Batteries, especially the component of them with which I've spent the most time, cathodes, are a lot of fun. Here's an explanation of them starting with the basics.
*If you already know battery basics or if you liked this article and want to know more, here's my cathode deep dive post
How batteries work
There must a thousand high quality blogs and videos about this on the internet, but I'll take a short stab at it as well.
Batteries have a positive side (that's the cathode) and a negative side (that's the anode). Both sides contain some atoms and electrons that must stay equal, that is if an atom leaves, an electron must leave as well. Those two sides are separated by a barrier called the electrolyte. The electrolyte is most similar to a coffee filter; it allows atoms to travel between the cathode and anode, but not electrons, similar to how a coffee filter allows water through but not the coffee grounds.
The electrons would really like to move between the cathode and anode though, so the second a copper wire (or anything that conducts electricity) connects the anode and cathode, the electrons can flow. Once electrons flows through the copper wire, atoms will flow through the electrolyte. The two of them can meet back up on the other side.
Electrolytes/Anodes
Don't worry too much about these for now, but generally you can imagine the anode as a locker system for atoms and the electrolyte as a sort of chemical coffee filter
Cathodes
Now onto the money maker (literally, cathodes have by far the highest price tag of the three components). Cathodes can come in many forms, but they all operate according to the same basic principles.
Cathodes are made up of tiny building blocks (like bricks) called atoms. There are many different types of atoms (elements) in various cathodes, most famously, lithium, nickel, cobalt, but also iron, manganese, phosphorus, carbon, oxygen and the list goes on...
These atoms form a 3-dimensional structure; you can imagine it simply as a Jenga™ tower, except instead of all the same color blocks, let's color them based on an element.
In the case of NMC cathodes, it would be something like this:
Now, keeping with the Jenga analogy, imagine if in this round of Jenga, you only need to remove the blue blocks, the lithium. Once you've removed as many as you can without the structure collapsing, you've successfully charged your Li-ion battery.
Now to use your Jenga battery's power, you'll have to put the lithium blocks back where you found them.
Of course, as with any analogy, the Jenga one is an over-simplification - in reality:
1) There are many different kinds of cathodes, some of which totally disobey this analogy and actually RESTRUCTURE as you pull out and put in Lithium blocks.
2) Secondly, and most importantly, the other blocks around the lithium block, i.e, manganese, nickel, cobalt blocks etc. will have different effects on pulling and putting back in the lithium block, physically, though not quite parallel, you could imagine this effect as the weight and friction of the surrounding blocks. They will also resist more and more as more lithium is removed. This phenomenon is where the voltage of a battery is derived from.
But anyway, if you scale up this colored block Jenga example infinitely (well not quite infinitely, something like 10^23), you'll sortave end up with a cathode and the basic functionality of how it works.
Price
As mentioned earlier, cathodes are the component of EV Li-ion batteries with the highest price tag. This price tag comes mostly from its components which are traditionally very expensive and unethically sourced raw materials.
But the price tag also comes from the research involved in novel cathodes. The reality is, most of the bottleneck for cars to have more power (to carry heavier things) and more capacity (to go further distances) comes from cathodes. The anodes and electrolytes (the other two major pieces of modern batteries) generally speaking (of course there are exceptions) are not limiting for these features. This means that cathode research is ongoing and expensive, and companies can charge a lot if they have the best cathodes, especially because they are very difficult to reverse engineer.
Research
I'm not sure what others think of when they think of the battery cathode industry - I've been in it too long to have a sense of that. But I imagine people think it's pretty high-tech, maybe like semiconductors.
Well as it turns out batteries only have the nanometer-scale part in common with semiconductors. All the other parts are far more similar to the steel industry (even the competition with China).
Most of the portions of cathode synthesis and research, from mining all the way to preparing it for insertion into the battery, are pretty standard.
1) The raw materials (lithium, cobalt, nickel, manganese etc) are mined and are then refined.
2) These refined materials are then put in a mixture in a certain ratio at specific conditions to create tiny particles with a rough shape and size, called precursors.
3) The precursors are then put in an enormous furnace (very hot oven) with some lithium mixed very well to create a cathode. That final process is called "firing" and may happen a couple times at some different temperatures and conditions but you get the basic idea.
So cathodes are treated with highly controlled, yet still macro processes as opposed to semiconductors which are produced using highly precise billion dollar lasers. But the actual functionality for cathodes is happening quantum-level and of course that world is entirely different, quite literally, from the macro world. The problem is that cathodes, by nature of how they work, are incredibly difficult to observe or alter on a small scale.
So researchers from academia through to industry make educated guesses generally based on cathode theory, but in reality shoot in the dark. They try different sized precursors, different shaped precursors, different ratios of the raw materials, and increasingly, start adding other materials (magnesium, titanium, gold you name it) in at varied amounts. They'll also change the temperature of the furnace or how long it's at that temperature or how long they mix the precursor with the lithium. It's science, so there's always a hypothesis, and most of the time it's wrong.
There's a lot of variables, and then there's really only one thing to do with this test cathode: test it against an electrolyte/anode in a battery and see what the result is. It's brutal work and requires a high amount of manpower and costly labs. That reason (as well as monopolized supply chains) is what has kept so many players out of this industry.
This is why people are now increasingly buying lab equipment that can automate these processes and using robots to create and test cathodes at scale.