Solving the battery supply chain’s structural deficit

Although demand trajectories vary, experts agree that the global energy transition will be hindered by a structural shortage of critical minerals – particularly lithium, graphite, nickel, copper and cobalt – as early as 2025. This forecast shortage is because many forms of renewable energy generators, transmitters and consumers including electric vehicles, wind turbines and solar panels require significantly more mineral inputs than their fossil fuel counterparts.

In the U.S., interest and investment in electric vehicles has surged over the last several months in response to President Joe Biden’s “aggressive action to advance our (sic) EV future” with nearly $50 billion investment committed since Biden took office. Indeed, the U.S. has a bold goal for 50% of all vehicle sales to be electric by 2030 – which would be an incredible increase on the 6% of 2022 (according to Motor Intelligence). With a typical electric car requiring six times the mineral inputs of a conventional car, this represents a staggering increase in the quantity of minerals that will need to be mined, processed, and manufactured into batteries.

Although theoretically there are sufficient mineral quantities in the ground, and the U.S. has the political backing to go the distance, a structural deficit exists along the entire battery supply chain that first needs to be solved. From mining and extraction from brines, through materials processing to cathode and anode manufacture, the U.S.’s limited domestic industry simply does not have the time nor human resources to ramp up supply to meet demand following the traditional path. While researchers are rapidly innovating new technologies that reduce our dependence on certain minerals, it will be several years before these innovations filter through to product lines.

To keep the energy transition on track, we must seek to address the battery supply chain’s structural deficit by expanding U.S. production in new and creative ways. This will be especially important given the recent changes to the U.S.’s EV tax credit regime which now requires at least 40% of the value of critical minerals for batteries to be sourced inside the U.S. or from a free-trade partner, meaning fewer imported minerals and parts can be used in designs.

No time for bespoke design

There are several challenges to increasing mineral supply, but the most pressing is how to condense typical project timelines to bring new mining, processing and manufacturing capacity online more quickly.

Historically, we’ve been hooked on bespoke infrastructure design which can take a decade or more to deliver. For context, according to the IEA, between 2010 and 2019 it took an average of 16.5 years to take a mining project from discovery through to first production, with construction taking up to five years! Similar constraints are evident at all stages in the battery supply chain with each production or processing facility requiring complex engineering, investment in the region of half a billion to a billion dollars, and several years to build.

Given the industry has less than seven years to increase supply chain throughput to a point where it can deliver Biden’s ambition for all-electric vehicle sales, we need to rethink the traditional bespoke approach to infrastructure delivery.

Design one, build many

Worley’s response to this is to innovate modular designs from which we can build many plants. Much like the trusty Lego block, while each modular block will be different, they will all share common interconnection points. This has the combined benefit of being quicker to construct but flexible enough so that new technologies and upgrades can be readily assimilated into the plant as they become available in the future. This will also reduce the barriers for the industry when adopting new technologies to help address future market changes such as the declining quality of ore, increases in the use of recycled materials and heightened sustainability standards.

Ultimately, with far fewer bespoke requirements, modular designs are much easier to scale, replicate and disseminate around the world, ultimately fast tracking the industry’s response for more battery supply chain throughout.

This is not entirely new territory as it takes inspiration from the manufacturing mindset embodied by the likes of the automotive, telecommunications and aviation industries as well as our own. Boeing’s move towards standardization within its design and production, for example, illustrate what is possible even in the face of complex engineering. While each aircraft can be customized and modified by the end customer to suit certain requirements, much of the core engineering remains the same – the frame, the windows, the wiring looms, etc. This has allowed Boeing to make production more predictable, repeatable and cost efficient while still being able to manufacture an aircraft from start to finish in nine days. To make a similar approach feasible for the battery supply chain we need to reimagine the design approach to focus on utility, adaptability of standard designs and speed of delivery.

Partnerships and collaborations

A large part of the success of this new design philosophy relies on collaboration from the battery supply chain who will ultimately deliver it; dozens of critical vendors for 4,000+ pieces of equipment. With the right information supported by a collaborative environment, vendors can support this vision of modularity and standardization in their own products. By leveraging vendor’s expertise, we can streamline equipment supply by adapting designs to accommodate largely “off the shelf” equipment which eliminate the time spent designing and manufacturing custom pieces. To bring it all together there is then the need for an experienced “system integrator” – an organization that takes accountability for the overall operating performance and process design, and crafts the participation by various vendors and other parties to align and maximize the contribution by each within their specific areas of expertise.

A simple example of this are the materials handling facilities needed at the receiving and dispatch ends of many such facilities. There are particular requirements for battery materials processing relating to containment of toxic substances and protection from moisture ingress that, with close collaboration from typical vendors of this equipment, can be readily adapted and standardized for this industry – ultimately reducing the need for bespoke design efforts and shortening delivery lead times. More complex examples exist deeper into the plant process – along the same lines and with the same outcomes.

The final piece in this reimagination is to build long-term partnerships with battery material miners, processors and manufacturers who are establishing new facilities in the US to successfully bring this novel concept to market. This is something that must happen quickly if the industry is to stand a chance of meeting Biden’s 2030 deadline. While we are in the midst of the 6^th industrial revolution, it is clear that traditional methods of construction for chemical and mineral processing will not get us there in time. The battery industry must blaze its own trail if the US is to contribute at the scale needed to meet the world’s net zero ambitions and lessen the impact of climate change, at pace.

Driving innovation and leading the charge comes with risk, but with the right blend of creativity and expertise, there is always a way to solve even the most complex engineering problems.

Greg Pitt, vice president of battery materials – growth, Worley. Greg works to identify key growth areas and technology advancements within the battery materials market. He has past experiences in the automotive and manufacturing industry and infrastructure.