Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Vincent Ledoux Pedaille - IHS Markit

235 views

Published on

Vincent Ledoux Pedaille's talk on EV's Lithium & Battery Supply Chain realities at the EV Momentum Summit Berlin, 19 June 2018

Published in: Technology
  • Be the first to comment

Vincent Ledoux Pedaille - IHS Markit

  1. 1. Confidential. © 2017 IHS MarkitTM. All Rights Reserved.Confidential. © 2017 IHS MarkitTM. All Rights Reserved. Lithium & Battery Supply Chain Are electric vehicle makers putting the cart before the horse? June 2018 Vincent Ledoux-Pedailles Associate Director Lithium & Battery Materials Research Vincent.ledouxpedailles@ihsmarkit.com
  2. 2. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 2 Governments to set strict targets to lower CO2 emissions Leading solution: greener transportation modes powered by clean electricity stored in batteries
  3. 3. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 3 Battery is the most important cost of an electric car Large investments in Li-ion battery factories will lead to further drop in battery costs
  4. 4. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 4 Lithium a crucial battery raw material but its production is limited while demand surges Lithium prices move up by more than 200% following a lack of material Li
  5. 5. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 5 Some investments are being made but more is needed; most lithium projects suffer delays Upcoming producers are securing partnerships to gain expertise and funding
  6. 6. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. Lithium supply chain, simple but fragmented Upstream Middle stream Downstream End-Users Lithium Supply Lithium-ion Battery Battery Manufacturing Chain Electric Vehicles 12 3 Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
  7. 7. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. Upstream Middle stream Downstream End-Users Consumer Electronics EV Energy Storage Lithium Producers Battery Manufacturing Chain Cathode Other Battery Raw Materials Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
  8. 8. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. GROWTH OF ELECTRIC VEHICLES
  9. 9. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. EV adoption needs to accelerate to align with governments’ targets 2016 2017 Germany: Change to taxes and incentives to achieve only zero-emission vehicle sales EU-wide by 2030 Netherlands: Ban all fossil fuel passenger car sales by 2025 Norway: Change to taxes & incentives to achieve only zero or low emission sales by 2025 India: End the sale of petrol and diesel cars by 2030 France: End the sale of cars emitting greenhouse gases by 2040 UK: End the sale of all new conventional petrol and diesel cars and vans by 2040 China: “New Energy” Vehicles to make up at least 20% of vehicle sales by 2025
  10. 10. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. Recent automakers’ announcements: the world is moving fast 2017 BMW EVs to be 15-25% of sales by 2025 BYD BYD expects all China sales to be EV by 2030 Volvo All Volvo cars to be electric or hybrid from 2019 Mercedes 10 EVs by 2022 EVs to be 15-25% of sales by 2025 Volkswagen VW announced plans to invest $84b to bring 300 new EV models to the market by 2030 GM At least 20 new EVs by 2023 Ford Spend $11 Bn on EV through 2022 Confidential. © 2018 IHS MarkitTM. All Rights Reserved. Toyota Hybrid and electric vehicles to make up half of its sales by 2030. 2018
  11. 11. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. EV vs ICE growth, a gradual take over 8% EV 35% HEV 50% ICE 7% PHEV 0 20 40 60 80 100 120 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Millions Light Vehicle Engine Production EV PHEV HEV Fuel Cell ICE © 2018 IHS Markit
  12. 12. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. LITHIUM DEMAND Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
  13. 13. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. E-Mobility Electronics Industrial applications Energy storage Industrial applications still dominate global lithium demand Lithium demand in 2017 – 230Kt © 2018 IHS Markit Source: IHS Markit 54% 23% 22% 1%
  14. 14. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 2017 - 230kt 19% 71% 7%2% 16%py 2025 - 800kt E-MobilityIndustrial Electronics Batteries and EV leading growth in global lithium demand Source: IHS Markit 54% 23% 22% 1% 46% Batteries 81% Batteries
  15. 15. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. LI-ION BATTERIES INDUSTRY
  16. 16. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. After portable electronics, E-mobility is now taking over the Lithium-battery market 2000 2GWh 2017 134GWh 2025 >800GWh Lithium-ion battery market evolution
  17. 17. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 0 60 2016 2020 GWh North America 0 60 2016 2020 GWh Europe 0 50 100 150 200 250 300 350 2016 2020 GWh China 0 60 2016 2020 GWh Japan, Korea China is powering growth in Lithium-ion battery manufacturing
  18. 18. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 0 200 400 600 800 1000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 $900/kWh US$perkWh Cheaper EVs helped by falling battery costs ~200/kWh Cost to decrease further: • Economies of scale • Manufacturing process improvement • EV simpler and faster to build than ICE Goal $100/kWh 2010 40kWh Battery Pack Cost $36,000 2020 $4,000 Confidential. © 2018 IHS MarkitTM. All Rights Reserved. Energy cell average cost © 2018 IHS Markit Source: IHS Markit
  19. 19. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. Lithium-ion batteries displaced NiMH but what will replace them in 20 years? Future cell technologies • Solid-state • LiS Lithium Sulfur • Li-air • Vanadium flow • Etc. Rise and total dominance of lithium-ion Now 2025 Demise of NiMH GWh installed © 2018 IHS MarkitSource: IHS Markit
  20. 20. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 0.0 0.5 1.0 1.5 2.0 2.5 2017 2021 2025 2030 2050+ MilliontonsLCE Once global fleet is electric, battery recycling should lower demand Rise and fall of lithium industry – caused by recycling? Risk to long term lithium demand • Example - lead-acid batteries now 99% recycled • Li-ion battery recycling process still uneconomical & years from reality • Using batteries in second life applications will arrive before efficient recycling of raw materials • Long term, recycled lithium could become secondary source of lithium Today’s lithium demand Moving world’s vehicle fleet to electric will lead to higher demand of lithium David Deak – CTO Lithium Americas Extreme view of impact of recycling on lithium demand
  21. 21. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. Cathode technology: de-risking the supply chain 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% LCO NCA LMO LFP NMC 111 NMC 433 NMC 532 NMC 622 NMC 811 Lithium Cobalt Nickel Manganese Aluminum Iron NCM – A Leading Technology EvolvingCurrent Technologies NCM 433 NCM 532 NCM 622 NCM 811NCM 111
  22. 22. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. LITHIUM SUPPLY Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
  23. 23. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. Do we have enough lithium to power all cars in the world? Global resources 250 Mt LCE 150 millions electric vehicles by 2050 would require: 60Mt LCE Proven reserves 60Mt Potential total demand >70Mt
  24. 24. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. Ch Rock Mining Brine Mining Chile Chile 33% Arg. 13% Australia 45% US China 7% <2% Confidential. © 2018 IHS MarkitTM. All Rights Reserved. Global lithium production was ~230Kt LCE in 2017 (including DSO)
  25. 25. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. LITHIUM SUPPLY WHO CONTROLS IT? Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
  26. 26. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 20172014 2021 90% 72% ~54% Lithium production – historically concentrated but now fragmenting Top four producers - market share Source: IHS Markit © 2018 IHS Markit 72%
  27. 27. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. Albemarle SQM Tianqi FMC Galaxy Mt Marion China various Orocobre 27% 20% 13% 8% 7% 7% 6% 4% Assets location Headquarters Lithium producers – current snapshot 100K LCE
  28. 28. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2017 2025 China Australia USA Chile Argentina Canada Japan Others 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Lithium Feedstock Production 2017 2025 2017 2025 Lithium Feedstock Ownership + Offtakes Agreements 2017 2025 2017 2025 Lithium Chemical Production 2017 20252017 20252017 2025 Lithium Feedstock Ownership 2017 20252017 2025 Lithium Chemical Ownership Who really controls lithium?
  29. 29. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. China Securing Existing and Potential Future Source of Lithium 2011 2012 2013 2014 2015 2016 Investment Offtake List of Chinese Companies securing lithium supply across the world • Ganfeng and Tianqi have been investing in lithium abroad for years, now others joining in • Most Chinese companies investing are existing lithium players, but more from further downstream (i.e. battery manufacturers and automakers) starting to invest 2017 2018
  30. 30. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. Tianqi SQM OptimumNano Altura Mining SQM Lithium Americas Jiangxi Special Elec. Mot. Tawana Resources Huayou Int.Mining AVZ Minerals Hanwa Co Bacanora Minerals Ganfeng Lithium Americas Ganfeng Pilbara Minerals Bangchak Petroleum Lithium Americas SQM Kidman Resources Nextview New E. Lithium X Nextview New E. Bacanora Minerals Sinomine Prospect Resources Suay Chin Int. Kodal Minerals Chemphys NRG Metals Golden Concord Millennial Lithium Toyota Tsusho Orocobre CATL North America Lithium Posco Pilabara Minerals Soft Bank Nemaska BlackRock Bacanora Minerals Some of the lithium investments since 2016: Tianqi’s investment in SQM dwarfs recent lithium deals Tianqi SQM $4.1Bn 2016 2017 2018 Size of the investment Investor’s industry Chinese Investor
  31. 31. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. LITHIUM SUPPLY DREAM & REALITY Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
  32. 32. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. Lithium – despite a number of investment plans, more is needed to match demand More Investment needed Demand By 2025 Current Demand Investment secured/in discussions Additional 570Kt $6Bn $3Bn Who has/will invest? • Existing lithium producers making high ROI and enjoying high prices (e.g. Albemarle, SQM, etc.) • Number of players realise that EV growth is real and battery raw materials need to be secured: ✓ Financial players (e.g.. Blackrock) ✓ Chemical converters (e.g. Ganfeng) ✓ Battery makers (e.g. LG) ✓ Car makers ((e.g. Great Wall, Toyota) 230Kt Average CAPEX US$15-16,000/mt
  33. 33. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. But it takes time to develop new assets and make them operational 7-10 years 4-6 years 1.5-2 years Brine Rock Conversion Plant • Most recent lithium projects have suffered delays • A number of milestone to achieve: ✓ Environmental study ✓ Permitting approvals ✓ Feasibility study ✓ Project financing ✓ Secure know-how
  34. 34. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. Operating 3% Construction 2% Feasability 5% Exploration 37% Pre-exploration 53% 0 600 1,200 2011 Capacity 2017 Forecast 2017 Actual 2025 Forecast 2025 Actual Lithium supply: A lot of ambition but reality is different ~400 lithium projects MtLCE Goal Goal Result Result? Capacity expectations vs reality Existing and potential lithium operations © 2018 IHS MarkitSource: IHS Markit
  35. 35. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 MillionsLCE Others Lithium Americas Nemaska Lithium Altura Pilabra Tawana/AML Wodgina Mt Marion Orocobre Galaxy Resources FMC Tianqi SQM Albemarle Evolution of lithium supply feedstock Growth 2017-2025 Forecast 16-17%py to <800kt Source: IHS Markit © 2018 IHS Markit
  36. 36. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. LITHIUM BALANCE & PRICES
  37. 37. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. Market balance will depend on how fast EV are adopted Supply looks sufficient but… We expect tight market : • Operational issues at lithium plants will happen • Not all plants deliver battery-grade lithium • Delays in plants start-up • Base case demand forecast very conservative By 2025, if instead of 6 million EV we have 10 million, market will be massively undersupplied 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 MillionsLCE Lithium Market Balance Production base case Production high case Demand base case Demand high EV penetration
  38. 38. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 0 100 200 300 400 500 600 700 800 900 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 Spodumene Lithium Carbonate Lithium Hydroxide Lithium prices jumped on the back of limited supply High prices here to stay • On contract prices more than doubled between 2015 & 2018 • Short term, not enough lithium resources to answer strong demand from battery sector • Market will remain tight, prices won’t go back to historical level • Some price erosion to be expected Contract Prices Lithium Chemicals & Spodumene $/t Li Chem $/t Spod More than X2 Source: IHS Markit © 2018 IHS Markit
  39. 39. Confidential. © 2018 IHS MarkitTM. All Rights Reserved.Confidential. © 2018 IHS MarkitTM. All Rights Reserved. FINAL THOUGHTS
  40. 40. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. China Japan South Korea Europe USA Argentina Chile Australia Canada Others 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2017 2025 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2017 2025 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2017 2025 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2017 2025 Who Really Controls the Lithium-ion Batteries Supply Chain? Lithium Feedstock Lithium Chemical Battery Cathode Li-ion Batteries Electric Vehicles* Production of: 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2017 2025 *Including HEV, PHEV & EV
  41. 41. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. Summary Chinese players securing lithium supply and account for 70% of recent offtake agreements and investment deals Now a reality - demand for lithium-ion batteries is set to grow +25%py to 2025 driven by move to Electric Vehicles China accounts for 7% of lithium extraction, yet controls 48% of lithium chemical production Of 400+ lithium projects, few new assets will come on stream; it takes 4-10 years to bring new lithium project on stream Li Market will remain in tight balance, potentially undersupplied; lithium prices likely to stay high
  42. 42. Confidential. © 2018 IHS MarkitTM. All Rights Reserved. Contact details Vincent Ledoux-Pedailles Associate Director / Lithium & Battery Materials Research +44 203 159 3616 tel +44 78179 49658 mob vincent.LedouxPedailles@ihsmarkit.com London

×