Vancouver's Nano One benefits from Tesla's lithium battery demand

Vancouver Sun - The meteoric rise of electric-car manufacturer Tesla has increased the demand for lithium batteries and the components that go into them, and a Vancouver materials technology company hopes to grab a share of the business.

Nano One Materials Corp. has developed a new method of making cathode material, a black, powdery substance used in lithium batteries. Nano One is building a $6-million plant to test its ability to produce the substance in commercial quantities in a production line-type setting.

“We are at the stage where we’ve proven the technology at a certain level,” said Nano One CEO Dan Blondal, who founded the company in 2011. “We’ve tested the material and gotten the performance we expected, as well as proving to ourselves that the technology scales. … What we want is learn (with the pilot plant) is whether it’s a platform that will give a manufacturer the ability to make the material for any kind of battery, going into a number of applications.”

The Nano One technology, Blondal said, creates cathode materials that could last up to three times longer in a battery than current materials. That would allow batteries to store more energy while trimming the cost of producing hem.

Blondal said Nano One’s process has generated wide interest including from battery makers and the companies that use batteries in everything from tiny phones to large cars.

He added the bulk of his potential business is in East Asia, since the world’s biggest battery producers are predominantly in China, Japan and South Korea.

Nano One intends to license the technology to a bigger player when the pilot plant proves the production viability of the company’s cathode material.

“That’s one of the areas that many companies stumble and fail,” he said of the commercialization. “We recognize that’s not our strong point, so the plan is to bring in partners who can help us with their expertise in those areas.”

Blondal said automakers are the main drivers of the battery market.

“It’s really going to be the automotive sector that will drive the cost down, because that’s what automotive does,” Blondal said. “They have a very, very strong presence in the supply chain, and they work with suppliers to drive costs down. We expect the same thing with batteries … and we fit neatly into that.”

 Tesla’s stock has surged on the NASDAQ to more than $200 today from the $30-range in 2013. The automaker, led by high-profile CEO Elon Musk, made 50,000 electric cars in 2015 and plans to make 500,000 a year starting in 2018.

Tesla chains together thousands of small lithium-ion battery cells because they are produced inexpensively in high numbers — instead of using single, custom-made batteries as in other electric cars on the market. As it ramps up production, it will mean an huge increase in demand for lithium batteries.

A report from Taiyou Research said the global market for lithium batteries is expected to reach US$30 billion by 2020.

Efraim Levy, senior equity research analyst with S&P Global, covers Tesla and said it is clear the automaker is among the dominant reasons for demand in lithium batteries.

“Clearly, Tesla a big driver because they plan to sell 500,000 battery-operated vehicles,” Levy said. “That makes them the elephant in the room that can sway markets. … We’re not seeing 500,000 yet, but they are still buying a good amount of lithium for their vehicles. If they sell 40,000 or 50,000 this year, that still makes them a significant player.”

Nano One’s pilot plant is expected to be completed in early 2017 and the production testing process is expected to take two years.

Officials with Nano One said the company is getting $2.08 million in grants from Sustainable Development Technology Canada, a federally funded foundation that funds the development of clean technology in Canada, for its test plant. The rest is coming from Nano and its investors.

Image caption: Nano One CEO Dan Blondal says there’s a rapidly growing market and pent-up demand for lithium-battery cathode materials. Credit: HANDOUT/NANO ONE MATERIAL CORP. 

Research advances in high voltage spinel LiNi0.5Mn1.5O4 are reviewed in, as reported by R. Santhanam and B. Rambabu, "Research progress in high voltage spinel LiNi0.5Mn1.5O4 material", Journal of Power Sources, 2010, 195(17)1:5442–5451.