The story of modern and global battery manufacturing
Battery production has changed rapidly in the last two decades and has a seen a massive shift in the ambitions of manufacturers around the world. For a very long time, Europe and the United States have been leaders in the industry, with ambitions around electrification. But there has been a shift. At nearly every turn the Chinese market has chosen to do the hard parts of development, the parts that the previous leaders didn’t want. And now, they have become a global competitor in the market – often delivering industry leading technologies.
To understand how this change happened, examine the effect it is having and talk about how to regain a competitive edge in the market, we brought in Roger Atkins of Electric Vehicles Insights for an episode of The Battery Podcast. You can listen to the first half of our discussion below. But if you keep reading, we’ll get to some of the major points Roger and our host Puneet Sinha discussed.
The story of the battery manufacturing industry is one of critical resources and global supply chains. The materials used in today’s ubiquitous chemistries are only found in high quantities in a few places around the world. That’s not entirely unusual in our globalized markets, but the processing and then manufacture of batteries with these materials is nearly just as consolidated. The most well know battery manufacturers and OEMs are all in China, Japan and Korea. Again, not unusual, but it does create a very real challenge given the application of batteries. Much of this consolidation happened when the main use case was in consumer electronics, which were also being made in the region. But now, batteries are being put in so many more products from automobiles to grid-scale energy storage systems. There are even national security implications as has been highlighted with the conflict in Ukraine and the use of electric drones. Access to batteries is valuable.
An interesting application of batteries is one that could not have been easily planned for, illustrating the need to invest in broad technology capabilities at a national scale as China has done for decades. Datacenters, specifically AI datacenters. The rise of these facilities has been extremely fast, with broad investment in the technology. But it has brought a challenge – power stability. These types of facilities are much more transient in their power load compared to other data centers. When a load kicks in, shuts off, or even transitions to a new task it can cause the grid frequency to fluctuate. This is bad for the sensitive equipment inside and the surrounding community on the same grid. Thus, companies are looking to quickly deploy large battery backups to act as a power buffer for the grid. This emergent need has only underlined the viability of standardized or modularized battery architectures to fit in multiple applications without the need to redesign a system every time.
Looking at energy and batteries as a holistic system, more broadly can have many other benefits in how we consume and store energy around the world. Vehicle to grid systems for instance, when a vehicle’s battery can put stored energy back onto the grid, or as backup for a home, changes the economics of a vehicle purchase. Companies like Ford and their F150 Lightning Truck in the United States, the partnership with BYD and Octopus Energy in the UK, or BMW and E.ON in Germany are making these vehicles more valuable by creating a marketplace for energy storage. They are bringing energy arbitrage to the customer, rather than having it restricted to only the large-scale investors.
While this episode is one of the longest we’ve posted, I think it is one of the best conversations we’ve had on the show and there is still so much I didn’t cover here. If you have the time, I will highly recommend listening in to the discussion with Roger Atkins and Puneet Sinha. Even if it’s at 1.5-time speed. But if listening isn’t your speed, you can view the full transcript of the episode here. And if you do listen, make sure to subscribe so you don’t miss the second half of our discussion.
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