Three Ways the United States Can Catch Up to Europe’s Gigafactory

With Europe set to reach 789.2 GWh of lithium-ion battery gigausine production by 2030 according to new benchmark data, what does the US need to do to keep pace as the two race to prevent China from completely monopolizing the sector as it did with solar?

Panelists speaking on the first day of the Lawrence Berkeley National Laboratory (LBNL) National Energy Storage Summit agreed yesterday (8 March) that Europe is far ahead of its Atlantic neighbor for the commissioning of its gigafactory pipeline – despite some recent forecasts linking the two markets. Projected capacity figures for 2030 are close. So what needs to happen for this pipeline to become a reality?

Create a mindset that says it’s possible

The good news is that the current US administration is optimistic about getting there, said Robert H. Edwards, Jr. of the US Department of Energy’s Office of Lending Programs.

“We are unanimous across the administration in the belief that our innovative energy sector in the United States, with the help of the federal government, will be able to establish one of the leading battery manufacturing ecosystems in the world,” said he declared.

This was in response to a good point from Ilka von Dalwigk, policy manager at InnoEnergy and the European Battery Alliance. She said when the Alliance was launched in 2017, some argued it was too late to launch a battery industry as Asia had already won, while others said it was too late. sooner given that future generation batteries like solid state would be a better bet.

“I think there was a lack of understanding of the speed and scale of this transition and one of the main achievements of the European Battery Alliance initiative has been a shift in mindset, to believe that we can do party and even a winner in this transition,” she said.

Research from information provider Benchmark Mineral Intelligence’s Lithium ion Battery Gigafactory Assessment, which provided the 2030 figure, indicates existing results of this mindset shift. Four of the world’s seven tier-one producers of automotive-grade lithium-ion batteries have gigafactories in Europe, and once Northvolt’s gigafactory in Sweden is active, it will be five.

Consider the ecosystem around the gigafactory and next-gen apps

Northvolt’s expansion across two continents has made panellist Landon Mossburg, its US President, unique on this topic.

He said the main challenges in launching gigafactory projects are finding a suitable site, procuring the necessary amount of clean energy and recruiting a sufficiently skilled workforce. But the challenge goes beyond the plant itself.

“If you look at Asia, they’re about 10 to 15 years ahead of us in terms of equipment, suppliers, raw materials, even things like network elements and logistics. These factories are just the tip of the iceberg. You need a very time-consuming and highly specialized vendor ecosystem,” he said.

Another major challenge is to be at the forefront of future high-volume applications for batteries, for which he highlighted aviation as one, and warned that there were already signs that the Asia is moving much faster than anywhere else on this. It is important not to underestimate the challenge, to be fully aware of the amount of capital, partnership and upfront planning that would be required.

“But I think what’s super encouraging for me is looking at what’s happened in Europe, which is an exceptional achievement, and I’m starting to see that happening here in the United States as well. I so think we’re in a good place,” he said, ending on a positive note.

And especially money

The U.S. federal government has many financial programs in place to help projects get started, said Monica Gorman, deputy assistant secretary for manufacturing at the U.S. Department of Commerce’s International Trade Administration. She explained the importance of the Federal Consortium for Advanced Batteries and its goals, which you can read here.

But the administration is also keen to do so in a way that helps disadvantaged and disenfranchised communities, particularly by ensuring that the transition does not create more post-industrial regions that become unattractive to private capital. . She pointed to a $4 million electric vehicle manufacturing program in Detroit that created 810 jobs, saved 300 and leveraged $45 million in private investment.

She also stressed the need to invest in the country’s semiconductor production sector with the bipartisan Innovation Act, much to nods from other panelists. “Because if you want batteries and electric vehicles, you also have to have semiconductors.”

On the same topic of funding, Edwards said the current lack of substantial gigafactory announcements on US soil will change by the end of this year.

“We currently have $10 billion in loan applications for battery manufacturing plants. These are new factories in the United States. These plants include both manufacturing plants for lithium-ion batteries for use in vehicles and trucks and general transportation, as well as manufacturing capacity for energy storage for stationary storage applications for the grid, so before the end of the year, you will see some announcements from the loan programs office that will signal the administration’s financial commitment to building these new battery projects,” he said.

The gigafactory 2030 European pipeline

Information provider group Benchmark Mineral Intelligence said Europe is on track for 27 gigafactories from 18 battery cell producers by 2030.

The largest will be Tesla’s Gigafactory in Berlin, which will start commercial cell production in 2023 but will reach an annual capacity of 75 GWh by 2026 and 125 GWh by 2030. This will make it the largest in the world. world behind its counterpart in Austin, Texas.

By 2030, Benchmark predicted that the top five battery manufacturers in Europe by capacity would be:

  • Tesla (Germany): 125 GWh
  • Northvolt (Sweden x 2): 92 GW
  • CATL (Germany): 80 GWh
  • LGES (Poland): 67 GWh
  • ACC (Total/Stellantis) (Germany, France, Italy): 64 GWh

The 789.2 GWh capacity by 2030 would give Europe a 14% market share in the global 5,454 GWh lithium-ion battery production market, Benchmark said. The figures from Clean Energy Associates, mentioned above, gave Europe a slightly higher share (16%) of a slightly smaller market (4,764 GWh).

Benchmark indicates that Europe will increase its capacity by more than six times (500%) between the end of 2022 and 2030, China by 220% and the United States by 575%.

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