithium Carbonate Low Lithium Carbonate High Lithium Hydroxide Low Lithium Hydroxide High

$1bnraised

$520mraised

$/tonne

• =20,000tonnesLCE• Shouldhave=50,000tpa• 1expensivebankruptcy• 2failedchemicalplants• 40%misallocatedcapital

• =25,000tonnes• Moretocome• Investorsmorecautiousbut

furtherdowneducationpath

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What investment is needed?

Source:HouseMountainPartners,BenchmarkMineralIntelligence

~$500m~$400m

BrineMine

25,000tpa

BatteryGradeLithiumPlant

HardRockMine

Concentrator=

25,000tpaoffeedstock thatneedschemicalconversion


What investment is needed?

2020 = 100,000tonnesLCE=

2025=150,000tonnesLCE=

IncrementalLithiumNeeded

$2.5bn0%allocatedbyend2017

$1.7bn50%allocatedbyend2017

Source:HouseMountainPartners,BenchmarkMineralIntelligence

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Where will the most profitable sit?


Upstream Downstream

RawMaterials BatteryGrade

Materials

Batteries Battery

Packs

Mobile/

EV/Utility

LithiumGraphiteCobalt

AnodeCathodeSeparators

CellsVariousformfactors(18650)

4-7Wh7-10kWh40-85kWh>500kWh

SmartphoneHomeEVsCommercial


Othertrendstowatch

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Othertrendstowatch

Corporate Social Responsibility



Othertrendstowatch

Corporate Social Responsibility


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Othertrendstowatch

Recycling

• Tesla seeking torecycleitsbatteriespost2020• Gigafactorycellswillnothavesecondlifeinutilitystoragepost80%capacity• Nomajorplansinplaceyet, justaninitiativeforspentbatteries



Othertrendstowatch

Recycling

• Recyclingabout responsiblydisposingofbatteries• Extractinghazardouswaste• Forcingcompaniestothinkaboutmanufacturing

• Notlikelytobeaboutrawmaterialsupply• Cobaltopportunity• Nickelopportunity• Lithium&Graphiteunlikelybefore2023(economics)

Credit:Bloomberg


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“Changeoccurswhenpeoplearebusydiscussingwhetherchangewilloccur.”

SimonMoores - Oxford Energy Network · • Battery Size Increases 4x • Sales from 10,000s to...

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