Will Rising E-Bike Sales Be Faced with Battery Supply Shortages?
ASCHAFFENBURG, Germany – The TerraE battery cell facility in Europe is established as there is currently a strategic gap in supply. That gap widens as demand is exploding – not only due to the automotive industry switching to electric cars and buses. Other applications such as energy storage systems are on the rise because of the transition to green energy.
Where the exploding demand for battery cells in particular leads to in view of the rising e-bike sales was outlined in a global market analysis by CEO Sven Bauer of BMZ GmbH, Europe biggest battery maker, at the recently held Battery Experts Forum.
Demand for e-bike batteries to rise by 30%
Currently the world’s e-bike sector takes up about 10% of all battery cells produced. Taking into account that fact that Bosch recently said that it expects the e-bike market to have tripled by 2020, the demand for cells used in e-bike batteries will rise to 30%. Looking at the current market situation and taking into account the significance of the bicycle industry compared to that of the automotive sector, Bauer predicts a scenario of, “main suppliers of battery cells not being able to meet the demand. The smaller customers like e-bike manufacturers will be faced with shortages or even a stop of supplies.”
However, the CEO of battery maker BMZ also presented the solution to such a nightmare situation. How that solution looks like will follow in this report. First, the current and future situation of the worldwide battery market; according to analysis by Sven Bauer.
Current and future technology
That current situation shows for instance a Tesla car that needs close to 8,000 battery cells, or an electric public bus that has a battery system incorporating a whopping 35,000 cells! By comparison, an e-bike battery has about 40 – 60 cells. In series and parallel-connected cells make up a complete battery including all that comes with it such as the Battery Management System (BMS).
Almost all of these cells are currently 18650 types (18mm diameter and 65 mm long) and look like the commonly used penlight batteries. Cell production is slowly switching to 21700 ones as the bigger size is bringing a bigger capacity. With that capacity the lifetime of an e-bike battery is extended from the current average of roughly 500 charging cycles up to 1,500 to 2,000 cycles.
According to Bauer the round 21700 cells with their nominal capacity of 5.2Ah are the way to go for the near future. He said, “It will be the new standard. Of the major cell makers Sony and Panasonic start producing them next September and Samsung by April 2018.”
However, the BMZ CEO also explained that while Tesla is convinced of the superior 21700 cell qualities the German car industry isn’t, as BMW is opting for prismatic Lithion-Ion batteries.
Near future batteries offering 2,000Wh
Next to 21700 Lithion-Ion battery cells the BMZ CEO doesn’t see any other technology taking over from the current Lithium-Ion technology. Apart from Li-NMC (Nickel Manganese Cobalt) that is. He predicted at the Battery Experts Forum that this is the battery technology for the near future.
“NMC is the battery of choice for power tools, e-bikes and other electric powertrains. It will be possible to reach over 2,000Wh and with that it will be possible to produce more tailored batteries like for instance for e-bikes that need an annual recharging of only some 50 cycles.”
Production concentrated in Asia
Currently the world has 4 major cell makers; Sony, Panasonic, Samsung and LG. Next to them there are about a dozen smaller makers like Lishen, Maxell, or ATN while Apple i-phone producer Foxconn is looking to step in. All these producers are located in Asia; in Japan, Korea, and China.
The four biggest makers handle 80% of the market. According to the BMZ CEO, annual cell production currently stands at 5.4 billion. This production total is expected to quadruple in the next ten years. But even then the question remains; will there be enough supply? And next to that another question arises. And that is whether batteries will still be affordable in the near future? This question is brought about by the fact that the demand for lithium is growing by 27% per year. According to Sven Bauer, “there’s enough but it comes mainly from China and this country’s subsidies for switching to Light Electric Vehicles for urban mobility brings a huge demand increase. Will it come to China First? Next to that the price for copper is up by 30%.”
According to BMZ CEO Bauer all this leads to the following conclusions:
- Cell makers cannot keep up with demand
- Cell makers will concentrate on automotive industry
- Raw material prices on the rise
- Increased volatility also in currencies
Cell production in Europe
What is to bring relief to the nightmare scenario described by Sven Bauer – with e-bike makers no longer getting the batteries they need, is to start cell production in Europe. That is made possible as the federal German government is offering a subsidy.
At the Battery Experts Forum the first plans for the cell producing facility were revealed. Plans that clearly showed to be in a well-advanced stage. In the meantime these plans got a solid base with the founding of TerraE.