The Rechargeable Battery Market and Main Trends 2016 – 2025 Lisbon, Portugal Christophe PILLOT September 20th, 2017 AVICENNE ENERGY Presentation Outline • The rechargeable battery market in 2016 • The Li-ion battery value chain Christophe PILLOT • xEV & ESS battery market + 33 1 47 78 46 00 • Forecasts & conclusions [email protected] THE BATTERY MARKET IS REALLY DYNAMIC Cellular Phones sold per Year (Million) Portable PC sold per Year (Million) 3000 400 Li-ion Li-ion Year year 300 / 195 M / NiMH 2000 The Rechargeable Battery Tablets Market and Main Trends 200 Units 2016 – 2026 Units 1000 165 M 100 Portable Million PCs 0 0 Million 2000 2016 2000 2016 Tons of cathode active materials Li-ion 18650 cell price ($/Wh) 250000 3 Lisbon, Portugal 211 000 2,6 th September 20 , 2017 200000 2 150000 Tons 100000 $/Wh 1 50000 7 000 0,15 Christophe PILLOT 0 0 + 33 1 47 78 46 00 2000 2016 2000 2016 [email protected] Source: AVICENNE ENERGY, 2017 2 THE WORLDWIDE BATTERY MARKET 1990-2016 Lithium Ion Battery: Highest growth & major part of industry investments 120 000 The Rechargeable Battery Market and Main Trends CAGR Li-ion 2010-2016: +25% 2016 – 2026 100 000 80 000 Others (Flow battery, NAS, …) 60 000 Li-ion Lisbon, Portugal MWh NiMH September 20th, 2017 40 000 NiCD 20 000 0 Christophe PILLOT 1990 1995 2000 2005 2010 2015 2016 + 33 1 47 78 46 00 Source: AVICENNE ENERGY, 2017 [email protected] 3 THE WORLDWIDE BATTERY MARKET 1990-2016 Lithium Ion Battery: Highest growth & major part of the investments Lead acid batteries: By far the most important market (90% market share) The Rechargeable Battery 400 000 500 000 Market and Main Trends 450 000 2016 – 2026 350 000 400 000 300 000 Others (Flow battery, 350 000 250 000 NAS, …) Li-ion 300 000 200 000 NiMH 250 000 MWh Lisbon, Portugal 200 000 September 20th, 2017 MWh 150 000 NiCD 150 000 100 000 Lead Acid 100 000 50 000 50 000 0 0 Christophe PILLOT 1995 2000 2005 2010 2015 2016 + 33 1 47 78 46 00 1990 [email protected] Source: AVICENNE ENERGY, 2017 4 THE WORLDWIDE BATTERY MARKET 1990-2016 69 BILLION US$ in 2016 – Pack level1 8% AVERAGE GROWTH PER YEAR (2006-2016) The Rechargeable Battery 80 80 Market and Main Trends Others (Flow 70 70 OTHERS 2016 – 2026 battery, NAS, …) 60 60 AUTOMOTIVE 50 Li-ion 50 INDUSTRIAL 40 40 30 NiMH 30 E-BIKES Billion US $ US Billion Billion US$ Billion 20 20 POWER TOOLS 10 NiCD 10 Lisbon, Portugal PORTABLE 0 0 September 20th, 2017 SLI Lead Acid 2014 1990 2000 2005 2010 2013 2015 2016 1990 2000 2005 2010 2013 2014 2015 2016 SLI: Start light and ignition batteries for cars, truck, moto, boat etc… INDUSTRIAL PORTABLE: concumer electronics (cellular, portable PCs, tablests, • MOTIVE: Forklift (95%), others Camera, …), data collection & handy terminals, • STATIONARY: Telecom, UPS, Energy Storage System, Medical, Others (Emergency Lighting, Security, Railroad Signaling,, Diesel Generator POWER Tools: power tools but also gardening tools Starting, Control & Switchgear, AUTOMOTIVE: HEV, P-HEV, EV Christophe PILLOT 1- Pack: cell, cell assembly, BMS, connectors – Power electronics (DC OTHERS: Medical: wheelchairs, medical carts, medical devices (surgical power tools, mobile instrumentation (x-ray, ultrasound, EKG/ECG, large oxygen + 33 1 47 78 46 00 DC converters, invertors…) not included concentrators [email protected] Source: AVICENNE ENERGY, 2017 5 LI-ION IN 2016 - MAIN APPLICATIONS 90 000 MWh - 23 B$ (1) CAGR 2006/2016 5 675 M small cells +23 % per year in Volume Li-ion Battery sales, 2000: < 2GWh The Rechargeable Battery MWh, Worldwide, 2000-2016 Portable Phones Market and Main Trends 100 000 Electronics 17% 2016 – 2026 90 000 17% 80 000 Others 70 000 Portable PC 60 000 Industrial, 66% 50 000 ESS Wh M Lisbon, Portugal 40 000 Auto, E-bus 2016: 90 GWh th September 20 , 2017 30 000 China Auto, E-bus Excl. China 20 000 Auto, e-bus Auto, E-bus 17% China 10 000 Excl. China 33% - Electronic devices 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2000 Electronic Christophe PILLOT devices Industrial, ESS (1) Cell level + 33 1 47 78 46 00 35% Others 5% [email protected] Others: medical devices, power tools, gardening tools, e-bikes… 10% Source: AVICENNE Energy 2017 6 LI-ION BATTERY: MARKET SHARE IN 2016 WORLDWIDE The worldwide Li-ion battery market The worldwide Li-ion battery market Company market share in 2016 in volume Company market share in 2016 in value(1) The Rechargeable Battery (small cells only) 6,4 B cells Estimated at B$ 31 in 2016 Market and Main Trends 2016 – 2026 Others 3% 9% 8% 24% OTHERS 9% 31% 9% 10% Lisbon, Portugal 7% Zhuoneng 2% th September 20 , 2017 5% 5% 8% Optimum 4% 9% 2% BYD 4% 19% A123 Wanxiang CALB 7% 1% 2% AESC Microvast BAK 2% 2% COSLIGHT Others for Small cells: Chinese suppliers like Tenpower, DLG… YUASA First New Christophe PILLOT 1% (1) LIB battery pack market 1% Energy + 33 1 47 78 46 00 3% [email protected] Source: AVICENNE ENERGY Analyses 2017 7 LIB: THE BIGGEST PART OF THE COST IS RAW MATERIALS RAW MATERIALS ACCOUNT FOR 50 TO 70% OF LIB CELLS BUSINESS RAW MATERIAL COST IMPACT DRASTICALY ON THE BATTERY MAKERS PROFIT The Rechargeable Battery LIB Cost structure for TESLA & 40 Ah EV Average cost structure of Li-ion cell in 2016 Market and Main Trends pouch cell NMC 2016 – 2026 Cell Process 100% Margin Yield, Scraps Warranty 7% 4% 90% Operating profit 3% 80% Proces Yield Overheads 70% 3% Depreciation Sales & Adm 3% 60% Cathode cost Production cost Production SGA, overhead Lisbon, Portugal 50% R&D 22% th R&D September 20 , 2017 40% 6% Anode cost Utility Energy, 6% 30% utilities 20% Labor 4% Electrolyte 6% 10% Material Direct labor 4% 0% Depreciation Separator 7% 14% Other materials Christophe PILLOT 11% + 33 1 47 78 46 00 Note: Average mix of cylindrical, prismatic & laminate cells [email protected] Sources: AVICENNE ENERGY 2017 8 LI-ION VALUE CHAIN – MARKET DEMAND CATHODE 211 OOO T in 2016 Revenues: 4,75 B$ CELL PACK CAGR 06/16: +14% MANUFACTURERS MANUFACTURERS ANODE Revenues: Revenues: The Rechargeable Battery 104 000 T 22,5 B$ 31 B$ Market and Main Trends Revenues: 1,16 B$ 2016 – 2026 CAGR 06/16: +13% Gross margin: Gross margin: <10% <10% ELECTROLYTE 103 000 T Revenues: 1,4 B$ CAGR 06/16 : 19% Lisbon, Portugal September 20th, 2017 SEPARATOR 1 500 M m² Revenues: 1,6 B$ CAGR 06/16 : 15% ANCILLARY Christophe PILLOT Revenues: 1,5 B$ + 33 1 47 78 46 00 [email protected] Sources: AVICENNE ENERGY 2016 9 2025 LIB FORECASTS FOR PORTABLE ELECTRONIC DEVICES 2000-2025 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 16-25: + 6% 2016 – 2026 60000 5000 50000 Other Portable Electronics 4000 40000 Tablets 3000 30000 Lisbon, Portugal Portable PCs cells/year M 2000 th MWh September 20 , 2017 20000 1000 10000 Cellular Phones 0 0 2000 2005 2010 2015 2020 2025 Li-P Li-ion Pr 2005 2000 2010 2015 2020 2025 Christophe PILLOT Li-ion Cyl Takeshita - March 2013 (1) + 33 1 47 78 46 00 Source: AVICENNE ENERGY Analyses [email protected] (1) Source: Takeshita, Battery Japan 2013 BJ-3 conference Slide p 4 10 X-EV MARKET CAGR 2016-2025:+ 17% 200 000 185 GWh Why x-EV ? 180 000 Definition & segmentation 160 000 X-EV worldwide in 2016 140 000 E-buses The Rechargeable Battery Market and Main Trends By country buses 2016 – 2026 - 120 000 110 GWh PHEV & EV in By car makers China 100 000 EV By battery chemistry for Auto& E X-EV forecasts 80 000 PHEV MWh Lisbon, Portugal AVICENNE ENERGY & other 60 000 HEV September 20th, 2017 45 GWh analyst forecasts 40 000 Battery chemistry forecasts 20 000 Battery cost forecasts - Christophe PILLOT X-EV battery forecasts 2016 2020 2025 + 33 1 47 78 46 00 [email protected] 11 Growth 2015-2016: +2% HEV WORLDWIDE IN 2016 From 1,8 M to 1,84 M HEV 1,8 M HEV HEV sold per year, M units, worldwide, Penetration of hybrids in the global sales, 2000 - 2016 2000-2016 2,0 30% JAPON TOYOTA OTHERS The Rechargeable Battery 1,8 20% Market and Main Trends Million 1,6 2016 – 2026 10% USA 1,4 0% EUROPE 1,2 Penetration of HEV 2000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2001 1,0 Gazoline price impact on HEV market in 0,8 the US Lisbon, Portugal th 600000 4 September 20 , 2017 0,6 3 0,4 400000 year / Gallon 2 $ 0,2 200000 1 0,0 0 0 Gasoline HEV sales HEV sales per 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Christophe PILLOT 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 + 33 1 47 78 46 00 [email protected] Source: TOYOTA, HONDA, NISSAN, FORD, GM, HYUNDAI, MERCEDES, GM, BMW, VW, PORSCHE… Compilation AVICENNE ENERGY Micro hybrid not included 12 PHEV SOLD WORLDWIDE World excl. China growth +14% China is leading the P-HEV Chinese Growth + 21% market thanks to high incentives Others US 6% 24% The Rechargeable Battery 300000 OTHERS CHINA Market and Main Trends +16% SAIC CHINA 2016 – 2026 30% 250000 BYD JAPAN 2% OTHERS EUROPE 200000 AUDI ) 38% PORSCHE units HYUNDAI 120 000 150000 VOLVO Lisbon, Portugal 100 000 Europe HEV HEV ( th - P DAIMLER September 20 , 2017 ) 100000 BMW 80 000 China HONDA units 60 000 USA 50000 MITSUBISHI HEV HEV ( - 40 000 VW P 20 000 0 FORD Others TOYOTA Japan Christophe PILLOT - 2015 2011 2012 2013 2014 2016 + 33 1 47 78 46 00 2010 GM 2012 2013 2014 2015 2016 [email protected] Source: AVICENNE ENERGY Analysis, 2017 13 EV SOLD WORLDWIDE World excl.