The next era of battery manufacturing is the convergence of local and global needs
The battery industry walks a very interesting rope between globalization and localization. Our globalized economy and local incentives have centralized much of the manufacturing expertise – a major challenge for a widening market. The key resources for production can only be easily collected in a handful of locations around the world. And the products batteries go into has led to greater regulation on the cells in certain markets for many reasons – political, environmental, or for national security. The biggest example of this is battery passport regulations, specifically those set to become law soon in the European Union.
To talk about this change to the industry and understand how companies and governments are moving forward, and how they should be planning, Puneet Sinha and I sat down with Roger Atkins of Electric Vehicles Outlook for two episodes of The Battery Podcast. You can listen to Part One here if you haven’t already. Part Two is available below, but you can keep reading to get some of the highlights from the discussion.
Part of the challenge with the transition to battery electric vehicles is in understanding the impact of these vehicles on the environment. They are touted as a more energy efficient options, but this comparison is when looking at the lifetime of that vehicle. Manufacturing the batteries for an EV is energy intensive and higher than a comparative internal combustion vehicle. But after they each leave the factory floor the story changes and the EV makes ground back. This interplay between the now and the long term plays out over and over again in the industry and is part of why battery passports will be so valuable. Not only does it provide a way to track and optimize what goes into the battery, it can provide data to OEMs and even secondary customers about the health and expected longevity of the battery in the product. That last point ties into the first part of our conversation with Roger about secondary lives of batteries in grid storage.
Talking with battery manufacturers, there is an incentive for them to want battery passports even though it would impose new requirements. Traditionally, the OEM, the car manufacturer for instance, would be the entity with data on how a battery performs in the real world. They are designing the packs, modules, whatever, that goes into their product and the battery manufacturer is in effect just a supplier. But by creating a thread of data from the taw materials through the use of a product, the manufacturers now have more insight into how their batteries are behaving. This can feed their optimizations and design iterations to not just meet the stated needs of an OEM, but work towards emergent needs in a wider marketplace.
Transparency afford by battery passport regulations also has geopolitical ramifications. Many regions around the world are working on way to become more self-sufficient – through on-shoring and diversified supply chains – while also seeking the same returns Chinese manufacturers have seen on green and electrified technologies. That might mean establishing battery manufacturing capacity locally or adding value to the supply chain before critical materials leave a region. Brazil for instance is working on material refinement to add value to their resource exports rather than selling only the raw resource. This kind of action adds to the local economy and reduces the energy needed to chip those resources because they have already been sifted into their most valuable forms.
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