Renault and LG Chem To Join Forces for Next-Gen Li-Ion Batteries

By · July 31, 2012

LG Chem

In cooperation with Renault, LG Chem aims to launch its next-generation lithium-ion batteries in 2017.

Renault, LG Chem and CEA (France’s Alternative Energies and Atomic Energy Commission) are expected to sign a big three-way agreement in September 2012 concerning next-generation lithium-ion battery production. The top line of Renault's press release on the matter, issued on July 27, was the company restating "its ambition to be present across the entire electric vehicle value chain, from technical architecture to motors and batteries."

In addition to the research and development of next-generation traction batteries, Renault, CEA and LG Chem will work together to begin production of current generation li-ion batteries in France starting in 2015. Production of next-gen li-ion batteries is expected to get underway in 2017.

Should we expect a major breakthrough in battery energy storage, and therefore electric car driving range, in the next four or five years? I don't think so. Battery technology is more likely to move in incremental steps. Moreover, the critical factor for future adoption of electric cars is reducing the cost of the battery, by far the most expensive component in an EV.

I spoke with Prabhakar Patil, CEO of LG Chem, a few weeks ago. He told me that since 1991, when Sony introduced lithium ion batteries, the "price on a dollar per kilowatt hour basis has dropped by almost a factor of 14 or 15.” That's over a 20-year period. Patil said that LG Chem aims for a realistic cutting of costs in half between 2010’s price and what it will offer by 2015. He's confident about reaching that goal, at least at the cell level, which represents about 70 percent of the battery pack cost.

Better cheaper batteries are essential for Renault, but even with anticipated cost curves, the company faces a big challenge in reaching its over-the-top ambitions for increasing sales of electric cars. The company said that it's installing capacity to produce 150,000 units per year of its Zoe compact electric car, due out in fall 2012. The Zoe joins the Kangoo delivery van, Fluence sedan, and Twizy motorcycle-car, in the Renault line-up. But through June 2012, the total EV market in Europe achieved 11,600 sales. The level of increase is not impossible, but the depth of the consumer base for EV simply has not been tested. Perhaps France's new incentives in effect for at least the rest of the year, worth about $8,500 per vehicle, will help.

Negotiations on the battery tie-up are still underway. A final agreement is expected by the second half of 2013.

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