February-ish News Roundup
Battery fires, fiery tweets, and the nickel crisis explained
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🛠 Industry News
We need to talk about nickel
On Tuesday, the London Metal Exchange (LME) suspended nickel trading after prices surged to $101,365 per tonne, a roughly 250% increase over two days.
We’ve covered the rising prices of battery commodities before, but this sudden price increase — which is also being seen on the Shanghai Futures Exchange — has a more complicated explanation than just supply and demand.
Xiang Guangda, or “Big Shot”, is the founder of Tsingshan Holding Group, which Bloomberg says is the biggest nickel producer in the world. In a move that is apparently normal for metals producers, Xiang is hedging against the risk of falling nickel prices — a metal whose rising price otherwise benefits Xiang as a producer — by holding short positions against it on the LME. Essentially, Xiang is betting that the price of nickel will decrease, which isn’t such a terrible idea when you consider that Xiang and Tsingshan were able to lower the price of nickel just a year ago by boosting output of a key precursor in Indonesia.
On Monday, a bunch of margin calls were due on Xiang’s short positions, meaning he had to pony up hundreds of millions of dollars just to keep his short positions going. At the same time though, Western sanctions placed on Russian exports have created fears of a nickel shortage. Norilsk Nickel, a Russian nickel supplier, is responsible for 15% to 20% of global battery-grade nickel.
While exports of Norilsk’s nickel haven’t been banned (yet), many Western buyers have already halted purchases. This fear has driven nickel prices up, making Xiang’s margin calls even costlier. Xiang ultimately decided to close out a portion of his increasingly untenable short positions by buying back a bunch of nickel contracts yesterday at a staggering loss. These purchases further drove the price of nickel up, prompting other nickel short-sellers to close out their positions, and the rest snowballed from there.
So what does this all mean for battery production? In the short term, battery makers should be unaffected as they aren’t buying directly from exchanges like the LME. Instead, they have long-term contracts in place with nickel suppliers. There’s no telling where the price of nickel will settle in the coming days and weeks, though.
Long-term, nickel-free battery chemistries such as LFP and sodium-ion look like an increasingly safe bet. If you’d like to learn more about sodium-ion, check out our first entry in a deep-dive series on sodium-ion technologies.
None of Elon Musk’s tweets should shock you
We at Intercalation Station have a policy of not writing about Elon Musk, whether it’s to avoid signal boosting him, dodging potential conflicts of interest, or to prevent the possibility of a flame war in our Twitter mentions. It’s generally good protocol.
But sometimes the Player of Games tweets something so outrageous, so jaw-dropping, the backlash surrounding it becomes extremely hard to ignore.
On Friday, Elon Musk tweeted about increasing oil production amidst the Russian invasion of Ukraine, and a lot of people were shocked by it.
(As a reminder, this is the world’s richest man/memelord who tweeted about taking Tesla private for $420 a share, accused a man who rescued a Thai youth soccer team trapped in a cave of being a “pedo guy”, and just a few weeks ago compared Canadian prime minister Justin Trudeau unfavourably to Hitler.)
But this recent tweet doesn’t neatly fall into the trolling category. Instead, it speaks to the disconnect between Elon Musk’s stated goal of “accelerating the world’s transition to sustainable energy” and the reality of Tesla’s business model, which largely depends on selling luxury consumer vehicles.
So there isn’t necessarily anything at odds with increasing oil production and selling EVs. Of course, we’ll need EVs if we want to wean ourselves off fossil fuels for automotive transport, but Elon advocating for more oil production, even in the short term, isn’t as ironic as you think.
Battery fire on the high seas
The Felicity Ace, the EV-carrying cargo ship which caught fire in the middle of the Atlantic Ocean last month, has sunk. All crew members were safely evacuated weeks earlier.
The vessel was reportedly carrying 3,965 luxury vehicles from the Volkswagen Group, including Porsches, Lamborghinis, Audis, and Bentleys. According to salvage workers, Portuguese authorities, and the captain of a nearby port, many of these vehicles were electric. While the source of the fire hasn’t been confirmed, it’s been speculated that EVs caused it, or at the very least made the fire more difficult to put out.
Whatever the case, the estimated $500 million worth of cars now lie at the bottom of the ocean. It’s a shocking and costly reminder of the fire risk present in EVs.
AI is spreading
KoBold Metals, a battery metals exploration company backed by billionaire investment fund Clean Energy Ventures, has raised an additional $192.5 million in their latest funding round. The company appears to be leaning heavily into its AI branding as of late, with recent headlines hailing the company’s use of AI as potentially “fuelling the electric vehicle revolution.”
KoBold isn’t alone in chasing the AI dragon, though. Recently we’ve noticed that the websites for SES (formerly SolidEnergy Systems) and Our Next Energy both feature .ai domains, which is either an attempt to signal each company’s respective use of machine learning/AI, or both companies really like the British overseas territory of Anguilla. Tesla, of course, held an entire AI Day late last year to promote their not quite full self-driving system. This is to say nothing of the push in academia for AI battery research.
Whether or not AI actually transforms the battery industry, it definitely feels like it isn’t going away any time soon. Feel free to check out this review if you want to wrap your head around how AI is being used in battery research.
Electric trucks are having a rough month
Everyone from Ford, to Rivian, to Tesla is having trouble financing or producing their electric truck models:
Rivian has had to renege on its attempt at hiking prices for all preorders made before March 1st. The company recently increased prices for its vehicles by around 20% due to “inflationary pressure, increasing component costs, and unprecedented supply chain shortages,” according to chief growth officer Jiten Behl. The decision to apply this price increase to preorders was immediately faced with backlash, resulting in a declining stock price and even a lawsuit from a disgruntled investor.
Tesla’s Cybertruck has been delayed yet again. Originally promised for release by the end of 2021, the electric pickup truck’s production timeline has now slipped to 2023 at best. In the meantime, some people have started making their own Cybertrucks out of scrap metal.
Ford appears unable to fulfill orders for all 200,000 F-150 Lightening reservation holders for the 2022 model year. Investment strategist George Pearkes shared a screenshot on Twitter that appears to show Ford admitting they don’t have enough production capacity to fulfill his order. This isn’t a huge shock, as early reports indicated that Ford initially only planned to build 15,000 Lightnings in 2022, but it still points to production being a major hurdle even for established automakers.
Following up from last month’s roundup
Here’s a list of recent developments which build off last month’s news roundup:
Sony is building its EV! The technology company has agreed to form a joint venture with Honda to produce EVs for sale in 2025.
Donfeng’s new solid-state-powered car, which features a semi solid-state battery made by Gangfeng Lithium, has an overall energy density of just 157 Wh/kg. This is only slightly higher than a comparable car from BYD featuring a regular Li-ion battery. The folks at CnEVPost noticed this when combing through data in a catalog compiled by the Chinese Ministry of Industry and Information Technology.
Ian Morse at Green Rocks interviewed the head of Serbia’s grassroots environmental movement that successfully protested the development of a proposed Rio Tinto-owned lithium mine in the country. The interview does a great job of showing some of the steps the group took to organize and put pressure on the government to cancel the project.
🔬 Research News
A new cathode + electrolyte combination for lithium-sulfur batteries
Researchers at Drexel University published a paper on a novel phase of sulfur (γ-monoclinic or “gamma sulfur”) for use as a cathode material in lithium-sulfur batteries. The goal of the work was to eliminate the self-discharge effect caused by polysulfide shuttle in lithium-sulfur batteries utilizing carbonate-based electrolytes.
The findings in the paper were somewhat overshadowed by flashy press extolling the research as a “holy grail” for EV batteries. As with any lithium-sulfur work, it’s useful to keep in mind the baseline values required for commercialization (as outlined in this handy paper by the Manthiram group).
Forecasting battery production costs
A paper from the University of Münster suggests NMC batteries may continue to get cheaper in the future despite increasing raw material prices. Production innovations such as the elimination of NMP solvents — and eventually the widespread adoption of dry coating technology — are expected to drastically reduce production costs. The authors point out that volatile nickel prices are still a big concern and suggest nickel-free cathode chemistries as a good alternative for less range-sensitive applications.
🚀 Startup Tracker
Zenobe (UK) raises £241m for EV expansion of 430 new electric buses in UK/Ireland.
Volta Trucks (Sweden) raises $260m Series C for EV trucks launch.
Revel (New York, USA) raises $126m Series B for fast charging EV network.
Instagrid (Germany) raises $33m Series B for portable power for construction, catering, events.
Ion Storage Systems (Maryland, USA) raises $30m Series A for solid-state batteries.
Zoomo (Australia) raises $20m as part of the $80m Series B for e-bike expansion in Europe.
Chilye (China) raises $15.7m for high voltage batteries systems.
Nth Cycle (Massachusetts, USA) raises $12.5m for clean critical mineral recycling and mining.
Morrow (Norway) receives 100m NOK ($11.2m) grant to study sustainable materials.
Soelect (North Carolina, USA) raises $11m Series A for lithium metal anode technology startup.
Ace Green Recycling (India) raises $7m for battery recycling technology.
Gouach (France) raises €3.3m for repairable battery for e-bikes.
🎧 On our reading/listening list
Electric & Eclectic with Roger Atkins. Emily Hersh — CEO Luna Lithium.
The Electric Revolution. The Electric Revolution (Mark Newman’s new battery newsletter).
Sutter Hill Research. An Interview with Gene Berdichevsky and Gleb Yushin, Co-Founders of Sila Nanotechnologies.
Intercalation Station. Battery Chats: Richard Wang, CEO and Co-Founder of Cuberg.
Circular Energy Storage. There is no such thing as status quo in battery reuse and recycling.
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