EV batteries make daily commutes more sustainable, but they could do much more, including helping deploy the low-emission energy system our world needs to fight climate change.
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When it comes to electric vehicles (EV), it’s not a matter of if but when they’ll overtake traditional gas-powered automobiles as the transportation mode of choice. The decarbonization of the transportation sector is pivotal to achieving net-zero targets and addressing climate change.
In the U.S., the Biden Administration recently passed the Inflation Reduction Act which will help accelerate the production and sales of EVs. With transportation accounting for close to 40% of the world’s CO2 emissions from end-use sectors, that’s a big win for the environment.
The question is, what to do with what could be mountains of decommissioned batteries? It turns out quite a bit. Once lifted out of cars, batteries that no longer meet the needs of EVs can continue to provide terawatt-hours of valuable energy storage capacity. As the EV market evolves and grows, our ability to efficiently leverage that untapped capacity could usher in new business opportunities that will help meet our need to reach carbon neutrality.
Innovation, technology and strategic investments
For EVs to live up to their full potential, we first need technological breakthroughs and strategic investments to scale a sustainable supply chain of energy-dense, fast-charging batteries that are safe for consumers. Technical innovations in the manufacturing process, such as z-folding technology and high-quality separators, have helped make safer lithium-ion batteries. Such advancements are crucial because they help make EVs safer, expand their driving range and subsequently increase consumer demand for electric-powered transportation.
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Beyond EVs: Creating the green energy system of the future
One way to limit the environmental impact of the lithium-ion batteries powering EVs is to provide them with a second life once they’re removed from vehicles. The fact is most batteries still have plenty to give and retain up to 70% of their charging capacity for up to eight years. This is why we need to focus on a range of clean power technologies along the complete battery lifecycle and value chain.
A fully-fledged Battery-as-a-Service” (BaaS) business model could help drive the global shift toward a more sustainable and circular economy. Second-life EV batteries, for example, could be repurposed as Energy Storage Systems (ESS), storing zero-emission power generated by wind and solar power plants. SK On’s self-developed BaaS solution analyzes battery life and state of health to better assess and utilize the battery’s condition and residual value for further reuse and recycling.
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With growing EV use, the ability to store and target peak-load demand through energy saved in electrochemical storage will become more important. Targeted investments in the EV charging infrastructure include V2G (Vehicle to Grid) and power demand response (DR). Using EV charging facilities along with other B2B and B2C options are vital to ensuring a sustainable power supply.
When it comes to batteries, SK envisions an ecosystem of services and products supporting their entire value chain, including their recycling as Energy Storage Systems to efficiently store renewable power.
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Driving a greener supply chain with public-private partnerships
Because of ever-growing demand for safe and reliable EV batteries, sourcing the raw materials that go into them is critical. Sourcing that raw material will require public-private coordination and well-coordinated investment strategies.
SK On is dedicated to working with partners and governments to ensure a sustainable and cost-efficient supply of critical raw materials. For example, the higher nickel content in SK On’s Li-ion batteries reduces the dependence on cobalt and is a tangible answer to ESG concerns surrounding mining operations of these critical resources.
Final takeaway
The growth of EVs is undeniable. There are now more EVs sold each week than all of 2012, and the growth is not slowing. The Inflation Reduction Act will foster greater opportunities across the entire EV value chain.
SK On currently has seven new battery plants under construction in the U.S., Europe and China – collectively adding enough capacity so that by 2026 it could supply batteries for 4.3 million vehicles annually. In the U.S., SK On already operates a plant in Commerce, Ga., with a second Georgia plant slated to start production in 2023. It also plans to invest approximately $4.45 billion in facilities in Kentucky and Tennessee as part of the BlueOval SK joint venture with Ford.
The company is poised to fully leverage this existing infrastructure as well as its investments and strategic partnerships to optimize the EV battery value chain.
Fully realized, the battery value chain will do much more than power vehicles. Providing second lives to EV batteries by implementing concepts like BaaS will help create a more sustainable and prosperous future for all of us.
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SK Group’s Executive Vice Chairman Jae Won Chey leads business strategy and global alliance as the CEO of SK On. He also plays an important role in SK Group’s global business expansion as Executive Vice Chairman of SK Inc. and SK E&S.
He earned his Bachelor of Arts degree in Physics from Brown University, a Master of Science in Material Science from Stanford University, and a Master of Business Administration (MBA) from Harvard University.
