The Rechargeable Battery Market and Main Trends 2018-2030

Christophe PILLOT th September 18 , 2019 Director, AVICENNE ENERGY

Lyon, France Presentation Outline • The rechargeable battery market in 2018 • The Li-ion battery value chain • Li-ion battery material market Christophe PILLOT • Focus on xEV batteries + 33 1 44 55 19 90 [email protected] • Forecasts & conclusions AGENDA

The market in 2018 by technology, applications & battery suppliers The Rechargeable Battery Market and Main Trends 2018 – 2030 Li-ion components market & value chain xEV market in 2018 xEV forecasts up to 2030 Lyon, France Rechargeable battery market forecasts up to 2030 September 18th, 2019

Christophe PILLOT + 33 1 44 55 19 90 [email protected] 2 OEM INVESTMENT IN VEHICLE ELECTRIFICATION Carmakers to invest more than $90 Billion in EV Ford will invest $11 billion by 2022 to launch 40 new electric cars and hybrids worldwide The Rechargeable Battery Volkswagen plan to spend $40 Billion by 2030 to build electrified versions of its 300-plus Market and Main Trends 2018 – 2030 global models Daimler will spend at least $11,7 billion to introduce 10 pure electric 40 hybrid models Nissan pledged to launch 8 new electric vehicles and hit annual sales of 1 million electrified vehicles by 2022 Toyota will launch 10 Evs by the early 2020s and sell 5,5 million electrified vehicles, including Lyon, France hybrids and hydrogen fuel cell vehicles, by 2030

September 18th, 2019 BMW will offer 25 electrified (12 fully electric) vehicles by 2025 GM pledging to sell 20 all-electric vehicles by 2023 Honda says two-thirds of total car sales to be electrified models by 2030 Chinese automakers, all have publicized aggressive investment plans

Christophe PILLOT + 33 1 44 55 19 90 [email protected] Source: Ted Miller, Ford, AABC Japan 2018 (From Reuters Jan 2018 Publication) – Avicenne Energy 3 CARMAKERS TO INVEST MORE THAN $300 BILLION IN EV

Mazda 0,3 FAW 0,3 Chery 0,4 Honda 0,5 Volvo 0,7 PSA 0,8 Tata (India) 0,9 Jaguar Land Rover 2,3 The Rechargeable Battery BAIC 2,5 Market and Main Trends BYD 3,9 2018 – 2030 Dongfeng 5 SAIC 5 Geely 5 Mahindra (India): 6 JAC 6 GAC 7 BMW 7 Great Wall (China) 8 Lyon, France GM 8 Tesla 10 Renault 10 September 18th, 2019 Nissan 10 Fiat Chrysler 10 Ford 11 Toyota 14 Changan 15 Hyundai 20 Daimler 42 Volkswagen 91 Christophe PILLOT + 33 1 44 55 19 90 0 50 100 [email protected] Source: Reuters January 2019, Avicenne Energy 4 WORLDWIDE BATTERY MARKET OVERVIEW Battery market in value (2016-2018, global, $bn, all market segments, all technologies) Expected CAGR 18-30 (%) The Rechargeable Battery 95 +8% Market and Main Trends 88 2018 – 2030 82 Primary 14 ~ +2-3 % 13 (1) 12,5

Rechargeable +7-9% Lyon, France 81 69 75 September 18th, 2019

2016 2017 2018 Christophe PILLOT (1) Non rechargeable – Source: AT Kearney, Duracell, Avicenne – Based on selling price from manufacturer to retailer + 33 1 44 55 19 90 [email protected] Source: AT Kearney, Duracell, AVICENNE ENERGY 2019 5 THE BATTERY MARKET IS REALLY DYNAMIC

Cellular Phones sold per Year (Million) Portable PC sold per Year (Million) 2000 400

Li-ion Year year 300 1500 / The Rechargeable Battery / NiMH 155 M

Market and Main Trends 1000 200 Tablets Units

2018 – 2030 Units 500 100 164 M Portable PCs 0 Million 0 Million 2000 2018 2000 2018 Tons of cathode active materials Li-ion 18650 cell price ($/Wh) 400000 3 Lyon, France > 340 000 2,6

th 300000 September 18 , 2019 2

200000 Tons $/Wh 1 100000 7 000 < 0,15 Christophe PILLOT 0 0 + 33 1 44 55 19 90 2000 2018 2000 2018 [email protected] Source: AVICENNE ENERGY, 2019 6 THE WORLDWIDE BATTERY MARKET 1990-2018 Lithium Ion Battery: Highest growth & major part of the investments Lead acid batteries: By far the most important market (>70% market share)

The Rechargeable Battery 400 000 700 000 Market and Main Trends 2018 – 2030 350 000 600 000

300 000 Others (Flow battery, 500 000 NAS, …) 250 000 Li-ion 400 000

200 000 NiMH MWh

Lyon, France MWh 300 000 150 000 NiCD th September 18 , 2019 200 000 100 000 Lead Acid

50 000 100 000

0 0 Christophe PILLOT + 33 1 44 55 19 90 [email protected] Source: AVICENNE ENERGY, 2019 7 LI-ION IN 2018 - MAIN APPLICATIONS

>160 000 MWh - 31 B$ (1) CAGR 2008/2018 +24 % per year in Volume 2000: < 2GWh Li-ion Battery sales, The Rechargeable Battery MWh, Worldwide, 2000-2017 Portable Phones Market and Main Trends 180 000 Electronics 17% 17% 2018 – 2030 160 000 140 000 Others 120 000 Portable PC 66% 100 000 Industrial, ESS

M Wh M 80 000 Lyon, France Auto, E-bus 2018: 160 GWh 60 000 China September 18th, 2019 Auto, E-bus 40 000 Auto, e-bus Auto, E-bus China Excl. China 20 000 Excl. China 44% - Electronic 20%

devices

2002 2016 2001 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2017 2018 2000 Electronic Industrial, ESS Christophe PILLOT devices (1) Cell level 5% + 33 1 44 55 19 90 20% Others [email protected] Others: medical devices, power tools, gardening tools, e-bikes… 11% Source: AVICENNE Energy 2019 8 Growth 2017-2018: +9% HEV WORLDWIDE IN 2018 From 2,3 M to 2,5 M HEV 2,5 M HEV HEV sold per year, M units, worldwide, Penetration of hybrids in the global sales, 2000 - 2018 2000-2018 3,0 30% JAPON TOYOTA OTHERS The Rechargeable Battery 20% Market and Main Trends Million 2,5 2018 – 2030 10% USA EUROPE

2,0 HEV of Penetration 0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1,5 Gazoline price impact on HEV market in the US Lyon, France 1,0 600000 4 th September 18 , 2019 3 400000 0,5 year 2 / $ Gallon 200000 1 0,0

0 0 Gasoline

HEV sales HEVsales per

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Christophe PILLOT 2000

2016 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2017 + 33 1 44 55 19 90 [email protected] Source: TOYOTA, HONDA, NISSAN, FORD, GM, HYUNDAI, MERCEDES, GM, BMW, VW, PORSCHE… Compilation AVICENNE ENERGY Micro hybrid not included 9 PHEV SOLD WORLDWIDE > 535 000 IN 2018

World excl. China growth +18% China is leading the P-HEV Chinese Growth + 100% market thanks to high incentives Others US 22% 600000 11% The Rechargeable Battery OTHERS Market and Main Trends CHINA CHINA 2018 – 2030 500000 +37% EUROPE 35% US EUROPE 400000 32% ) 200 000 China (+100%) units 180 000 300000 Europe 160 000

(+25%) HEV HEV (

Lyon, France -

P 140 000 ) 200000 120 000 USA September 18th, 2019 (+40%) units 100 000

100000 HEV ( 80 000 - P 60 000 40 000 0 Others 20 000 Japan

Christophe PILLOT (-30%)

2011 2012 2013 2014 2015 2016 2017 2018 2010 - + 33 1 44 55 19 90 2012 2013 2014 2015 2016 2017 2018 [email protected] Source: AVICENNE ENERGY Analysis, 2019 10 EV SOLD WORLDWIDE> 1,4 M IN 2018 World excl. China growth > 65% China is leading the EV market Chinese Growth > 65% thanks to high incentives OTHERS US 4% 17% 1600000 OTHERS

The Rechargeable Battery 1400000 CHINA Market and Main Trends EUROPE EUROPE 2018 – 2030 1200000 16% US > 65% CHINA

1000000 63% ) 1 000 000

units 800000

900 000 China (+70%) EV EV ( 600000 800 000 Lyon, France 700 000

400000 ) September 18th, 2019 600 000

units 500 000 200000

EV EV ( 400 000 0 300 000 USA (+130%)

200 000 Europe (+30%)

2011 2012 2013 2014 2015 2016 2017 2018 2010 100 000 Christophe PILLOT Japan (+50%) - + 33 1 44 55 19 90 2012 2013 2014 2015 2016 2017 2018 [email protected] Source: AVICENNE ENERGY Analysis, 2019 11 BATTERY MARKET FORECASTS 2018-2030 Applications covered Parameters analysis

The Rechargeable Battery Portable PCs, net-book, Ultra-book Cellular Phones, Smart-phones Main segment trends Market and Main Trends Tablets 2018 – 2030 Power Bank Power need trends (volume, Camcorders Cordless Tools, Gardening tools weight, capacity, running time) Digital Camera Games, MP3 Cordless Phones Penetration rate for each Shavers, Toothbrush, RC Cars, Toys Chemistry, each form factor, Lyon, France Drones Hoverboard 2018 -2030 Forecasts September 18th, 2019 E-bikes Power tools Security lighting OEM strategies and positions Vehicles: HEV, P-HEV, EV, E-buses Industrial motive (forklift) Main drivers & limiters Industrial stationary (UPS, Telecom) Medical Energy Storage (Small / large) Christophe PILLOT + 33 1 44 55 19 90 [email protected] 12 2030 LIB FORECASTS FOR PORTABLE ELECTRONIC DEVICES 2000-2030 LIB market, MWh, by 2000-2025 LIB market, M cells, application (3C) by form factor (3C) The Rechargeable Battery 6000 Market and Main Trends CAGR 17-30: + 4% 2018 – 2030 60000 5000 50000 Other Portable Electronics 4000 40000 Tablets 3000 30000 Lyon, France Portable PCs cells/year M 2000 MWh 20000 September 18th, 2019 1000 10000 Cellular Phones

0 0

2000 2005 2010 2015 2020 2025

2005 2010 2015 2018 2020 2025 2030 2000 Li-Pouch Li-ion Pr Christophe PILLOT Li-ion Cyl Takeshita - March 2013 (1) + 33 1 44 55 19 90 Source: AVICENNE ENERGY Analyses [email protected] (1) Source: Takeshita, Battery Japan 2013 BJ-3 conference Slide p 4 13 TIME TO MARKET FOR NEW MATERIALS IN LIB INDUSTRY

The Rechargeable Battery Market and Main Trends 2018 – 2030 The research and development in this industry is very long and time consuming. Time to market to commercialize a new material is long. Remember that the first Li-ion battery was launched by Sony in 1991 with LCO cathode, Lyon, France graphite, LiPF6 electrolyte & polyolefin membrane. It was 27 years ago.

September 18th, 2019 LTO was invented by Matsushita in 1993 (25 years ago) Lithium iron phosphate was invented in 1995 (23 years ago). So, it takes between 10 & 20 years to commercialize a new material in the battery industry.

Christophe PILLOT + 33 1 44 55 19 90 [email protected] 14 SAFETY ISSUES Li-ion and LMP are not thermally stable what raises serious safety concerns

In the 80’s, lithium metal batteries were put into the markets (Moli Energy). Their further development has for a long time been slow because of a low cycle efficiency and safety issues: High chemical reactivity and a low melting point enable strong chemical reactions, even explosions. In the The Rechargeable Battery charging-discharging process, lithium metal can form dendrite and accumulate on electrodes. The Market and Main Trends growing lithium dendrite could puncture the separator and result in an internal short circuit. Background Except BOLLORE, all the companies developing Li metal batteries cancelled their projects 2018 – 2030 Li-ion batteries for mobile devices mostly used a Lithium Cobalt Oxide Cathode and liquid electrolyte. In case of overcharging or short-circuit (contact between anode & cathode) a chain reaction starts -> heating & gasing -> fire (“Thermal runaway”)

Mobile In 2006, SONY had to recall millions of portable PCs for total costs of 400 million USD, more than there profit-to-date

With new cathode chemistry, most of the automotive today on the markets experienced safety Lyon, France concerns: (1) BYD Taxi in China with a lithium iron phosphate cathode (2) GM Volt in the US with a LG Chemical battery using LMO cathodes (as a result of a crashed tested Chevrolet Volt caught three th weeks after the testing !) (3) PRIUS P-HEV in the US (converted from HEV Prius by a local engineering

September 18 , 2019 company without any authorisation by Toyota) Automotive

Boing 787: The fire that burned near the tail of a parked Boeing 787 in Boston was caused by an overheating Lithium ion battery pack. The battery fire could have been hot enough to melt the carbon-fiber reinforced plastic that makes up the plane’s shell.

CONSEQUENCES: All the 787 worldwide are grounded. Considerable losses for Boing. Aircraft Christophe PILLOT + 33 1 44 55 19 90 Source: AVICENNE ENERGY [email protected] 15 LI-ION BATTERY COST 2018-2025 LIB cell average cost (40 Ah pouch) LI-ION BATTERY PACK COST FOR (EV design ; NMC622 cathode) EV 450 250 The Rechargeable Battery Pack Cost Market and Main Trends 400 Margin 2018 – 2030 350 Warranty 200 Cell Overheads Manufacturing 300 Sales & Adm Other Materials 150 250 R&D Energy, utilities 200 Direct labor Separator

100 $ / kWh / $ Lyon, France 150 Depreciation kWh / $ Scraps Electrolyte September 18th, 2019 100 Others 50 Separator 50 Anode Electrolyte 0 Anode (1) 0

2010 2018 2020 2025 Cathode (1) Cathode Cell

-50 Cell

Pack

Cell

Pack Pack Christophe PILLOT 2018 2020 2025 + 33 1 44 55 19 90 (1) Active materials only [email protected] Source: AVICENNE ENERGY 2019 * For Production > 100 000 packs/year 16 HEV, P-HEV, EV 2030 FORECASTS Realistic Scenario

HEV manufactured PHEV manufactured EV manufactured

35 100% 8 7,5 16 70

The Rechargeable Battery 13,8World Excl. 90% 7 China Market and Main Trends 30 14 60 2018 – 2030 80% 6 12 25 70% 50

World Excl. 5 10 7,4 China 60% 20 6,0 World Excl. 40 China 50% 4

ion HEV 8

- 3,4 6,5 Million Million cars

15 Million cars

Million Million cars 29,0 30 kWh/ Pack Lyon, France 40% %Li 3 6 th 30% 2,9 September 18 , 2019 10 2,5 20 2 4 14,0 20% 1,2 2,6 6,4 5 1 0,7 1,4 0,9 10 10% 0,8 1,5 2 3,6 5,2 0,5 0,9 China 0,5 China 3,4 1,7 1,1 2,2 0,3 0,2 0,4 1 0 0% 0 0,08 0 0

Christophe PILLOT

2010 2015 2018 2020 2025 2030

2010 2015 2018 2020 2025 2030

2015 2018 2020 2025 2030 + 33 1 44 55 19 90 2010 [email protected] HEV: 1kWh battery / car PHEV: 12 kWh battery / car 17 LONG TERM EV FORECAST EV sold, in million units, worldwide, 2010 – 2030

35

30 TOTAL 2017 High The Rechargeable Battery Market and Main Trends 25 BNEF 2017 2018 – 2030 EIA (1) 20

15 TOTAL 2017 Low

AVICENNE 2018 (Realist) 10 AVICENNE 2018 (Base) Lyon, France 5 Navigant (2017) AAB HIGH 2017 September 18th, 2019 AAB LOW 2017

0 Number of EV sold worldwide (Million) worldwide sold EV of Number

AAB, AABC US, June 2017 BNEF, BATTERIES 2017, October 2017 Christophe PILLOT AVICENNE Analysis 2018 + 33 1 44 55 19 90 [email protected] (1) EIA – Avicenne estimation based on “Stock” numbers 18 TOTAL BATTERY DEMAND FOR XEV 2030 FORECASTS Li-ion for EV, HEV & P-HEV Battery Li-ion for EV, HEV & P-HEV Battery needs (MWh) needs (M$) CAGR 2015-2030: +26% CAGR 2015-2030: +18% The Rechargeable Battery Market and Main Trends 1200000 140 000 2018 – 2030 1000000 120 000

100 000 800000 80 000 600000

Lyon, France 60 000 M$

th MWh 400000 September 18 , 2019 40 000

200000 20 000

0 - 2010 2015 2020 2025 2030 2010 2015 2020 2025 2030 Christophe PILLOT 12-48 volts SLI HEV PHEV + 33 1 44 55 19 90 12-48 volts SLI HEV PHEV EV EV & PHEV China E-bus EV EV & PHEV China E-bus China [email protected] E-bus excl. China E-Bus excl. China 19 LI-ION BATTERY MARKET FORECASTS From 160 GWh in 2018 to >1,2 TWh CAGR 2015/2030 +20 % per year in Volume Li-ion Battery sales, MWh, Worldwide, 2000-2030 1 200 000 2018: >160 GWh The Rechargeable Battery Auto, E-bus Market and Main Trends Auto, E-bus China 1 000 000 Excl. China 2018 – 2030 CAGR 15/30 44% (Optimistic) 20% Electronic 800 000 Others 14% Industrial, devices ESS 20% Others 11% 5% M Wh M 600 000 Industrial, ESS 18% Lyon, France 400 000 2030: 1200 GWh Auto, E-bus China 24% September 18th, 2019 200 000 Auto, e-bus Excl. Auto, E-bus Excl. Auto, E-bus China 29% China 38% China 47% - Electronic devices 4%

Electronic

2005 2010 2015 2020 2025 2030 2000 Industrial, ESS Christophe PILLOT devicesOthers 5% 7% 3% + 33 1 44 55 19 90 Others: medical devices, power tools, gardening tools, e-bikes… [email protected] Source: AVICENNE Energy 2019 20 LITHIUM ION CELL PRODUCTION European market demand 150 GWh in 2025

EUROPE $ 5 Bn $ 282 M $ 562 M $ 360 M $ 5 Bn 32 GWh 790 M$ 25 GWh 14 GWh 3-5 GWh 2-3 GWh 34 GWh 7,5 GWh Solid State ? Korea – 15% $ 1 Bn 2023 2022 2018 2018 2028? 2020 2024-2025 SAMSUNG LG $ 5 Bn SKI 35 GWh Kokam 2019 EU -<1% SAFT The Rechargeable Battery FIAMM BOLLORE Market and Main Trends USA – 2% LG China – 60% Japan – 17% 2018 – 2030 Johnson-Controls CATL Panasonic Enersys BYD NEC SAFT Hefei Guoxuan Maxell … LISHEN PEVE TESLA FARASIS YUASA BAK EVE National CALB Cenat Others* – 5% Lyon, France Optinum Nano SAMSUNG Wanxiang (A123) LG Coslight September 18th, 2019 LG 400 SAMSUNG 100% PANASONIC 350

MWh … 297 80% 300 247 60% Production Capacity 191

200 Capacity

. . 162 Demand 122 40% Source: AVICENNE 2019

Prod 100 Production Ratio

Christophe PILLOT 20% Production Ratio (%) Ratio Production + 33 1 44 55 19 90 * OTHERS: Malaysia mostly - 0% [email protected] 2015 2016 2017 2018 2019 2020 21 TAKEAWAYS RECHARGEABLE BATTERY MARKET Battery Market 2015-2030 - CAGR = +7% / Li-ion>+10% WORLDWIDE 2000-2030 (base scenario)

Li-ion battery is driven today by Automotive: 1% of the automotive 1 500 GWh market consume 60% of the LIB Others In 2012, most of the car makers (except Toyota) switch to Li-ion for 1000 GWh HEV LIB 725 The Rechargeable Battery P-HEV, EV and E-buses will be powered by Li-ion: GWh 440 NiMH 18 B$ market in 2017 - 36 B$ in 2020 & 75 B$ in 2030 with high 325 Market and Main Trends 210 numbers in China (2017: US$5 Billion for xEV and US$ 4 Billion for NiCd 2018 – 2030 xE-Buses) Lead Acid EV expectations attract large Chemical companies 2005 2010 2015 2020 2025 2030 New materials are needed to meet Automotive standards 170 B$ HEV will account for 4% of the auto sales in 2020 (Pack level) 140 B$ 27 P-HEV & EV for 2-3% by 2020 Micro-hybrid will achieve >50% in 2020/25 100 B$ 75 Lyon, France Lead acid battery will be the first market in 2025 in volume, but Li- 65 B$ 8 ion market (US$ 40 Bn) will be higher than Lead acid in value in 2018 30B$ 43B$ 25B$ th (US$ 38 Bn) September 18 , 2019 57 A very small EV market in the automotive world will represent a huge market for batteries New LIB applications: UPS, Telecom, Forklift, Medical, Residential 2000 2005 2010 2015 2020 2025 2030 Lead Acid (+5%) NiCd (-6%) ESS, Grid ESS, hoverboard, drones: CAGR > 10% in the next 15 years NiMH (-7%) LIB for 3C (-1%) Lithium battery for other application (ESS, stationary, industrial…) LIB for xEV (+19%) LIB for Others* (+12%) will reach 10 Billion $ market at the pack level in the next 5 years (CAGR 2015-2025) Christophe PILLOT ESS market could be much more important if the price of LIB at the Others: Automatic handling equipment, robots, forklifts, back-up, UPS, + 33 1 44 55 19 90 system level is under 150 $/kWh [email protected] Telecom, medical devices, Residential ESS, Grid ESS, drones, Hoverboard…… 22 THANK YOU

Christophe PILLOT AVICENNE ENERGY The Rechargeable Battery Market and Main Trends 2018 – 2030 [email protected] Phone: +33 1 44 55 19 90 Mobile: + 33 6 88 82 79 49

Lyon, France

September 18th, 2019

Christophe PILLOT + 33 1 44 55 19 90 [email protected] 23 WE WILL WELCOME YOU IN NICE IN ONE MONTH

The Rechargeable Battery Market and Main Trends 2018 – 2030

Lyon, France

September 18th, 2019

Christophe PILLOT + 33 1 44 55 19 90 [email protected] 24 METAL NEEDS FOR RECHARGEABLE BATTERY WILL INCREASE RAPIDLY Cobalt Nickel Lithium

160000 80% 500000 80,0% 700000 80,0%

The Rechargeable Battery 450000 140000 70% 70,0% 600000 70,0% Market and Main Trends 2018 – 2030 400000 120000 60% 60,0% 60,0% 350000 500000 100000 50% 50,0% 50,0% 300000 400000

80000 40% 250000 40,0% 40,0% 300000 Lyon, France 200000

60000 30% 30,0% 30,0%

Ni Tons batteries Ni for

Co for Batteries (Tons) for Co Batteries

Tons forbatteries Tons (LCE) % of the Global production %Global the of

th production %Global the of September 18 , 2019 150000 production %Global the of 200000 40000 20% 20,0% 20,0% 100000 100000 20000 10% 10,0% 10,0% 50000

0 0% 0 0,0% 0 0,0% Christophe PILLOT + 33 1 44 55 19 90 [email protected] Sources: AVICENNE ENERGY 2019 25