Innovations in battery manufacturing, such as use of a ‘dry process’ to make electrodes, will be key to reducing cost and lowering the environmental footprint of producing lithium-ion batteries to be in line with the EU’s new Batteries Regulation, say experts.
Innovations in battery manufacturing, such as use of a ‘dry process’ to make electrodes, will be key to reducing cost and lowering the environmental footprint of producing lithium-ion batteries to be in line with the EU’s new Batteries Regulation, say experts. The ‘dry process’ for manufacturing electrodes being developed by AM Batteries in the US is far less energy- and CO2-intensive
than the widely used ‘wet process’ and is also free of the NMP (N-methyl-2-pyrrolidone) solvent to be in line with the EU Batteries Regulation, said industry stakeholders.
Reducing the cost of battery manufacturing will be key to rolling out the industry more widely, beyond the realms of China, and to bringing down the cost of electric vehicles and grid-scale energy storage, said Anil Achyuta, managing director of TDK Ventures, which invests in early-stage frontier tech companies, including several battery startups.
Battery manufacturing today is expensive because most of the equipment comes from China, lack of industry talent, and high interest rates that push up the cost of capital required to build new facilities, he told Carbon Pulse. Weak demand for electric vehicles from consumers has been blamed on their continued high cost (https://carbon-pulse.com/260977/) , with
batteries accounting for around a third to half the cost of these vehicles
The success of EU ETS2 for road transport and heating fuels, which aims to reduce emissions by 42% by 2030 compared to 2005 levels, hinges largely on EV adoption (https://carbon-pulse.com/280481/) to bring down the emissions from cars, trucks, and vans, analysts have said.
Some parts of battery manufacturing, such as slurry casting for battery electrodes, can account for about 50% of the energy cost of the entire battery manufacturing process, so transitioning to alternative ways to produce electrodes, such as using a ‘dry process’, can save on energy, reduce the carbon footprint, and remove the use of the environmentally harmful solvent NMP, he said.
AM Batteries, backed by TDK Ventures, has devised a way to produce lithium-ion battery electrodes that avoids the use of NMP solvent. It uses a ‘dry process’ that consumes 40% less energy and more than halves the carbon footprint of the alternative ‘wet coating’ process, said CEO Lie Shi. Having already demonstrated proof of concept, the company expects to have an engineering pilot line in place by next year and to have commercial equipment ready for sale from 2026, he told Carbon Pulse. “For the last 30 years, lithium-ion batteries have been produced using the so-called ‘wet process’, which is very energy-intensive, and also uses a toxic solvent that has to be recovered for safety reasons, which also requires a huge amount of heat,” he said.
AM Batteries’ technology is attractive for solving these issues and for plugging a gap in the lithium-ion battery supply chain in the US – to supply equipment to gigafactories, he said. Batteries play a key role in the clean energy transition, from powering electric vehicles that reduce transport sector emissions, to filling the gap with intermittent renewable energy generation. But the sector faces challenges in sustainably accessing the critical minerals needed to make batteries. This has become a key point of concern for Europe and the US, which are also seeking to protect their domestic automakers against cheap EV imports from China, which controls the entire supply chain, from minerals to battery and vehicle manufacturing. The EU recently raised tariffs on Chinese EVs to shield the bloc’s motor industry.
The EU-US Trade and Technology Council is aiming to work towards a critical materials agreement (https://carbon-pulse.com/274332/) , to give Europeans “preferential Free Trade Agreement treatment on raw materials with the US”. Analysis by clean mobility group Transport & Environment (T&E) earlier this year also made the case for reshoring parts of the battery supply chain to Europe (https://carbon-pulse.com/285860/) , due to the emissions reduction and CO2 savings benefits.
TESLA GOT THE BALL ROLLING
Tesla’s Elon Musk got the battery industry geared up around the concept of dry battery electrodes in 2020, when he presented on the topic at Tesla’s Battery Day.
But AM Batteries takes a different approach to dry electrodes than Tesla and has a different business model, in that it will sell turnkey equipment coupled with technology licensing once commercially available, said Shi. AM Batteries has so far raised $60 million from investors including Toyota Ventures, Porsche Ventures, and TDK Ventures. Battery manufacturers are likely to be keen to licence out its technology for the energy, cost, and environmental benefits, and because getting a gigafactory permit will likely be much faster if building a manufacturing facility without the use of NMP, said Shi.
Potential customers in Europe have expressed a particular interest, he said, because use of NMP will be restricted under the new EU Batteries Regulation. In line with the European Green Deal, the Batteries Regulation will ensure that batteries used in the bloc have a low-carbon footprint, use minimal harmful substances, need less raw materials from non-EU countries, and are collected, reused and recycled to a high degree in Europe.
Starting from 2025, the regulation (https://environment.ec.europa.eu/news/new-law-more-sustainable-circular-and-safe-batteries-enters-force-2023-08-17_en) will gradually introduce declaration requirements, performance classes and maximum limits on the carbon footprint of electric vehicles, light means of transport (such as e-bikes and scooters), and rechargeable industrial batteries.
It will also ensure that batteries placed on the EU single market will only be allowed to contain a restricted amount of harmful substances that are necessary, with substances of concern used in batteries under regular review. All this information will have to be made available in a “battery passport”, which will be mandatory as of 2026 for all rechargeable industrial and electric vehicle batteries with a storage capacity above 2 kWh. The exact information that the battery passports must contain will be established in separate technical implementation rules – called a “delegated act” – due by the end of 2024.
From 2025 onwards, targets for recycling efficiency, material recovery, and recycled content will be introduced gradually, and from 2027, consumers will be able to remove and replace the portable batteries in their electronic products at any time of the lifecycle.
Achyuta praised the regulation for helping to promote a circular economy in battery manufacturing, which should reduce the amount of primary mining required.
He also called out Swedish battery maker Northvolt for taking the lead on developing a Europe-based battery industry, though the company is to mothball part of its Swedish gigafactory and close another, among fierce competition and stalling demand, according to media reports (https://carbon-pulse.com/320497/) this week.
Achyuta said it was important to take a long-term view when investing in the energy transition and not to get too distracted by short-term macro influences such as high interest rates and political changes, stressing that the critical minerals used in lithium-ion batteries will always remain a national security issue and are therefore a bipartisan concern.
Climate tech investment including battery manufacturing has proven to be more resilient than other clean tech sectors to macro headwinds, investors have said (https://carbon-pulse.com/282589/) .
LITHIUM-ION HERE TO STAY
Lithium-ion batteries have pretty much won the battery race among EV consumers, with NMC (nickel manganese cobalt) and LFP (lithium iron phosphate) likely to be the two main chemistries to dominate in the coming years, said Achyuta, who is a chemical engineer by training.
However, for applications where energy density is less important, such as grid-scale storage or three-wheelers and two-wheelers in some developing countries, where range is much less of an issue, sodium-ion batteries are a very good candidate, he said.
“Sodium is incredibly cheap, and North America has about 30% of soda ash reserves in the world” so these batteries don’t have the challenges with accessing the critical minerals of cobalt and lithium needed for most lithium-ion batteries.
TDK Ventures has some $350 mln of assets under management and has invested in the battery startups: AM Batteries, Ascend, Novalith, and Peak Energy.
