“Without A High Degree Of Automation, We WonʼT Win Anything”

Question from within the European battery ecosystem: Who actually does what? From production to recycling, is it better to have everything from a single source? Or would you prefer the “everyone does their own thing” model? In an exclusive interview with Battery-News, Dr. Philipp Seidel, Principal in the Automotive, Transport and Sustainability divisions at the management consultancy Arthur D. Little, explains why the European battery industry is still finding its feet.

Battery-News: How important is the aspect of a circular economy when you talk to other companies?Dr. Philipp Seidel: We experience that recycling is becoming an increasingly important part of the value chain, especially in the battery world – quite simply because batteries can only be sustainable for mobility, energy generation, and energy distribution if there are genuine cycles. Batteries and their raw materials are far too valuable and their extraction, processing, and manufacturing processes far too complex not to recycle them. This is precisely the great potential of electric mobility and renewable resources as such: Unlike in the fossil fuel system, the materials are not extracted from the earth to be irretrievably burned for single use.

Battery-News: Overall, how can battery production be made more sustainable?Seidel: This can only be done comprehensively with a holistic view of all components of the value chain and basically starts with responsible, efficient raw material extraction and the prior selection of battery technology. Even then, there are significantly more sustainable choices than others. Lithium iron phosphate, LFP, for example, is less critical in terms of composition than the classic NMC battery with materials such as cobalt and nickel. Of course, the question is also important: Which energy-intensive processes can be operated with “renewables” and how can waste be avoided or kept to a minimum? In addition, how far the materials and the intermediate stages of the batteries have traveled during their production also plays a role – albeit not a major one.

Battery-News: Product design is also considered an important sustainability factor, with a view to reusability.Seidel: Thatʼs right, there are trends towards approaches such as “cell-to-pack” or even “cell-to-chassis,” which make reuse, repair, and recycling more difficult. Sustainability also includes the question of how the batteriesʼ service life can be extended, and this starts with the charging and discharging management of the BMS. What is the main criterion for battery management? Is it about service life, cycle stability, or is it about fast charging and discharging capability? You can have just as much influence on this as on thermal management. And I think that in terms of sustainability and cost-effectiveness, we will also be asking ourselves more precisely which second-life applications actually make more sense than direct recycling.

“The allocation of roles has not yet crystallized in Europe – this is currently still in the development and testing stage.”

Battery-News: The economic aspect of recycling is currently being questioned more frequently in the industry. How do you experience this?Seidel: Itʼs difficult to generalize. The challenge in the recycling business – similar to battery production – is that itʼs a new industry in Europe in many respects, so there is no scaled experience to fall back on. Europe does not yet have a closed business case. However, recycling will be a regulatory requirement in the future. In the automotive sector, it is becoming clear that appropriate capacities need to be available for batteries. Mercedes, for example, is making great strides in this area and is building its own recycling plants with partners. It remains to be seen whether it will be more successful to do this in-house or as a joint venture, or whether external providers are better suited to the task. All of this ultimately brings us back to the fundamental questions: How is our battery ecosystem, how is the battery industry positioned? What does an OEM have to do and what does a supplier have to do? This allocation of roles has not yet crystallized in Europe – this is currently still in the development and testing stage.

Battery-News: What specific trends and innovations do you see on the European market?Seidel: On the one hand, we are seeing high cost pressure from the electric vehicle industry in global competition, and on the other hand an uncertain, delayed market ramp-up curve in the target markets. This is why all battery players are currently looking for ways to cut costs. The innovation driver lies in the question of how processes in both the recycling and production of batteries can be made more efficient, faster, and more flexible. This starts with material preparation with more efficient ovens for cathode active material and continues with more efficient drying processes or dry coating in cell production. The entire value chain is very energy-intensive, and energy is more expensive in Europe than in other competitive regions.

“We are once again seeing EU regulations that set tough targets and percentages that are unclear as to whether they can be achieved.”

Battery-News: The EU is introducing stricter requirements for battery recycling. What kind of response are you experiencing?Seidel: Generally speaking, it is the right thing to do that the EU is introducing a set of regulations that will extend far into the future. In China, for example, such regulations have been in place for some time with regard to recycling. On the one hand, the fact that we have “caught up” is a good thing – on the other hand, we are once again seeing EU regulations that set tough targets and percentages that are unclear as to whether they can be achieved. It has been recognized that Europe needs a closed battery material supply chain, but there are probably still far too few batteries in circulation to serve recycling plants on a large scale in a timely manner. The same applies to gigafactory capacities and their industrial output. Things need to grow together in a meaningful way. At the moment, it also seems that the recycling approaches we have in Europe mainly work until black mass is available, but then there is a lack of capacity to actually generate battery material from it again. The Mercedes plant can now do this as it has integrated the hydrometallurgical step. Otherwise, however, we have a lot of disassembly and black mass production in Europe, but the chain is not yet closed.

Battery-News: Speaking of a “chain”, the question is whether Europe can become self-sufficient in battery materials at all.Seidel: Probably not, and that may not even be necessary. However, we need to achieve a much greater diversification of the upstream and midstream value chain than has been the case to date. Itʼs not as if all battery raw materials are located in China, but they are mainly processed there. We have already taken the right steps with some materials: Lithium refineries are now also being built in Europe, and phosphate, for example, comes from North Africa. But this can only be the beginning.

“For Europe, one success factor will be the use of renewable energy so that the system is truly sustainable.”

Battery-News: Under what realistic conditions can Europe ultimately develop the best possible battery production?Seidel: In addition to the entire ecosystem for production, research is also very important, as is specialized plant engineering. We donʼt necessarily need all of this in one place, but for each key area we need strong players somewhere in Europe. For this, we need more coordination – not necessarily by the government, but there must be a body that takes this into its own hands. In the field of aviation, Europe has already achieved this once, when Airbus was founded. This cost a lot of money and time and was not particularly successful commercially at first. But today, Airbus is a leading global player, while Boeing, for instance, is in trouble. Perhaps we need something similar for the battery. China has shown us how to create national champions from individual companies and then use subsidies and regulations to form global market leaders. For Europe, one success factor will be the use of renewable energy so that the system is truly sustainable.

Battery-News: Another sticking point is likely to be the cost.Seidel: Correct. This is well illustrated by the example of automation, which is a key factor in a region with high labor costs and high productivity. If we donʼt manage to establish a high level of automation in our battery industry, we wonʼt win anything. This applies to cell production as well as recycling.