What we learned at the world's largest conference of lead-acid battery manufacturers

A highlight from a talk on the state of European battery markets. A lot of discussion about where lead stands in relation to other technologies.

We spent the first part of last week at Battery Council International’s annual convention, which was in Fort Lauderdale this year.

BCI, despite the international in its name, is effectively the North American lead-acid battery manufacturer industry group, and many of the biggest global manufacturers sent delegations (the CEOs of Clarios, EnerSys, and EastPenn were all in attendance).

Some miscellaneous notes from the conference:

1. Batteries are the future, but people are nervous about lead. While growing electrification and a switch to renewables were driving demand for batteries, people were unsure about how the lead-acid chemistry fits into this.
   
   There’s a sense the times are changing, and the battery industry needs to change with them (one talk, “Charting the Course for U.S. Battery Manufacturers in the Age of Electrification,” focused on the parallels between lead batteries and Kodak).
   
   The lead-acid battery is a relatively old (resilient!) technology. Lead-acid batteries were invented in the 1850s, and have continued to be used basically continuously since then. By comparison, lithium ion batteries only really began to be developed in the 1970s.
   
   Right now, the lead battery market is big! They’re most commonly used in automotive applications (as starter batteries for combustion engines as well as auxiliary power supplies for some of the electronics), as well as stationary power supplies. They’re also used in some other kinds of smaller vehicles, like golf carts.
   
   But it’s not clear where they go from here. They’re beginning to get phased out of fully electric EVs, where lithium-ion has always been dominant. Alongside lithium, other chemistries (e.g. sodium-ion, nickel-cadmium) look like they may further displace lead as well.
   
   It seems like stationary and backup power supplies (in particular, for data centers) might see some growing demand. Lead-acid batteries are very reliable and don’t have the fire risks of lithium, and with stationary storage, the increased weight isn’t a problem. But this market is seeing strong and growing competition from other technologies as well.

   “Amazing market… but warning signs for lead.”
   - A slide on the North American backup power supply market; BCI 2024

   Not everyone agreed with this assessment — some people think that the EV transition will be slower than people think, that EVs will continue to use lead-acid batteries, and lithium fire risks are currently underestimated— but a lot of downward-sloping future projection charts, particularly in automotive.

2. Want to build a small formal recycling plant? It costs between $3mm and $6mm for a small recycling plant that can process around 12,000 tons of batteries a year, which is generally the minimum. This is usually around half of the total cost once you account for land, structures, etc.

3. Want to build a battery manufacturing factory? Prices start at around $8mm.

4. The medium-term future of lead-acid batteries is in Asia, where the market is seeing growth driven by small EVs like e-bikes. This lines up with what we’ve been seeing in places like Bangladesh, where people are wiring together hundreds of pounds of lead-acid batteries to power electric rickshaws.
   
   One of these rickshaws can use as much lead as 10 cars — that’s a lot of demand!
   
   From a presentation on the APAC market, it represents ~63% of the global lead-acid battery market, and of this market, it’s split around 40% motive and 40% SLI. Inside this motive segment, 73% of demand is allegedly to power E-bikes, particularly in China. China is reaching e-bike saturation but South and Southeast Asia are seeing more rapid growth.
   
   This presentation predicted the Asian lead-acid battery market peaking in 2035, followed by a gradual decline. As with elsewhere, this is a result of displacement by lithium-ion and other chemistries.

   

5. Lead prices are flat, and people expect them to stay that way. Since November 2022, lead prices have been relatively stable. Per one analyst, no one is bullish or bearish on lead — investors aren’t thinking about lead at all.
   
   (It’s not clear this is unequivocally true, LME net short interest in lead is at its highest since 2018.)

   
   A lot of lead is staying in Asia, some is flowing into LME warehouses, which are seeing a lot of lead delivery recently.
   
   Regional lead markets play an important role. Lead and lead-acid batteries are heavy and consequently pretty expensive to ship, making it a “make-here, sell-here” product.
   
   Production costs of lithium-ion batteries in China are apparently beginning to approach lead-acid levels.

6. Turns out indoor shooting ranges have a lot of lead! Study here.

7. Flow batteries are really interesting. Hadn’t been familiar with them, but it turns out one of the ways you can get lead out a battery is by storing charge in what are basically big barrels of electrolyte solution. It’s a new technology and people are working on getting costs down, but it seems like it might have real returns to scale and be useful for large stationary energy storage systems.

8. One of the arguments for lead-acid batteries is that they have a fully domestic supply chain. Because the vast majority of the lead that goes into LABs is recycled, often domestically, lead-acid batteries don’t have the critical minerals risks that other batteries like lithium-ion do.

The conference was a good way to get a sense of how the leaders in the lead-acid battery industry are thinking about the market. There’s real consensus that while LABs are dominant right now, the status quo is changing, and big manufacturers want to change with it. The extent to which this will include lead remains to be seen.