ENERGY WATCH #2 - October 30, 2018
As EVs go, so go batteries. One after the other announcement is being made of new battery production initiatives – including in European countries. Although Europe has long been behind Asia in battery manufacturing capability, it now definitely seems to be catching up.
The two latest announcements of new initiatives have come from Northvolt and BASF.
Swedish battery manufacturing startup Northvolt has partnered with South Bay Solutions, a Tesla supplier, to jointly set up a plant in Poland to produce battery systems for energy storage companies and the mining industry, Reuters reported on 22 October.
Northvolt, founded by former Tesla executive Peter Carlsson, unveiled ambitious plans last year to build a vast cell production factory in Sweden with a planned capacity of 32 gigawatt hours by 2023.
It said the production plant in Gdansk, Poland would take cells from the Swedish factory and use them to develop battery systems, or modules.
Northvolt expects production to begin in 2019 and the site to have an initial manufacturing capacity of 10,000 modules per year. The company has yet to reach an agreement to supply its cells to a carmaker, but earlier this month said it was working with Germany’s BMW to develop a process to recycle batteries, adding that it hoped this was the first step in a “long partnership”.
On the same day, 22 October, BASF announced that it has selected Harjavalta, Finland, as the first location for battery materials production serving the European automotive market. The plant will be constructed adjacent to the nickel and cobalt refinery owned by Norilsk Nickel (Nornickel).
“This investment is part of BASF’s €400 million multi-step investment plan announced last year and builds upon initial battery materials production started in Harjavalta in 2018”, the company announced. “Start-up is planned for late 2020, enabling the supply of approximately 300,000 full electric vehicles per year with BASF battery materials. The new plant in Harjavalta will utilize locally generated renewable energy sources, including hydro, wind and biomass.”
Additionally, BASF and Nornickel “have signed a long-term, market-based supply agreement for nickel and cobalt feedstocks from Nornickel’s metal refinery. The agreement will establish a locally sourced and secure supply of raw materials for battery production in Europe.”
The company notes that “the investment in the new plant in Finland reinforces BASF’s support of the EU Commission’s agenda towards a European battery production value chain. BASF is also evaluating additional locations in Europe for the construction of new production plants for battery materials.”
“The co-location of BASF’s new plant and Nornickel’s metal refinery in Harjavalta will enable unparalleled access to a local nickel and cobalt supply,” said Jeffrey Lou, Senior Vice President, Battery Materials at BASF. “Our high-nickel cathode materials are key to deliver enhanced energy density and vehicle range to our customers.”
BASF said that “with this world-scale production facility, BASF will be able to serve the European e-mobility growth strategies of key OEMs and cell suppliers with reliable supply and close collaboration.”
This refers to the initiative of the European Battery Alliance, set up by the European Commission last year.
On 15 October 2018, the Commission reported that “major progress” has been made “in establishing battery manufacturing in Europe” over the last year.
The Commission said that “The Commission Action Plan is in place, the first pilot production facilities are being built and further projects are announced to establish the EU as the lead player in the strategic area of battery innovation and manufacturing.”
The Commission notes that “in less than a year, the European Institute of Innovation and Technology (EIT) InnoEnergy has managed to mobilise and steer a network of around 260 innovation and industrial actors, coming from all segments of the batteries value chain. These key actors have committed to investing into actions and projects that they have collectively identified as top priorities, ranging from cells manufacturing, second-life batteries, ecolabel, carbon footprint reduction in manufacturing, a clearing house for batteries recycling, vehicle-to-grid, and enhanced cooperation between universities and companies to set up relevant education and training programmes.”
It list the following concrete projects:
- Umicore announced in June 2018 a major investment in Poland – Nysa – for the production of cathode materials. The plant will build upon the state-of-the-art technologies and is due to start deliveries in late 2020.Furthermore, a new Process Competence Centre will be built in Belgium to develop and scale up high-efficiency production technologies.
- BASF is a strong player in the battery materials market. The company expects the market for lithium-ion batteries to grow rapidly and plans to add production capabilities in Europe.
- Solvay is working on developing state-of-the-art electrolytes and electrode binders and separators that are needed for highly efficient batteries. The company is considering building a plant in Europe.
- Work has already begun to build a demonstration line in a project led by Northvolt of Sweden (with a EUR 52.5 million loan from the European Investment Bank). The production is to start in the second part of 2019.Northvolt has also obtained the permit to construct a larger scale facility in Skellefteå in Sweden. The objective is to scale up production up to 32 GWh in 2023.
- The BMW Group, Northvolt and Umicore have formed a joint technology consortium in order to work closely together on the continued development of a complete and sustainable value chain for battery cells for electrified vehicles in Europe.
- The battery maker company SAFT has announced in February 2018 a consortium with Solvay, Umicore, Manz and others to develop and manufacture battery cells – starting with advanced Li-ion technology followed by Li-ion solid state.
- Siemens is working with the entire cell manufacturing value chain on manufacturing challenges and solutions, and has recently engaged in piloting the first fully automated and digitized production lines in Europe.
- Companies and research institutions in Germany are working with great ambition to establish a battery cell production in Germany in due time.
- Other EU operators are also building facilities to produce battery cells, notably for energy storage applications (FAAM in Italy and MES in the Czech Republic).
The Commission has also started with the rapid implementation of the Strategic Action Plan for Batteries. Key actions are now underway:
- The regulatory framework – the work on a new Eco-design Regulation is rapidly developing, to set the performance and sustainability criteria that batteries will have to comply to be placed on the EU market. In the context of battery Ecodesign, the Commission’s Joint Research Centre has also published the results of a survey of battery-related standards. The Commission Report on the Evaluation of the EU Batteries Directive should also be published before the end of the year. It will address the collection of waste batteries, the recycling levels achieved within the EU or the labelling system. The results of the study in support of the Evaluation will be made available by the end of October.
- Raw Materials –a High Level Conference on Raw Materials in Brussels on 14th November will present recommendations based on a dialogue launched by the Commission with the Member States on battery-related raw materials in view of developing attractive framework conditions for exploration, extraction and recycling of battery raw materials in Europe. The Commission is calling on industry to also build raw materials refining capacity in the EU.
- Interregional Partnership on Batteries – at a workshop on 8th October an Interregional Partnership on batteries has been set up. Slovenia has proposed to take the lead together with 7 regions in total on advanced materials. Support is provided from the European Regional Development Fund (ERDF).
- Research – on 24 January 2019 a call will open with a total budget of EUR 114 million from the EU Research and Innovation Programme Horizon 2020 for battery related topics, also supporting European Battery Alliance objectives. In 2020, additional topics for battery-related projects with a total budget of EUR 70 million will be published.
- Skills – In the framework of the Erasmus+ programme, the next call for proposals for the Sector Skills Alliances implementing the Blueprint for Sectoral Cooperation on Skills will be published at the end of October 2018. This new call will cover six sectors including ‘batteries for electro-mobility’.
This list of announced manufacturing projects and investments is by no means exhaustive, notes the Commission.
Indeed, it is hard to keep track of all the projects and plans for battery production and research in Europe.
In June 2018, Reuters published a Factbox on Plans for electric car battery production in Europe.
Europe has only one operating factory producing battery cells for electric cars, said Reuters, a plant in Britain that produces batteries for Nissan vehicles such as the LEAF.
It then gave an overview of plans to establish electric vehicle (EV) battery plants in Europe:
The Swedish company, headed by a former Tesla executive, aims to build Europe’s biggest lithium-ion battery factory, producing 32 gigawatt hours (GWh) of battery cells a year by 2023, rivalling Tesla’s U.S. “gigafactory”.
It has partnered with Siemens, ABB and Volkswagen-owned truckmaker Scania to build the 4 billion euro ($4.7 billion)plant while the European Investment Bank has provided financial support.
The German-based consortium of 17 companies and research institutions plans to build two foundries, where lithium-ion battery cells are custom produced to customers’ specifications. The two factories aim to have a capacity of 34 GWh by 2028.
Chinese electric vehicle maker BYD is also one of the world’s biggest battery producers with the lowest production costs in the industry, according to Bernstein Research.
BYD is considering cell production in Europe, an executive told Reuters, adding it was not clear where it might be located.
BYD has a growing business making electric buses and is also involved in monorails, solar farms, and energy storage. The company has two production sites for electric buses in Europe, in Hungary and France.
The company, backed by Warren Buffett’s Berkshire Hathaway Inc, warned in March that Chinese subsidy cuts for new-energy vehicles could slash its quarterly profit by as much as 90 percent.
China’s Contemporary Amperex Technology Co (CATL), one of the biggest EV battery producers, said in November it was planning a $2 billion initial public offering to boost its lithium-ion battery output six-fold to 50 GWh capacity by 2020.
In January last year, CATL bought a 22 percent stake in Finnish auto supplier Valmet Automotive and has said it plans to build a factory in Europe, but has not announced details.
Volkswagen and Daimler have said they plan to buy batteries from CATL.
South Korea’s LG Chem plans to produce 100,000 EV batteries per year at a Polish factory due to be completed this year.
LG Chem supplies batteries to Volkswagen, General Motors and Renault SA.
South Korea’s Samsung SDI Co plans to open a factory near Budapest this year which would be able to produce batteries for 50,000 electric vehicles a year.
Samsung SDI, an affiliate of Samsung Electronics Co Ltd, also produces rechargeable batteries for electronic devices such as smartphones and energy storage systems.
Samsung SDI, which already has a plant in Austria assembling battery packs, has supplied batteries to Volkswagen and BMW.
South Korea’s SK Innovation plans to break ground this year on a battery plant in Hungary and launch production from 2020, producing 7.5 GWh of batteries per year. Customers would include Daimler, it said.
SK Innovation started as Korea Oil Corporation and owns South Korea’s largest crude oil refiner. It also has divisions for chemicals, lubricants, batteries and electronic materials.
Last year, Chinese investment firm GSR Capital bought Nissan Motor Co’s electric vehicle battery business – Automotive Energy Supply Corp – including battery plants in Japan, the U.S. state of Tennessee and England.
The UK plant produces 2 GWh of lithium ion batteries per year for Nissan electric vehicles.
In February, GSR signed a $4.5 billion joint venture deal with Turkey’s Zorlu Holding to build a factory that would launch production in 2023 for batteries for electric vehicles and energy storage systems.
GSR said in March it would invest $500 million in Swedish electric car maker National Electric Vehicle Sweden (NEVS) and planned to start production of EV batteries at NEVS.
GSR Capital Chairman Sonny Wu told Reuters the Swedish plant may launch output in mid- to late-2019 and GSR was also looking at elsewhere in Europe for additional battery factories.
Japanese battery maker GS Yuasa Corp said in January it would set up a factory in Hungary that would assemble lithium ion batteries and would consider producing cells on the site in the future.
Last year, the Nikkei business daily reported the company would begin mass-producing a new lithium-ion battery that would double the range of electric cars as early as 2020.
Chinese battery maker Tianjin Lishen plans to open a sales office in Germany, its first in Europe, and has held talks with Volkswagen and Daimler, a source at the company said in April.
Lishen’s biggest shareholder is China Electronic Technology Group (CETC), a state-owned firm managed by the central government, according to its website.
France’s Saft, owned by energy company Total produces a range of batteries, including for back-up power and industrial applications, but not for electric vehicles.
In February, it created an alliance with Siemans, Solvay and Manz) to develop a new generation of batteries.
The group will focus on advanced high-density lithium-ion and solid-state technology, targeting the market for electric vehicles, railway, marine sectors, among others.
German auto parts and tyre maker Continental AG formed a joint venture in March with China’s CITC Ltd to produce so-called “mild” hybrid batteries in China.
Continental also said it was considering making EV batteries using solid-state technology, but for now was holding out for more advances to be made in the field.
Note that this overview does not mention Leclanché, the oldest battery company in the world and (at least until recently) the largest lithium battery manufacturer in Europe, as we reported on Energy Post in 2015.
Leclanché is also ignored in the European Commission’s press release for some reason.
With regard to recycling initiatives, website The Driven reports that German carmaker Audi and partner Umicore are “one step closer to a closed loop on EV batteries after successfully completing the first phase of a battery component recycling program.”
Audi, which started the partnership with industrial materials group Umicore in June 2018, “is looking to ensure valuable raw materials used in lithium-ion EV batteries – which also includes cobalt, nickel and copper – can be recovered for use in new batteries instead of being relegated to landfill.”
“Lab tests run by the carmaker indicate that up to 95 per cent of the elements used in battery components can be recycled”, according to a statement by the company. “The focus is now on developing the technology by which end-of-life batteries for the new all-electric Audi e-tron can be resurrected into new batteries.”