The Automotive Battery Value Chains Insight report from the Technology Trends team at the Advanced Propulsion Centre UK (APC), highlights the challenges for manufacturers and aims to help them to make smarter, more informed plans, for the future of automotive battery manufacturing in the UK.
UK Automotive manufacturers have tough decisions to make about what type of battery chemistry they plan to use in their Electric Vehicles (EVs) in the future, impacted by changing regulations, supply chain risks, and rapidly developing adaptations in battery technology.
Nickel Manganese Cobalt (NMC) batteries have long been the industry standard, but scrutiny over the use of, and supply chain risks associated with the critical materials it requires has fuelled a shift in thinking towards other technologies – namely Lithium Iron Phosphate (LFP) and Sodium (Na) based chemistries. While LFP and sodium-based chemistries use fewer critical materials than NMC, there are other significant factors that need to be considered before making a switch, not least energy density, weight, and overall cost.
In 2019 we launched a first-of-its-kind battery value chain describing the process of making a lithium-ion battery. The 2019 value chain represented a single chemistry. Now, in 2023, we wanted to reflect upon the innovation in different battery technologies by providing value chains for two lithium-ion and sodium-ion chemistries,” explained Dr Hadi Moztarzadeh, Head of Technology Trends, APC. To place the UK in a strong position to succeed in this arena to 2030 and beyond the automotive industry needs to secure a stable NMC(A) supply chain to mitigate against higher costs, while high-volume manufacturers need to invest in LF(M)P. Research and development into sodium technologies should be considered alongside these too and would require further investment.
Dr Hadi Moztarzadeh continued,
There are complex market dynamics that will be driving battery strategy decisions. We have already seen from manufacturers such as Tesla, a move towards LFP batteries, while in China the likes of BYD and Chery are starting to commercialise sodium-ion batteries. The picture for the UK automotive industry remains unclear, but what is clear is that there is still plenty of room for innovation, and chemistry diversification could support longer-term sustainability of the sector.
Our insight report also examines the potential use for each chemistry as the battery technologies develop, and how the advancement of the overall vehicle classes themselves and consumer trends might change how manufacturers think about the associated battery chemistry they use for each vehicle type.
Sodium-ion looks like an interesting solution. Potentially low cost and less reliance on critical materials with turbulent supply chains. However, there is a long way to go with research to develop cells that meet the sort of performance that would be needed to get a foothold in the UK automotive market. Without significant demand signals, will the supply chain be built? It looks like sodium-based battery cells will only account for a very small percentage of all cells made in Europe in 2030. Will lithium-based chemistry supply chains remain at the forefront, preventing sodium chemistries from getting a foothold or is disruption on the horizon? said Dr Chris Jones, Strategic Trends Manager, APC.
Two further areas that will be of consideration for manufacturers are how the obligations they have regarding end-of-life battery recycling will shape their decisions, and how EU rule changes will impact their ability and responsibilities in this area.
