Tesla, Altech Advanced Materials, BYD - The battle for the battery of the future

Tesla - Waiting for production to start

Elon Musk has always been a visionary and did not talk about producing batteries without cobalt in the future for nothing in an interview with Wired. On the one hand, for ethical and environmental reasons, on the other hand, because the deposits are finite and otherwise a supply bottleneck could loom in a good 10 years. He also wants to push the price per kilowatt-hour in the battery below USD 100. According to Cairn Energy Research Advisor analysts, that could be as early as the end of this year. That is due above all to the speed with which battery production is being ramped up.

In Berlin, a production facility for e-cars is to be built and the world's largest battery production facility. Whether this will happen in the end remains to be seen. Currently, the Company could produce just 5 Model Y vehicles as a test. The Tesla boss has built up pressure with his statement that he hopes to start production this year. The mills of the German bureaucracy grind slowly, and one can only hope that these hurdles do not still move the American manufacturer to rethink. The rejection of billions in government subsidies could be a warning signal.

The figures for the third quarter clearly show that the Company is on the right track. For the second time in a row, a record profit of USD 1.6 billion was reported. Sales amounted to almost USD 14 billion. As a result, the share was able to break out of the sideways phase set between February and October to the upside. At its peak, the share stood at USD 1,243.49 and has since consolidated. At the upper end of the breakout edge, the price bounced back upwards and is currently trading at around USD 1,090.

Altech Advanced Materials - Supplier for battery manufacturers

Heidelberg-based Altech Advanced Materials is pursuing a very interesting approach to extending the life of rechargeable batteries. The problem with the first charge cycle of any battery is that 8-10% of the lithium is bound to graphite particles and is subsequently no longer available. Thus, the battery loses capacity during the very first charge. The Company has found an economical way to coat the graphite with aluminum oxide to prevent the lithium from binding. A positive side effect is the avoidance of thermal chain reactions, which occur with uncoated graphite and make the batteries so difficult to extinguish. As a result, battery life is increased by 20-30% and battery performance by 8-10%. The first tests, over 100 cycles, have been successfully completed. In addition, cooperation with SGL Carbon has been established.

Since Tesla announced at Battery Day 2020 that they want to use silicon in their batteries, Altech is already working on a coating solution for this material. Cooperation with the leading silicon supplier Ferroglobe already exists. The problem with silicon is, on the one hand, the change in volume and, on the other hand, the 40% loss of power during the first charge. The hope is that the aluminum oxide coating can also help here. The batteries would then have 20-40% more energy density. The Company is planning the first plant in Saxony, where both graphite and silicon can be coated. Patents for this technology have been filed. About 600,000t of anode graphite will be needed per year by 2030.

For the production of the high-purity aluminum oxide, a plant is already available in Malaysia, which is fed by the Company's alumina mine and can produce 4,500t per year. A 10-year purchase agreement has been concluded with Mitsubishi. In addition to lithium-ion batteries, the high-purity alumina is also required in other areas such as LEDs, semiconductors, high-performance catalysts and synthetic sapphire glass. Demand is expected to rise from 30,000t to 272,000t in 2030. The share, which had soared to EUR 3.60 in June, is currently bobbing along and quoted at just EUR 1.00. The share could quickly pick up again if news of larger partnerships comes in.

BYD - Production capacities expand

BYD grew up with the production of batteries before conquering the market for electric vehicles. The Company put an exclamation point on the e-mobility sector with their Blade batteries, produced using lithium iron phosphate (LFP). The rumors that Tesla had secured batteries from BYD have not been confirmed to date, but it shows the appreciation of the competition. It wouldn't be surprising because a wide variety of batteries are already installed in the Model 3.

In December, the Group announced plans to expand its battery production significantly. In the Chinese province of Jiangxi, a 15-gigawatt battery factory is to be built in phase 1. If everything goes as planned, another 15 gigawatts are to be added. The Company had always emphasized that it would also sell its batteries to other interested parties. BYD has also become a competitor to Tesla in the e-vehicle sector. Next year, it plans to sell more than 1 million e-vehicles.

The first steps into Europe have already been taken in Norway with the Tang SUV. The 1,000th vehicle was delivered before the end of December. The share, which has risen from USD 17.41 to USD 41.24 since May, has consolidated for the first time to USD 31.12 after two capital increases. The share is currently trading at USD 33.80 and is thus still in an intact upward trend. The uptrend would only be broken when the USD 30 mark is breached.

All three companies are trying to optimize their batteries. At the moment, BYD is ahead with its Blade batteries. But Tesla is certainly not idle either. Altech Advanced Materials has chosen a path as a supplier where both Tesla and BYD could become customers, provided the technology positively impacts their batteries.