The Future of Lithium-Ion Battery Technology

The lithium-ion battery market is growing exponentially, as the technology increasingly becomes a critical component of future energy infrastructure.

Various market reports predict the global lithium-ion battery market value to grow to almost $200 billion by 2030. This is driven by demand for renewable energy sources and rising popularity of electric vehicles, as lithium-ion batteries are rechargeable, lightweight, and offer high energy density to increase battery life.

In the data centre space, lithium-ion batteries are becoming a popular choice for uninterruptible power supplies, as operators become pressured to reduce their footprint and improve energy consumption. Frost & Sullivan predicts adoption of these batteries will increase from 15% in 2020 to 38.5% by 2025.

However, cathodes in most lithium-ion batteries require cobalt, for which the price has risen from $32,000 per ton in 2017 to $82,000 in spring 2021, and down to $55,000 in 2022. This cost and volatility has led to manufacturers seeking alternatives.

Moreover, data centre operators remain concerned about the safety of lithium-ion batteries, as they have become a known fire risk.

Read more: Kakao data centre fire linked to lithium-ion batteries

What’s next for lithium-ion battery technology?

This year alone, multiple mining projects have successfully discovered battery-grade sustainable lithium, including Atlantic Lithium’s  Ewoyaa Project, Sigma Lithium’s Grota do Cirilo Project, and the Camaro – Hellcat Project.

“[These discoveries are] timely given the rapid growth of the lithium and battery metal market over the past months. Nearly every day there is another announcement regarding expansion in the North American battery metals supply chain,” said Zayn Kalyan, CEO of Infinity Stone.

These findings positively impact technology manufacturers that rely on lithium-ion batteries. To illustrate, a Tesla Model S has approximately 12 kilograms of lithium in it.

“Every major car manufacturer and battery manufacturer is in the process of building out infrastructure in Canada and the US, all in the context of considerable government support, including the recent announcement by the Biden administration of $2.8 billion in support for manufacturing and processing companies in the battery metals space,” added Kalyan.

In future, however, Tesla is planning for next-generation batteries to contain lithium-iron phosphate, which is generally considered to be safer and more sustainable than lithium-ion.

“A lot of manufacturers have started changing from lithium-ion batteries to lithium phosphate because phosphate is easier to get,” said Meghan Nutting, the Executive Vice President for Government and Regulatory Affairs at Sunnova, a Houston-based residential solar developer.

Other alternatives to lithium-ion are also being researched, including lithium hydroxide and solid-state lithium-metal battery technology.

Chilean chemical company, SQM, reached an agreement with Johnson Matthey, a British sustainable technologies company, to increase production of lithium hydroxide by 30,000 metric tons.

“These expansions will be done simultaneously with our efforts to reduce our environmental footprint by cutting our brine extraction and freshwater consumption in half by 2030. Additionally, we continue the work in Australia to develop our lithium hydroxide project with Wesfarmers,” said Ricardo Ramos, SQM’s Chief Executive Officer.

In January 2022, QuantumScape and Fluence Energy also announced their intention to introduce solid-state lithium-metal battery technology to stationary energy storage applications.

“While we have historically focused on automotive applications, we believe our battery technology is broadly applicable and can play a role in other sectors contributing to a lower-carbon future,” said Jagdeep Singh, Co-Founder and CEO of QuantumScape.

Solid-state lithium-metal battery technology is expected to have the potential to offer higher energy density battery cells that can store more energy in less space than leading lithium-ion batteries.

“Fluence’s technology-agnostic platform is also particularly suited to early adoption of next-gen technologies like this that have the potential to increase the adoption of stationary storage,” said Manuel Perez Dubuc, CEO of Fluence.

In the climate and energy-conscious world we live in, research into more sustainable and stable energy sources will undoubtedly continue and likely increase at a rapid pace, as the race for net zero heats up.