The next generation of lithium-based battery technologies promises to revolutionize transit both at the personal vehicle and commercial ends of the capacity scale. One technological advancement leading the charge are so called ‘lithium air’ batteries; a fundamentally different technology that delivers power by dissolving lithium in an electrolyte with oxygen. A key benefit of this technology is that oxygen doesn’t have to be stored in the system, allowing for a much higher density of energy per cell and, ultimately, greater range for vehicles.
The resulting step change will facilitate a shift in developmental focus for applications far beyond simply enhancing the viability of electric vehicles and toward the aviation market as engineers and scientists home in on the optimal mix of materials to maximize energy density. Experts today estimate that a 3-5X increase in energy density is needed before batteries would be practical for single aisle regional aircraft applications.
It goes without saying that these ambitions will not be achieved however without substantial investment and while the global market is seeing aggressive financial investment into battery R&D, capacity expansion, and large-scale recycling capabilities; the U.S. market is struggling to participate. Of the $110 billion estimated by AlixPartners to be spent on battery development in just the next five years alone, nearly all of that investment will be allocated to activities outside the U.S. (and predominantly to activities in China and Europe).
While the U.S. has a host of tools at its disposal to become more commercially involved in battery development, one of its most powerful is the R&D tax credit. Because the R&D tax credit is a dollar-for-dollar credit against a percentage of eligible development costs incurred during the R&D process, it can reduce the net cost of battery development programs by substantial margins. While other countries do offer R&D tax credits, the U.S. R&D tax credit is often cited as one of the most compelling both in terms of return on investment and relative ease of computation.