A Roaring Li-ion: Reflections on the State of Battery Technology

In mid-March, I escaped from snowy Boston and traveled to hot and sunny Phoenix to join about 200 others attending the annual meeting of NAATBatt, a trade association that promotes advanced electrochemical battery technologies.

Given my interests in energy storage, I wanted go upstream to get a better handle on the current state of battery technologies, as innovations on this front are at the root of the rapid increase in grid-connected energy storage activity.

The conference provided an interesting cross-section of perspectives ranging from national laboratories engaging in early research, through start-ups aiming to commercialize developing technologies, up to established battery manufacturers.  While the exhibition floor was small and held few booths, the presentations were generally illuminating.

The key insights I gleaned from my time at NAATBatt were:

  • Lithium-ion (Li-ion) batteries dominated the discussion. Upon reflection, this shouldn’t be that surprising:  with significant cost declines in recent years, owing to the advancement of electric vehicle (EV) markets, Li-ion sales have grown rapidly.  And under the expectation of continuing cost reductions for the foreseeable future, Li-ion will expand beyond EVs to capture ever-increasing shares in an ever-increasing number of grid-connected market segments.  To the extent that other battery chemistries were discussed (e.g., vanadium, nickel-iron, sodium-sulfur, zinc-air), presenters are often thrust into the defensive position of explaining how their battery technology is superior to Li-ion for the particular application being targeted.


  • Founded just a few years ago, the little-known Chinese firm CATL stands poised to leapfrog many of the current market leaders (e.g., Tesla/Panasonic, LG, Samsung, BYD) to soon become the world’s largest producer of Li-ion batteries. A video of CATL’s massive new manufacturing facility revealed not only the scale of the commitment, but also the advanced technologies – mostly robotic, with minimal human labor input – involved in precision fabrication and assembly of batteries at high volumes to minimize costs.


  • There is an enormous base of intellectual property available to be licensed in the battery sector. While there are probably a few nuggets lying in the rubble, I would guess that most of the patents for license or sale are of low value, as anything profound or easily commercialized probably has already been exploited, leaving only the dregs unclaimed.  Moreover, it would seem that the patent space is extremely crowded, implying that patents need to be drawn extremely narrowly in order to be issued, in turn suggesting that any issued patent might be circumvented with clever engineering.


  • Start-up companies continue to emerge in the battery sector, despite the downturn in availability of venture capital from investors that are purely motivated by attractive financial returns. To counteract that trend, and with the expected decline in government funding under the Trump Administration, these companies will be pressed to raise capital either from (1) patient investors with below-market return expectations that are committed to the environmental benefits afforded by increased utilization of batteries, or (2) strategic investors at corporations who stand to benefit substantially in their core businesses by the success of a new battery company.  Even so, raising enough capital will be a challenge, because succeeding with a new venture commercializing a novel battery chemistry is likely to require much more capital than the typical digital/software start-up.


  • The continued exponential growth in Li-ion battery demand will dramatically affect global markets for lithium and other metals (e.g., cobalt), which heretofore have been niche. Prices for these commodities will generally experience upward pressure, especially during periods of tightness when supply expansion lags demand increases.  As prices rise, expansion of mining activities for these commodities will require major influxes of capital, and well-positioned low-cost producers stand to earn attractive returns.


  • In theory, the challenges of satisfying lithium supplies for new battery production could represent an opportunity for recycling of aging Li-ion batteries as they reach end of useful lives in the first-generation of electric vehicles, which will likely face retirement in the 2020s. In practice, recycling of Li-ion batteries may be prohibitively expensive, as challenging disassembly steps would first be required before the content would be sufficiently sorted to reprocess.  So-called “second-life” utilization – involving reconditioning of Li-ion batteries after their “first-lives” – might be practical in certain circumstances, but only if the duty cycle during first-life is well-understood.


  • Although Li-ion captures virtually all the growth and attention in today’s battery marketplace, it’s still the case that good old lead-acid batteries account for most of the $65 billion annual battery industry – at least for the next few years. While Li-ion will overtake the leading position by the 2020s, lead-acid batteries are simply so inexpensive and so well-proven that they will remain viable in many applications for years to come – especially ones for which depth of discharge, high energy density, or high power density are not critical.

It’s impossible to attend all of the various battery conferences held annually around the world, but if you can only attend just one, NAATBatt is a good candidate.  The NAATBatt event planners are savvy:  they pick very nice event venues (next March in San Antonio will be at the Hyatt Regency Hill Country Resort outside San Antonio), do a great job on catering food and drinks, and organize an extensive program of events for spouses, so that you can plausibly make a vacation of it.

By spring of 2018, I suspect that the state of battery technologies and markets will have changed appreciably, as things are happening quickly.  However, I’m willing to bet that Li-ion chemistry will still be attracting the lion’s share of attention.

Posted in Conference summaries