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The Lithium-Ion Battery Value Chain

Istanbul, October 2012

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

Roland Berger has extensive project experience in all aspects of


the (Automotive) battery market
Clients

Selected projects
> Market and technology studies Li-Ion batteries for raw material suppliers (3 projects
with focus battery value chain on Japan, Korea, and China)
> Production cost benchmarking for LiIon battery materials (cathode, anode, separator,
electrolytes)
> Market entry studies Cathode Active Materials (CAM)
> Akquisition target search for battery materials (CAM, electrolytes)
> Market study and partnering strategy for global Japanese manuf. of Li-Ion batteries
> Site selection Europe for Japanese LiIon manufacturer
> Market studies on the global LiB market for passenger cars and commercial
vehicles as well as for other industries (High end consumer goods, ESS)
> Market entry strategy Europe for Asian battery manufacturer
> Strategy development for European battery manufacturer
> Strategy development Commercial vehile for Asian battery manufacturer
> Analysis of standardization impact on European LiIon-battery market
> Trend analysis eMobilty in the Triad for Chinese battery manufacturer / State-owned
EV manufacturer association
> European key-account strategy for overseas battery manufacturer
> Study on use of different battery types for European battery manufacturer
association

Source: Roland Berger

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

We continuously do first-class research on current and future


e-Mobility issues, with a special focus also on batteries

Selected Roland Berger studies E-Mobility


Global Vehicle LiB
Market Study

Joint VDMA study:


Effect of e-Mobility on
equipment suppliers

Battery materials multiclient study: Creating


cost transparency

PHEV Readiness Study:


Electric Vehicles in
America

Powertrain 2020
The Future Drives
Electric

> The demand for Li-Ion


batteries is rising
along with xEV market
development
> In total, the market will
compromise around $ 9bn
on pack-levek in 2015
> 80% of the market is
dominated by 5 players,
not more than 8 will
dominate the market from
2016 onwards
> Industry consolidation is
highly likely

> Joint study with the VDMA


(German engineering
association)
> Study outlines effects of
e-Mobility on equipment
suppliers due to shift to
alternative powertrains
requiring new
manufacturing processes

> Recent multi-client study


with various OEMs and
Tier-1 suppliers
investigating costs of
battery raw materials
> Battery raw materials
have cost reduction
potential of ~10% in the
next 5 year
> In the long-term, new
process innovations can
further decrease costs

> USA must prepare for the


mass introduction of
PEV's (EV's & PHEV's)
> Cities, states, government
automakers, utilities and
consumers alike must
participate and contribute
to the successful rollout

> EVs/PHEVs necessary


due to future emissions
regulations
> Technology basically
available, but with
improvement potential
> Market volumes of up
to 8 m EVs/PHEVs
> Challenges for players
identified and actions
derived

Aug 2011/Jan 2012


Source:

Roland Berger

May 2011

Dec 2010
(Updated Apr 2011)

Oct 2010

Oct 2008/Sep 20091)

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

We play a key role at all major and industry-renowned conferences


through speeches or as chairman

Selected conferences in 2010/2011


FOCUS

CONFERENCES

ROLE

BATTERY

AABC 2011, Mainz

Speech

Kraftwerk Batterie 2011, Aachen

Speech

3rd and 4th EV Battery Forum 2011:


Barcelona, Shanghai, 2011

Speeches

Elektronik-Kongress Ludwigsburg 2011

Speech

ELECTRIC
MOTORS

SAE Powertrain 2010/2011:


Stuttgart / Indianapolis / Shanghai

Speech and role as


chairman

E-MOBILITY
STRATEGY

Internationales Wiener
Motorensymposium 2011

Speech

Aachen Colloquium Automobile and


Engine Technology 2010, 2011

Speeches

EVS 24, EVS 25 Shenzhen 2010

Speeches

Source:

Roland Berger

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

A.

Disclaimer and abbreviations

A.

Introduction

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

1. This presentation has been compiled for the exclusive, internal use by our client. Within the framework of the engagement, Roland
Berger Strategy Consultants ("RBSC") will act solely in the interest of the client. Property rights in favor of third parties will not be
constituted and no protective effect shall arise for the benefit of third parties
2. The presentation shall be treated as confidential and may not be passed on and/or may not be made available to third parties without
prior written consent from RBSC. It is not complete without the underlying detail analyses and the oral presentation
3. RBSC does not assume any responsibility for the completeness and accuracy of any documents and information made available to
RBSC in the course of the project. RBSC assumes that the data and documents provided are complete, comprehensive and that the
contents are truthful and exact; a detailed examination has only been conducted by RBSC if stated so in the presentation
4. This presentation does not confirm whether turnaround is possible or worthwhile. The decision over the use, the evaluation of the
applicability and the use of the presentation by RBSC are the sole responsibility of the client. The content and scope of the
presentation is exclusively at the discretion of RBSC
5. This presentation relates only to the position as of May 2012 and might not be updated. This presentation has been compiled based
on the General Terms and Conditions of RBSC as attached to this presentation. Any use of this presentation (or excerpts of it) or its
content must only be made within the scope of the General Terms and Conditions of RBSC. It is explicitly stated that section 2 no. 2
(no protective effect for the benefit of third parties) and section 9 (limitation of liability) of the General Terms and Conditions of RBSC
apply. If, notwithstanding the intention of the parties, property rights in favor of third parties shall be constituted, section 334 BGB
(German Civil Code) shall apply mutatis mutandis. Any possible liability to third parties is limited according to section 9 of the General
Terms and Conditions of RBSC

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

INTRODUCTION

Glossary

Terms
Abbreviations

Explanation/translation
HEV

Hybrid electric vehicle

PHEV

Plug-in hybrid vehicle

EV

Electric vehicle

ESS

Energy storage system


Exchange rate [vs. USD]

Currency designations

Currency name

Abbreviation

RMB

Chinese Yuan Renminbi

1 USD = 6.31 RMB

JPY

Japanese Yen

1 USD = 82.84 JPY

KRW

Korean Won

1 USD = 1,139.26 KRW

Source: Roland Berger

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

B.

The "high-end" LiB Market

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

B.1 Market analysis

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

MARKET ANALYSIS - OVERVIEW

The high-end LiB market is expected to double every 5 years

MWh forecast comparison with Avicenne


Forecast comparison with Avicenne by seg't [GWh]
2011

2015

Forecast comparison with Auto vs. Non-auto [GWh]

2020

2011

2015

2020

224

224

10
142
29
71
31
11

10
61

31
11

Roland AviBerger cenne

19
14

19

Roland AviBerger cenne

29
23
18

142

111

25

Roland Roland AviBerger Berger cenne


- Low - High

31
4

23

31
4

45
6

24

Roland AviBerger cenne

Other

Tablets

PHEV

Auto

E-bikes

ESS

EV

Non-auto

Power tools

Mobile phones

HEV

Notebooks

Source: Roland Berger, Avicenne

71
21

0
27

111

49

58
63

131
33

61
12
43
6

Roland AviBerger cenne

85

85

71

Roland Roland AviBerger Berger cenne


- Low - High

Other Non-Auto

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

10

B.1.1

Automotive

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

11

AUTOMOTIVE

There are different options for electrifying powertrains


Technical layout depending on application and vehicle segment
PURE ELECTRIC DRIVING POSSIBLE
Micro/mild hybrid

Full hybrid (PHEV option)

Belt-driven
startergenerator

Parallel
hybrid

Integrated
startergenerator

PHEV

EV

Serial hybrid
Serial hybrid
(parallel option) (range
extended)

Battery
electric
vehicle

Mixed operation, incl. long distance

Urban/rural

Urban

Upper medium class/premium class, large SUVs, sports


cars, transporters/vans

Mid-size cars, Mini & small


MPVs, small
cars, small
SUVs, light
vans, mini
delivery trucks, vans, fun
sports cars
cars

Power-split
hybrid

Second
electric
axle

1)
2)

Main applications
(vehicle segments)

Engine

Gears

Clutch

HV E-Machine

1) Belt-driven starter-generator 2) Integrated starter-generators


Source: Roland Berger

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

12

AUTOMOTIVE

Roland Berger has developed two scenarios for xEV market


development Downsized Mobility and The Future Drives Electric
Scenarios to estimate powertrain penetration shares
Drivers
Mobility
needs

EV driving range

Low Scenario:
Downsized Mobility

High scenario:
The Future Drives Electric

EVs have limited range


No disadvantage for PHEVs

EVs have limited range


No disadvantage for PHEVs

Limited infrastr. in city centers


Slow roll-out

Developed infrastr. in urban areas


Accelerated roll-out

Stagnating fuel prices


Battery cost reduction

Rising oil prices


Accelerated battery cost reduction

Little government support for fuelefficient technologies

High tax incentives/subsidies first for


zero- or nearly zero-emission vehicles

Limited segment offering, A/B segments


for EVs, C/D segments for PHEVs

Wide segment offering; A/B/C segments


for EVs, C segments or bigger for
PHEVs

A few front-runners
Most OEMs remain skeptical

Numerous OEMs already in first phase


Many incumbent OEMs actively
involved

1
Infrastructure

Fuel and battery prices

Cost
limitations

Taxes/incentives

Segments

Image/
comfort
requirements
Brands

Source: Roland Berger

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

13

AUTOMOTIVE

Despite stagnating growth in Triad markets, vehicle sales are


developing strongly due to emerging markets' growth
Automotive End-user user markets
Passenger vehicles [Mio]
Market
development

PC + LCV (Class 1-3)


83.5

Trucks [Mio]

Buses [Mio]

Class 4+
89.2

75.8

2011

Comment

2015

2020

2.0

2.7

3.4

2011

2015

2020

Global passenger car sales are


expected to grow at 2% and 1%
annually through 2015 and 2020

Rising global transportation


demand will lead to strong growth
especially in heavy truck sales

While TRIAD markets are largely


stagnating, China, India and Brazil
are the main growth drivers

Annual growth between 2011 and


2015 will be 8%, between 2015
and 2020 a further 5%

Source: Expert interviews, industry reports, Roland Berger analysis

0.4

0.5

0.6

2011

2015

2020

Bus sales are largely replacement


sales, as bus fleets, especially in
emerging economies, are being
successively upgraded
Annual growth between 2011 and
2015 will be 5%, between 2015
and 2020 a further 4%

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

14

AUTOMOTIVE

Hybrids and will be adopted widely on passenger vehicles and


trucks, while plug-in and EV penetrations rates remain lower
Automotive HEV, PHEV, EV penetration
Passenger vehicles [%]
EVpenetration

Trucks [%]

Buses [%]

10%
9%

6%

5%
3%
3%
2%

2%
1%

0%

2015

2011

Comment

1%
2020

Mild or full hybrids penetration will


increase strongly as OEMs
struggle to meet new emission
standards
PHEV and EV sales remain highly
susceptible to extraneous changes
HEV

PHEV

EV

Source: Expert interviews, industry reports, Roland Berger analysis

0
0%
2011

2
2%

3%

1%

2%
1%

2015

2020

HEVs will installed on long-haul


trucks to lower overall fuel
consumptions
EVs will be used on in short heavy
duty hauling at warehousing
facilities

0.00%

2011

0.01%

2015

0.02%
0.01%
0.01%

2020

Hyrbid and EV-penetration


remains low in the bus segment,
as alternative technologies, such
as CNG are given preference over
hybridization and electrification
No PHEVs in this segment

High scenario
LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

15

AUTOMOTIVE

In terms of total energy demand, passenger vehicles will


contribute by far the largest share
Automotive Total energy demand
Passenger vehicles [GWh]
Market
development

PC + LCV (Class 1-3)

Trucks [GWh]

Buses [GWh]

Class 4+
124
8

58

45

Comment

58

23

19
3
12

2011

2015

2020
Low

15
2020
High

HEVs only account for a small


portion of the total energy demand
All three segment will grow by
between 50% and 70% between
2011 and 2015 and by up to 50%
thereafter
HEV

PHEV

0.2

2.1

4.1

2011

2015

2020
Low

7.3

2020
High

HEVs will installed mainly on longhaul trucks to lower overall fuel


consumptions
EVs will be used mainly on in short
heavy duty hauling, e.g. at
warehousing facilities

0.8

3.2

6.0

9.2

2011

2015

2020
Low

2020
High

Hyrbid and EV-penetration


remains low in the bus segment,
as alternative technologies, such
as CNG are given preference over
hybridization and electrification
No PHEVs in this segment

EV

Source: Expert interviews, industry reports, Roland Berger analysis

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

16

TECHNOLOGY ROADMAP

Accordingly different chemistries will be used over time NCM


dominating, LFP gaining ground for HEV and in China
CAM shares Automotive
HEV [%]

PHEV [%]

Share
development [%]
57%

53%

46%

54%

31%
9%

Comment

2015

6%

8%

2020

2011

2015

LFP is predominately used in


China due to cost advantages
LMO

LFP

NCA

48%

41%

29%
34%
38%

14%
7%

NCM and LMO dominate due to


their high power capability

53%

31%

22%

NCA is only used in products from


JCI (SAFT chemistry)

NCM

41%

34%

7%
2011

48%

26%

27%
33%

EV [%]

27%
6%

4%

14%
4%

2020

2011

2015

For higher energy cells (longer


electric range) NCM is preferred
over LMO
LFP is predominately used in
China

27%
3%
2020

NCM is dominating since it


provides higher energy (longer
electric range) over LMO
LFP is only used in China

LCO

Source: Expert interviews, industry reports, Roland Berger analysis

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

17

B.1.2

E-bikes

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

18

E-BIKES

More than 90% of all e-bikes sold globally are sold in China, highend penetration, however, remains low
High-end e-bike sales by geography
E-bikes sales by region [Mio bikes]

46.1
28.3
0.6 0.4
26.6
2011

76.7
4.3
3.7
11.1
4.4

2.0 3.2

Japan/Korea

52.2
37.6

China
2015

India

60%

India

Other Asia

35%
21%

25.6
14%
4%

2020

NAFTA

Source: Industry reports, Roland Berger analysis

However, China has the lowest


high-end penetration rate and
therefore contributes relatively
less to global high-end e-bikes
sales
Other Asia

High-end e-bikes sales [Mio bikes]

97%

Europe

NAFTA

In 2011 China accounted for 92%


of global e-bikes sales
By 2020 this figure is going to
drop to 62%

Japan/Korea

High-end penetration rate 2011 [%]

Europe

2.2
1.2 0.5

8.0
4.4 1.3

2011

2015

4.2
3.3
12.3
2020

As a result, China contributed only


50% of global high-end e-bikes
sales in 2011
The major markets driving highend e-bikes sales are Europe,
NAFTA and Southeast Asia

China
LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

19

E-BIKES

LiB is mainly relevant in the high-end market, however, penetration


remains comparatively low
E-bikes End-user markets and Lib penetration
E-bikes sales [Mio bikes]

LiB penetration [%]

Average cell capacity [kWh]

Market
0.39

16%

26

0.33

5%

8
1%

2
2011

Comment

0.35

2015

2020

Global e-bikes sales will grow by


37% annually between 2011 and
2015 and by 26% between 2015
and 2020
90% of e-bikes sales are
accounted for by low-end bikes

2011

2015

2020

2011

2015

2020

Li-ion is gradually coming to


replace NiMH and NiCd battery
packs

The majority of high-end e-bikes


sold have limited battery capacity
and are mainly used for assistance

Li-ion penetration in China, which


accounts for over 90%, remains
low due to high price sensitivity

Battery capacity growth is also


limited as power output is
legislatively limited in most market

Low-end
Source: Expert interviews, industry reports, Roland Berger analysis

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

20

E-BIKES

We expect a total demand of approx. 1.6 GWh in 2020, the majority


being LMO and LFP
E-bikes Energy demand and CAM shares
Energy demand [GWh]

CAM shares [%]

Market

5%
1,574

8%

10%

NCM

LMO
LFP

147
8
2011

Comment

2015

2020

Calculated in kWh energy


demand for high-end e-bikes will
grow by 161% p.a. between 2011
and 2015, and by another 61%
p.a. between 2015 and 2020

Source: Expert interviews, industry reports, Roland Berger analysis

80%

72%

15%

20%

2011

2015

60%

NCA
LCO

30%
2020

Since only high-end market


considered, lower LFP share and
correspondingly higher share of
high-end materials NCM and NCA
Nonetheless, high LMO share
accounted for largely by China

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

21

B.1.3

ESS

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

22

ESS LIB MARKET

Lithium-ion batteries are still at an early stage of development in


ESS applications and growth patterns remain volatile
ESS End-user markets and Lib penetration
Total newly installed storage
capacity [MW]

Newly installed LiB storage


capacity [MW]

Average discharge rate [h]

Market

10,866

2
3,415

2,601
122
2011

Comment

10
2015

2020

Strong growth in installation of


renewable energy power plants
will create a growing demand for
on-grid energy storage or loadleveling applications

Source: Expert interviews, industry reports, Roland Berger analysis

2011

578
2015

2020

Lithium-ion power are but one in a


range of technologies competing
in this segment
Unlike in other segments LiB
installation is somwhat volatile
depending on projects undertaken
in any given year

2011

2015

2020

Average discharge rates will


increase also, as Lithium batteries
are deployed more widely in the 612 our storage range

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

23

ESS LIB MARKET

Energy demand for LiB-ESS applications will reach >10 GWh, the
largest share of which will be taken by LFP
ESS Energy demand and CAM shares
Energy demand [kWh]

CAM shares [%]

Market
10,404

45%

32%

62%
16%
23%
2,311

32%

21
2011

Comment

51%
32%

6%
2015

2020

Demand for Lithium-type ESS


applications will grow by 35%
annually on average between
2015 and 2020

Source: Expert interviews, industry reports, Roland Berger analysis

2011

2015

2020

LFP is dominating since it


provides longest life for lowest cost
For applications where higher
energy per weight and volume is
required, NCM and LMO are
preferred

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

24

B.1.4

Electronics

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

25

ELECTRONICS

The global electronics market will continue to grow strong, with


more than 5 Bn cells being sold in 2020
Electronics End-user user markets
Tablets [Mio cells]

Notebooks [Mio cells]

Market
development

Mobile phones [Mio cells]


2,714

2,529
1,966

2,057

1,573
1,335
850.0
475.0

154.0
2011

Comment

2015

2020

Global notebook sales will grow by


33% annually between 2011 and
2015 and by 12% between 2015
and 2020

Source: Expert interviews, industry reports, Roland Berger analysis

2011

2015

2020

2011

2015

2020

Global notebook sales will grow by


11% annually between 2011 and
2015 and by 6% between 2015
and 2020

Global mobile phone sales will


grow by 6% annually between
2011 and 2015 and by 5%
between 2015 and 2020

95% of sales are accounted for by


replacement demand

95% of sales are accounted for by


replacement demand

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

26

ELECTRONICS

Lithium penetration is highest in consumer electronics; polymer


cells are gradually replacing cylindrical and prismatic cells
Electronic LiB penetration
Tablets [%]
LiB
penetration

100%

Notebooks [%]
100%

Mobile phones [%]

100%
86%

83%

78%

67%
73%
33%
10%
1%
2011

Comment

2015

2020

Lithion-ion polymer cells are te


only cell-type that can meet tablets
requirements in terms of weight
and width, penetration therefore is
and will remain at 100%

Cylindrical

Prismatic

Source: Expert interviews, industry reports, Roland Berger analysis

2011

17%
1%

22%

2015

1%
2020

Lithium-ion penetration remains


constant at 97% overall, the
remaining 3% being accounted for
by niche applications
As weight requirements increase,
polymer penetration goes up

23%

0%
2011

0%
2015

2020

Lithium-ion penetration for mobile


phones is at 100%
The share of polymer cells will
gradually increase, also with a
view to increasing weight
requirement

Polymer
LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

27

ELECTRONICS

Increased demand and growing average battery capacity produce a


compound growth effect in all three electronics segments
Electronics Total energy demand
Tablets [GWh]

Notebooks [GWh]

Market
development

Mobile phones [GWh]

28.5

23.2

18.7

16.5

12.9
10.7

7.9

7.2
1.9
2011

Comment

2015

2020

The table market will grow by 39%


between 2011 and 2015 and
continue to grow strong at 18%
through 2020
There seems to be no substitution
effect between tablets and
notebooks or mobile phones

Source: Expert interviews, industry reports, Roland Berger analysis

2011

2015

2020

Strong market growth and


increasing average battery
capacity produce a compound
effect, resulting in annual growth
rates of 15% between 2011 and
2015, and 11% between 2015 and
2020

2011

2015

2020

As more media and entertainment


applications migrate to mobile
phone platforms average battery
capacities increases
In effect total energy demand will
grow by 13% annually between
2011 and 2020

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

28

TECHNOLOGY ROADMAP

With slimer tablets and notebooks and higher energy demand of


gadgets, NCM replaces LCO and NCA gradually
CAM shares Consumer electronics
Tablets [%]

Notebooks [%]

Mobile phones [%]

Share
44%

22%

Comment

NCM

53%

19%

47%
62%
19%

53%

16%

15%

34%

28%

23%

2011

2015

2020

35%

31%

26%

2011

2015

2020

NCA is used in top-of-the line


products only, which require the
longest operational time

NCA is used in top-of-the line


products only, which require the
longest operational time

LCO (lower energy than NCM) for


lower priced products.

LCO (lower energy than NCM) for


lower priced products.

NCA

17%

91%

87%

83%

2011

2015

2020

14%

NCM is the predominant material

LFP

13%

60%

NCM is the predominant material

LMO

9%

Application requires thin pouch


cells; LCO is most suitable for this
NCM, due to its higher energy is
used in top-of-the-line products
NCA cannot be used in pouch
cells due to gassing issues.

LCO

Source: Expert interviews, industry reports, Roland Berger analysis

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

29

B.2 Technology cost and price analysis

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

30

B.2.1

Cell economics and target prices

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

31

CELL ECONOMICS & TARGET PRICES

We use a realistic reference cell for our analysis throughout this


study over 96 Wh
Typical 96 Wh PHEV cell Cell specifications
Cell design

MAIN SPECIFICATIONS

26 Ah/3.7 V
Energy capacity: > 96 Wh
Specific energy: 135 Wh/kg
Cell dimensions: 85 x 173 x 21 mm
Active materials:
Cathode: NCM ternary mix
Anode: Graphite mixture
Electrolyte: EC/DMC/EMC 1m LiPF6
Separator: Entek (20m)
Prismatic Al-housing (0.8 mm) including lid and
feed-throughs (Al, Cu posts )
Major area of application in PHEVs

Source: Roland Berger

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

32

CELL ECONOMICS & TARGET PRICES

A typical Li-Ion PHEV2 cell (with 26 Ah, 3.7V) has a weight of


716 g CAM accounts for approx. 31%
Typical 96 Wh PHEV cell Mass breakdown assumptions
Cell mass breakdown1)

COMMENTS

Exact material split depends on


cathode/anode material type/cell
chemistry

~716 g

Housing and feed-througs


19%

Cathode
31%

Separator

Electrolyte

4%

16%

Weight of cathode and anode


shown includes Cu/Al foil, binder
and carbon black
2020 forecast assumes constant
energy capacity of 96 Wh; usage
of higher-density CAM materials
therefore results in total weight
reduction to 680 g in 2016 (using
higher-density NCM) and 667 g in
2018 (using HCMA)

30%

Anode
1) Approximate values for ternary mixture (NCM), depend on the chemistry and quality
Source: IIT; expert interviews; Roland Berger

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

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CELL ECONOMICS & TARGET PRICES

In a typical 96 Wh PHEV cell cathode material1) accounts for up to


39% of cell material costs
Typical 96 Wh PHEV cell Cell cost structure 2015
Cell cost breakdown, 2015

Cell material cost split, 2015

Total cost: approximately USD 23.3/cell (~ 249 USD/kWh)


Margin
SG&A
Overheads

USD 13.4/cell
~24%
of total cell
costs)

5%

10%

39%

Cathode

18%

Anode

13%

Electrolyte

19%

Separator

11%

Housing and feed-througs

Labour

6% 1%
Energy/Utilities 0%

D&A Equipment

58%

18%

0%
2%
D&A Building
Quality / Evironmental

Raw material

Material cost
breakdown

1) Including carbon black content, foil and binder cost


Source: Expert interviews, Roland Berger price calculation

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CELL ECONOMICS & TARGET PRICES

... while CAM raw materials nickel, cobalt and manganese and
lithium account for as much as 63% of cathode material cost
Typical 96 Wh PHEV cell Cathode cost structure (NCM ternary mix CAM) 2015
Cathode cost breakdown, 20151)

Cathode material cost split, 2015

Total cost: approximately USD 5.22/cell

USD 3.28/cell

SG&A Margin
5%
Overheads
Labour
1% 7%
Energy/Utilities
9% 0%

~45%
of total Cathode
costs)

20%

Nickel (>99.8%)

33%

Cobalt (>99.3%)
Manganese

7%

D&A Equipment 9%

0%
3%
D&A Building
Maintanance 3%
Quality / Evironmental

63%

12%
Raw material
25%

Lithium carbonate
1%
Carbon black
Al foil (20 )

PVDF Binder
3%
Material cost
breakdown

1) Carbon black, foil and binder manufacturing costs included in raw material cost, manufacturing costs shown are those of the CAM manufacturer. Excluding carbon black, foil and binder cost, raw material share equals 55%
Source: Expert interviews, Roland Berger price calculation

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35

CELL ECONOMICS & TARGET PRICES

According to our bottom-up calculation, declining cell prices will


put pressure on cell and CAM manufacturer margins in mid-term
Typical 96 Wh PHEV cell Cell price breakdown 2015 [US $ / cell]
Other
materials1)

CAM cost

CAM
margin

Cell
margin

Cell cost

7.5%

6.0 %

22.1

Cell
price

Delta

23.3

1.2

1.3

Market
price2)

22.0

2.3
2.1
0.4

8.2

0.3

13.4

4.3

CAM
Cell
margin material
cost

For a typical CAM


manufacturer
Raw materials account for
up to 55% of total cost
D&A and utilities account
for up to 25% of total cost
For a typical cell
manufacturer
Raw materials account for
up to 58% of total cost
D&A and utilities account
for up to 19% of total cost

4.6

Other Cathode CAM


material SG&A
cost

Comment

Cell
D&A

Labor/
utilities

Cell
SG&A

Cell
cost

Cell
margin

Cell
Price

Market Market
price
price

Margin pressure
Any price decrease beyond 24 USD / cell will have direct impact on CAM
and cell manufacturer margins

In view of their limited ability


to offset sales price declines,
CAM and cell manufacturers
will compete over a shrinking
profit pool

1) Anode, separator, electrolyte, housing 2) Expected market price based on expert interviews
Source: Industry reports, experts interview, Roland Berger analysis

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

36

CELL ECONOMICS & TARGET PRICES

To significantly reduce cell costs beyond 2015, major innovations


in CAM technology and introduction of new CAMs are necessary
Typical 96 Wh PHEV cell Impact of material improvements on cell prices
(cost for Auto. customers)
Comment
NCM cell
2015

Cost reduction NCM cell 2015 2020

NCM cell
2020

Potential cost
reduction HCMA

(230
USD/kWh

204
USD/kWh

-6%

22.1

0.4

1.0

-10%
0.1

20.8

5.2

4.3

16.9

16.5

NMC
cell cost
2015

HCMA cell
2020

Manufacturing

Energy
density1)

Labor

NMC
cell cost
2020

0.9

19.9
3.4

16.5

HCMA

HCMA
cell cost
2020

Innovation pressure
Unless HCMA material is introduced, further price reduction potential of CAM materials is
limited and margins remain at unacceptable level
Also cell manufacturer need (and will) improve processes and yield rate
CAM cost share 1) Based on a high-density 50-50 mixture of NCM 111 and LiNiO2

Const. cell energy (at 96 Wh)


assumed
In 2016 introduction of higher
density NCM CAM, resulting
in:specific cell energy increase
to141 Wh/kg and concurrentt
reduction in NCM usage to 113 g
In 2018 introduction of high-density
HCMA CAM: furher increases
specific cell energy to 144 Wh/kg
with HCMA usage to100 g
HCMA price includes a license fee
of 2%
No changes in anode, separator
and electrolyte cost assumed in
figure:
add. potential 10..20$ /kWh
Add. cell manufacturing process
improvement: potential ca. 10..15$
/ kWh
Cell price forecast 2018..2020:
170$ 190$ / kWh (incl. 6%..12%
margin for both CAM and cell
manuf.)

Source: Industry reports, experts interview, Roland Berger analysis


LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

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37

CELL ECONOMICS & TARGET PRICES - CONSUMER CELL

In the mass consumer cell segment Chinese players dominate;


also high margin pressure despite significantly lower invest
Typical 2.2 Ah 18650 Consumer cell China3) Cell price breakdown 2015
Other
materials1)

CAM cost

CAM
margin

Cell
margin

Cell cost

7.5%

6.0 %

1.45

Cell
price

1.52

0.08

Delta

0.02

Market
price2)

1.50

0.13
0.03

0.57

0.02

CAM
Cell
margin material
cost

Cell
D&A

Labor/
utilities

Energy capacity: > 8 Wh


Cell dimensions: Height: 65
mm, 18. 5 mm

0.18

0.36

Other Cathode CAM


material SG&A
cost

2.2 Ah/3.7 V
Specific energy: 141 Wh/kg

0.15
0.98

Comment

Cell
SG&A

Cell
cost

Cell
margin

Cell
Price

Market Market
price
price

Margin pressure
In spite of significantly lower fixed costs, Chinese CAM and cell
manufacturers rely heavily on subsidies to retain acceptable margins

Active materials:
Cathode: NCM ternary
mix
Anode: Graphite mixture
Electrolyte: EC/DMC/EMC
1m LiPF6
Separator: Entek (20m)
Cylindrical cell with lid and
burst membrane
Major area of application in
consumer electronics

1) Anode, separator, electrolyte, housing 2) Expected market price based on expert interviews 3) Based on Chinese labor cost with 50% lower invest
as compared to Japanese/Korean production
Source: Industry reports, experts interview, Roland Berger analysis

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

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B.2.2

Material manufacturing process economics

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

39

MATERIAL MANUFACTURING PROCESS ECONOMICS

Material prices are expected to decline Driven also by strong


competition to capture market shares
Impact on the material prices (mid-term - 2015)
IMPACT FACTORS ON PRICES
Raw material
cost

Materials

Standardizatio
Competition/
n
capacities

Process
cost1)

NMC 25 $
LMO 15 $
NCA 35 $

2)

CATHODE

Overal Price
l
per kg
impact 2015

18 $
(50-50 mix)

ANODE

SEPARATOR
Solution:
20 $

ELECTROLYT
E

Increasing the price


1) Investment, energy, labor
Source:

(LiPF6:25-30$)

Limited impact

Decreasing the price

Overall strong price decrease

2) Process cost reduction potential for LFP available

Roland Berger "Battery material cost study V.2.4 / Q1 2011"

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B.2.3

Technology roadmap, sell-in cycles and expected price


development for NCA, NCM, LFP and LMO

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

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TECHNOLOGY ROADMAP

Major innovations in cathode material technology are expected to


emerge only after 2015
Li-Ion key materials roadmap
2000

2005

2010

Cathode

NCA

2015
NCM

LCO
LCO

2025

2030

5V spinel

Sulfur

HCMA

Air

LiNiPO4 5V

LMO

LiCoPO4 5V
LFP

LiMnPO4 4V

Graphite

Soft Carbon

Electrolyte

LiPF6 + org.
solvents
(standard
electrolyte)

Polyolefin

Li metal

Li4Ti5O12

Hard
Carbon

Separator

Anode

2020

Graphite + Graphite Si-composites


Gel-polymer
electrolyte

5v electrolyte
Solid polymer electrolyte

Polyolefin +
ceramic coating

Source: Avicenne compilation, Kai-Christian Mller, Frauenhofer ISC

Polyolefin +
ceramic filler

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

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SELL-IN CYLCLES

however, because sell-in cycles vary between 2 and 6 years,


depending on industry, actual deployment will be even later
Example: Commercialization/Sale-in of CAM materials for passenger car usage
R&D by LiB supplier & auto OEM

Checking
data sheet
Needed
period
Details

Material
evaluation

2-3 years1)
Data sheet of a material
is checked
Contents are following
Specification of
general battery that
uses the material
Characteristics of the
material itself
Price

LiB supplier produce a


"pilot" LiB using the
material
Check the performance
of the LiB
Safety
Energy density
Power density
Durability, etc.

R&D by OEM
Battery tune up &
mass production
preparation

At least 1 year
LiB development with
the material
Matching with other
materials

Market
launch
of EV

At least 2 years
At least two years
are needed to
conduct an in-car
test

material's positioning
in a battery
Preparation of massproduction of LiB
Quality control
Yield ratio
improvement

1) In case of improvement of the material that are already used by the LiB supplier, it can be one year
2) Before the car fine-tuning, two years are needed for a "model fix" that includes exterior design and fabrication of main components
Source: Roland Berger Analysis

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43

SELL-IN CYLCLES

For the four industries analyzed, sell-in cycle range from 3 to 6


years
Sell-in cycles by industry
Data sheet checking

Material evaluation

Mass production
preparation

1 Automotive

0.5-1 year
General material
requirements
checked

0.5-1 year
Detailed material
evaluation and
release

> 1 year
Detail quality
checks as well as
design revisions

2-3 years
Intensive road
and test bench
testing

2 ESS

0.5-1 year
General material
requirements
checked

0.5-1 year
Detailed material
evaluation and
release

0.5-1 year
Quality and
safety checks
and testing

1-2 years
Project-based
onsite testing

3 Consumer
electronics

End-user largely
not concerned with
CAM, focus on cell
performance

End-user largely
not concerned with
CAM, focus on cell
performance

2-6 months
Packing and
batching largely
standardized

0.5-1 year
Fast innovation
cycle and short
supply chains

4 Power tools

End-user largely
not concerned with
CAM, focus on cell
performance

End-user largely
not concerned with
CAM, focus on cell
performance

2-6 months
Packing and
batching largely
standardized

0.5-1 years
Longer for highend applications

Segment

Source: Expert interviews, industry reports, Roland Berger analysis

Launch

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

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C.

Changes in the value chain

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

45

CHANGES IN THE VALUE CHAIN

The value chain is expected to consolidate and to develop a


clearer tiered structure (1/2)
TODAY (2010)
Raw materials > Oligopoly
Lithium
mining
Anodes,
Cathodes,
Separators,
Electrolytes
and
Precursors

Source: Roland Berger

CHANGES BY 2020
> Some selected new players
> New recycling companies
> Business models integrating recycling

> Dominated by Asian > New players (from specialty chemical


(Jap.) players
sector ) especially for Automotive and
ESS
> Partially specialized
precursors sourced > More integration of precursor
manufacturer
> Some cathode
materials
> Cathode manufacturing by cell
manufactured by
manufacturer only for top 2..3 with
cell manufacturer
large chemical business

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

46

CHANGES IN THE VALUE CHAIN

The value chain is expected to consolidate and to develop a


clearer tiered structure (2/2)
TODAY (2010)
Battery cells / > New JVs (Autostacks
Consumer LiB
("LiB manuf.") manuf.)
> Indepen. Asian LiB
> Research spin-offs
with public & IPO
funding
Battery
assembly

Source: Roland Berger

CHANGES BY 2020
> Massive consolidation (cost
pressure, innovation)
> Less upstream integration (esp.
cathode/anode material)
> More downstream integration, cell
manufacturer as Tier-1s to OEMs
> Auto-Cell manuf. JV's as exemption

> Mainly by OEMs (JVs > Increased outsourcing, but still


LiB) inhouse
dominated by in-house assembly
> Selected supplier > Cell manufacturers will deliver larger
LiB JVs
part of system (incl. electronics) as
Tier-1
> Limited LiB alone
LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

47

Please contact us for further information

CONTACT

CONTACT

Francesco
Pavoni
Senior Partner

Dr. Wolfgang
Bernhart
Senior Partner

Roland Berger Strategy Consultants Turkey


Automotive Competence Center
nirah Cad. Mektep Sok. No. 1
Bebek 34342 Beikta, stanbul
Turkey
Phone +90 212 358 64 00
Mobile +90 531 747 53 35
mailto:francesco_pavoni@tr.rolandberger.com

Roland Berger Strategy Consultants Germany


Automotive Competence Center
Loeffelstrae 46
70597 Stuttgart
Germany
Phone +49 711 3275 7421
Mobile +49 160 744 7421
mailto:wolfgang_bernhart@de.rolandberger.com

LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

48

It's

character
that creates
impact!
LiB-Market-Overview-SHORT_2012-08-03_TR version.pptx

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