Will batteries follow Moore’s law? China invests $A1.3 billion into solid-state battery research

According to the China Daily newspaper, the Chinese government will invest 6 billion yuan (around $A1.27 billion) to develop solid-state battery technology for electric vehicles.

According to the report, a total of six companies including CATL, BYD and Geely are eligible for the government support which will focus exclusively on all-solid-state batteries (ASSBs).

ASSBs have a higher energy density than lithium-ion batteries but are difficult to produce in high volumes which is the main barrier to their uptake.

Are batteries following Moore’s Law?

In a briefing note posted this week, Morgan Stanley poses the question: “Will Moore’s Law Apply to Batteries?” referring to the famous observation that the number of transistors in an integrated circuit doubles roughly every two years.

The observation, originally made by Gordon Moore in 1965, was that the doubling happens every year. In 1975 Moore revised his prediction down to a doubling every two years which has remarkably remained true ever since, almost 60 years since the original observation was made.

Morgan Stanley thinks battery technology could be on a similar compounding development path, albeit with different metrics.

“Significant R&D efforts have increasingly improved battery performance in EVs over the past decade. Innovations have been made from chemistry to form factors, material modifications to architectures, and cell levels to pack assemblies,” says Morgan Stanley.

“Every two years, we have seen battery energy density increase ~20% at pack level, associated with faster charging, longer cycle life, better low temperature reliability and safety.”

Morgan Stanley say that if solid-state development obeys this kind of Moore’s Law, we would expect its commercialisation to happen between 2028-2030.

The analysts say that China’s investment in solid-state R&D signifies the country’s determination to hold onto its leading position in the global battery industry.

“While solid-state development is taking place globally, we believe China’s advantages (advanced EV/ battery manufacturing capabilities and comprehensive supply chain) will amplify the efficiency of this R&D input.”

Recent protection measures confirm US is taking the slow path to decarbonise transport

In its 100 page Re-wiring the Battery Supply Chain report published in May 2023 (which The Driven covered in depth at the time), Morgan Stanley posed three possible scenarios the world may follow regarding decarbonising road transport. In the report Morgan Stanley says each case will have dramatically different decarbonisation timeframes and global economic outcomes.

1. The China Case: Rapid EV adoption continues despite policies that incentivise onshoring, increasing the West’s dependence on a China-dominated battery supply chain.
2. The De-Risking Case: A geographically diversified supply chain supports high, rapid, EV penetration. This will take significant policy action, capital deployment, and innovation.
3. The Slow EV Case: Onshoring means slower EV adoption, while ICE vehicles maintain share for longer.

Politicians say EVs “too expensive” then vote for high EV import tariffs

With the announcement of a 100% trade tariff on Chinese made electric vehicles, its becoming clear that the US government is choosing Morgan Stanley’s slow case. In addition to US protectionist moves against the rise of China’s electric vehicle industry, next month the EU Commission is set to announce its likely decision also impose tariffs on Chinese EVs.

The CEO of the US’s only major EV manufacturer Elon Musk has publicly slammed the EV tariffs which suggests the push has likely come from the US fossil car industry.

“Neither Tesla nor I asked for these tariffs”, said Musk commenting on the protection measures. “In fact, I was surprised when they were announced. Things that inhibit freedom of exchange or distort the market are not good.”

The Australian government forecasts that transport will be the highest emitting sector of the economy by 2030. The same will likely be true for other major economies around the world including the US and Europe.

There are currently around 1.5 billion petrol and diesel cars in operation around the world, pumping out around six billion tonnes of emissions every year according to the IEA.

Despite road transport being on track to become the highest emitting sector and continued dire warnings from climate scientists calling for the urgent need to accelerate global decarbonisation efforts, the US and Europe’s move to deny their domestic markets from having access to affordable EVs seems utterly reckless.

Especially after years of complaints from politicians and media commentators that “electric vehicles are too expensive”. When affordable models finally become available these same politicians move quickly to restrict the public’s access to them.

With the US and Europe’s legacy car makers unwilling and/or unable to produce electric vehicles at scale, the industry’s strategy amounts to putting up walls, closing their eyes and hoping that the problem goes away.