The US Office of Industries working paper “Supply Chain for EV Batteries”, by Horowitz, Coffin, and Taylor gives an excellent account of what the team at Anodox has known for several years: demand for EV batteries is outstripping supply. It is this key economic factor that has led us to the decision to pivot Anodox from being a development consultancy to a supplier of systems and holistic solutions for both mobile and stationary applications.
Originally formed in 2016, our team has strong automotive industry pedigrees. Our consulting assignments have included high-profile projects with internationally recognised brands. Now the company is focussed on pursuing large product supply contracts, targeting the rapidly expanding Electric Vehicle (EV) and stationary Energy Storage Systems (ESS) markets. Sales in these sectors are estimated to be worth over 50 bn per annum with a 40% CAGR.
The supply chain for EV batteries is a relatively new area of global competition in the automotive industry. However, Anodox’s team have been active in this market since before 2010 through work with Volvo, Delphi, Lotus, Pininfarina, NEVS, etc.
Starting in 2017, EV-specific trade data became available internationally. The industry is now able to carefully analyse the import and export of EVs, in addition to sales. It is obvious that the increase in EV sales has led to an increase in demand for batteries. Afterall, the battery is the most important and expensive component in an electric drive train.
EVs are increasing in share of passenger vehicle sales. Although a small market, Norway has a per capita market penetration for EVs which is far ahead of the rest of the world. By volume, the top three markets for EV sales are China, the United States and the EU.
Anodox knows from first hand experience that the EV battery supply chain is particularly competitive. It is also in flux at the module, pack, cell and material levels. Thus, this market is full of opportunity because:
- EVs currently only represent 3% of the global market share
- Projected future demand outstrips current supply. Especially in the area of high performance batteries. Powerful SUV, trucks and many other areas are not accommodated by today's supply chain.
- Technologies as cell-to-pack, immersion cooling, inductive charging, 3D printing are still under development. Anodox, being innovators here, has a great opportunity in the market.
The growing EV market has allowed battery cell manufacturers to achieve greater economies of scale. In response to this rising demand, the number of global EV battery manufacturers is increasing with more cell, module and pack facilities built.
Tesla clearly has boosted the profile of the electric vehicle (EV). However, Tesla’s repeated failure to hit production targets has been widely reported. Elon Musk has made it clear that the batteries were the bottleneck and continues to do so in 2021.
Anodox understands that there is more to the battery market than passenger cars and that the high profile, large scale giga-factories will simply not be nimble enough to satisfy smaller or niche markets in both mobile and stationary applications. Especially when time to market is key.
The battery supply chain has matured significantly in recent years, particularly in regards to the availability of plant and machinery to produce cells, modules and packs. However, demand still far outstrips supply; it is entirely possible for a small, highly skilled team to help fill the gaps in lucrative niche markets.
Today Anodox’s focus is on immersion cooling, high performance systems, cell-to-car and battery management systems. The firm will choose cell suppliers wisely by keeping a close eye on how players in that market segment solve the challenges around sustainability, performance, capacity and cost.
Given the dependency on rare earth minerals and environmentally-expensive materials, protecting the value of batteries across multiple life cycles is critical. Anodox battery packs are cell agnostic and can use new cell technologies once they are ready for the market. Until then there is an economic imperative to extend the life of the battery as much as possible. Here Anodox’s innovative cooling techniques and highly serviceable designs will make our batteries a great fit for 2nd life applications.
We are extremely excited to be part of the global journey towards a sustainable future.