Welcome back to The Electric! (Our first two issues can be found here.)
Save the date: We are excited to announce The Electric's first live video event on Aug. 10 at 11 a.m. PT with Yet-Ming Chiang, a Massachusetts Institute of Technology professor and co-founder of some of the most important battery companies of the last decade, including lithium-ion battery makers A123 and 24M as well as energy storage startup Form Energy. Chiang is one of the most talked-about figures in the field so we expect a terrific conversation, including live questions from the audience. The event is open. Details to come. On to this week’s issue:
What EV Makers Don’t Get About BYD’s Battery Breakthrough
The price of lithium carbonate, a core material in electric vehicle batteries, has doubled this year. Nickel, another key metal in most EV batteries, is at a five-month high. Mining.com’s index of EV metal prices has quadrupled in the last year or so, and demand for them will surge tenfold by the end of the decade, according to BloombergNEF, a clean-energy research firm, putting more pressure on prices.
Which brings us to the Blade, a little-known, pioneering battery made of plentiful and relatively cheap iron and phosphate and costing roughly 28% less than lithium-ion batteries on average last year. Invented by the Warren Buffett–backed Chinese company BYD, the Blade densely packs volatile battery metals into a slender, long container while needing far fewer pounds of fireproofing material around it than a standard lithium-ion battery does. The Blade battery produces a driving range per charge similar to those of far more expensive batteries, and it lasts hundreds of thousands of miles—many times more than rival batteries.
What’s not to love?
A lot, apparently, if you are a Western automobile or battery maker. The Blade’s design, known as “cell to pack,” provides a cheap solution to an anticipated yearslong shortage of battery metals as EV demand rises. The Blade also promises to lower EV prices for the mass market. Yet it has barely been mentioned in the West.
That’s going to change. Look for the concept behind the Blade to become a core technology for EVs around the world. As I have reported in the last two issues, lithium-iron-phosphate batteries, the type contained in the Blade, are likely to swoop in and capture a much bigger share of the EV market than many experts foresee. A primary reason is the advance represented by the Blade. The major Western automakers seem to be both underplaying the probable surge of LFP and mostly missing the emergence of a likely new technology standard.
Mocked By Musk
In 2011, Elon Musk famously laughed at the notion that BYD, which develops both batteries and full-fledged electric vehicles, could compete with his company Tesla. He mocked the design and technology behind BYD’s vehicles and quipped, “I think their focus is and rightly should be on making sure they don’t die in China,” and not on what they might sell abroad. A decade later, however, Musk has become possibly the only Western EV maker to embrace BYD’s battery breakthrough. This caught my attention last September during Musk’s Tesla Battery Day event, when he spoke of using cell-to-pack as part of a top-to-bottom reimagining of his company’s batteries. Musk didn’t mention the Blade, but his comments validated it.
The loose context of the cell-to-pack concept is the industry’s battle for greater energy density. Researchers are forever attempting to fit more energy-providing battery material into a smaller space and thus achieve greater vehicle range. As it is, they are forced to fill some 40% of the average battery pack with extraneous packaging, largely cell management and sensing equipment and insulation to prevent an explosion. This is because the primary battery formulations—in electronic devices, lithium-cobalt-oxide, and in EVs, nickel-manganese-cobalt or its sister, nickel-cobalt-aluminum—are extraordinarily volatile and flammable. Just last week, GM recalled some 69,000 of its electric Bolts after a series of vehicle fires involving NMC (though that’s only half the story of GM’s failure in this case). But all that additional stuff is free-riding pack space and weight—materials that provide no extra energy.
Enter the Blade. In a March 2020 event unveiling the battery, BYD Chairman Wang Chuanfu lamented how the industry’s push to extend vehicle range led to high-energy battery formulations with greater density—and a toxic brew of battery explosions and fires. The Blade represented a “correction,” he said.
But the Blade, consisting of a series of relatively narrow cells—the “blades,” measuring about two feet by eight feet—had a public image problem. While much safer than traditional NMC and NCA batteries, LFP technologies like the Blade have failed to catch on among the major non-Chinese automakers because of their lower energy density. EVs running on LFP batteries simply won’t go far enough to satisfy Western motorists, these companies seem to assume.
Yet BYD has reported extremely high ranges for the Blade, similar to a standard NMC formulation known as NMC622. In June, for instance, BYD, which has long been one of China’s biggest electric vehicle manufacturers, shipped 100 of its $68,000 Tang SUVs, equipped with the Blade, to Norway. It said these vehicles would go about 350 miles on a charge and fast-charge between 30% and 80% of their energy capacity in a half hour—both extremely impressive numbers. At the Auto Shanghai show in April, BYD unveiled another model called the Dolphin, a Blade-equipped city car to be released next year. It has a reported $15,500 base price and, according to BYD, will go a little over 215 miles on a charge and get 93 miles of recharged battery life in five minutes. A second, longer-range Dolphin, BYD said, will go around 290 miles on a charge—again, surprisingly high numbers considering they come from an LFP-equipped battery. Moreover, BYD said, the battery in both Dolphin models will last around 750,000 miles, about five times the lifetime of a typical conventional vehicle and representing around 50 years of average driving. (The extreme longevity of such batteries will be the subject of a future edition of The Electric.)
Benefit of the Doubt
In conversation with the battery community in the U.S. and Europe, I found ubiquitous incredulity. No one accepted the numbers at face value. The reason again was LFP’s physics—the energy density is what it is. I asked whether BYD would outright lie. Everyone responded that it wouldn’t, yet all equally disbelieved the ranges BYD claimed. “You can report it but it doesn’t mean it’s true,” said Sam Jaffe, who runs Cairn Energy Research Advisors, a battery research firm.
But Chao-Yang Wang, among the foremost LFP experts in the U.S. and a professor at Penn State, suggested that everyone was doing the math wrong. He said the problem is that detractors are focusing on LFP’s performance at the cell level when they should be looking at what is happening in the battery as a whole. Because BYD changes the pack design, stuffing in more LFP without the extraneous packing material, it is in effect increasing LFP’s energy density. In a paper published in January, Wang did a side-by-side comparison of LFP and NMC622. As a proxy, he used the NMC622 battery contained in the BMW i3. At room temperature, NMC622 had specific energy of 145 to 171 watt-hours per kilogram—a typical number for today’s best commercial EV batteries. LFP was comparable, at 156 to 175 wh/kg.
The cost of the Blade is about $90 per kilowatt-hour, Wang said, allowing an EV containing it to be priced close to a gasoline-propelled vehicle. Average costs of NMC and NCA batteries are trending down but are currently around $129/kWh, according to BNEF.
In the 16 months since the Blade’s launch, China’s other major battery makers—Contemporary Amperex Technology and Gotion—announced their own versions of cell-to-pack. Tesla is using CATL’s version in Model 3 and Y vehicles it makes in China. And, as noted above, Musk announced in September that he intends to incorporate cell-to-pack in the future design of all his vehicles.
Analysts who watch China say they are surprised by how fast all of this has happened. James Frith, BNEF’s head of energy storage, said BYD appeared to develop and commercialize the breakthrough in just 18 months. Typically, such battery development can take years or even decades. “It’s quite remarkable,” Frith told me. “They completely changed their cell manufacturing in two years.”
In recent months, Volkswagen, Ford and Stellantis have taken a partial step in BYD’s direction. In separate announcements, all said they will use LFP in some of their vehicles—lower-end, smaller ones. But neither they nor any of the other legacy automakers appear to intend to incorporate their LFP batteries into a cell-to-pack system.
Cold Survival
When you ask about the industry’s hesitancy regarding LFP and the Blade, skeptics note that LFP becomes sluggish in supercold weather: In subzero temperatures, lithium ions have trouble moving through typically thick LFP cathodes and manage to push themselves only partway through the electrode. In practical use, this means LFP-equipped vehicles end up with much shorter range in cold weather, which aggravates drivers. And LFP skeptics say that though the Blade is a cool invention, battery designers are bound to create a similar cell-to-pack system for NMC and NCA. That would result in a halving of raw material cost for the metals at the pack level, thus undercutting LFP, Frith told me.
Wang, the Penn State professor, challenged this expectation. He told me that cell-to-pack would be too dangerous to use with NMC or NCA, which could not be safely stuffed so densely. In terms of the cold-weather problem, Wang suggested another solution: the addition of a nickel-based heating element to a Blade-type battery, a strategy his paper claims would entirely eliminate the problem. For its part, BYD says a bit of added insulation reduces the lithium sluggishness.
If EV sales put stress on battery metal supplies later this decade, sticker prices could soar, and automakers will do everything they can to prevent that. That’s why they are likely to turn to LFP and cell to pack. BYD is reportedly already speaking about supplying batteries to Apple, Toyota and Hyundai, although with the exception of Hyundai, it’s not clear if the discussions are specifically about the Blade.
Investors may have not realized the scope of BYD’s battery achievement. The stock prices of Chinese EV and battery companies have soared as a group over the last year or so: CATL is up five-fold since the start of last year, Great Wall four times, Gotion three times, and Nio a whopping 13-fold. In that context, it’s not surprising that BYD is up almost six times in the same period. But with BYD leading the way to cell to pack, and CATL and Gotion following, all three of these companies could have more upside before other companies catch up.
The story of the Blade ultimately challenges U.S. assumptions that it can overcome China’s huge lead in battery development by inventing technology that leapfrogs it. While U.S. labs are working on next-generation battery ideas (which we covered last week), Chinese companies are—so far at least—maintaining an edge thanks to their own advances.
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An exclusive premium service covering the nascent battery and electric vehicle revolutions.
About Steve LeVine
Steve LeVine is editor of The Electric. Previously, he worked at Axios, Quartz and Medium, and before that The Wall Street Journal and The New York Times. He is the author of The Powerhouse: America, China and the Great Battery War, and is on Twitter @stevelevine
