With Europe set to reach 789.2GWh of lithium-ion battery gigafactory production by 2030 according to new Benchmark data, what does the US need to do to keep up as both race to prevent China completely monopolising the sector as it did with solar?
Panellists speaking on Day 1 of Lawrence Berkeley National Laboratory’s (LBNL) National Energy Storage Summit yesterday (8 March) agreed that Europe is far ahead of its Atlantic neighbour on getting its gigafactory pipeline up and running – despite some recent forecasts pegging the two markets’ 2030 expected capacity figures closely. So what needs to happen to make that pipeline a reality?
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Creating a mindset that says it’s possible
The good news is that the current US administration is bullish on getting there, said Robert H. Edwards, Jr. from the the US Department of Energy’s Loan Programs Office.
“We are uniform across the Administration in believing that our United States innovative energy sector, with some assistance from the federal government, will be able to establish one of the premier battery manufacturing ecosystems in the world,” he said.
That was in response to a good point from Ilka von Dalwigk, Policy Manager at InnoEnergy and the European Battery Alliance. She said that when the Alliance launched in 2017, some argued it was too late to launch a battery industry as Asia had already won, while some said it was too early considering the future generation of batteries like solid-state would be a better bet.
“I think there was a lack of understanding of the speed and scale of this transition and one of the major achievements of the European Battery Alliance initiative has been a change in mindset, to believing we can become a part of and even a winner in this transition,” she said.
Research from information provider Benchmark Mineral Intelligence’s Lithium ion Battery Gigafactory Assessment, which supplied the 2030 figure, points to the existing results of that change in mindset. Four of the world’s seven tier one producers of automative-grade lithium-ion batteries have gigafactories in Europe and, once Northvolt’s gigafactory in Sweden is active, that will be five.
Consider ecosystem around the gigafactory and next-gen applications
Northvolt’s expansion on both continents made panellist Landon Mossburg, its America President, uniquely placed on this topic.
He said that the main challenges for getting gigafactory projects off the ground are around finding a suitable site, procuring the necessary amount of clean power and recruiting the adequately skilled workforce. But the challenge goes beyond just the factory itself.
“If you look at Asia, they’ve got about a 10-15 year head start on us in terms of capital equipment, suppliers, raw materials, even things like grid elements and logistics. These factories are just the tip of the iceberg. You need an ecosystem of suppliers that take a very long time to develop and are highly specialised,” he said.
Another major challenge is being ahead of the curve on the future high-volume applications for batteries, for which he highlighted aviation as one, and warned that there were already signs that Asia is moving much faster than anywhere else on this. It is important not to underestimate the challenge, be fully aware of how much capital, partnership, and up-front planning would be needed.
“But I think what’s super encouraging to me is looking at what’s happened in Europe which is an outstanding success story, and I start to see that happening here in the US as well. So I think we’re in a good spot,” he said, finishing on a positive note.
And above all, money
The US federal government has brought in numerous financial schemes to help projects get off the ground, said Monica Gorman, Deputy Assistant Secretary for Manufacturing in the US Department of Commerce International Trade Administration. She explained the significance of the Federal Consortium for Advanced Batteries and its goals, which you can read about here.
But the administration is also keen to do this in a way which helps disadvantaged and disenfranchised communities, especially making sure the transition doesn’t create more post-industrial regions which become unattractive to private capital. She highlighted a US$4 million EV manufacturing scheme in Detroit which created 810 jobs, saved 300, and generated US$45 million in private investment.
She also pointed out the need to invest in the countries semiconductor production sector with the bipartisan Innovation Act, to much nodding of heads from other panellists. “Because if you want batteries and electric vehicles, you have to have semiconductors as well.”
On the same topic of funding, Edwards said the current dearth of substantial gigafactory announcements on US soil would change by the end of this year.
“We currently have US$10 billion of loan applications for battery manufacturing plants. These are greenfield plants in the United States. These plants include both manufacturing plants for lithium-ion batteries for use in vehicles and trucks and transportation generally, as well as manufacturing capacity for energy storage for stationary storage applications for the grid, so before the end of the year you will see some announcements from the loan programmes office that will signal the administration’s financial commitment to build these greenfield battery projects,” he said.
Europe’s 2030 gigafactory pipeline
Information provider group Benchmark Mineral Intelligence said Europe is on track for 27 gigafactories from 18 battery cell producers by 2030.
The most significant will be Tesla’s Berlin Gigafactory, which will commission commercial cell production in 2023 but reach an annual capacity of 75GWh by 2026 and 125GWh by 2030. That will make it the largest in the world behind its counterpart in Austin, Texas.
By 2030, Benchmark anticipated Europe’s top five battery makers by capacity to be:
- Tesla (Germany): 125GWh
- Northvolt (Sweden x 2): 92 GW
- CATL (Germany): 80 GWh
- LGES(Poland): 67 GWh
- ACC (Total/Stellantis) (Germany, France, Italy): 64 GWh
The 789.2GWh capacity by 2030 would give Europe a 14% market share of the global 5,454Gwh lithium-ion battery production market, Benchmark said. Clean Energy Associates’ figures, referred to earlier on, gave Europe a slightly higher (16%) share of a slightly smaller market (4,764GWh).
Benchmark says Europe will grow its capacity more than six-fold (500%) between end-2022 and 2030, China by 220% and the USA by 575%.