Navigating The Wild West of Lithium Battery Manufacturers

We often ask ourselves: Why do people prefer to buy this or that Lithium-iron Phosphate battery? In general, we think most people make the decision based on price and availability, not documented performance or how the battery was made.

If you're shopping online, you've noticed a plethora of lithium battery manufacturers in the market, and some are better at marketing than others. Working with customers in the off-grid living and mobile markets, we learn about a new battery company just about every week.

When you take off the shell, you have battery cells, a battery management system (BMS), and a bunch of wires. But that's not all you are buying. You're also getting access to the company that made the thing and have your own set of expectations for how long it will last.

In this blog, I'd like to share my perspective on the current lithium battery market and why we're so selective about the battery-inverter combinations that we sell and support. 

What's the 'best' battery for my system?

We all want the best combination of performance and price. So, what makes a lithium battery 'good' or 'reliable?' Well, it has nothing to do with the marketing that's for sure. Unfortunately, availability and price don't typically tell you about technical merit.

Without a compelling differentiator, a more expensive battery is not better. Most shoppers buy something in the middle, knowing intuitively that the cheapest batteries are probably that cheap for a reason. Meanwhile, a low-cost battery may be perfect for you, especially if you know what you're getting.

Turns out this 'knowing' piece becomes a real challenge as it is nearly impossible to lock down a given battery manufacturer's quality and performance data. At best, you get a great deal. At worst, you end up wasting time and money. Similar to gambling while not knowing the game. 

Why are some lithium batteries more expensive than others?

The answer might surprise you. It turns out that the more expensive batteries are some of the worst at marketing. The middle-of-the-pack batteries are low-cost batteries with marketing dollars bringing those batteries up to the middle price. The low-cost batteries are the same battery components without the marketing dollars added in. And of course, you have batteries with some brand name recognition, but those brands are typically not very old and a brand without a reputation is not much of a brand. 

You could spend a lot of time trying to figure out the difference between the two bottom tiers, but in many cases, they are the same exact thing. Why? Because most battery companies in the middle tier are battery assemblers. They are not battery manufacturers, meaning they do not build their own battery cells. This does not mean they will not claim to build them but just because it's glued together in America does not mean it's made in America.

Larger companies like BYD or Pylontech are vertically integrated and have thousands of employees in R&D and testing as well as compete cell to case to BMS manufacturing. 

When shopping for a genuine battery manufacturer, you want a company with a long history of installation and in areas with more demanding rules, regulations, and expectations than we have in what is still a burgeoning wild west market.  

There's a scramble to get a piece of the home-standby battery market. And hundreds if not thousands of well-pocketed investors are creating or thowing in with startups. There's no denying the significant bubble in the number of 'battery companies' on the market today. It's fairly easy to 'make' your own batteries by having a factory in China put your name and custom enclosure and start marketing your version, similar to 20 others but with a catchy name and some killer logos.

And people are buying them.

What’s a company like BYD doing with 40,000 R&D staff?

Well, they aren't marketing, as far as we can tell. BYD Battery-Box is one of the leading manufacturers of Lithium-ion batteries worldwide. They got there by being a technology-first company that self-developed, patented, and manufactured their own battery cells and then developed exhaustive protocols for testing their batteries in extreme conditions. They've been around for 25 years, developing a completely integrated supply chain from mineral resources all the way to recycling. This is not a here today, gone tomorrow battery manufacturer. BYD has logged 250,000 installations in 90 countries in the past 7 years with no battery cell failures (yeah, amazing). Again, this isn’t a company that is crossing its fingers when it comes to safety, reliability, and performance. In 2021, they had more than 23,000 approved patents, 11 research institutes, and yes, 40,000 R&D personnel perfecting, innovating and moving the company forward. 

My point: what makes a 'better' battery isn't found in a bullet point on a spec sheet. And it may not be any 1 thing. Today, it could be quality in a new product. Tomorrow, it could be a breakthrough in the battery's BMS that takes five years to develop and bring to market. But that gives any company a future. And isn't it nice to think that when you buy a battery from a business with a warranty, they aren't a ticking clock actively hoping to go out of business through acquisition? 

Why is Intelligent Controls opting out of this wild west rodeo show that is the current battery market?

The first reason is that we work with Victron Energy equipment every day and we see what they are doing with battery manufacturers across the globe. It's evident to us what state of the art is, and that's the only thing we want to do because our customers expect that from us.

Victron has worked closely with select manufacturers to create an inverter-battery system that we believe is the pinnacle of performance. 

Ask anyone installing Victron systems for their RV or boat or home: What's the weak link of a Victron inverter system? A sucky battery, of course. What's the weak link of a BYD or Pylontech battery? An inverter that doesn't know what its job is.  

So, what's the benefit of solid battery-inverter relations? Well, it's significant if done right. 

In line with Victron's high levels of performance and technology, high-performance and high-tech batteries will benefit most from Victron inverters.

Here’s a common scenario: Victron equipment has been paired with sub-par lithium batteries in a motorhome or security camera trailer system. If the battery isn't getting what it wants and the inverter isn't capable of communicating with the battery over anything other than voltage, the battery just doesn’t get what it needs to perform at its best. Meanwhile, the Victron inverter isn't going to know what the problem is. 

It's like a really bad marriage; some of it comes down to communication skills. Getting a 'yes/no' signal from a battery is often not enough to maximize the potential. Higher-quality battery systems fully communicate. Not only do they communicate, but they also respond. Saying "Huuuh" to your wife is not the same as telling her 'I love you' and giving her a kiss. A BYD or Pylontech battery will tell the Victron inverter exactly what it wants for Christmas, and the inverter will have no problem making it happen.

The second reason is that Victron inverters are designed and programmed to work better with some battery manufacturers. This gives us confidence that our customers will receive a reliable and quality product.  

>>> Related: Victron & Pylontech: A Robust Inverter-Battery Combination for Off-grid Energy Systems

Lastly, we're not into rolling dice and placing bets regarding battery performance. BYD has an incredible track record of professional installations. Pylontech, which also manufactures its own cells and is recommended by Victron, is a top-ranking battery for residential storage systems. Intelligent Controls has sold over 1,000 Pylontech battery systems in the last three years and has dealt with 2 warranty issues. Thanks to Pylontech's advanced BMS, faulty units can be hot-swapped without any disruption or long-term impact on the performance of the larger system (Read: Adding Capacity to a Pylontech Lithium Battery Bank).

Let's do some math

But where is the proof in the pudding? I like to point people to this independent performance report focused on testing conventional and emerging battery technologies. Published every six months by the Lithium-Ion Battery Test Centre program with funding from the Australian Renewable Energy Agency, the report aims to “independently verify battery performance (capacity fade and round-trip efficiency) against manufacturers’ claims.” (Juicy! Well, it’s a little dry actually but stick with me, it gets good.)

The March 2022 report tested lithium battery packs from over a dozen companies including Pylontech, BYD, Sony, CALB, GNB, Samsung, Alpha ESS, Ampetus, LG, Redflow, Tesla, among others. 

The whole point of this type of testing process is to prematurely age a battery and simulate a real-life performance in less than a real lifetime. The idea is that we should not need to wait 16 years to see if any particular battery has a major issue. Turns out, a lot of them do. This report is completely independent and probably the best-documented example that we’ve found of a broad range of name-brand lithium batteries. But these are also batteries with actual manufacturers that wanted to participate in a study. If you’re familiar with the TV show America’s Ninja Warrior, everyone thinks they have what it takes to win. (Spoiler alert: They don’t.)

I did some rudimentary math and this is what I'm seeing:

As a basic analysis, we’d like to ask: how much life can we get out of these batteries? 

In the report, if you take the summary of the graph performance for each battery, and you divide the number of cycles by the loss in the state of health, it gives you an idea of how much you lose in battery capacity for every cycle and it’s not very much. But when you multiply that by 1000 cycles, it gives you a number which is a percentage of loss per 1,000 cycles. 

Technically, these are not straight-line curves so the batteries that are tested with more cycles in the report would be at a disadvantage in this metric because aging is accelerating near end-of-life. 

What we can see in the reports is that some batteries are more reliable than others in terms of failures and some batteries die faster than others. In some cases, significantly faster. This highlights the point that batteries die in one of two ways:

1.) They die hard and fast (giving you little time to buy a new battery bank before you had expected to

2.) They die slowly at varying rates (as they are designed and as shown in the report.)

With any battery or critical infrastructure, you want it to be predictable. Knowing how your battery will age and having realistic expectations for that are actually more important than anything when trying to predict value. If you know it’s going to fail in 10 years and it does with 100% certainty, that’s better than telling someone their battery will last 20 years but instead it dies in 11. 

In this example, the Tesla battery could lose 10% of its capacity in 1000 cycles. The Pylontech might lose 8.5% of its capacity in the same amount of time. The BYD is half of that at a 4% loss, beating out Sony. And at the bottom of the pile, you have LG Chem which lost 14% and GNB which lost 30%.

If we assume that a cycle is a day, we’re talking about 2.8 years of life in 1,000 cycles. If we think a battery is good for 10 years, which is really common, there will be 3,650 cycles, the Pylontech battery will be at 70% of its original capacity. The BYD will be at 85% of its original capacity. The GMBs will be 106% dead. No one wants a lithium battery that is half-dead after 5 years.  

But what about the price tag? 

Lithium batteries are expensive. But based on the analysis above, you would expect from a value standpoint that Tesla and Pylontech would be in the same price range. You would expect the BYD battery to be twice as expensive. And you’d expect the LG Chem to be half the price of a Pylontech but surprise, surprise that is not the case. The price differences are not significant among these brands with the expectation of possibly Tesla, likely because of the name-brand recognition. 

How do Victron batteries stack up? 

Victron Energy also makes high-quality lithium batteries, the Victron Lithium Smart LiFePO4 and Lithium Superpack. If you like to keep everything under 'one roof' or one manufacturer, Victron batteries are a very reliable option, and they are competitively priced when you consider what you are getting (full communication, reliable BMS options, backed by a real manufacturer).

Of course, Victron batteries were designed to communicate with Victron inverters, solar charge controllers, battery monitors, etc., and they do so very well. Like a BYD battery, a Victron Smart Lithium battery has an external BMS and there are several different options for this depending on the application. Learn more about them here. This broad range of options allows you to fully customize your builds which is quite unique in the market.

Victron Smart lithium batteries come in 12 Volt and 24 Volt models, and you can connect them in parallel or series depending on your needs.They offer high charge and discharge rates, enabling fast charging and discharging. Additionally, Victron Smart Lithiums have a high energy density with more capacity with less weight and volume. Their compact size and integration with Victron equipment is designed with mobile and marine applications in mind (those with DC charging sources and DC load, not just inverter loads).

Again, every Victron battery is backed up and supported by a manufacturer offering a clear path for resolving an issue or processing a warranty. This is a significant selling point if you're a manufacturer or a van builder already using Victron Energy equipment.

Remote monitoring for lithium batteries with VRM

Thanks to the complete integration Pylontech and BYD have with Victron Energy equipment, the battery state of health is actively recorded and reported back to you, the end-user using the GX Touch display screen or remotely from VRM, Victron’s remote management portal.

Why is this a really big deal? Because it means no surprises. The BMS is recording all relevant data points like an odometer on your car. Wouldn’t you wanna know how many miles are on that sucker? We do. Especially if it’s a power system that we’re sending out into the field. It needs to work as designed and it needs to be checked in on remotely. Check, check. Done. 

>>> Related: Remote Power System Monitoring with Victron's GlobalLink 520 and Ruuvi Sensors

Conclusion

When it comes to selecting lithium batteries, the best indicator of future performance is still past performance. 

It has become rare to find a battery manufacturer that does not rely on a third party to bring their product to market. In the meantime, BYD and Pylontech, have become the go-to batteries for professional Victron inverter-battery system installations worldwide. Now you know why. 

Have a question or need advice? You can shoot me a message at aaron@icmontana.com, reach out via our contact form, or drop us a note in the chat box. 

Check out our latest video on Pylontech's 48V US5000