Industry
Manufacturing
TCS Neural Manufacturing: Driving Agility & a Competitive Edge
Highlights
- A high demand for electric vehicle batteries has turned the spotlight on the way these are manufactured and their opaque supply chain. Hence, there is a pressing need to source the raw materials of batteries and manufacture them more sustainably, going forward.
- The extraction of critical raw materials (CRM) for EV batteries results in a large quantity of greenhouse gases being emitted. Modern technologies such as blockchain can bring in transparency and traceability to the CRM supply chain and ensure ethical sourcing.
- Besides ethical sourcing, battery production processes also need to be optimized. Enhanced access to battery management systems can facilitate the repair and remanufacturing of batteries extending their lifespan.
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The demand for EV batteries is only going to go up
The transition from internal combustion engine (ICE) vehicles to electric vehicles (EV) is critical if we are to achieve a sustainable future. the right conditions need to be fostered the environmental benefits.
The sale of EVs have been on an upward trend over the last few years due to the drive to decarbonise road transport and improve local air quality. However, the manufacturing of lithium-ion batteries – the key component of EVs – is a highly carbon-intensive process, which has become a cause of concern among automakers and regulators.
EV batteries are expected to contribute about 60% to the $27 trillion market for clean energy technology requirements by 2050, according to the World Energy Outlook 2021 report by the International Energy Agency (IEA). A large part of those batteries will be used for electric vehicles, which are expected to make up 60% of the global auto sales by 2030.
Such stratospheric demand has turned the focus on how these batteries are manufactured, their often-opaque supply chain, and the need to make them sustainably. Ecodesign practices, circular economy business models, and sustainable manufacturing processes will be vital. These will have to be supported by digital technologies for end-to-end visibility and to enable the identification of hot spots in the value chain.
Put the spotlight on sourcing
Elements such as lithium, cobalt, and nickel are essential for the current EV battery technology.
Given their scarcity and economic importance, these are classified as critical raw materials (CRM) in the European Union (EU) and the United States (US). Considering that lithium, cobalt, and nickel are predominately found in just a few countries, most governments have taken extra measures to ensure their secure and sustained supply.
The global annual production of lithium and cobalt in 2021 was 100 kilotons and 170 kilotons respectively. Demand for those minerals will go up to 590 kilotons and 520 kilotons respectively by 2040 to meet the burgeoning demand of vehicle batteries, according to The Faraday Institution. Nickel supply needs to go up to 4,000 kilotons from 400 kilotons in the same period.
It is pertinent to note that the growth in production of EV batteries comes with its own set of challenges. Mining and refining huge quantities of CRMs will emit substantial quantities of greenhouse gases, resulting in significant environmental impact. Besides the depletion of natural resources, rampant mining activities can also be linked to human rights violation. Nearly 70% of the cobalt’s global supply comes from the Democratic Republic of Congo, where resource extraction often involves child labour and unsafe work conditions.
It is therefore essential to infuse transparency and traceability in the CRM supply chain to ensure ethical sourcing. This is where digital technology can help. Complex supply chains like these, where the source and chain of custody for goods and materials are essential, can hugely benefit from blockchain technology solutions that utilize a decentralised ledger or a digital system to record transactions between multiple parties.
This level of transparency and traceability can also be extended to the use and end-of-life phases of EV batteries. This could be very significant for the automotive industry at a time when the EU has brought in a new law to ensure that batteries are more circular and manufactured ethically.
Starting 2027, the EU Battery Regulation will require battery producers to recover 90% of the nickel and cobalt used in batteries. And this will rise to 95% in 2031. They must also recover 50% of lithium, which will rise to 80% over the same period. The car itself will then become the most sustainable and cost-effective source of those materials, thereby reducing the need to extract virgin materials to manufacture batteries. Blockchain and IoT technologies could enable automotive producers to maintain visibility of these materials after the vehicle has left the factory.
Follow the hierarchy of sustainability
To put the refuse and reduce principle to practice, manufacturers will need to find alternatives to CRMs or limit their use to the extent possible.
In the longer term, some materials could be phased out or significantly reduced. For example, nickel-manganese-cobalt (NCMA 811) lithium-ion cells battery chemistry has already reduced the cobalt content from 20% to 10%. However, such reductions are often linked to some trade-offs, as it’s technically very challenging to improve multiple battery performance metrics such as capacity, safety, cost, or lifetime at the same time. Therefore, completely phasing out CRMs from automotive manufacturing might not be realistic in the short or medium term. Further, R&D activities should help reduce the reliance on CRMs, and where they are used, support conservation and re-use.
In addition to the choice and source of materials, aspects of ecodesign must be applied to EV battery development to minimize the lifecycle impact of a product. Production processes need to be optimized, while ensuring that products are energy-efficient, durable, reliable, reusable, upgradable, reparable, and easier to maintain.
Use phase impacts of an EV battery also depend on its charging location. The carbon intensity of electricity grids varies from country to country. For example, Sweden has one of the lowest grid intensities in Europe at 45g CO2e per kWh whereas in Poland, it is 635g CO2e per kWh. Hence, to accelerate decarbonization of road transport, grid electricity needs to be made fully renewable to fully capitalize on the shift to electrification
Circularity in focus
To reduce the need for virgin materials and consequently reduce carbon emission, batteries should be utilized for as long as possible.
To facilitate this, more focus is needed in the following areas:
- Battery management systems
EVs typically have an eight-year or 100,000-mile battery warranty, with usually 75-80% capacity remaining after that period. With EV technology still in its infancy, the long-term usage data is not accessible yet. However, the experience gained over recent years shows that EV batteries can last for the lifetime of a car or longer. Individual battery performance will depend on its usage. Batteries used heavily and usually with rapid charging might have to be retired early as the effects of degradation will set in quicker than the batteries with lower utilization, good maintenance, and consistent slow-charging patterns. However, the exact impact on the given battery depends also on the battery chemistry, technical charging set up, and cooling mechanism. A deeper understanding of battery management systems, including the assessment of the state of health (SOH) of individual cells, can extend the lifetime of batteries and support the used EV market, by providing greater access to a larger portion of consumers, at varying price points.
- Repair and remanufacturing
Keeping batteries in automotive use not only protects scarce resources but also provides cost saving by extending the battery’s utilization period.
The Custom Automotive Lithium Ion Battery Recycling (CALIBRE) project, part of the Faraday Challenge, concluded that cells in batteries do not age in a linear manner, and therefore, replacing around 5%-30% of cells below the required state of charge (SoC) of 80% can bring SoC back to 100%.This would minimize the need for whole battery replacement, in line with the revised EU Battery Regulation that mandates repair and remanufacturing.
- Second life
In line with the circular economy principles and waste hierarchy, a product’s life should be extended as far as possible.
The second life applications of lithium batteries are also still in the early stages of development; however, the numbers are growing annually. It is presumed that the performance requirements of these batteries will depend on what they are used for. Not only that, the type of battery will also have a bearing on the performance. With a second life, lifetime expectation at around five to 10 years, they present serious competition to new batteries for energy storage.
In addition, since batteries account for about 40%-60% of EVs total production emissions, their second life can partially offset the emissions by reducing the need for new batteries.
A step into the future
Electric batteries are crucial to facilitate the transition to a climate-neutral economy by 2050.
Since they are the key enablers for transport and energy decarbonization, the right conditions and technologies need to be put in place to minimize its negative impact on the environment while maximizing the business benefits.
The end goal is to neutralize the automobile sector’s contribution to climate change by transitioning to zero emission vehicles. But that must be done without shifting pollution from the tailpipe of vehicles to elsewhere in the value chain or creating environmental and ethical issues in other parts of the world.
Forecasting for growth
Retail and consumer goods industries have realized significant benefits by implementing cognitive demand forecasting.
The manufacturing industry can also embark on this journey considering the myriad benefits AI-led forecasting offers. By evaluating the organizational maturity from both business and technology standpoints, the approach can be customized to a manufacturer’s specific needs. While the benefits are substantial, there are also a few limitations. Organizations must be cautious in selecting as well as periodically revalidating the factors that influence demand. This approach will help manufacturers improve working capital management, drive better customer service, ensure supply chain responsiveness, and explore new business avenues.
