Batteries & EVs Terms

A rechargeable battery that can be used many times, unlike a primary battery that is used once and discarded. It is used in everything from smartphones and laptops to EVs and energy storage systems, so the pace of EV adoption drives the industry's growth.

A battery that charges and discharges as lithium ions move between the cathode and anode, and it is the mainstream secondary battery today. It is light and holds a lot of energy, so most EV batteries use this type.

A cell is the smallest unit of a battery, a module is a group of cells, and a pack is the final form made of modules that goes into a vehicle. Battery makers often make cells while automakers often build packs themselves, so it matters to distinguish the scope of a company's business.

The four core materials in a battery. The cathode has the largest share of capacity and cost, the anode stores lithium, the separator prevents the cathode and anode from touching, and the electrolyte acts as a pathway for ions. Materials makers' earnings move with cell makers' production volumes.

An intermediate material made by mixing nickel, cobalt, manganese and other metals, one step before the cathode material. Vertical integration, handling everything from raw material sourcing through precursor and cathode production, is seen as a strategy that improves cost competitiveness and supply stability.

Classifications by the outer shape of a battery cell. Pouch cells offer flexible design, prismatic cells are rigid and suit large capacity, and cylindrical cells excel in mass production and cost. The form a customer chooses shapes each company's order opportunities.

A large cylindrical battery with a 46mm diameter. It has more capacity than older small cylindrical cells and simplifies pack design, which can lower costs. Mass-production timing and yield drive expectations for related cell and equipment companies.

e.g. 4680 means 46mm in diameter and 80mm in height.

Ternary cathode materials that combine nickel and cobalt with manganese (NCM) or aluminum (NCA). Their high energy density makes them common in long-range EVs, but raw material costs are high, so they tend to be expensive.

Cathode products with a higher nickel share. More nickel raises energy density and extends driving range, but thermal stability is harder to manage, so it takes strong technology and is regarded as a higher-value product.

e.g. NCM 811 means a nickel:cobalt:manganese ratio of 8:1:1.

A cathode material using iron and phosphate. It has lower energy density than ternary materials but is cheaper, longer-lasting and has a lower fire risk. Its growing share in entry-level EVs and ESS makes it a competitive threat to companies focused on ternary materials.

A measure of how much energy can be stored per unit of weight or volume. Higher density extends EV driving range, so it is a key metric for comparing battery technology.

e.g. It is expressed as Wh/kg by weight and Wh/L by volume.

A next-generation battery that uses a solid electrolyte instead of a liquid one. Expectations are high because it has a lower fire risk and can raise energy density, but mass-production technology and cost remain challenges, so news on commercialization timing can move related stocks sharply.

Hardware and software that monitors and controls a battery's voltage, temperature and state of charge in real time. It is directly tied to safety and lifespan, and shows the technological strength of battery and automotive electronics companies.

Large battery installations that store electricity and release it when needed. Linked to renewable energy such as solar and wind and to data center power demand, ESS is watched as another growth pillar for battery makers when EV demand stalls.

Prices of the key minerals that make up a large share of battery costs. Big swings in mineral prices shake materials makers' selling prices and inventory valuation gains and losses, a major cause of quarterly earnings volatility.

A contract method that adjusts battery and materials selling prices to raw material prices with a time lag. It lets companies pass cost burdens on to customers, but when mineral prices fall, selling prices fall too, lowering revenue, and expensive inventory can cut profits.

e.g. In a quarter when lithium prices plunge, revenue and profit can both decline.

A business that recovers metals such as lithium, nickel and cobalt from used batteries or defective products from manufacturing. It is becoming important as a way to secure raw materials reliably and to comply with regulations.

An HEV combines an engine with a small battery, while a PHEV has a larger battery that can be charged externally. They carry less battery capacity than pure battery EVs (BEVs), so a growing hybrid share can slow the growth of battery demand.

The availability of EV charging stations and chargers. Inconvenient charging makes people hesitate to buy EVs, so how fast charging infrastructure expands is seen as a precondition for EV demand and battery industry growth.

The stretch where demand temporarily stalls as a new technology moves from early adopters to the mass market. The term is used for the period when EV sales growth slowed, and during it battery and materials companies tend to see weaker utilization and earnings.

A tax credit created by the US Inflation Reduction Act (IRA) that gives tax benefits in proportion to output for producing battery cells, modules and other components in the US. The benefit is sometimes included in operating profit, so also look at 'real profit' excluding AMPC. Conditions have changed with later tax law revisions, so check the latest rules.

Rules that deny tax benefits for using parts or minerals from countries or companies designated by the US as concerns. The name and scope have changed with tax law revisions, and where a company places its raw material supply chain is tied directly to its ability to win orders, so changes in how the rules are interpreted affect related stocks.

The volume of long-term supply contracts with automakers that a battery or materials company has not yet delivered. It underpins future revenue, but if EV sales are weak, volumes can be cut or delayed at customers' request, so it does not translate directly into earnings.

How much a battery plant is actually running relative to its maximum production capacity. A heavily expanded plant with low utilization easily runs losses because of fixed costs, making this a key metric for gauging earnings during demand slowdowns.