Cushioning South Africa from the Rising Price of Lithium-Ion Batteries

After more than a decade of falling prices, the price of lithium-ion batteries started going up in 2021. This trend is continuing in 2022.

However, lithium-ion batteries remain considerably cheaper than they were. In Southern Africa, REVOV’s 2^nd LiFe batteries are providing a cushion against cost pressures.

In this article, we discuss:

• the context for lithium-ion battery price increases
• what’s driving price increases, including…
  • global lithium demand outpacing supply
  • prices of nickel and cobalt
  • Covid-related disruptions
  • greater adoption of lithium batteries for backup power storage
  • the growing popularity of electric vehicles
• REVOV’s 2^ndLiFe batteries: an affordable solution.

Lithium battery price increases in context

As of last year, lithium-ion batteries were 97% cheaper than they were a decade ago. Current pressures are pushing battery prices up, potentially by as much as 5%.

That said, even with recent, sharp inflation in lithium prices, lithium-ion batteries are much cheaper than they were just a few years ago.

Overall, the greater affordability of 2^nd LiFe lithium-ion batteries is great news for consumers and the planet. It’s helping to drive more sustainable energy solutions, as well as the recycling – rather than simple disposal – of large volumes of electric vehicle batteries.

What’s driving increases in the price of lithium-ion batteries?

The increase in the price of lithium-ion batteries is being driven mainly by the rising prices of raw materials used to make them.

Recently, Russia’s invasion of Ukraine has further disrupted the supply of these raw materials, causing prices to surge.

This supply disruption is happening at the same time as ballooning worldwide demand for lithium-ion batteries, mainly from the auto industry making electric vehicles (EVs).

As the demand for EVs rises, so does the demand for batteries and the minerals they contain.

Global lithium demand outpacing supply

There’s no shortage of underground lithium, but booming demand is outpacing supply.

Mining companies, particularly in China – the world’s biggest battery-producing company – are scrambling to increase production from existing mines and develop new sources of supply.

But it takes time to make mines productive.

Increasing prices of nickel and cobalt

The prices of two other raw materials, nickel and cobalt, have also surged as a result of sanctions and supply-chain disruptions following Russia’s invasion of Ukraine.

Nickel and cobalt are essential to the construction of lithium-ion batteries. Increased prices are also pushing up the price of lithium batteries.

COVID-related disruptions

COVID-19-related supply disruptions had a significant impact on manufacturing, particularly in Asia.

The recovery process is now being hampered further, by the Russian invasion of Ukraine.

Greater use of lithium batteries for backup power storage

In 2010, lithium batteries powered our phones and computers.

Twelve years later, they’re increasingly powering our homes and cars. They’re found in everything from phones and medical devices to planes, and even the International Space Station.

There’s also greater use of lithium batteries for backup power storage, especially in countries like South Africa where load shedding is often part of daily life.

Growing popularity of electric vehicles

The global demand for electric vehicles is booming. In 2021, global EV sales more than doubled and are expected to reach 9.5 million units in 2022. This figure could be higher if supply and logistics are resolved.

China, Europe and the US account for about 90% of global electric car sales. In China, EV sales nearly tripled to 3.4 million in 2021. In Europe, they increased by almost 70% to 2.3 million. In the US, sales more than doubled to surpass 735,000 units.

In South Africa, sales of electric cars are increasing, but the adoption is considerably slower.

EV sales more than doubled in SA in 2021, but off a very low base.

In 2021, 218 EVs were sold in South Africa. This was out of a total of 464,122 new vehicles that were sold.

In 2020, only 92 EVs were sold in the country.

Adoption of EVs in South Africa is slow for a variety of reasons:

• low availability
• high prices
• lack of infrastructure
• frequent load shedding.

If petrol prices continue to climb, the demand for EVs could soon change.

REVOV’s 2^nd LiFe batteries: an affordable solution

2^nd LiFe lithium-ion batteries are an affordable solution that can revolutionise the power sector. Batteries hold the key to transitioning to a world powered by renewable fuels. Large-scale battery storage is essential to be able to shift away from a world dependent on fossil fuel.

2^nd LiFe lithium-ion batteries are so called because they’ve been repurposed from electric vehicles. The batteries in EVs can only be used for a certain amount of time before they become heavy, inefficient and need to be replaced.

But these batteries still have a lot of cycle life. Repurposed as battery backups, they have a “2nd LiFe”. With the steady rise in the popularity of EVs, 2^nd LiFe batteries repurposed from EVs are more readily available.

With fewer electric cars on the roads, the uptake of 2^nd LiFe lithium-ion batteries has been slower in South Africa.

However, innovative players in the battery backup industry have recognised the impact that imported 2^nd LiFe  EV batteries can have.

Growing this industry will lead to more affordable battery backup and off-grid systems. It will boost the viability of renewable energy sources by establishing dependable energy storage options. This is something that renewables can’t be 100% viable without.

These new and exciting backup options will give more people and businesses access to real and affordable solutions to counter the impact of load shedding.

According to McKinsey, the stationary storage capacity provided by 2^nd LiFe lithium-ion batteries – also known as lithium-iron batteries or LiFe batteries – could exceed 200 gigawatt-hours or 0.2 terawatt-hours by 2030.

To put this in perspective, the entire United States uses a few terawatt-hours per year.

How REVOV can help offset the rising price of lithium-ion batteries

REVOV’s 2^nd LiFe batteries are more affordable than new lithium-ion batteries but are still as efficient in demanding applications. They’re ideal for stationary energy storage that requires less frequent battery cycling than a car.

Storing energy for periods of scarcity, such as load shedding, is one of the most essential applications.

Others include providing reserve energy capacity to maintain a utility’s power reliability at a lower cost and deferring transmission and distribution investments.

South African consumers can be cushioned from the rising price of lithium-ion batteries with REVOV’s affordable 2^nd LiFe lithium-ion batteries. These are ideal for battery backups and power storage solutions.

We work with the top installers to offer off-grid and backup solutions that ensure your home or business is never left in the dark.

We also offer all-in-one plug-and-play solutions that can be easily installed into any home or small business.

To find out more about what we offer, browse our product section or contact us for a quote or to discuss your needs.