#1SIDLEY Deloitte. Exponent® SIDLEY'S BATTERY AND CRITICAL MINERAL SERIES 2023 Battery Summit: Power Up and Take Charge July 26, 2023 TALENT. TEAMWORK. RESULTS.#2Disclaimer This presentation has been prepared by Sidley Austin LLP and Affiliated Partnerships (the Firm) for informational purposes and is not legal advice. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. All views and opinions expressed in this presentation are our own and you should not act upon this information without seeking advice from a lawyer licensed in your own jurisdiction. The Firm is not responsible for any errors or omissions in the content of this presentation or for damages arising from the use or performance of this presentation under any circumstances. Do not convey to us confidential information until you speak with one of our lawyers and receive our authorization to send that information to us. 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Exponent#3Our Speakers ASSA Steve Murray Group Vice President and Principal Engineer Exponent Sergio Mendoza Senior Manager, Data Sciences Exponent Gary Hecimovich Partner Deloitte Ryan Meyers Tax Managing Director Deloitte Samuel B. Boxerman Partner Sidley Nicolas J.S. Lockhart Partner Sidley Ted Murphy Partner Sidley Justin A. Savage Partner Sidley SIDLEY Deloitte. Exponent Brittany A. Bolen Counsel Sidley Marshall R. Morales Senior Managing Associate Sidley 2023 Battery Summit | 3#4Agenda Topics Battery School 101 with Exponent Inflation Reduction Act with Deloitte Legal and Policy Roundtable with Sidley SIDLEY Deloitte. Exponent A 2023 Battery Summit | 5#5SIDLEY Deloitte. ExponentⓇ INDUSTRY OUTLOOK €#6Global Demand for Li-ion Batteries Is Growing in All Regions GWh/Year 600 500 400 300 200 100 0 2016 2017 2018 2019 2020 2021 2022 Europe China United States Other https://www.iea.org/data-and-statistics/charts/battery-demand-by-region-2016-2022 SIDLEY Deloitte. Exponent IEA. Licence: CC BY 4.0 2023 Battery Summit | 7#7Demand for Li-ion Batteries Is Driven by EVs GWh/Year 600 500 400 300 200 100 0 2016 2017 2018 2019 2020 2021 2022 LVDs Bus ● Other https://www.iea.org/data-and-statistics/charts/battery-demand-by-mode-2016-2022 SIDLEY Deloitte. Exponent IEA. Licence: CC BY 4.0 2023 Battery Summit | 8#8Global Consumer and Government Spending on EVs 400 300 2017 Share of government spending in total: 21% 200 100 40% 30% 20% 10% 0 0% 2017 2018 2019 2020 2021 2022 Consumer spending Government spending Share of government spending in total https://www.iea.org/data-and-statistics/charts/global-spending-on-electric-cars-2017-2022 SIDLEY Deloitte. Exponent IEA. Licence: CC BY 4.0 2023 Battery Summit | 9#9Global Policy Transitions to EVs Chile Japan United (25%) States Legend 100% electrified sales 100% ZEV sales 100% electrified stock ICE ban 100% ZEV public bus sales 100% ZEV public bus stock Slovenia Italy United Cabo Kingdom Verde Iceland Singapore Canada Austria Israel European Union Argentina Norway Netherlands 2025 Ukraine United Kingdom Sri Lanka 2030 2035 2040 Costa Rica Mexico LDV 2045 2050 Mexico HDV Denmark Ukraine Austria Cabo Verde Chile Ecuador Netherlands Chile Canada Colombia United Kingdom New Zealand Singapore https://www.iea.org/reports/global-ev-outlook-2023/policy-developments#abstract SIDLEY Deloitte. Exponent Costa Rica Dominican Republic Israel 2023 Battery Summit | 10#10Projected Demand for Selected Minerals From New EV Sales kt 14000 12000 10000 8000 6000 4000 2000 Stated Policies Scenario Sustainable Development Scenario 0 2020 2030 2040 2030 2040 ● Lithium Nickel Cobalt Manganese Copper Graphite ⚫ Silicon Rare earth elements https://www.iea.org/data-and-statistics/charts/total-mineral-demand-from-new-ev-sales-by-scenario-2020-2040 SIDLEY Deloitte. Exponent IEA. Licence: CC BY 4.0 2023 Battery Summit | 11#11Committed Lithium Production May Not Meet Future Demand kt of lithium carbonate equivalent 3000 2500 2000 1500 1000 500 0 ד Primary demand in the Sustainable Development Scenario Under construction Primary demand in the Stated Policies Scenario Operating 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Operating Under Construction Primary demand in the Stated Policies Scenario Primary demand in the Sustainable Development Scenario https://www.iea.org/data-and-statistics/charts/committed-mine-production-and-primary-demand-for-lithium-2020-2030 SIDLEY Deloitte. Exponent IEA. Licence: CC BY 4.0 2023 Battery Summit | 12#12End-of-Life Recycling Rates for Selected Metals % 100 90 80 70 60 50 40 30 20 10 0 Gold Platinum/ Palladium Nickel Silver Copper Aluminum Chromium Zinc Cobalt Lithium REES https://www.iea.org/data-and-statistics/charts/end-of-life-recycling-rates-for-selected-metals SIDLEY Deloitte. Exponent IEA. Licence: CC BY 4.0 2023 Battery Summit | 13#13What Challenges Face the Battery Supply Chain? Dramatic Growth for Li-Ion Batteries • The demand for lithium-ion batteries is growing, driven by electric vehicle (EV) sales and policies • The demand for critical minerals is growing, driven by EV sales and energy transitions Relatively Rare Raw Materials • Batteries use diverse and innovative chemistries, many involving critical minerals ● Projected production of many critical minerals may not meet projected demand More Waste, More Recycling • Waste management will be an increasing concern with batteries Recycling is essential to meet ongoing critical minerals and materials demands SIDLEY Deloitte. Exponent 2023 Battery Summit | 14#14SIDLEY Deloitte. ExponentⓇ BATTERY SCHOOL 101 €#15Presenters: Exponent ASS Steve Murray, Ph.D., P.E. Group Vice President and Principal Engineer Sergio Mendoza, Ph.D. Senior Manager SIDLEY Deloitte. Exponent 2023 Battery Summit | 16#16LITHIUM-ION BACKGROUND €#17Energy Storage - Terminology Charging Current (A) H Capacity (Ah) ש 2023 Battery Summit | 18 . Current (Amps): Rate of electron flow • Capacity (Amp - hours): Amount of electrons a battery can store • Voltage (Volts): How much work can be done by each electron (like water pressure) • Energy (Watt-hours): Total ability to do work - Capacity x Voltage SIDLEY Deloitte. Exponent#18How is Lithium-ion Different? 800 700 Source for commercial lithium-ion cell data: Linden's Handbook of Batteries, 4th edition, 2011 SEMICONDUCTORS OTHER NONMETALS HALOGENS NOBLE GASES HYDROGEN ALKALI METALS ALKALINE EARTH METALS TRANSITION METALS OTHER METALS 2 Energy Density (Wh/l) 600 500 400 300 200 100 Smaller Size Ni-MH Ni-Cd 0 Lead- Acid Lighter Weight 0 50 100 150 200 250 Lithium-ion 300 350 400 Specific Energy (Wh/kg) SIDLEY Deloitte. Exponent' 3 Li PERIODIC TABLE OF ELEMENTS ydrogen 1.008 +1 4 MIC NUMBER SYMBOL NAME B 26 Fe Iron 55.845 Lithium 6.941 Ber STATE OF MAT GAS LIQUID 9 4 5 VB IVB 11 +1 12 23 V ГЕ ОF MATTER LIQUID ARTIFICIAL UNKNOWN 37 5 No Rb -1 38 40.078 Sr SC Scandium 44.956 +2 39 Y +3 40 Zr Zirconium Highest energy density of all commercial rechargeable batteries Tight manufacturing control and cleanliness is needed 2023 Battery Summit | 19 nadium#19Lithium-ion Cell Specification Lithium Ion Battery Standart Voltage : 3.8 V Battery Li-Ion : 2500mAh Model: A-ZX150 Charging Voltage Limiting : 4.5V Item Capacity Nominal Voltage Min/Max Voltage Charging Temperature Chemistry Specification Min. 2250mAh Typ. 2500mAh 3.8V 2.5V / 4.5V CC-CV 1125mA; 4.5V, 112.5mA Charge & Discharge 0 °C to 45 °C NCM Charging Current CEAX SIDLEY Deloitte. Exponent 2.5V 0 mAh 4.5V 2500mAh 2023 Battery Summit | 20#20Lithium-ion Battery Chemistry DISCHARGE ELECTROLYTE SEPARATOR CATHODE (+) ALUMINIUM CURRENT COLLECTOR ANODE (-) COPPER CURRENT Electrode Redox Reactions COLLECTOR LI-METAL CARBON Positive electrode reaction: LIMO2 Li₁-x MO2 + xLi+ + xe¯ Negative electrode reaction: xLi+ + xe¯ + C6 Lix C 6 LIMO2 Lithium Metal Oxide = LITHIUM ION ELECTRON LI-METAL OXIDES SIDLEY Deloitte. Exponent 2023 Battery Summit | 21#21Cell Form Factors Lithium ion Panasonic Li-ion Lithium ion Panasonic Li-ion Lithium ion Panasonic Rechargeable battery Li-ion https://industry.panasonic.eu/company/newsroom/ncr18650bd- improved-ultimate-generation-safe-smart-and-stable-li-ion-cell Pouch 888 Prismatic SIDLEY Deloitte. Exponent 2023 Battery Summit | 22#22Cell Construction Positive Current Collector (Al) Positive Electrode (lithium metal oxide) Separator Negative Electrode (graphite) Negative Current Collector (Cu) SIDLEY Deloitte. Exponent 5mm 100 μm 2023 Battery Summit | 23#23From Cell to Pack BEV Truck: 900 kWh BEV PLDV 100 kWh PHEV PLDV 25 kWh SIDLEY Deloitte. Exponent EV battery Battery shell Electrical harness Module Each module houses many battery cells. Heavy batteries give EVs a low center of gravity. Cell-to-cell wiring Module output Module case Battery charge controller Battery output Cell EV batteries can have hundreds or even thousands of cells. Designs vary, and include rectangular prismatic cells (below, right) and cylindrical cells (below, left). Prismatic cell Cell case https://www.science.org/content/article/millions-electric-cars-are-coming-what-happens-all-dead-batteries 2023 Battery Summit | 24#24What Are EVs? HEV Hybrid Electric Vehicle ICE PHEV BEV Plug-in Hybrid Electric Vehicle Battery Electric Vehicle ICE FCEV Fuel Cell Electric Vehicle Regenerative Regenerative Braking Braking Regenerative Braking Regenerative Braking Electric Electric Motor Electric Motor Motor Batteries Batteries Gasoline/ Diesel Gasoline/ Diesel Batteries លោ Electric Motor Fuel Cell H₂ Im Consumption QQQ +4 Q+444 444 4444 H₂ H₂ H₂ H₂ H₂ H₂ Sources of energy Hybrid Electric Vehicle (HEV) Plug-in Hybrid Electric Vehicle (PHEV) SIDLEY Deloitte. Exponent H₂ Battery Electric Vehicle (BEV) Fuel Cell Electric Vehicle (FCEV) 2023 Battery Summit | 25#25Road to Electrification 1500 15 Battery Pack Costs per kWh($) 1250 1000 750 500 Battery Price at 250 which EVs reach parity with ICE on an upfront Cost Basis 2010 0 2012 2014 2016 2018 2020 2022 https://iea.blob.core.windows.net/assets/ad8fb04c-4f75-42fc-973a-6e54c8a4449a/Global Electric VehicleOutlook2022.pdf https://about.bnef.com/blog/top-10-energy-storage-trends-in-2023/ SIDLEY Deloitte. Exponent 5 2.5 12.5 10 7.5 EVs Sold (Millions) 2023 Battery Summit | 26#26...What's Next? EVs Sold (Millions) 200 150 Estimated Values 100 50 0 2010 2015 2020 https://iea.blob.core.windows.net/assets/ad8fb04c-4f75-42fc-973a-6e54c8a4449a/Global Electric VehicleOutlook2022.pdf https://about.bnef.com/blog/top-10-energy-storage-trends-in-2023/ SIDLEY Deloitte. Exponent' 2025 2030 2023 Battery Summit | 27#27How Do We Get to 250M EVs? 250 PLDVS BEV 200 150 PLDVS PHEV LCVs BEV LCV PHEV Buses BEV Buses PHEV Trucks BEV Trucks PHEV Estimated EVs Sold (Millions) 100 50 0 2023 2024 2025 2026 2027 2028 2029 2030 https://iea.blob.core.windows.net/assets/ad8fb04c-4f75-42fc-973a-6e54c8a4449a/Global Electric VehicleOutlook2022.pdf https://about.bnef.com/blog/top-10-energy-storage-trends-in-2023/ SIDLEY Deloitte. Exponent 2023 Battery Summit | 28#28DEVELOPMENT IN DESIGN AND ENGINEERING €#29Cell Chemistries Cathode Chemistries 26% LFP Na-ion <1% NCA 9% NMC Na-ion 65% 70% Anode Chemistries <1% Li-Metal → Graphite Si-Graphite 30% https://www.iea.org/reports/global-ev-outlook-2023/trends-in-batteries • LFP batteries contrast with other chemistries in their use of iron and phosphorus rather than the nickel, manganese and cobalt found in NCA and NMC batteries. Sodium ion has the dual advantage of relying on lower cost materials than Li-ion, leading to cheaper batteries, and of completely avoiding the need for critical minerals SIDLEY Deloitte. Exponent' 2023 Battery Summit | 30#30Battery and Thermal Management Systems Available Measurements: • Voltage Current Temperature Vehicle Speed Pack Size: 200-7000+ Cells SIDLEY Deloitte. Exponent 80 EV Charge Necessary Outputs: • • • • . State of Charge Estimation (SOC) Range State of Health Estimation (SOH) Power Limits Range Battery Pack Cooling/Heating Balancing 2023 Battery Summit | 31#31State of Health (SOH) Estimation and Modeling Battery SOH estimation methods Experimental methods Model-based methods Machine learning methods Impedance measurements Internal resistance measurements Capacity measurements Incremental capacity analysis Differential voltage analysis Temperature-based methods Support vector regression Neural network Fuzzy logic Reinforced learning Electrochemical models Model reduction techniques Adaptive learning / observer design (EKF, UKF, etc) SOH can be used for individual cell analysis or fed into larger modeling and simulation tools for population analysis SIDLEY Deloitte. Exponent 2023 Battery Summit | 32#32AI/ML in Batteries Input layer Deep neural network Multiple hidden layers Sensor Signals оо SIDLEY Deloitte. Exponent O O O O C Models goodo • Models Look-up Tables Empirical Models Physics Based Models Multi-Physics Models Molecular Atomistic Models • Observers Output layer ୦୦୦ Vehicle Operating Parameters 2023 Battery Summit | 33#33Components in EV Batteries Volatile Components 8.3% Steel Electronics Plastics 5.7% 2.7% 3.8% Aluminum 5.8% Electrolyte, Separator, Others Battery Cell System Periphery Housing Graphite 8.2% Anode Copper 9.2% Module Periphery Cathode Aluminum 18% Plastics 5.7% Cables 2.3% Aluminum 5.2% Plastics 1.5% Steel 3.3% Aluminum Oxygen 4.8% Mn 2.8% Li 5.5% 3.1% Ni Co 3.1% 1.0% https://onlinelibrary.wiley.com/doi/full/10.1002/smtd.202000039 SIDLEY Deloitte. Exponent 2023 Battery Summit | 34