AABC Europe 2020 kicked-off on Monday 12 January in Wiesbaden, Germany, with more than 1,000 attendees. Around 150 speakers representing global automakers, cell makers, parts suppliers, equipment manufacturers, recyclers, research companies, scientists and governments presented at the conference. Among them, Roskill’s managing director Robert Baylis presented on the sustainability of the EV supply chain.
The main trends discussed at the conference that continue to govern battery metals include: dedicated EV manufacturing platforms; negative sentiment on NCM 811 cathode; battery makers’ margins; environmental, social, and governance (ESG). Some key take-aways from the conference are detailed below:
Automakers with a fully-dedicated EV platform, like that of Volkswagen (VW), will be able to achieve lower production costs and better specifications for their cars. Dedicated EV platforms like VW’s will ultimately erode EV sales from other automakers using non-dedicated platforms and producing vehicles with lower performance parameters. VW’s platform also allows for a simpler “modular” battery pack system where, by adding more modules, the consumer can increase vehicle range (kWh capacity). It is believed that this flexibility in battery capacity will create several tranches in the car price which will ultimately attract different consumer segments.
European cathode makers like Umicore and BASF are reducing expectations on NCM 811 manufacturing. Umicore said at AABC that it can produce NCM 811 but the “sweet spot” may be 70% Ni (NCM 712), or monolithic or over-lithiated NCM 622. BASF now targets high-manganese cathodes as a solution to the price volatility of other metals. In Roskill’s view, this narrative is more aligned with the fact that NCM811 is a difficult cathode chemistry to produce, as it requires specific conditions of temperature and atmosphere. Roskill believes that the cost of using NCM 811 cathodes at system level (EV pack) is considerably higher than using other NCM cathodes with nickel under 80%, as they require advanced coatings and electrolyte additives.
Battery cell makers like LG Chem may market their cells depending on the vehicle segment. High-nickel cathodes and complex cell configurations will be marketed for use in high-end vehicles (Segments D-F), while lower nickel will be focussed on mass-market vehicles. OEMs want LG to develop a single advanced cell chemistry to increase efficiency and reduce costs; however, LG Chem’s intention is to create several chemistries depending on the car segment, in order to charge premiums for more complex cells.
Mining, processing and refining of raw materials contributes significantly to global emissions. Roskill’s Robert Baylis explained how the “clean transport” revolution will draw the focus of sustainability towards the metals it employs. Increasingly, lower-grade ores such as those of cobalt or nickel will mean higher CO2 intensity to obtain the “active” battery metals. Carbon credits and other regulatory instruments may start to penalise EV supply chain participants if there is no improvement in mining and refining practices. Renewable energy supply to mine sites, lower water intensity, and heavy electric mining vehicles are among the most realistic solutions to cope with ESR issues.