A step-change in battery technology

Insights — May 2023

Mass production of a new variant of lithium battery with step-change performance benefits has been announced

One industry development surprised us during April. The world’s largest battery manufacturer, Chinese-based CATL, announced that it expects to begin mass production this year of a new variant of lithium battery with step-change performance characteristics relative to the current generation of technology. For context, the industry average energy density (how much energy a battery can store relative to its weight) is c.160Wh/kg and the best lithium-ion batteries presently available are just short of 300Wh/kg. The new CATL battery is quoted at 500Wh/kg. This is not just significant for the automotive industry, as 400Wh/kg is a threshold which brings electric aviation into the realm of possibility.

Lithium battery evolution won’t end there, during April, the United States Government funded Argonne National Laboratory research and development centre announced that it expects its R&D-stage lithium-air battery to achieve 1200Wh/kg. We truly are experiencing an extraordinary era of innovation with considerable implications for industry and society.

We reflect that the availability and maturity of battery technology has been holding back the adoption of renewables (solar and wind are intermittent energy sources and require energy storage to be ‘baseload’ competitive) and electric vehicles (range anxiety). This development represents a remarkable rate of change and indicates that batteries present much more of an opportunity than a risk to clean energy. T8 Energy Vision has unique exposures to various energy storage technologies and their supply chains on the basis that we believe they represent an extraordinary investment opportunity at this relatively early stage of their evolution.