With the rise of battery storage technologies and electric vehicles, the demand for lithium-ion batteries, which serve as the power supply in battery storage and EVs, is seeing a corresponding rise as well. To catch up to Asia’s dominance in the industry, Europe has recently been making a major push to develop its own battery technologies. However, since Europe needs to import most of the raw materials involved in battery manufacturing, it must first resolve the issue of domestic graphite manufacturing.
The lithium-ion battery is constructed of two electrodes, an electrolyte (which sits between the electrodes), and a separator. When charging, ions flow from the lithium cathode, through the electrolytes and separator, to the graphite anode. Lithium-ion batteries are used in a wide variety of applications, from small-scale uses like smartphones and laptops, to large-scale ones like EVs and BESS. In particular, lithium-ion battery is one of the key components of the EV, taking up 40% of its unit manufacturing cost. Most lithium-ion batteries are made in South Korea, China, and Japan, while most graphite is mined in China, among other Asian regions.
Europe is investing in the development of key battery manufacturing technologies and anode graphite technology. As an example, France-based carbon and graphite manufacturer Carbone Savoie and German-based carbon fiber manufacturer SGL Carbon have joined the European Battery Alliance (EBA).
Graphite manufacturing is perhaps not a bad entry point into the battery market. Nickel, lithium, manganese, and cobalt – raw materials used in lithium-ion battery manufacturing – need to be mined. The battery manufacturing industry imports lithium from Australia and Chile; and Cobalt from Congo. Graphite, which is used in battery anodes, can be mined as well, but manufacturers prefer the more expensive, high-performance synthetic graphite. Therefore, synthetic graphite presents the perfect opportunity for Europe to achieve battery independence.
Carbone Savoie's CEO Sebastian Gauthier indicated that about 150 lb (70 kg) of graphite is involved in the production of one Tesla vehicle. The company claimed to have developed a new carbon manufacturing technique that halves energy expenditures and waste levels. “It will be less expensive and more efficient than Chinese graphite, while consuming less energy. The hard part is that we have to move quickly,” said Regis Paulus, Carbone Savoie R&D director. “To catch up with the Chinese, we have to invest massively.”
At the moment, EU is also providing major funding for battery development, case in point, the €3.2 billion approved by the European Commission in November 2019. EU members such as Germany, France, Italy, Poland, Belgium, Sweden, and Finland have pledged funding to the EBA to potentially attract up to €5 billion in private capital.
Notable participants of the European Commission’s plan to develop innovative battery modules include German firms BASF, BMW, Opel, and Varta, to name a few, with the hopes that these battery modules can be used in EVs and power tools in the future.
Many research consultancies have a favorable outlook towards the European battery industry. For instance, according to Wood Mackenzie, “Europe is on track to increase its battery-making capacity by 20 times in the next seven years, hitting 90 gigawatt-hours of manufacturing output per year by 2025”. EIT InnoEnergy also forecasted a €250 billion market value by 2025 for the European battery industry, while the European Commission speculated that “Europe demand alone requires at least 10 to 20 ‘gigafactories’”.