Challenges in Battery Manufacturing

Battery manufacturers need to adapt to the changing field of battery manufacturing by accounting for prevailing challenges in lowering costs, workforce, securing supplies, and meeting sustainability regulations. 

FREMONT, CA: Cell manufacturing will account for 40 percent of the battery industry by 2030. Companies are investing billions of dollars in new plants to accommodate the rising demand for batteries. A significant number of gigafactories can meet the demand in the next ten years. Many factors in expanding plants can hamper battery manufacturing globally. Industrialists are securing funding, maintaining budgets, recruiting talent, and training workers to meet demands. Other potential issues include securing the capacity of capable machinery producers and qualifying and developing a supply chain.

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Market forecasts predict battery manufacturing industries will grow by 20 percent annually until 2030. Manufacturers need to act now to establish their hold in the market. The following challenges affect meeting rising demands:

Low-cost producer: Original equipment manufacturers prefer to purchase at lower cost, higher quality, better yield, reliability, and sustainability. Cell manufacturers are improving their yield by adopting new technologies, product chemistries, and innovative production processes to charge competitive prices from the moment manufacturing plants open. Battery manufacturing plants will reduce operational costs and close long-term deals with the OEM.

Skilled workers: The right workforce can establish an industry as the cost leader in the market. Competition amongst other manufacturing plants is becoming fierce as fewer graduates in electrochemistry and electrochemical engineering degrees each year. Recruiting qualified workers for optimal production hinges on the challenges like finding the appropriate expertise and retaining employees while providing benefits and incentives.

Raw materials supply: Emerging manufacturing industries will find it difficult to secure reliable raw materials like cobalt and battery-grade nickel. Established manufacturers are locking suppliers through partnerships with producers and miners. Resources like nickel may run out in later years due to growing numbers of plants and over-mining. Environmental regulations can limit the number of suppliers and the volumes available for cell industries.

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Sustainability: The industry is seeing a shift in priority from profit-centric production and marketing to sustainable outsourcing and processes. Automotive OEM focus more on reducing greenhouse-gas emissions. Producers are decarbonization targets according to the criteria of the Science Based Targets initiatives (SBTi). Manufacturers try to minimize the potential for upstream Scope 3 emissions in the value chain of sourced materials.