This week BMW Group announced a partnership with Sila Nanotechnologies to develop and manufacture the next generation of lithium-ion batteries. The objective is to lower the cost of the electric vehicle battery pack by improving the energy density. To do this the current graphite graphite anode is replaced by silicon. BMW expects these batteries to be in use within the next five years.

Sila’s silicon anode can be mass produced and can be used in existing battery plants without any design changes. Sila is growing rapidly and forming a number of partnerships in both the automotive and general consumer sectors. Further, one of the major battery suppliers for both Apple and Samsung is Amperex Technology, which has provided funding to Sila.”

This is only the start for battery innovation, and further competition is on the horizon. BMW expects to have hydrogen fuel cell powered cars in production and on sale, by 2020. The advantages over electric vehicles include much longer range, very short refuelling times, all with zero local emissions.

The current hype over exploding demand for battery materials such as lithium, cobalt and graphite appears rather overdone. There is currently little demand for electric vehicles, except where government-mandated, such as in China. Competition from fuel cell vehicles will also hurt demand.

If you are invested in the battery materials space, keep a close watch on trends in battery technology and on the competition to EV’s.