'Hazardous goods'
Battery suppliers will need to locate close to their customers' factories, VW's Sedran said, because transporting the cells over long distances is costly and risky: "They are hazardous goods. You won't find insurance for shipping lithium ion batteries."
Two of the biggest cell suppliers already are setting up factories in Europe. LG Chem is building a plant in Wroclaw, Poland, with a capacity of more than 100,000 batteries and a delivery range of about 200 miles, the company said. Production is set to start in the second half of 2017. LG Chem also has a plant in Holland, Mich., one in Nanjing, China, and its flagship factory in Ochang, South Korea.
Meanwhile, its Korean rival, Samsung SDI, announced it is building a plant in Hungary that will be ready in 2018 and have an annual capacity of 50,000 batteries.
That won't be enough to supply to the predicted EV boom, but automakers aren't worried. "It's hard to forecast demand in 2025, but battery cell manufacturing capacity can be increased within a reasonable time. A shortage is unlikely," Wolfgang Ziebart, Jaguar Land Rover's technical design director of product development, told Automotive News Europe.
The next breakthrough
What would persuade VW Group to make its own cells is a switch to solid-state battery technology. Solid-state batteries are preferable because they are expected to provide 40 percent more energy density than the top-level lithium ion solutions due by the end of this decade, Sedran said.
VW has a stake in solid-state specialist QuantumScape in Silicon Valley, and Sedran said the technology will be powering VW electric vehicles as soon as 2022. He said the production VW Group plans for its factory in Salzgitter, Germany, would be solid-state batteries. However, any cells VW makes are likely to end up in top-end cars rather than mainstream models, at least initially.
"I think the top end would be a good idea because this is where you have to have highest density in the battery and the best charging performance," he said. "That would mean cars like the next-generation [Porsche] Mission E or a Lamborghini maybe."
A key supplier executive has said there are benefits to solid-state batteries besides the improved energy density.
"They are safer because there is no combustible electrolyte [liquid], they are 75 percent smaller and have reduced weight," Robert Bosch CEO Volkmar Denner told journalists in 2015. Bosch bought U.S. solid-state battery maker Seeo in 2014, a move that could make the world's largest component supplier a potential candidate for localized cell making in Europe.
Other automakers experimenting with solid-state batteries include longtime EV skeptic Toyota, which late last year reversed its strategy, putting company President Akio Toyoda in charge of a newly formed electric car division. The hybrid specialist, which also has made a big bet on fuel cells, won praise for its commitment to the future technology.
"We highly value Toyota's long-term strategy to focus on all-solid-state batteries," Exane BNP Paribas said in its report.
Regardless of how quickly EVs gain share, it is clear that the trend toward electrification is forcing automakers and suppliers to make fundamental changes to the way they operate.
"In our historical business model, we had very high vertical integration," VW's Sedran said, "but going forward, we don't think that may be the smartest way."
Is the industry zooming toward a battery shortage?
|
|
|
