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Batteries are fast becoming the Achilles heel of the drive towards widespread electric vehicle take-up, a key policy priority for this decade if Net Zero emissions are to be realised by 2050.
High input costs, rising demand and moves towards the next-generation of batteries – on top of supply chain woes – have put ever greater priority on scaling up battery production in Europe through new gigafactories.
2022 looks like a boom year for scaling up production and opening new facilities – from Northvolt’s Ett plant in Sweden to Tesla’s gigafactory development near Berlin. However, ramping up production to the levels required is far from straightforward.
Hitting targets
The headline announcements from Europe’s battery cell manufacturers suggest there’ll be 1,200 GWh of installed capacity by 2030. This would be enough battery supply for European passenger cars and heavy vehicle segments, as the EU seeks to reduce emissions by at least 55% compared to 1990 levels and moves towards new battery regulations.
Arriving there, though, means taking a different approach to achieving operational efficiency. To hit the required production output, facilities will need to be working at a high level as soon as possible. Earlier this year we looked at how the construction of gigafactories could fare, but as red tape is cut and lines begin to open, reaching mass production will mean closing the loop on the manufacturing process.
In the loop
Building up to an overall equipment effectiveness (OEE) level of 80-85% is likely to be a key goal of all battery manufacturers. This is no mean feat in such a complex manufacturing process, where tiny tolerances – from winding/stacking alignment to coating thickness – determine whether the output is a high-performing product or destined for scrap.
In the past, optimising through Lean, Total Quality Management or Six Sigma may have delivered, but to win in the race to mass battery output – with the cost of poor quality so high – a different approach is needed:
- Digital Twin – investments in digital process modelling will be essential to test and refine often subtle process changes before they are put into operation.
- Advanced Analytics – collecting data from many sensors in the production line and reviewing it in near-real time will be critical to increase quality and take performance up a level. However, a volume approach to data collection is unhelpful – knowing exactly what to measure and why will have the biggest impact, aided by advanced data analytics and Artificial Intelligence (AI).
- Closing the loop – implementing an effective closed loop in manufacturing process is essential to identify issues early, reduce defects and scrap, and to generate critical efficiencies downstream – for example, optimising the charging profile for each cell in final assembly and testing (FA&T).
A market differentiator
Quickly ramping up quality production is likely to be the key differentiator in the race to become a leading cell maker in Europe. While making that first production cell is an important milestone, mass production at a high standard is the true challenge.
The high raw material costs for EV batteries make up 75% of the cost of production. That leaves little left in which to move to compete against rivals. Driving up and then maintaining OEE is the area of opportunity.
The focus internally – and for customers – will be on quality, performance, and availability, with defects costly, new equipment taking time to run up to speed and planned and unplanned stops likely. New gigafactories must spend time on adjustments and training, and building up maintenance capabilities.
OEM-led gigafactories may have an advantage over multi-customer or multi-product facilities (where there is added complexity in the process transitions). But for either set-up, maximising OEE through intelligent sensing, focused analytics, skills targeting and downstream efficiencies in a closed-loop approach will yield major gains.
Our analysis suggests actual production output from Europe’s new cell manufacturers could be as low as 50% of installed capacity by 2030. That will be a major blow to efforts to improve and increase battery production, as well as hampering efforts to broaden EV take-up.
If battery manufacturers can ramp up production quicker, it will not only help Europe move to greater EV ownership and lower emissions and reduce reliance on Asian supply chains, but cell manufacturers will also see the returns from their new investments.
