By introducing circular approaches, battery makers can improve their efficiency now, while laying the foundations for a sustainable future.
Electric vehicles (EVs) will form a big part of the future. Within just two years, they’re expected to account for almost a third of global car sales, and three quarters by 2040. That’s an exciting development for sustainability. But for those who make the batteries to power EVs, it’s creating a significant challenge. Forecasts for the growth of the EV battery sector are regularly being revised upwards. McKinsey predicts that the lithium-ion battery chain could grow by more than 30% annually up to 2030.
With demand increasing this quickly, it’s understandable that the most urgent priority for many manufacturers is scaling up production. But amid these efforts, it can also help to step back and take a wider perspective. One idea that’s generating increasing interest is circularity – reducing waste as much as possible by reusing, recycling and making the best use of resources. From both a sustainability and a financial point of view, taking a circular approach to EV battery manufacturing seems to make a lot of sense. As well as improving quality and efficiency, it could also lead to cost savings and help companies meet regulatory requirements. But what would it mean in practice?
To understand this, it helps to consider one of the biggest challenges facing manufacturers as they boost production: ensuring quality. The EV battery industry currently produces a considerable amount of scrap – between 6% and 15% in mature gigafactories, and higher in new ones. Active battery materials – such as the metal compounds used in the cathodes of many EV batteries – are synthesized early in the manufacturing process, well before final testing takes place. And their quality has a significant impact on the quality of the final battery cell. This means that the level of visibility manufacturers have over the materials throughout the procedure is crucial. And in particular, being able to promptly identify any emerging defects can make a big contribution to ensuring a consistently strong product – improving efficiency and reducing the amount of valuable resources wasted through scrap.
Recent developments offer innovative ways to address this challenge. Manufacturers typically use X-ray and CT scans to monitor for quality issues. But this approach is inefficient, often only detecting problems at a late stage. In contrast, newer techniques such as ultrasound scans offer more sophisticated capabilities. Because it’s able to assess more variables (such as material density), ultrasound can identify small deviations early, before they lead to faulty products that need to be scrapped or recalled.
The potential of this technology increases when it’s combined with machine learning and automation. This allows manufacturers not only to better assess quality, but also to incorporate the data into predictive models that can support efficiency more widely. By combining scan readings with modelling and analytics, manufacturers could identify some potential deviations before they even happen. A system might also recommend which batteries to test, or pinpoint where processes could be improved.
By linking faults to their root causes, this approach establishes greater traceability of materials and components throughout the manufacturing process, helping to reduce waste. Incorporating other types of sensors, such as 3D scanners, allows for even more visibility across the various stages. There’s a lot of data involved in manufacturing EV batteries – so it’s crucial that systems use the right metrics and technology. But when deployed effectively, they can provide the basis for developing a more circular approach – with connected sensors and analytics supporting the optimal use of resources. A new partnership between Liminal Insights and Schneider Electric will enable this type of high-quality, scalable manufacturing by bringing together advanced ultrasound scanning with our industry-leading automation and analytics capacities.
Traceability throughout the value chain
True circularity extends beyond the factory walls to take in the whole value chain – from raw materials to the end product and back again. But on this bigger scale, the principles remain the same. Visibility supports efficiency and sustainability. The full EV battery life cycle involves many different organisations, systems, and people. A circular approach requires a continuous thread linking all of these, so important information on materials, parts and processes can travel smoothly between them.
Developing traceability in this way will be essential if the industry is to meet its sustainability challenges.As concerns grow over securing raw materials for EV batteries and the impact of this on the planet, the industry’s focus on recycling is increasing. Recycling scrap from manufacturing offers the potential to recover valuable resources and save costs. And in the coming years, used batteries will also become a significant opportunity, with 100 million units expected to be retired in the next decade. According to one recent study, within Europe recycling from end-of-life batteries and scrap could meet a quarter of the industry’s cobalt demand by 2030, as well as 14% of lithium, 16% of nickel, and 17% of manganese.
Managing recycling on this scale will require a high level of transparency over materials and processes – a reality that is recognised in new regulation from the European Union (EU). From 2027 it will be mandatory for all batteries with a capacity over 2 kWh sold in member states to have a unique digital passport, including details on aspects such as composition, performance, recycled content and carbon footprint. The EU’s rules will apply to all batteries over 2 kWh and have already prompted substantial changes in the automotive industry. Volvo introduced the world’s first EV battery passport last year. Several Japanese auto companies are working on a similar initiative, and China is also developing a battery passport to comply with the regulations.
Battery passports will support benchmarking against the EU’s sustainability targets. The need to meet these standards – and similar measures planned in other parts of the world – is a further motivation for EV battery manufacturers to make sure they have clear visibility over their processes. But to see this as an obligation would in many ways be missing the point. Developing a digital infrastructure that can support traceability will be crucial to establishing genuine circularity in the complex EV battery ecosystem – and that’s an ambition that will benefit everyone, in the industry and beyond.
To play their part in this, manufacturers will need equipment and systems that can accurately track materials throughout the life cycle. As well making their own processes more efficient, this can also support more effective battery recycling, and align with wider efforts to develop accountability throughout the value chain. Creating a circular industry involves many stakeholders, and it’s impossible to take the necessary steps all at once. But by starting their journey today, manufacturers can see immediate results while also laying the foundations for long-term sustainability.
To discover more about how technology can support a circular approach, download the Schneider Electric and AVEVA white paper: Connecting the digital thread across EV battery manufacturing.
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