The future is going to be about sustainable energy generation, sustainable storageand sustainable mobility. They all have one thing in common:batteries. As demand for EVs is increasing the automotive OEMs are trying to collaborate with the battery manufacturers to make batteries for them and bring the $/Kwh to the best minimum possible.
Lithium-ion batteries are anywhere between 30-40% of the bill of materials in making electric vehicles. During the year 2014-15, there were only two giga factories present in the whole world.Today there are more than 200 Giga factories that are in production or in the construction stage whose capacity will be around 3Twh/annual capacity.
Due to this rapid increase in production and making the full use of technology, there is a steep decrease in price from 1300$/Kwh(2010) to 120$/Kwh(2021). A ten times reduction in cost in 10years.The announcement of Mr.Elon Musk at Tesla’s battery day to build factories by making full use of local resources in TWh capacities will eventually bring the cost down by 80%.
For batteries to last long in electric vehicles there must be a continuous supply of pure minerals/metals, which involves a very complex supply chain. This is where the supply chain challenges arise.
Let’s take an example of the NCA cell used by most Tesla EVs which is manufactured by Panasonic at their cell factory at Giga Nevada. The NCA cell is comprised of Nickel, Cobalt, Aluminum and Graphite and their cathode is manufactured by Sumitomo located in Japan.
Lithium comes from two different mines which are located in South America(LIVENT) and Australia(GENFENG, ALBEMARLE). The Lithium produced in these mines cannot be directly used in the cell so they are first converted to Lithium Hydroxide in China and then sent to Sumitomo for Cathode manufacturing. So here lithium is shipped to three different countries before used in a EV battery.
Availability of nickel is high in Indonesia, The Philippines, Russia, Australia and Brazil. The sources are kept confidential by Sumitomo. Tesla is trying to increase the Ni content and minimize the use of Cobalt. The Philippines have suspended 17 Ni mines because of environmental concerns, due to elevated rates of deformities and respiratory problems to the community living nearby and also to the mine workers due to the exposure to pollution generated by nickel mining and smelting.
Aluminium is mined in the form of bauxite and its mines are present in Guinea, Vietnam, Brazil, Indonesia and Australia. Mining, refining of bauxite is immensely energy-intensive and uses large amounts of water and generates air, water and soil pollution. It aso and leaves back behind tonnes of carbon emissions.
Cobalt is necessary for improving the energy density (vehicle range) and also the cycle life of the batteries. Most of the countries do not possess any Cobalt. Cobalt is mainly available at the Republic of Congo, where child labor is a big concern.
All minerals are mined in different countries, processed at different countries and then the pure metal form is sent to the factory which is also located in a different country. So lots of transportation costs as well as CO2 emissions which in turn is not at all sustainable
To solve the challenges, EV manufacturers including Tesla are shifting to LFP cells as it is less expensive, raw materials easily available, and cobalt free. More research is going on to increase the life of the cells so that there is no need to replace the battery pack during the vehicle’s lifetime. Many recycling plants are being set up in different countries to get back the minerals out from the cells which can be further used in new cells.
You can imagine the effect on the design of factories and choice on where to locate them. Lay-outs of production plants, the machines within and supply chain towards them is changing rapidly and even ‘old’ factories will need the ability to change. Imagine also the challenges of recycling plants who will need to be able to recycle different kind of batteries (cells, modules and packs) and retract different materials and bring them in a re-usable state.