India is undergoing an unprecedented transformation. The Indian economy is likely to rise from $3.46T (2022) to $5T (2027). Around the same timeframe, India will surpass China to become the most populous country in the world. And as a consequence, the purchasing power is all set to explode.
Incidentally, this transformation is evident in the automotive sector too. India's transition from conventional Internal Combustion Engine (ICE) vehicles to Electric Vehicles (EV) has a clearly defined goal: 30% EV adoption by 2030.
India's growth story and the national EV adoption goals would directly impact the demand for electric cars. These demands will have a cascading effect on the entire value chain. Naturally, the rare-earth elements of the value chain, such as Lithium, will see a rise in national demand.
The question is simple: will we have enough reserves of Lithium to cope with the rising demands? According to the Boston Consulting Group (BCG), 2030 is the inflection point where demand outgrows supply. In 2030, the global supply of Lithium will be 0.1 million tons lesser than the demand. By 2035, this gap will rise to 1.1 million tons of Lithium Carbonate equivalent. Even if the available reserves skyrocket from newly discovered mines, we need to realize that there will always be only a finite amount available, and someday we will run out. We need to correct the course while there is time.
The way we see it, there are four pieces to cracking this puzzle:
Seeing beyond the recycling stage
Finding a way to make battery cells live longer
Balancing the demand with repurposed cells
Normalizing short-range EVs
Seeing beyond the recycling stage
Before 'recycling' was a thing, all of the valuable materials that went into building stuff would end up at landfills after their usable lives. We used this approach and built a linear economy around us. The value lost was evident. Recycling offered a way to improve the situation. Theoretically, recycling a material produces a fresh supply of the same material. Also, it offsets the demand for new stuff and reduces our energy needs. For instance, every 1 kg of recycled Aluminum offsets the need to mine 8 kgs of Bauxite and saves 14kWh of energy. Thus, we could close the loop and build a more circular model with recycling processes. So we agree. Recycling is a good thing. Many would argue that salvation from recycling is not 100% yet, but that's probably only a matter of time before we get there. However, there's a catch.
When recycling takes a used product and reduces it to raw materials, the inherent value of the product is irreversibly lost. Transforming these raw materials into a newly manufactured product will cost us time, money, and energy. And this cost is incurred every time a product reaches the recycling stage. So the goal is simple. Delay the recycling stage by engineering a way to make the product live longer. In the context of electric cars, the goal is to make the cells last longer before reducing cells to raw materials like Lithium. In summary, recycling is necessary but not sufficient.
Finding a way to make battery cells live longer
Generally, EVs have lesser wear and tear when compared to an ICE vehicles. However, the battery is where the bottleneck lies. Battery cells last about eight years, give or take. The usable life of a battery cell depends on its charge and discharge speeds. These rates are more aggressive in the EV application. And as the cells age, the influence of the charge and discharge rate on the health of the cells becomes more ruinous. How, then, can we make these cells live longer?
Our approach is to find a suitable second-life application before it is too late. The timing is paramount. We monitor the health of the battery cells, and at an optimal point in time, the old cells in our battery modules make way for new ones. Our modules are 'designed for disassembly' for this very reason. It has two benefits. Firstly, our modules don't get too old for our users. Ergo, they do not experience any drop in their car's performance or range. Now, who wouldn't want this EV? Secondly, the old cells still have a lot of value when repurposed. In these non-automotive use cases, the charging and discharging speeds are much slower, slowing down battery ageing and leading to long-lasting batteries.
Balancing the demand with repurposed cells
India is committed to sustainability and is accelerating the transition from non-renewable energy sources to renewable ones. But renewable sources have limitations. It is not sunny or windy all the time. So we need batteries. But if every sector turns to freshly curated Lithium, it will add to the massive demands. Repurposing could help here. We've already discussed how it is possible to repurpose second-life cells for non-automotive use cases. The repurposed cells will be cheaper than the new cells, making the transition to renewables less capital-intensive. So, repurposing would essentially merge the automotive and non-automotive value chains into an integrated mechanism to minimize global demand.
However, it is easier said than done. After all, repurposed cells will have a shorter lifespan when compared with new counterparts. So the timing of the supply of first-life used cells needs to match the demand for the second-life repurposed cells. The integrated value chain can enable this match-making for a seamless, sustainable, holistic future.
Normalizing short-range EVs
A prime factor impeding mass EV adoption is range anxiety, which stems from the fact that the EV batteries are finite and may run out relatively sooner than one would expect, stranding the vehicle's occupants mid-way. So the apparent solution is to fit larger packs into the EVs, which would translate to more drive range. But there are two fundamental issues with this solution.
Firstly, the weight problem: Batteries weigh roughly 50 times that of petrol to store the same energy. Therefore, offering a larger battery pack would make the EV much heavier, reducing the general efficiency of the EV. Secondly, the shortage forecast: We have finite resources. It is not about when we run out of reserves. It is about the realization that all our resources are limited, and someday we will run out. That's inevitable. Thus, it is abundantly clear that the EVs of tomorrow will have to do with a smaller battery pack. Therefore, we need to normalize short-range EVs. Such EVs would also be highly affordable. But for an EV to be desirable, the user must be able to recharge like we used to refuel. We need to offer 100% recharge in under 5 minutes. At Swapp, this is the future we are working to build.
However, with traditional swapping, there is always the concern of a large number of additional batteries stored in the swapping stations, which could otherwise be in more EVs. Conventionally this 'floating asset ratio' is 30%. We acknowledge this limitation of battery swapping, which is why, at Swapp, we have crafted methods to lower this ratio to less than 10%. But despite this need to keep 10% more battery in swapping stations, if every 4W EV reduces the average battery pack size from 30 kWh to 20 kWh, then the total reduction in the LCE (Lithium Carbonate Extract) demand will be 23% lower. That alone would skew the demand-supply equilibrium in favour of sustainable mobility.
And, as always, we're just getting started. There's a lot we still need to do!
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