Europe must grow its lithium-ion battery-manufacturing capacity if it’s to compete with China. Staffan Södergård, product group manager at ABB, discusses this need, with a focus on the cutting-edge lithium-ion factory Northvolt Ett.
Will there be enough battery factories to meet EV demand in Europe as it strives for a carbon neutral society?
It’s well understood that lithium-ion batteries hold a lot of energy storage in a small, light battery and as such have become the battery of choice in many consumer electronics from laptops to cell phones. Sales of electric vehicles (EV) have increased more than tenfold in the past five years and with more countries setting bans on internal combustion cars this exponential growth is only set to continue apace.
China has seized momentum in lithium-ion battery production in recent years. In early 2019, BloombergNEF placed 73% of global lithium cell manufacturing capacity in China, and there are a number of factors behind this. Importantly, China is a leading market for EVs with new sales supported by a government credit scheme, a part of Beijing’s strategy to reduce energy imports, clean up air quality and build its domestic auto industry.
As a vital part of the EV supply chain, Chinese lithium-ion battery manufacturers also receive government support— which has been essential to their growth, given the large capital investment required to establish large-scale factories.
Europe, which is the second largest market for new EV sales and with its own substantial domestic auto manufacturing capacity, is now waking up to the strategic importance of developing its own lithium-ion battery capacity.
Given the role lithium-ion batteries will play in decarbonising the transportation and energy sectors, where energy storage technologies are needed to support high levels of intermittent renewable generation, securing a European supply of lithium-ion batteries will be crucial to meeting the continent’s climate goals.
European manufacturers can also guarantee that battery production is done in as sustainable a way as possible, from a minimum carbon footprint using clean carbon-neutral energy sources, to the ethical sourcing of raw materials and recycling the lithium at the end of life. Ensuring the supply of lithium-ion batteries from green manufacturing facilities makes sure that you have the greatest possible impact when it comes to tackling today’s climate challenge.
Leading the way
One European manufacturer leading the way is Northvolt, whose vision is to develop the world’s most environmentally friendly battery and to establish one of Europe’s largest and most advanced lithium-ion battery manufacturing factories. Northvolt Ett, in northern Sweden, is the company’s first large-scale battery factory and will serve as its primary site for the manufacturing of active material, cell assembly, recycling and auxiliaries. The factory is powered by 100% clean energy. Large-scale manufacturing will commence next year and annual capacity will ramp up to at least 32GWh by 2024, with the potential to expand to 40GWh in the future.
ABB partnered with Northvolt in 2017, when the companies signed a memorandum of understanding for a wide-ranging supply and technology partnership. This included complete electrification, instrumentation and process control for both Northvolt Ett and Northvolt Labs— a smaller facility that will house a 350MWh demonstration manufacturing line where the company can work with customers to develop battery cells for mass production. ABB are currently supporting Northvolt in fine-tuning and optimisation of the process at Northvolt Labs.
What we (ABB) are doing with Northvolt is really laying the foundation for the future of lithium-ion battery production in Europe. The first 8GW block at Northvolt Ett will be the largest lithium-ion manufacturing facility in Europe. It is the blueprint.
Even though 8GW is a large facility, it covers about 1% of potential demand from the European auto industry for passenger car production. That does not take into account demand from heavy transportation, let alone other sectors, such as energy. Although Northvolt Ett will be scaled up to 40GW, it will still be a drop in the ocean of potential demand.
It is therefore vital to get this right because we are in a position to determine the path of a whole industry.
Northvolt Ett is fundamentally different to conventional battery production facilities. With a concept leveraging scale, vertical integration and automated manufacturing, the lessons learned here will help speed-up the development of the industry to meet the huge potential demand. Scalability is therefore one of the crucial aspects of the factory.
With EV demand surging in Europe, building enough lithium-ion battery factories, quickly enough, is going to be a real challenge. Realistically, it is going to be a bottleneck for the next five to ten years in terms of providing European-made products to the market.
The work ABB are doing with Northvolt is designed to help reduce that bottleneck and facilitate the rapid expansion of Europe’s manufacturing capacity. Northvolt itself has some aggressive targets to scale up and we are helping to meet them. The company also has a joint venture in place to establish a second factory— Northvolt Zwei— with Volkswagen, at Salzgitter in Germany. Construction is expected to begin with an initial capacity of 20GWh in early 2024.
The speed and extent of expansion that is being seen at Northvolt, and is likely within the wider European lithium-ion battery sector, will bring benefits to the communities and regions that play host to these developments— not least in terms of providing highly-skilled employment. Capital-intensive projects on this scale are few and far between in Europe and there are more than 400GWh in announced plans for gigafactories in Europe. The economic impacts that will accrue from building this strategically important industry will be huge.
Factories on this scale have not been seen before in Europe. As such, there are bound to be unexpected situations that arise during its development. There are going to be times when companies will have to adapt and learn as they go— especially when working in a particularly dynamic market environment. At both ABB and Northvolt, we have a culture that facilitates this type of fast-thinking and problem-solving in response to any challenges that may come our way.
It is an exciting time in the lithium-ion battery space in Europe. We are establishing an industry and what we do now will have real consequences far beyond ABB’s work with Northvolt. We anticipate a boom in the next five to ten years and are at the front of that. It is a rare opportunity and will make a real contribution to the decarbonisation efforts that are so crucial in minimising the effects of climate change.
