Lithium Werks To Build Battery Gigafactory In China

OCT 21 2018 BY MARK KANE 27

Another day, another battery gigafactory announcement

Lithium Werks, a Dutch energy storage company, is the latest who would like to catch onto the growing demand for lithium-ion batteries and announced a battery gigafactory project.

The idea is to build a new plant in China for €1.6 billion ($1.85 billion). We believe that the majority of the investment will come from partners of Lithium Werks.

The project scale would be just the beginning, as by 2030 company would like to have installed production capacity for 500 GWh annually.

Earlier this year Lithium Werks acquired the original A123 Systems manufacturing plants (for cylindrical cells) located in Changzhou, China. The other acquisition was Valence Technology (“including the customer relationships, global manufacturing, sales and distribution locations along with all of Valence’s Proprietary Lithium Magnesium Iron Phosphate intellectual property (IP), trademarks, and inventory”).

Press release

€1.6bn investment project kickstarts Lithium Werks’ battery gigafactories vision

Dutch energy storage and battery company Lithium Werks B.V. (www.lithiumwerks.com) and Chinese Zhejiang Jiashan Economic and Technological Development Zone Industry Corporation have signed a framework agreement with the intention to construct a 60 hectares battery gigafactory in the Yangtze river Delta. Total investments required are estimated at €1.6 billion.

The Lithium Werks factory and related facilities will produce battery cells for lithium-ion batteries, enabling the energy transition from fossil fuels to clean energy in order to reduce CO2 emissions.

Lithium Werks expects to have installed production capacity of 500 GWh per annum by 2030 as it continues to contribute to the shift to a carbon neutral world.

“With our Chinese partners’ help, and as we continue to grow both organically and through acquisitions, we will deliver the energy storage solutions that our customers increasingly ask for as the world transitions to clean energy,” said Koolen.

“We need safe, reliable, clean and sustainable energy storage. Batteries are an essential part of the energy transition. They enable us to store wind and solar energy to make it available whenever people need electricity,” said Kees Koolen, chairman of the board, Lithium Werks.

The agreement, which was signed in the presence of the Chinese Premier Li Keqiang and Dutch Prime Minister Mark Rutte, marks the start of Lithium Werks’ plan to build multiple gigafactories across the world as part of a 15-to-20-year program that mirrors the long-term business models of the wind and solar industry.

Lithium Werks expects its revenue to exceed $1bn by 2020 as it continues to grow its share of the rapidly expanding market for energy storage.

During the next decade alone, we can expect demand for lithium-ion batteries to grow tenfold.* The battery industry will need to respond by constructing factories to deliver capacity in excess of 10,000 GWh in the next three decades.

“We are grateful and happy to work with our Chinese partners, the first to support our strategy to have a factory in their country. Speed of execution is key as is evidenced by building permit and other regulatory processes in China being completed within 100 days. Other countries and partners are invited to take up the dialogue in order to accelerate the roll out in other locations. We work closely with our customers to meet their specific energy storage requirements and are excited to develop new business relationships.” said Koolen.

Lithium Werks is committed to providing energy storage solutions that make electricity generated from renewable energy available when consumer need it, thus facilitating the global transition from fossil fuels to clean energy.

Lithium Werks is working closely with the regional development organisation Oost NL, which has invested in the company, and with the University of Twente, with which it is developing a research campus that by around 2025 will employ some 2,000 engineers and other experts to focus on energy storage, transport and smart software.

“Significant investments are needed for an actual energy transition. The Chinese government has been working on clean energy plans for some time and their commitment confirms the crucial role that batteries play in this,” said Victor van der Chijs, rector of the University of Twente.

“Lithium Werks, with the University of Twente as a research partner, is an important player with a clear vision for a sustainable world. The University of Twente has been investing in sustainable energy research for years, including research into new materials that enable further innovation in battery technology,” he said.

Marius Prins, CEO, Oost NL said: “These developments show that Lithium Werks can grow into a company that makes an important contribution worldwide to the way we handle energy and energy storage. As the development company, we were among the first to invest in Lithium Werks. We firmly believe that Lithium Werks’ energy research R&D activities will contribute significantly to the strength of East Netherlands’ economy.”

 *)  Capgemini Research Institute, 2018

Source: Lithium Werks, Green Car Congress

Categories: Battery Tech, China

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27 Comments on "Lithium Werks To Build Battery Gigafactory In China"

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Alex

As I said a few times before, battery market will become a commodity with huge plant capacity and small margins.
At the same time it’s going to be a huge market as transportation moves to electricity.
500GWh seems huge but that’s between 5 to 10 million EVs – that’s less than half of the US car market.

Lou Grinzo

And not just transportation. We’ll see increasing use of batteries in renewable energy to store transient energy and make it dispatchable.

Almost any reasonable projection of our global battery manufacturing capacity results in science fiction-y numbers. Time to buckle up, buttercups. Things are just starting to get interesting.

Robb Stark

Meanwhile in the real world

https:// www. reuters.com/article/us-audi-electric/audis-electric-suv-faces-four-week-delay-because-of-software-bug-idUSKCN1MV0BD

“The paper also said Audi was locked in price negotiations with LG Chem, the South-Korean supplier of batteries for its electric vehicles, which wants to increase prices by about 10 percent because of high demand.”

Get Real

Production hell for Audi and prediction hell for Alex who just claimed that batteries are becoming low cost commodities?

Might want to ask Audi about that.

Do Not Read Between The Lines

Will become.
Lack of capacity is the problem right now, but there is a lot being built.
This is a similar situation to LCD displays in the 2000s.
At a certain point the market was waiting for new manufacturing to open and when it did the whole display industry flipped to LCD within 5 years.

antrik

VW might want to reconsider the plan to make LG their main supplier in the future…

antrik

Will? I’m pretty sure that’s an apt description of the battery (cell) market today…

Pushmi-Pullyu

Well, except EV batteries are not commodities, and haven’t been since the days of the original Tesla Roadster, which used laptop batteries.

These days, EVs use battery cells which are designed to the specification of the auto makers. In fact, batteries are one of the areas in which EV makers are competing. So that’s precisely the opposite of batteries being a “commodity”. With commodities, one source is just as good as another because the products are all the same.

Frankly, I don’t see the situation changing. Sure, there might be some EVs made using commodity batteries; cheaply made EVs aiming for the bottom end of the market. But auto makers who want to make their EVs competitive won’t be using commodity batteries, for the same reason that gasmobile makers, as a general rule, don’t use the same ICEngine in their cars and trucks.

Just my opinion, but I think the electric motors in PEVs are more likely to become commodities than the battery cells.

antrik

Call it what you will: but I’m pretty sure “huge plant capacity and small margins” is fitting for battery cell production. There might be occasional hiccups of course: but in general, scaling production volumes doesn’t seem particularly challenging; and thus I expect to always see various makers trying to outdo each other in capacity increases, while struggling to squeeze out a profit — just like in PV, memory chips, and similar continuous growth markets…

Pushmi-Pullyu

Sure, production in large quantities and with very narrow profit margins.

I note there are different definitions for “commodity”. I thought the term “commodity” was used in relation to EV batteries in the sense of “a mass produced unspecialized product”, but perhaps some other meaning of “commodity” is intended here?

If this is merely a semantic argument, then I apologize for wasting everyone’s time.

antrik

I think the meaning you are using would more aptly be described as “off-the-shelf”?…

Even if the specific cell types are often custom-ordered, I think a market where you can choose between different vendors to place the order, with fairly limited differentiation, can be described as a commodity market.

Just like most “chip makers” pick independent foundries for the actual manufacturing. While the exact processes are proprietary to each foundry, the “chip makers” often switch between different foundries from one generation to the next, depending on who has the best deal, a (usually minor) temporary technological edge, etc.

Bob Wilson

A nit, I associate the term “Gigafactory” with Tesla as opposed to a general term for a battery manufacturing facility. If it isn’t Tesla, “battery factory” or “Gigawatt battery factory” would be adequate. Then the article tells us their planned size and schedule. But if “Gigafactory” become a common term, I can adapt.

In this case, I think more history of Lithium Werks would make sense. Perhaps a synopsis of their existing plants and production. I went to their web site and learned they already have a Chinese factory.

antrik

Supposedly the factory they already have is the former A123 factory they acquired, as mentioned in the article?…

This one should be called half a Terafactory. 😉

Robb Stark

How much capacity by 2021? 500 GWh in 2030 is just a daydream.

tekram

No mention of the fact that Lithium Werk the company’s focus is on lithium iron phosphate batteries which are the size of shipping containers. They are quick to charge and suitable for a variety of uses, including solar or wind farms, or in the shipping industry.

antrik

Well, the fact that they are talking about grid storage is a strong hint that it’s about container-sized batteries… And while there is no explicit mention of LFP, the fact that they acquired a A123 factory and Valence Technology made me strongly suspect that LFP is their focus. But thanks for the confirmation 🙂

Matthew Kennel

Makes sense—LFP are not as energy-dense by mass as the cells used in vehicles (where that’s a critical performance metric), but they are stable, safe, can discharge to low state of charge, and have long cycle lives.

That’s important for long-lived grid-assets for a risk-averse power utility which is used to having equipment last for 50 years.

antrik

I think cycle life for grid storage is overrated: in a market where a replacement in ten years will likely cost a fraction of the original price, a longer lasting battery only seems a good investment if it doesn’t come at a higher cost…

I’m pretty sure cost is by far the most decisive factor for grid storage. And I have no idea how the long-term perspective looks for cost of LFP batteries: on one hand, lack of expensive materials in the cathode might suggest that there is less of a bottom for price reductions… On the other hand, the significantly lower density means there are higher production costs, logistics costs, and even material costs in some other components of the battery.

Pushmi-Pullyu

As I recall, Elon Musk said it would take the equivalent of the output of 100 of Tesla’s Gigafactory 1 to satisfy worldwide demand for EV battery cells, once the entire automobile industry turns to BEVs. So it’s definitely good to see news of another high capacity battery factory being built, but let’s not lose sight of the larger picture; this is only a very small piece of what will eventually be needed.

* * * * *

I’d like to support Bob Wilson’s call for the term “Gigafactory” to be reserved for Tesla factories. Not all facial tissues are Kleenex, not all photocopies are Xeroxes, and not all large battery factories are Gigafactories.

antrik

The fact that “gigafactory” is explicitly a descriptive term, makes it a logical candidate to use it in a generic way. I don’t think Tesla would mind… And capitalisation should be sufficient in most contexts to distinguish the proper name of Tesla’s Gigafactories from the generic use of the term — if there is even any ambiguity to begin with.

antrik

As for this being a small piece… It doesn’t seem they mentioned the planned capacity of their first gigafactory? The 500 GWh/year target for 2030 however doesn’t seem small at all: that should be something like 5% of global Li-Ion production capacity by that time — and quite a bit more than that in the stationary storage space alone.

Pushmi-Pullyu

I concede the point. Clearly you’re paying more attention than I. 🙂

Bob Wilson

I read the article because I was hoping it would be about the recently signed, Tesla factory planned for China. I’m not interested in other battery facilities because compared to the Tesla 2170 cells, the others don’t impress me.

My question is whether or not Panasonic will be partnered with Tesla in China. The NCA cell chemistry is interesting and I’m under the impression Panasonic is handling the battery electrodes in Reno. We know the Chinese have a reputation for casual enforcement of patents which makes me wonder how the new Tesla factory will deal with Panasonic intellectual property rights.

Terawatt

Funny, nobody builds factories anymore.

Who will make the first Terafactory?

Pushmi-Pullyu

I say they shouldn’t fiddle around with any piffling Terafactory or Petafactory; they should jump right to a Zettafactory! 😀

* * * * *

Utterly off-topic, but I’m reminded of a Soviet-era Russian cartoon. It showed a factory, from one end of which was emerging an enormous nut and bolt scarcely smaller than the factory itself. In the foreground were two men, with one explaining to the other “We have solved the problem of meeting our annual production quota!” 😉

Timmy

Tera’s Whey?
( simplyteras dot com )