Lithium’s Replacement Is Here

Remember a few years ago when Samsung phones were exploding or melting in people’s pockets?

That issue was eventually traced to faultily-installed lithium-ion batteries. The same kind used in electric vehicles (EVs).

In recent years, a growing number of EV battery explosions and fires have made headlines around the world.

More than 40 Tesla (NASDAQ: TSLA) fires have been reported since 2011, including one incident in which a Tesla was filmed spontaneously bursting into flames while sitting in traffic on a hot day in Los Angeles.

tesla car on fire

These safety issues are just some of the problems with lithium-ion batteries.

Fortunately, in recent years an alternative battery configuration has emerged as a possible alternative to lithium-ion batteries in EVs: solid-state batteries.

These unusual devices have the potential to be safer and more powerful than conventional batteries. And the cost of producing them is falling rapidly over time.

But to truly understand the investment potential of solid-state battery technology, we have to take a brief chemistry lesson and review how batteries actually work (and how they sometimes don’t work)... 

 

How Conventional Batteries Work

Fundamentally, a battery consists of two terminals — an anode and a cathode — that are made of different metals. These terminals are brought into contact with an electrolyte, or a chemical solution that undergoes different types of reactions with the anode and cathode metals.

Specifically, the electrolyte experiences reduction-oxidation (“redox”) reactions with the anode and cathode in which ions flow from the anode to the cathode through the electrolyte. This causes a buildup of negatively-charged electrons in the anode and a buildup of positively-charged ions in the cathode.

Once the anode and cathode are connected by a wire, electrons will flow through that wire from the anode to the cathode in order to equalize the imbalance of electrons caused by the redox reactions, creating an electrical current.

how conventional batteries work

Most battery types are made in such a way that depleted (i.e. electron-balanced) anodes and cathodes can be “re-ionized” if an external current is pumped back into them, thus allowing for rechargeability.

Many contemporary problems with battery engineering — including the ones responsible for phone and EV explosions — boil down to the makeup of the electrolyte. Most batteries, including the lithium-ion batteries used in EVs, use liquid or gel electrodes that are prone to leaking.

And many of these liquid electrodes are corrosive (as in the sulfuric acid used in conventional car batteries), or highly-flammable and potentially explosive (as in the lithium salt gels used in lithium-ion EV batteries)... making any leaks or overheating episodes extremely dangerous to anyone nearby.

To mitigate these risks, engineers have to encase lithium-ion and similar batteries in a thoroughly-leak-proof housing, which increases battery weight and size — but reduces energy density.

 

What Makes Solid-State Batteries Different

Solid-state batteries, on the other hand, use solid electrolytes. These are typically ceramic or polymer plates.

Chemically, these solid electrolyte plates function much the same way as liquid electrolytes. They allow ions to pass through them from the cathode to the anode, thus oxidizing the cathode and giving it a positive charge, and reducing the anode to a negative charge.

solid electrolyte plates

An obvious engineering advantage of this arrangement is the lack of leakage risk. It’s difficult to “spill” a ceramic or polymer plate.

But even if a solid-state electrolyte is accidentally exposed to air or human flesh, it tends to be far less dangerous. Solid-state electrolytes are made out of far less-chemically-volatile materials than their liquid lithium-ion counterparts.

This relative lack of safety issues allows engineers to build more compact solid-state battery designs with lighter, sleeker casings… so car manufacturers can use them to fit more voltage into an EV chassis than would be possible with lithium-ion batteries.

 

Why Solid-State Batteries Weren’t Viable In The Past — But Are The Future

Given that solid-state batteries are both safer and more powerful than liquid-electrode batteries, you might be wondering why they aren’t the industry standard for EVs already.

The answer, in a word, is cost.

Solid-state batteries aren’t new. They’re used in a variety of small devices including pacemakers and RFID tags. But the supply chains used to manufacture EV-sized solid-state batteries are relatively new and expensive.

However, costs are falling over time, just as they did for things like lithium batteries and solar panels. Analysts at technology research firm FutureBridge believe that solid-state batteries will be just as cheap as lithium-ion batteries by 2025.

With all this in mind, it’s no wonder the solid-state battery market is expected to grow at a compound annual growth rate (CAGR) of 34.2% through 2027, reaching a value of $483 million by 2027.

While solid state batteries are likely the future of electric vehicles, they won’t replace lithium overnight.

And at the end of the day, both will still need to be plugged in and charged.

That’s why grid improvements remain one of the best investments to take advantage of the ongoing electrification of everything.

Call it like you see it, 

Nick Hodge
Editor, Daily Profit Cycle

Nick Hodge is the co-owner and publisher of Daily Profit Cycle and Resource Stock Digest. He's also the founder of Hodge Family Office, the umbrella organization for his three premium services: Foundational ProfitsFamily Office Advantage, and Hodge Family Office . He specializes in private placements and speculations in early stage ventures, and has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world.
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