A number of new lithium-ion factories planned in Europe
New Cathode Investments – One More Step Towards Back Integration
Cathode Investments in Europe
Umicore is planning to build a cathode plant in Poland due to start deliveries in late 2020. The first phase of this investment is included in the € 660 million programme announced earlier this year and is due to start deliveries in late 2020.
BASF and Norilsk Nickel enter exclusive negotiations to cooperate on raw material supply for battery materials production in Europe. BASF intends to invest up to €400 million in a first step to build production plants for cathode materials in Europe.
Johnson Matthey expects to start production in 2021-22 in Europe of a battery material it has developed with improved performance and reduced cobalt content to contain costs.
Northvolt is also planning to build its cathode in-house house they start their battery factory in Sweden.
A Fully Integrated European Lithium-ion Battery Supply Chain
The EU is pushing to have a fully integrated domestic supply chain, from producing EVs all the way back to producing raw materials. What would it mean for domestic lithium demand?
Notes: Electric cars include EV, PHEV and EV. Average battery pack for EV is 33kWh in 2017, 45kWh in 2025 and 52kWh in 2030. PHEV average battery pack around 12kwh, HEV around 1kwh. LCE consumption per kwh averaging 0.9Kg.
The European Story
There is a strong drive from the EU and various European countries to phase-out ICE cars and move to EVs.
European automakers such as Volvo, Volkswagen, BMW or Daimler have ambitious plans to electrify their fleet.
Europe will be one of the dominant players in terms of EV production and sales.
There is a wave of investments in lithium-ion battery factories across Europe and the continent is expected to be the second largest battery producer after China. However, most investments are coming from Asian based companies such as LG Chem, Samsung, CATL, SK innovation or GS Yuasa.
Majority of the lithium-ion battery factories that will be built in Europe will import battery cells from Asia, only the packing will be done in Europe. As German Chancellor A.Merkel said, it is “extremely important” that the EU develop its own battery cell production to secure its role in the automotive industry as it shifts to electric mobility.
The next step in this back integration is cathodes. 95% of the world cathode production takes place in Asia and despite a number of investment plans in Europe by companies such as BASF or Umicore, Europe needs to develop more production facilities domestically.
It is important to de-risk the European supply chain by having more domestic sources of raw materials, including lithium, available at a competitive cost. Producing the right lithium grade for the battery industry is also vital. Thanks to its rock resources, Europe is able to produce battery grade lithium hydroxide at a competitive price.