The UK Must Accelerate Battery Cell Production to Meet Rapidly Increasing Demands from the Automotive Sector

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According to the Faraday Institution, it is expected that by 2030, three Gigafactories will be necessary to meet the demand for lithium-ion batteries from the UK automotive sector, and eight will be needed by 2040.

While the need and demand for such facilities is evident, there are significant challenges and barriers to funding, building and operating Gigafactories successfully. HSSMI has led and supported Gigafactory projects which have pin-pointed these challenges and explored ways to resolve them. This white paper highlights key considerations for Gigafactory design, operation and manufacturing strategies, as well as the importance of selecting the right cells to optimise manufacture.

Globally, almost 1.8 terawatt hours (TWh) will be needed by 2030 to meet electric vehicle (EV) battery requirements. The production capacity for EV battery cells, however, will only be approximately 1.3 TWh, that is 0.5 TWh below the predicted demand level. Of the proposed sites, by 2028 more than 72% of global lithium-ion battery production capacity will be located in Asia (65.2% China, 3.8% Japan and 3.3% South Korea), while Europe and US will represent 17.2% and 10.2% of global capacity respectively. This presents a major concern for European and UK based automotive companies with the limited supply of critical battery components predominantly controlled overseas.

Furthermore, in Europe, there has historically been a lack of a joined up industrial strategy to attract large scale battery manufacturers, resulting in some European manufacturers setting up facilities elsewhere in the world. This is starting to change, with positive efforts to catalyse the setup of Gigafactories by government affiliated organisations and groups such as the ATF (Automotive Transformation Fund) in the UK. As such the European cell manufacturing landscape is positively changing and growing rapidly, with multiple announcements of Gigafactories and joint ventures between OEMs and cell manufacturers. In 2019, Europe (including the UK) secured a record €60 billion in investments to produce electric vehicles and batteries – 19 times more than in 2018, and 3.5 times more than China in the same year.

Gigafactory developments in the UK face challenges of higher labour and energy costs than Asia and parts of Europe and additionally must rely on other nations for the upstream supply of critical raw materials. Countries in similar positions, like Germany, have implemented significant incentives to change consumer habits and allocated significant internal investment. In 2018, Germany invested €25 billion towards its domestic automotive industry, equivalent to 35% of total R&D funding in Germany. A further €2.5 billion was allocated in 2020 to existing infrastructure programs to build additional charging stations and support further battery cell production. In comparison, investment directed towards the UK automotive sector falls short of these levels and has been falling since 2013 and, in 2018, UK inward investment was at £0.59 billion. This is despite the positive efforts being made by Government backed bodies such as the Advanced Propulsion Centre (APC) and the Faraday. Further investment is necessary to not only meet the automotive sector’s needs but to secure the future of the UK industry which may be shut out as global supply is bought up.

The UK has a wealth of knowledge and experience in battery chemistry and cell design which must be leveraged to provide competitive and next generation products. However, the typical development period is 10 years (from new chemistry research to volume production). The time it takes to scale up manufacturing can be reduced by parallel activities conducted early in the product development process which focus predominantly on integration within existing and expected future manufacturing processes.

The cell design significantly changes the layout and equipment of a Gigafactory with differences in format leading to large changes in annual output, e.g. 1GWh equates to typically 55 million cylindrical cells or 4.6 million automotive pouch cells. If the desired cell design changes following commissioning of the Gigafactory, expensive retooling will be required for much of the production equipment. More subtle changes in cell design can have similar impacts, increasing manufacturing costs and resulting in non-competitively priced products. As such, correctly selecting a cell design and ensuring there are no baked-in expensive processes is critical for this highly competitive market.

As with all factories, it is important to reduce failures on the line to minimise waste streams and the associated cost. With the cost of materials contributing to roughly 70% of the value of a cell, it is especially important to limit and detect failures early to prevent any further investment into a failed part. During the cell assembly stage of production, typically only tests associated with mechanical and electrical performance are conducted, with any changes to electrochemical performance only detected at end-of-line testing (FA&T-formation, aging and testing). Both of these stages demand high energy consumption, and operational cost, due to expensive controlled atmospheres, and additionally, testing channels in FA&T present a significant capital expenditure per channel. While destructive sample testing can be utilised, deployment of non-destructive testing methodologies will become critical to catch failures at source, reduce unnecessary material waste and optimise the number of FA&T channels.

Building Gigafactories in the UK presents unique challenges and barriers. However, with a clear need from the automotive industry there is also a significant opportunity for positive progression. The UK has a world-leading research and development base in battery technology as well as a crucial government backed innovation structure (e.g. Faraday Institution, APC ATF, etc.). With close collaboration between investors, customers, UK Government, technology developers and suppliers, these challenges can be overcome to provide competitively priced and potentially world leading cells in quality and performance.

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