Why its so difficult scale up a battery manufacturing plant?
Let’s start from the beginning: when a company have to establish a lithium battery manufacturing plant, needs to produce a feasibility study first which include all CAPEX and OPEX items and a project roadmap which should satisfy all the investors.
It’s not just a matter to find a place and build up a factory but is a very tricky relationship between supply chain, product development, skilled human resources and even local authorities permission.
Recent studies demonstrate the equipment CAPEX for 1GWh is about 30-60Mln$ which can reach 60-90 Mln$/GWh if we consider the overall CAPEX of lithium battery cell manufacturing plant.
The first production line, even called pilot production line, is the most painful for many reason: is the first excercise of the company trying to produce their product in several units per minutes with automated equipment considering a manufacturing process more or less established.
Unfortunately the pilot project is not so smooth: in the pilot production line, especially new camers, don’t have any experience about lithium battery manufacturing and no clue about what is needed and what is the optimum to run the production. In some case indeed, we face underdesign or as opposite overdesign in term of technical requirement for automated equipment and check quality inspection devices.
Equipment suppliers must provide budgetary quotation without any clear evidence how the product looks like or at least what is the target manufacturing process flow. In several cases is the cell manufacturer which is asking to equipment maker to suggest to them the best manufacturing process!
But, based on production line layout and utilities related to each single equipment, the battery manufacturer can start to design the production layout and provide all details to Dry room design and construction company which need to design not just the clean room itself but make all calculation even for HVAC and Dehumidifer.
But as you can see this is a close loop: equipment suppliers are not able to provide detailed equipment lis
t and details which represent a must for dry room design constructions. So what usually companies do is just foreseen spare space which represent for sure additional CAPEX but could be useful in the future for any kind of mistake or misevaluation.
When the equipment arrive in the factory, all installation and commissioning activities start and in many case the equipment validation must be done with final and real material….
…. but everybody know electrode manufacturing is a real pain. Only if electrode manufacturing start up phase is foreseen some months before the rest of the production line the schedule could be smooth; otherwise the risk is to start the cell assembly line commissioning and test with dummy material or even stop the activities due to incoming material absence.
Then the operations start but it’s tool late to train the manpower. So manufacturing manager need to study in advance, during pre-operation phase, all strategy how to train the engineers without having equipment in the production plant. But as you can image, the start of production is a cold shower for everyone.
After the SAT the equipment supplier leave the production plant and with them even big part of the knowledge in battery manufacturing. Starting from here the battery manufacturer is alone and need to run the production by himself trying to learn from mistake.
So what’s happen from Pilot to Mass production plant?
The size is the first issue
scale up to 20 – 40 – 100GWh foreseen huge number of equipment very big production plants and several suppliers to manage. Have you ever been in a gigafactory of 8GWh/year: is huge! Try to image 5 or 12 times more!
Currently the scale up is not so easy and sustainable for many reasons:
- In order to achieve 30GWh the number of equipment needed is huge, jsut to image that for a 46xx battery cell of 24Ah the throughput is about 18-22 Cell/min. That’s mean in the optimistic case of 85% OEE, about 35 winders, or in case of prismatic cell of 80Ah each, means over 80 Z-folding machines! And this numbers belong to just one single manufacturing process.
- Since the number of equipment needed is huge, usually cell manfuacturer move to multiple equipment suppliers making difficult is some case the equipment integration, make training of operators on different equipment, but even triggering some diffierences between production lines which have equipment from different suppliers. The reason is the equipment technology but especially quality is not the same for all suppliers and in average they are small or mid size companies which don’t have the financial and manpower strength to manage this big projects. If one gigafactory can make the annual revenue of equipment supplier company for 3-4 years, what happen if that projects have some delays or failed for some reason? Which are the effect on equipment supplier side?
- Everytime we talk about equipment supplier we talk about mechanical parts, electronic components and technology device like welding unit, vision camera, electrical test device, PLC, sensors etc.. maybe just few knows for some PLC the delivery time is over 35weeks, and this is just one the several examples.
The number of equipment trigger the dimension of the factory and then the energy consumption for cell manufacturing: just to mention dry room represent 30% of cell manufacturing electrical energy consumption.
The Dry Room OPEX vary with the Dry room Volume
- Number of equipment affect the number of equipment operators, logistic operators and quality inspectors making very high the FTE required, compared to other industries.
- The operators and manpower must be trained and skilled to avoid to ramp up the plant for several years just wasting a huge amount of money: if during a steady condition the overall scrap rate in lithium battery cell manufacturing plant is about 20% in a ramp up phase can even reach 50% or more making the project a black hole to financial dept. In average the scale up phase required between 1 and half to two years from start of production to reach steady condition and target OEE, in some cases even more.
- Hiring people is becoming harder and harder even because the competitions increase and with that the salaries of key expert engineers, making difficult and more expensive to get the best talent.
- In the lithium battery manufcturing system there are several inspection activities which must be done by operators due to the absence of reliable and affordable inline inspection system. This is another big pain which make impossible control 100% of the product in all inspection criteria but even obtain a huge amount of data regarding the overall product quality in lithium battery cell manufacturing plant and correlate this information with performance during the working life.
- What about utilities? A thumb rule of few years ago mentioned between 50 to 65KWh of energy consumption for each 1kWh of battery cell produced, that means for 40GWh the factory will need 2,4TWh of energy consumption which must be satisfy by network and other renewable source. But what about the network? Are all locations able to supply this amount of energy? The answer is no; Does it foreseen additional CAPEX for the project? Yes. How we can reduce the energy consumption? The answer again belong to equipment technology (with micro dry environment for example) but even smart manufacturing process which get rid of the most energy intensive process (see Dry coating process for example).
So, honestly, it’s very hard to image the battery industry can manage this scaling up phase with the current technology and this weak supply chain. High speed equipment is the key to minimize production footprint, manpower and then OPEX in term of $/kWh produced.
Even if it sounds quite easy to obtain we need to consider the automation can run at super high speed, just to consider there are equipment able to produce 1’000 gigarettes pack per minute!! But the entire automation supply chain in battery business have to be contaminated by other industries where the productivities are huge and the electronic and technology industry already develop dedicated technology able to support those speed.
In the last 10-15 years the battery automation business didn’t make any big improvement compare to cell and pack technology, so we need to move out from the confort zone, start to talk with new suppliers and companies which have great experience in other industries but with several similarities to lithium battery manufacturing business.