Automotive Battery Production How climate-friendly mobility is boosting the business of battery manufacturers
Big automotive manufacturers are winding down their output of vehicles with internal combustion engines (ICEs) and turning to e-mobility. What does this mean for battery producers in the process industries? We look at market trends, challenges and opportunities for process industry companies and their partners.
Electric vehicles (EVs) are a key part of the global energy transition, which is being driven by new technologies and increasing environmental awareness, responsibility and legislation. E-mobility continues to gain momentum, forcing the automotive industry to undergo one of the most significant transformations it has ever experienced. Changing attitudes, greener consumption and more sustainable production are going hand in hand.
While ICE vehicles, petrol and diesel are still important for keeping people and goods moving everywhere, fossil-fuel-based transport is giving way to electric. Growing together in a virtuous cycle, the rapidly rising numbers of partly (“hybrid”) and fully electric EVs is both a cause and an effect of greater environmental protection.
69 Percent of Drivers in China and 63 Percent in South Korea are Planning to Buy a EV Car
Although global demand for new cars is currently being moderated by microchip shortages and high inflation, we are seeing an accelerating switch from ICE vehicles to EVs. For example, in Norway the OFV (Norwegian Road Federation) says that in January 2022, 80 percent of new private cars were EVs; and according to recent research by EY, 69 percent of drivers in China and 63 percent of drivers in South Korea who are planning to buy a car would choose an EV.
New technology and materials have massively increased the energy density and reduced the cost of battery power — from USD 7,500 per kWh in 1991 to just USD 100 today. EVs can now travel much further between charges and, especially as most journeys are short, many people’s initial “range anxiety” concerns are easing.
Government Incentives are Driving the Trend Towards EVs
The trend towards EVs is often pushed by higher vehicle taxes on petrol and diesel fuel, and government incentives to buy and use EVs. Cities such as London have introduced low-emission zones to discourage ICE vehicles. Future restrictions will go much further, with for example the UK government banning the sale of all new ICE cars from 2030.
In addition to the rapid pace of the switch to electric, factors challenging the EV sector include much higher energy and raw material costs, the growing demand from fast-expanding populations in Asia and Africa, and political uncertainty and war.
More Effiency is Needed
To survive and thrive, no manufacturer can stand still. Energy-intensive manufacturers — such as automotive battery producers — need to be more efficient than most.
There is an urgent need to increase battery production capacity in Europe to achieve greater self-sufficiency.
Currently around 90 percent of the EV batteries needed in Europe are produced in Asia, and mainly in China. Factories in Europe typically wait weeks to receive their orders, and rely heavily on raw materials primarily from Africa, components from Asia, and generally on long-distance supply lines that are vulnerable to disruption.
How to Choose Plant Locations and Design
Investments in Europe have already started, especially in the Nordic countries, Germany and Eastern Europe, where a significant number of new automotive industry battery factories and production plants for battery materials are at the planning or construction phase. Many of these are so-called gigafactories — giant plants for producing batteries on a large scale.
Faced with the need to minimize transport emissions and costs, European automotive manufacturers, raw material processors and chemical producers are aligning their plants more closely.
Renewable Energy is Mostly Needed
As emerging gigafactories consume large amounts of energy, some are locating near to ready sources of renewable energy to make the entire value chain as green as possible. Apart from the fact that new battery production facilities are increasing in size, they are now designed for maximum flexibility to allow for new technology and changing market demands.
Production machinery and equipment needs to be able to be installed, moved and dismantled quickly and exactly as required. Compared with the plants of even a few years ago, steel and other structures involve “less welding and more bolting”. Put another way, the tracks are being laid while the train is at full speed!
How to Find Reliable Project Partners
A vital part of the EV supply chain starts with the engineering and construction of plants for processing raw materials such as graphite, lithium and manganese into preliminary products, as well as plants for the chemical production of battery components. These include cathodes, anodes and electrolytes, and the separators that help convert the stored chemical energy into electrical energy.
The chemical and process engineering of battery production plants are highly complex and often require customized solutions. Plant operators wanting to produce battery precursors or components are therefore often well advised to find competent, strong and reliable project partners to advise and assist them at all stages of the project lifecycle. This applies in particular to the increasing numbers of EV manufacturers thinking of moving “downstream” — producing batteries themselves and becoming more self-sufficient in semi-finished products and raw materials.
Support Through the Entire Life Cycle of a Battery Production
As a leading international industrial services provider, Bilfinger is supporting the process industry, including battery producers and battery material manufacturers, in their efforts to contribute to the energy transition. Decades of relevant experience in the closely related chemical industry, combined with expertise in the automotive industry, allow the company to comprehensively support its customers throughout the entire lifecycle, at all production steps and in the various trades of their battery plant projects.
Multidisciplinary teams offer all services — from project planning and procurement to engineering and installation to maintenance, modifications and end-of-life dismantling — from a single source, saving time, costs and effort.
As substantial experience and expertise are required for the design and construction of battery plants in line with customer demands as well as environmental requirements, Bilfinger provides support from an early stage of the investment. The local teams are familiar with regional legislation and can assist, for example, with the selection of suitable locations, preparation of business plans and conducting feasibility studies.
At a time of intense competition for technical expertise, Bilfinger supports customers as a manufacturer-independent system integrator with a large pool of qualified personnel to realize both the project and the operating phases of their plants efficiently and economically.
Projects Completed and Underway
Since the beginning of the “battery boom”, Bilfinger has been involved in numerous investments that well-known battery manufacturers and chemical companies are currently making in Europe.
For instance, the company has supported the world’s largest chemical company, BASF, in building a plant for precursor cathode active materials (pCAM) in Harjavalta, Finland. BASF is a leading producer of cathode active materials (CAM), which are used as a base material for battery cell manufacturing. Bilfinger was responsible for the steel and piping construction as well as installation and insulation work.
As EV and battery production expand rapidly around the world, these are exhilarating times. There are great opportunities now and ahead, but plenty of challenges, too. More than ever, existing and new EV manufacturers and suppliers need an expert partner such as Bilfinger.
For this company, every project is different. Bilfinger draws on decades of relevant process industry experience worldwide, but also takes a flexible and forward-thinking approach to each customer’s needs. With its comprehensive services, readily available resources and technical expertise, the cpmpany can comprehensively support its customers in many ways — and accompany them on their way to contribute to climate-friendly mobility.