The Path to Drawdown: Batteries for Electric Vehicles
The first electric vehicle (EV) prototype was built in the 1820s, but its inability to overcome the challenge of building a lightweight, durable battery with adequate range allowed internal combustion engines to dominate the automotive and transport landscape since the 1920s.
Today, that landscape’s changing. Thanks to supportive policies and declining costs, there are millions of EVs on the road. The difference in their effect on the climate is remarkable. Compared to internal combustion engine vehicles, CO2 emissions drop by 50% if an EV’s power comes from the conventional power grid. If powered by solar energy, emissions are cut by 95%. When households purchase EVs, the operating costs for those cars are often cheaper than gas-based cars, too.
What once used to be an obstacle for EVs - the question of how far the car can travel on a single charge - is now much less of a concern. The average range of a battery electric vehicle produced in 2020 is about 217.5 miles, up from 124 miles in 2015.
What’s making this increase in mileage possible is the development in battery technology and expansion in battery production capacity. The cost of batteries is falling fast as a result. The cost of lithium-ion batteries in particular -- the key technology for electrifying transport -- has declined sharply in recent years after having been developed for widespread use in consumer electronics.
But battery production needs to continue to scale massively to keep up with the electrification of the transport sector. According to the IEA:
- Manufacturing operations globally produced 170 GWh of batteries in 2020
- ~3,000 GWh battery production capacity is needed by 2030 to achieve long-term sustainability goals
- That’s CAGR of 33.25%
Flux Power Holdings Inc. (stock ticker: FLUX), headquartered in Vista, California, provides rechargeable lithium-ion batteries for lift trucks and other industrial equipment. It also offers a proprietary battery management system that makes managing and maintaining their batteries more cost efficient.
FLUX's Role in Drawdown
Flux Power designs, manufactures and sells lithium-ion battery packs for industrial forklifts. By the end of 2020, it had sold over 7,000 battery packs (p. 6) in total. In an industry that still predominantly uses lead acid batteries and propane-based solutions, Flux Power’s batteries have several advantages (p. 7).
Their edge over lead acid batteries includes environmental benefits, faster charging times, greater cycle life, longer run times, and less energy consumption, all of which provide operational and financial benefits to customers.
Compared to propane solutions, Flux Power’s lithium-ion batteries don’t emit greenhouse gases and other environmental contaminants, and don’t require arduous maintenance associated with internal combustion engines.
Flux also sells energy storage for solar-powered EV charging stations (to Beam Global - also in the Climate Index), another much-needed component of electrifying the transport system.
FLUX: What We Like
We applaud Flux for focusing on the niche market of providing zero-emissions batteries to industrial forklifts. Flux was founded (p. 4) in 2009 with a focus on EV battery packs, but in 2013 shifted to the industrial market. We think this was the right move.
Since then, Flux has established a diverse customer base in multiple sectors (p. 15), ranging from beverage, food, retail/grocery, manufacturing, airport ground support equipment, and more. This diversification ensures that the demand for Flux’s batteries are resilient.We are also excited about the news that Flux has recently expanded its facility to double its production capacity. This is a necessary step in keeping pace with the electrification of the transport sector and achieving a world of net zero emissions.