UK identifies £24bn battery and power market in electric vehicles

Market news | June 22, 2020

By Nick Flaherty

The global market for batteries, electric machines and power electronics is set to reach £97bn in 2025 according to a new report by the Advanced Propulsion Centre (AC) in Coventry. The report sees 12 key opportunities which the UK is particularly well placed to address with a market of £24bn in 2025.

Within batteries there are opportunities in areas from cathode, anode and electrolyte production as well as cell and pack manufacturing alongside vehicle assembly plants. This market is worth £12bn by 2025.

Today, with 40kT battery grade capacity, the UK has one of the largest nickel refineries in Europe for electrode manufacturing. The existing Intellectual Property (IP) in battery grade nickel powder and pellet production is world-leading and could be extended to cobalt refining, says the report, although there is strong move to reduce the amount of cobalt in batteries.

For NMC and NCA (Lithium Nickel Manganese Cobalt Oxide and Lithium Nickel Cobalt Aluminium Oxide) battery chemistries, mixing the cathode materials of nickel, cobalt and lithium are value-add processes. Cathode mixing is rich in IP and very energy intensive, so the industry is locating cathode active mixing facilities in areas with access to low-cost, low-carbon electricity, near sources of pre-cursor materials with good transport links to customers.

This trend is highlighted by BASF plant co-located with Nornickel’s facility in Finland: THREE TEAM FOR EV CELL RECYCLING CLUSTER IN FINLAND.

This opportunity in nickel has additional knock-on effects on nickel refining and lithium hydroxide production. The difficulty of transporting the hydroxide makes localisation more attractive. The UK is well placed with two lithium hydroxide and carbonate producers who supply to existing cathode manufacturers.

For anode manufacturing the UK is a significant European producer of high grade needle coke for producing synthetic graphite. This is typically blended with natural graphite, silicon and other conductive additives for lithium ion battery anodes. Currently, most of the needle coke produced in the UK is sent to China and there is an opportunity for an anode manufacturer setting up in the UK to benefit from lower shipping costs, tariffs and access to UK R&D networks into new anode materials, such as graphene or lithium metal anodes.

The UK also has a well-established electrolyte production supplier with significant IP, serving UK and European cell manufacturers, making it one of only two significant players in Europe. Growth forecasts suggest production capacity within Europe will be fully used by 2021 and so additional capacity will be needed.

Electrolytes are typically difficult and costly to ship, cell suppliers will often source this locally, so the production plant on the East coast of the UK is ideally placed to supply local and European demand.

Looking forward, the industry is investing in solid state batteries (replacing the liquid or polymer electrolyte with a solid electrolyte) which promise greater energy density and durability. The UK has a strong R&D base and leading companies working in this area, which would help to future-proof electrolyte supply.

The UK currently has a 1.9 GWh battery cell manufacturing plant producing Nissan electric vehicle products but conservative estimates suggest that the UK will need between 10 and 20 times its existing production capacity to meet the rapidly growing demand from electrified passenger cars by 2025.

Various OEMs are selecting their preferred partners and are attracting gigafactories close to vehicle assembly plants. Since 50-60% of the bill of materials cost is driven by six key materials (cathode, anode, electrolyte, separator, aluminium and copper foils), securing access to those materials at a competitive cost-point is an area where the UK can further enhance its attractiveness to cell manufacturers.

TOP 8 GIGAFACTORY PLANS

The UK currently produces approximately 10% of all the vehicles in the EU and battery pack manufacturing will mostly occur close to vehicle manufacturing. This makes the UK an attractive location for manufacturers of battery modules and packs (OEMs and Tier 1s) to source components including busbars, cooling plates, housing seals and the battery management system hardware.

Power electronics is a £10bn opportunity t o2025 says the report, ranging from semiconductor and sensors to passive components.

The UK has a number of facilities producing power electronic devices for automotive and other sectors, historically in silicon and now migrating towards wideband-gap semiconductors, such as SiC and GaN. For example, the UK has a facility that currently manufactures around 1 billion silicon MOSFETs (a type of power electronic switch) per annum and is currently investing in GaN. As the global demand for SiC is forecast to rapidly outstrip supply, this is encouraging UK companies to invest in new SiC fabrication technologies in readiness for the growing electric vehicle market.

Optimising wideband-gap power modules requires that the end application influences the design across the value chain, from epitaxy, to die-preparation, encapsulation and packaging. The UK has capability in all stages of the supply chain and is ready to work collaboratively to leverage the full set of capabilities.

Next generation electric vehicles require a plethora of sensors to assess the operating environment, such as temperature, voltage, speed, etc. The transition to wideband-gap materials requires higher temperature operation and better fault tolerance mechanisms, making sensors a key area.

Power electronic systems require the integration of semiconductors with passive components, such as inductors and capacitors, including DC link capacitors. These have remained relatively unchanged and will require new material innovations, such as improved dielectric materials, to operate effectively alongside wideband-gap semiconductors.

There are several UK companies that design and manufacture high-performance passive components, which are gearing up production to meet the anticipated demand for electric vehicles. The UK is also developing complementary technologies such as heat-coupling materials that provide semiconductor thermal management.

The report is at https://www.apcuk.co.uk/opportunities-for-you/strategic-uk-opportunities-in-passenger-car-electrification/