How can battery manufacturers ramp up faster, improve throughput, and reduce scrap rate?
The incredible demand for batteries has created significant opportunities for battery manufacturers, including both new market entrants and established companies. However, the complexity of battery production creates many risks that manufacturers must overcome to be profitable.
This eBook explores best practices for battery manufacturing and examines what battery manufacturers can do to meet the demand for new batteries. It explains how digital transformation can help manufacturers minimize the inherent challenges of battery manufacturing and what to consider to implement a digitalization strategy.
Please enjoy the summary* below. For the full research, please visit our sponsor Siemens (registration required).
Table of Contents
- Business Opportunities for Battery Manufacturers
- Battery Manufacturing Challenges
- How to Overcome Challenges
- 1. Improve Predictability
- 2. Unlock What You Know
- 3. Drive Decisions with Data Insights
- 4. Improve Throughput and Quality
- 5. Accelerate Ramp Up
- 6. Meet Sustainability Goals
- Implementation Considerations
- Recommendations
- References
- Acknowledgments
Business Opportunities for Battery Manufacturers
Significant Growth
The battery cell market is expected to grow by more than 20% annually until 2030, reaching at least $360 billion globally, with a potential for as much as $410 billion. This growth will be largely driven by a desire to address climate change. To achieve the targets set by the Paris Agreement to stay below 2°C above pre-industrial levels, there is significant investment to shift to electric vehicles (EVs) and alternative power sources. Batteries are critical to this transition as they can enable 30% of the required reductions in carbon emissions in the transport and power sectors.
Electric Vehicles
Demand for electric vehicles is booming, setting new sales records every year, with 2023 approaching $40 billion, nearly double 2022 sales. This demand will continue as it is expected that by 2040, EVs will represent 70% of all passenger vehicles. Since EVs rely on batteries as a power source, battery manufacturers will need to keep up with this demand.
Power Grid
Demand for batteries is further fueled by the growth in renewable energy sources in the power grid. By 2025, the installed capacity of wind and solar will exceed that of coal, natural gas, and hydropower. Further, from 2022-2027, renewable capability should grow by almost 2,400 GW, an 85% acceleration over the previous five years. Since wind and sunlight are not constant, energy storage will be critical to support this growth and in fact battery storage was the most invested-in energy technology in 2023.
Expanded Capacity Needed
Currently, battery manufacturers need more capacity. For EVs alone, the industry will need 200 new gigafactories to meet the expected demand. Europe and North America should see significant growth considering their relative immaturity in the battery market, especially as OEMs vertically integrate and rely on more domestic supply chains. However, Asia will also need to make substantial investments as many Asian battery cell manufacturing suppliers already operate at more than 95% capacity. They will only benefit from the growth opportunity if they expand their output.
Urgency
With the expected growth, fueled by government incentives and new funding to support green alternatives, it is an excellent time to make the needed investments to support battery production. It is still early in the competitive race with much opportunity to capture market share.
Recommendations
Recommendations and Next Steps
Based on industry experience and research for this report, Tech-Clarity offers the following recommendations for battery manufacturers:
- Improve process predictability with digital twins. Digital twins will allow you to simulate behaviors in a virtual environment in a low-risk way before implementing them in the physical world. This will help identify potential quality issues in advance to reduce scrap and ramp-up time.
- Unlock what you know in your data by integrating it and connecting it with a digital thread. This will link the data needed to feed into the digital twin and put it in context to support decisions. It will also provide traceability to identify the root causes of problems. Integrating enterprise systems such as PLM and MES supports this.
- Drive decisions with data insights. This allows you to leverage the power of digitalization to glean insights and make better decisions, especially to improve quality and reduce scrap.
- Improve throughput and quality with automation and MES to enforce best practices.
- Accelerate ramp-up by simulating production with the digital twin and using virtual commissioning.
- Meet sustainability goals by using the digital twin to lower energy consumption, reduce scrap, use fewer raw materials, and manage material compliance.
- Use partnerships for guidance and consider a vendor who offers an integrated solution to avoid interoperability issues. A cloud solution can also improve the accessibility of the data.
*This summary is an abbreviated version of the ebook and does not contain the full content. For the full research, please visit our sponsor Siemens.
If you have difficulty obtaining a copy of the research, please contact us.