Commentary Contributed by Tareq Al-Najjar, Thermo Fisher Scientific
April 19, 2024 | The battery production industry is facing unprecedented challenges—from skyrocketing demand and increasing regulatory scrutiny, to mounting pressure for better battery quality and performance. Manufacturers that fail to effectively navigate these difficulties risk reduced profits and losing market share to better-prepared competitors.
So, what can manufacturers do to get ahead in the race to produce better, more sustainable batteries, at scale? How can advanced digital solutions speed the path to success?
Modern Battery Production: A Changing, Challenging Landscape
Today, battery manufacturers must contend with several considerable challenges:
- Rapidly growing demand. Global demand for lithium-ion batteries is growing fast, driven in part by insatiable desire for modern, greener technologies, such as electric vehicles (EVs). As such, battery manufacturers must be able to quickly scale their operations like never before.
- Economic pressure. Raw material and manufacturing costs in the battery sector are high (and growing). Consequently, sector profitability is low, at ~4.7%. Manufacturers must, therefore, continually find ways to drive cost efficiency, including decreasing scrap rate throughout the battery production value chain.
- Fierce market competition. Hunger for battery-powered technologies has driven many new companies into the battery space. While this is good for consumers, it means competition is fierce. Accordingly, battery producers must strive to produce ever better products — batteries that are higher capacity, faster-charging, more sustainable, and safer. The latter point is important, as any safety risks could entail product recall, which companies must avoid at all costs given the reputational damage that can ensue.
But that’s not all. Perhaps one of the most important challenges manufacturers face is the increased regulatory focus, across the globe, on raw material sourcing and supply chains.
Take, for example, the USA Inflation Reduction Act (IRA). One of the IRA’s goals is to speed the transition to EVs, as well as stimulate domestic production of EVs and their batteries. Under the act, consumers can receive a tax credit of up to $7,500 per new EV, but for a vehicle to qualify, battery manufacturers must provide evidence that 40% of battery-critical minerals were extracted and processed either in the US, or one of its free trade agreement partners. After 2026, this figure jumps to 80%. However, ensuring traceability and transparency across the complex battery supply chain is no easy feat, and places a significant burden on manufacturers.
And the US is not alone. The EU has also increased its scrutiny of the battery life cycle through updated and strengthened regulations. European battery manufacturers will need to demonstrate material traceability and compliance right back to the mine, with all batteries requiring a battery “passport” by 2026. A Battery Passport can be thought of as a digital twin of the battery, helping stakeholders to identify, trace, and report on the life cycle of the battery and its components. As per the new EU regulations, the Battery Passport must include information on the battery’s material sourcing, carbon footprint, percentage of recycled material used, and durability, as well as detailing repurposing and recycling guidelines. Critically, the EU regulations will also apply to any battery manufacturers who wish to export their batteries to EU countries.
Taking Charge With Advanced LIMS: Meeting the Needs of Modern Battery Production
Advanced laboratory information management systems (LIMS) can help battery manufacturers better navigate the challenges that fill the modern battery production landscape. While they operate in sync with a manufacturing execution system (MES), LIMS go much further, supporting every part of the battery production process, from raw material extraction and processing to quality assurance in the production line, as well as research and development of the next generation of batteries.
One way that an advanced LIMS helps battery manufacturers is by streamlining operations to enable higher productivity and greater scalability. An advanced LIMS can connect a lab’s equipment, people, and processes, which simplifies workflows and reduces errors, since analysts no longer have to manually create worklists and send them to different instruments and can avoid manually transcribing data into different systems.
With this greater connectivity, labs can also begin to automate their processes and workflows, reducing the risk of human errors and enabling better reproducibility. Critically, when processes and workflows are automated, lab analysts get greater walk-away time, meaning they can focus on more value-adding tasks. All this translates to greater lab throughput and higher productivity.
What’s more, a better-connected, automated lab can gather the critical data and metadata necessary to make best use of advanced analytics and AI tools. By unlocking the full potential of these tools, labs can find ways to optimize processes and solve stubborn challenges, leaving fewer obstacles to scaling their operations.
Supercharging Battery Quality and Performance
Quality assurance (QA) and quality control (QC) testing is critical to ensure the quality and performance of batteries, spanning elemental impurity analysis, electrolyte degradation product analysis, cathode material bulk composition measurement, and a host of other tests.
LIMS help optimize testing by ensuring data integrity in line with ALCOA+ principles, securely collecting, storing, and better categorizing it, as well as making data more easily shareable. Analysts therefore get higher-quality and more consistent data that stakeholders can easily access and use to draw insights and make informed decisions, better positioning them to reduce product defects and waste, and make continual product improvements.
Meet Growing Traceability and Transparency Requirements
The most advanced LIMS can help manufacturers comply with the USA IRA and the EU’s incoming Battery Passport regulations, too. A modern LIMS can automatically and accurately track the raw materials involved in battery production — from the mine all the way to finished goods. Battery manufacturers can therefore easily see where battery minerals were extracted, processed, and recycled, as well as calculate the recycled content.
With such transparency and traceability, battery manufacturers can offer trustworthy data proving that they meet IRA requirements, as well as more easily provide two key pieces of information required for the Battery Passport (as per the new European regulations): the source of the battery’s raw materials, and the proportion of recycled content in the battery.
Facing the Future of Battery Manufacturing, Today
The battery industry is evolving at pace. Demand for sustainable technology, intensifying economic pressures, and tightening regulations are pushing battery manufacturers to their limits.
But advanced LIMS are available to help battery manufacturers effectively overcome these challenges. The right LIMS can help companies boost workflow and data management connectivity across the battery manufacturing continuum, ease complex testing schedules, and increase traceability from raw materials through to finished product. Consequently, companies can more quickly scale production, reduce waste, and ensure visibility and accountability throughout workflows — all while driving product quality.
With these benefits—and given the increasing regulatory pressure on manufacturers to document raw material source and recyclable battery content—the role of advanced LIMS in modern battery production is only set to grow.
Tareq Al-Najjar, Global Strategic Account Executive for Digital Science Solutions at Thermo Fisher Scientific, focused on the Energy sector, has extensive experience identifying, establishing, and expanding market/product presence in the oil, gas, and energy arenas. With his most recent experience as the VP of International Business Development/Investor Relations at Vacom Systems LLC from 2015 – 2022, Tareq joined the Thermo Fisher Scientific team in February 2022 to bring his expertise into the LIMS sector. Tareq has a Bachelor of Science Degree in Electrical and Computer Engineering from the University of Utah and a Master of Business Administration (MBA) from the University of Utah David Eccles School of Business. He can be reached at tareq.alnajjar@thermofisher.com.
