‘Batteries will open up new markets but there are bottlenecks’

Deep Dive

There is value in putting batteries in aircraft and it isn’t all sustainability. 

Electrification will open up new markets in short-haul that have never been viable before, according to Richard Wang, battery expert and former Cuberg CEO and founder.

His excitement about batteries does not lie in their decarbonisation potential. “I mean, there are some opportunities certainly, better efficiencies with cargo transport and regional applications. But I think the excitement is actually a new addressable market that previously could not be developed efficiently.”

Looking at distances flown in emissions, the majority is driven by long-haul flights with single and twin aisles. It is only when energy densities of 700-plus watt hours per kilogramme level are achieved that anyone can begin talking about battery-electric aircraft with 100 passengers or more flying hundreds of miles, says Wang.

“The battery industry has improved at a rate of roughly 3-5% per year and there is no reason to believe we will suddenly see some kind of enormous uptick in that rate of improvement. So given that, I think it is not going to be until 2040 and beyond before you start seeing batteries that are not only 400 watt hours per kilogramme, but maybe 700-800.

“That is really a 20-year-plus proposition, we’re at the very early stages, even academically. No chemistries have been proven out that can sustain those kinds of energy densities yet.”

In a wider context, production of vehicle batteries has exploded in recent years. Americans bought 1.2m electric vehicles (EV) last year. In the UK, the number of EVs registered jumped by over 100,000 from the year before to 314,000. The vast majority of these batteries are made using lithium ion and demand is often outstripping supply. A report from BMI forecasts a 20.4% year-on-year annual growth on average for China’s lithium demand for EVs alone from 2023-2032.

But Wang thinks aviation should not be adversely impacted by demand from other industries. The chemistry is often different, the price point is higher and so aircraft batteries should not compete with those made for other applications.

“Also, from a volume perspective it is going to be quite small, so I don’t believe that it will really materially detract from availability of volumes for other industries. The vision I have is that aviation, on the other hand, is a fantastic ecosystem to drive innovation for high performance technologies, including advanced batteries, because there’s a much higher value proposition for lighter weight and higher performance compared to EVs.”

Taking carbon fibre, for example, development started in aviation and motorsports like Formula One. “As those technologies mature and get scaled up that they tickle down towards mainstream automotive. So I think aviation has a very important role to play by fostering innovation and being that beachhead market for some of these more expensive, newer technologies.”

The interconnected nature of battery making — whereby the process of turning raw material into finished product means crossing multiple borders often more than once — means there is activity to establish a domestic industry at government level. Take the US Inflation Reduction Act (IRA) approved by Congress in summer 2022, key pieces of that legislation are aimed at bringing battery production in-house. It didn’t come as a surprise, China has some hand in more than two thirds of global battery production.

Wang points to solar as a cautionary tale for western governments.

“Ultimately, the innovations [in solar] coming out of the West were wiped out by cost competition from China. There is the ability to operate with a huge amount of efficiency at scale in China. But batteries are much more geopolitically sensitive than solar, and I think people are trying to avoid a repeat. The reason batteries are more sensitive is due to the location of most of the raw materials. In that way batteries start to look more like oil.”

Batteries, like oil, are also closely tied to the automotive industry which is a major source of employment globally. “The prospects of really a huge portion of that value chain getting outsourced outside the US and Europe is, I think, very concerning politically for Western governments. That’s why you see efforts to try to localise manufacturing and supply chains and set up new battery companies. The IRA is a good example.”

Wang says dependency particularly on Chinese suppliers is a risky geopolitical strategy. He expects to see movement on policy to mitigate this from western leadership. “If you think again about EVs, if you had true open competition Chinese companies would wipe out a lot of the legacy automakers.”

Fossil fuels are a finite resource; that fact is partly why usage must be reduced. The raw material for batteries also comes from the planet — predominantly via mining rock ores or evaporating brine. Wang has spoken previously about his vision of seeing innovations in battery technology usher in a transition that will eventually result in the abandoning of fossil fuels entirely. Is there a danger of swapping one polluter for another?

“If that’s the kind of the scale we’re looking to displace with batteries, I think there are all kinds of bottlenecks to get there. I think the good news is there’s a lot of innovations in battery chemistries to use raw materials that are less sensitive from a sourcing perspective and more abundant. Whether that is sodium-based chemistries replacing lithium or iron replacing nickel. But how fast you can scale up these new chemistries comes down to mining capacity. We will need a lot more mines.”

The problem according to Wang is that sustainable mining techniques lag behind the pace of electrification. He says usually the countries that have the best processes and technology are the strictest in terms of permitting with new facilities often taking upwards of 10 years to open.

Beyond raw materials, manufacturing remains a daunting challenge. “There’s an incredible level of industrial manufacturing knowhow and expertise that is needed to build out new battery factories and make batteries economically with quality. We see a lot of stress as the industry tries to expand but doesn’t have enough engineering capabilities to support all these new factories. And we’re still at the beginning stages of expansion.

“We’re still talking about a five to 10x increase in battery manufacturing capacity by the end of the decade. So it’s an incredible amount that needs to be built in a short time frame.”

Batteries will open new markets in short haul because they will make services economically viable for an operator. Take a hypothetical eVTOL aircraft with a $4m list price, the battery pack is worth about 5% or $200,000. If this aircraft flies regular services between 50 and 70 miles and uses up most of its battery capacity during the flight (which is more damaging per cycle), it will have a total life of about 1,000 cycles. At $200,000 a battery and 1,000 hours that is $200 per hour on the battery (this can go higher depending on the flight duration and mission type). Far lower than a helicopter, but also not as cheap one might hope.

“Make a battery that is more lightweight and then it is possible to do two or three flights without charging. This opens up utilisation significantly and reduces degradation from fast charging. Advanced batteries bring much higher profitability for operators on the right routes.”

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