Swedish battery maker Northvolt filed for Chapter 11 chapter security inside the US on 21 November. The start-up had raised over $15 billion (£12 billion) from patrons, nonetheless was left with practically $6 billion in debt. The switch offers the company the prospect to restructure and entry new finance, in an attempt to rebuild its operations.
Northvolt’s ambition was to drawback the dominance of Asian battery makers, akin to CATL and BYD in China. The company launched in 2016 with the considered tapping low-cost renewable energy to assemble lithium-ion batteries for electrical vehicles (EVs). It promised 90% a lot much less CO2 emissions compared with cells made using coal power by 2030.
Northvolt had secured contracts with quite a few European auto companies, along with Porsche, Audi and Scania. Patrons included Volkswagen and BMW. In June, it was reported that BMW cancelled a €2 billion (£1.7 billion) contract over Northvolt’s failure to ship promised batteries.
The company focused on nickel manganese cobalt (NMC) cathode provides for its batteries, which allow extreme energy density batteries and attributable to this truth longer car ranges. ‘There was this narrative that NMC was the very best chemistry, and that is nonetheless partially true, nonetheless worth reductions and enhancements in [lithium iron phosphate] LFP have shifted this argument,’ says Billy Wu, electrochemist at Imperial School London, UK.
It’s troublesome to be inexperienced when your rivals are beating you by means of costs so aggressively
High quality NMC batteries can attain energy densities spherical 250Wh/kg, whereas LFP batteries generally tend to sit down down spherical 130Wh/kg. Nevertheless in current occasions, corporations along with CATL and BYD have improved the effectivity of LFP batteries whereas lowering their worth.
‘Northvolt, UmiCore and BASF are all having problem on account of they’d been specializing in NMC batteries for long-range electrical vehicles, on account of all the [manufacturers] in Europe had been deciding on them,’ says Peter Tom Jones, director of the KU Leuven Institute for Sustainable Metals and Minerals in Belgium.
LFP batteries are winners by lifestyle cycle, sturdiness and thermal stability. As well as they stay away from the utilization of essential metals akin to cobalt and nickel. ‘With NMC, if we wished to have an effect on each half, we possibly would have a nickel shortage,’ says Wu.
BYD and CATL have arguably developed the proper LFP cells on the planet. They did this not solely by rising energy density, nonetheless altering the battery design: eradicating packaging and inactive components, alongside rising cell measurement and deepening integration. BYD says its blade battery is 50% additional space-efficient than a standard battery pack.
‘LFP tends to be significantly additional safe by means of thermal runaway traits versus NMC. That’s key,’ Wu explains. This moreover allowed companies akin to Tesla use greater LFP cells inside battery packs for its entry-level Model 3, as an example, rising whole functionality.
Europe ought to conjure up a method that options lithium iron phosphate, as that chemistry is true right here to stay
Within the meantime, the autumn in lithium prices helped. ‘There is a bit more lithium in an LFP than an NMC battery, per kilowatt hour, in order that they benefited better than some NMC cells from the autumn in lithium prices,’ says Wu.
Jones predicts a hard time ahead for European companies involved inside the battery ecosystem. ‘I really feel LFP is a deliberate attempt to kill the European battery EV ecosystem,’ he says. ‘That being talked about, Europe ought to conjure up a method that may even embrace LFP, as that battery chemistry is true right here to stay.’
Plant troubles
The problem at Northvolt, nonetheless, cannot be laid solely on the door of its provides various. Its main plant in northern Sweden reportedly produced decrease than 1% of its theoretical functionality in 2023, whereas the company had acquired US battery tech company Cuberg, and set out daring plans for a second manufacturing facility in Sweden and facilities in Germany, Canada and Poland.
It had problem getting processes correct at its first plant, which made its first provide to prospects in 2022. ‘It’s very robust to make these cells continuously and at scale,’ says Wu. ‘Merely since you buy the instruments doesn’t indicate you understand how to run it efficiently, and you might get your mixing, your coating and drying all working continuously in a sequential course of.’ A breakdown at one stage can hit productiveness arduous.
The state of affairs is less complicated for Asian producers, who’ve additional native know-how obtainable. ‘In China, you should have additional instruments producers, factories, producers of precursors, they usually’re all within the similar nation and talk the similar language,’ says Wu.
With clients confronted with inflation and worth of dwelling points in current occasions, the value of the inexperienced premium possibly moreover turned questionable. ‘Northvolt was doing the very best issue, nonetheless it’s troublesome to be inexperienced when your rivals are beating you by means of costs so aggressively,’ says Wu. Estimates of lithium-ion battery prices dropped from $780/kWh in 2013 to $139/kWh in 2023, nonetheless Chinese language language batteries now promote for as little as $55/kWh.
NMC batteries keep in fashion in high-performance EVs from BMW and Volvo, whereas Tesla makes use of nickel-cobalt-aluminium (NCA) cells in its premium fashions.