Originally published by NAATBatt International
Problem:
The National Association of Advanced Technologies in Batteries (NAATBatt) held a conference in February 2022 focused on addressing economic, technological, and logistical challenges regarding the rapidly increasing demand for US-made Lithium-ion batteries. Forge Nano hosted a roundtable discussion focused on Supply Chain with participants from all sectors of the market(1). This report summarizes that discussion and the findings realized to continue ensuring time-relevant information flow to governmental decision makers working to ensure the energy security and prosperity of the US.
Identified Challenges:
- Mismatch in timing and availability of supply chain segments
- Raw and processed material availability will constrain US cell production through at least 2030 due to timescales of starting new mines vs. new cell production factories
- Availability of spent batteries will constrain recycled material availability and cost viability
- Lack of trained and/or qualified labor for build-out and operation of facilities
- High cost and long product qualification timelines of OEMs prevent rapid technology adoption. Many see academic announcements about new batteries that are exciting, but even a qualified TRL 7-8 new technology would not be found operating in a Gigafactory until at least 5 years from initial at-scale proof of concept.
- Disconnects with other industries
- Circularly dependent suppliers unable to supply each other, i.e., chips shortages are preventing production of equipment which would expand chip production
- Immaturity of the market demand, i.e., there is not currently enough secured demand in the US for qualified large company suppliers to set up production locally
- Often people reference the semiconductor industry as an example of how to approach building the Lithium-ion industry in the US, yet little clarity exists on relevant and actionable requests, and semi is only now setting up production in the US and competing for the same labor pool
- Many of the technology-focused companies are too busy solving real problems to market themselves effectively, and too many marketing-focused companies are taking investor and political attention
- Existing automotive companies’ architecture is geared towards project management rather than value creation, a model which Tesla embodies well via vertical integration
- Faceless Demand
- Companies looking to address production requirements are unable to obtain capital from government and private investors without a specific, cell-governed supply chain, i.e., the DOE has announced 450GWh of demand but does not make its own products, so until there is a specific product and specification, such as a company/vehicle/partnership/cell, there is too much risk without a targeted series of supply agreements ranging from the OEM all the down to the miner
- The US is lacking companies to make equipment that makes Li-ion cells, i.e., a 100% US-made cell line is not possible at this time
- Lacking long term policy to incentivize US companies to work collaboratively towards manufacturing
Actionable solutions:
- The US is doing an excellent job cultivating a strong R&D community and encouraging a culture of innovation which requires ongoing resource allocation
- Organizations and conference organizers need to more effectively bring together technology, investment, and policy experts to ensure good market understanding and fewer industry black eyes
- Working toward unified and transparent federal and state alignment of financial and non-financial incentives focused on manufacturing, i.e permitting, international training visas
- Find and secure production sites and permits to reduce manufacturing timing and burden of companies, while incentivizing co-location
- Incentivizing companies to work with their home States, utilizing available resources for assistance early in the process of manufacturing build-out, rather than incentivizing an environment where companies force States to compete for business
- Establishment of a national Lithium-ion standards and qualification center to ensure rapid and affordable transition of qualified technologies and reduction of industry technology noise
- Need to draw the line and get started immediately, i.e., begin building facilities to produce today’s state-of- the-art technology and not wait to leapfrog competitors with next gen technology which has an ever-drifting timeline for manufacturing
- Assess achievements and failures of China and Europe and work with Allies to minimize mistakes and figure out how to streamline technological advancement in the way that is best for the US, capitalizing on our own strengths and not just blindly copying competitors
The US is behind in the Lithium-ion race, but this will not always be the case. To gain the lead in this developing industry we must finalize our market assessment, establish a long-term plan which can survive changing administrations, and then simply get going. The US does not have the capability to do it alone and so it is imperative that the US work with established and developing nations to provide incentives to our allies, with our strengths, to establish production in the US and unlock critical jobs and training opportunities. We must begin with the end in mind, define what we want our nation to look like, assign a completion target date, and then reverse engineer the ‘how’. We want employed Americans and energy security.
More Information
NAATBatt is a not-for-profit trade organization focused on promoting the development and commercialization of electrochemical energy storage technology and the revitalization of advanced battery manufacturing in North America.
Author
James Trevey Ph. D, CTO of Forge Nano, is an entrepreneur, an expert in Li-ion batteries and supply chain, and a thought leader in materials science and technology scaling. He is an Officer of NAATBatt and Vice Chair of the Military Power Sources Committee (MPSC), among numerous other advisory boards, where he is an active supporter and enabler of collaborative industry and government relations focused on energy security.
(1) Round Table Participants: SAFE, Eagle Picher, Urbix, Piedmont Lithium, Lithium Nevada, H&T Battery Components, Global Battery Solutions, SLAC Precision Equipment, Halocarbon Electronics Solutions, Armor, LG Chem America, Volta Energy Technologies, Busch Vacuum Solutions, RGP Northwest Ohio, Birla Carbon, American Electric Power, GruEnergy, and Mitsui.