Author: Gerrit Bockey
Published on 21st January 2022
The past months have brought numerous announcements of new battery production projects. For this reason, „Battery-News.de“ provides an update on current cell production – this time with a view to North America. Support for the creation of the corresponding map was provided by Christoph Lienemann, Managing Director of the consulting and engineering service provider „PEM Motion North America“, who explains the special features of the US market in an interview.
Battery-News.de: You have been active in battery production in North America for some time. How do you perceive developments there?
Christoph Lienemann: The starting position is clear: In North America, as in Europe, the electrification of mobility can no longer be stopped. At the same time, this means an enormous change in the value chain and a need to produce battery cells locally. With the many announcements about cell production in North America, something is happening that was already observed in a very similar way in Europe two or three years ago. We are still at the very beginning of the market development here, and many regions are struggling to attract potential projects and the associated investments. So they are facing similar challenges to the key regions in Europe. This means building up a sustainable workforce with the relevant skills in electrochemical areas, process know-how and quality. In the same way, it means developing a supply chain for raw materials as well as for logistics and recycling.
„New companies are emerging with highly innovative technology, almost unimaginable budgets and huge stock market values.“
Battery-News.de: Britishvolt recently commissioned a German equipment manufacturer for a factory in England and is just one of many cell producers now looking to establish themselves in North America. What are the chances for German manufacturers in this market?
Lienemann: The U.S. automotive market is generally structured and characterized differently than the European market. Traditionally, other players are active here. In particular, of course, the three big OEMs: Ford, GM and Stellantis (Chrysler). Tesla, a start-up company, has been shaking up the industry worldwide for some years now and is driving electric mobility forward enormously. This is now finding imitators, and new companies are emerging with highly innovative technology, almost unimaginable budgets and huge stock market values – for example, „Lucid Motors,“ „Xos“ or „Zoox“ in California. However, these innovations have one thing in common: they all drive electrically and therefore need battery cells. The quality, availability and price of the cells will become the differentiating factor, which is why the market for locally produced cells will grow strongly. This indeed offers great opportunities also for European players and suppliers, but at the moment we still see a strong focus on Asian initiatives in the field of cell production. „Britishvolt“ and „Saft“ are the first European competitors on the continent.
Battery-News.de: What is the situation in the field of module production?
Lienemann: Many German suppliers are already on site in the USA with production and development – for example „BMZ“, „Voltabox“ or „Akasol“. We continue to see great potential here, especially for German manufacturers with their USPs and references. In addition, the battery market is also highly attractive for German mechanical and plant engineering.
„Made in Germany“ equipment still offers competitive advantages for the productions being built here, because North American mechanical engineering companies in the field of cell production lack references and, in some cases, technological advantages. German start-up companies around the battery also have great potential, because the speed and investment power here are significantly greater than in Europe. However, the market is also extremely exciting for experts and talents with battery production knowledge, because they are urgently needed here and are in corresponding demand.
Battery-News.de: North America is very large and characterized by very different regional structures. Which locations are the focus of battery development?
Lienemann: One center is the region around Detroit in the Midwest of the USA with the three OEMs mentioned and the corresponding supply chain. Here, Ontario in Canada and in particular the Windsor-Essex region is an exciting place for us. The proximity to the major plants, an attractive business climate, strong local players in automation and good skilled labor training with special battery courses are helping a lot to shape the shift towards electrified powertrains. We also see many initiatives in the south of the U.S. and there in particular in Texas, Nevada and Arizona, which are looking to establish themselves as new automotive regions. Tesla and the relocation to Austin will have an enormous pull effect here. California, as the country’s innovation driver and most important market for electric mobility, will remain central for technology, regulation and talent. However, we are seeing a shift there from Silicon Valley to other regions, such as Los Angeles or Sacramento. The state capital is where future mobility laws and regulations are being shaped, laying the groundwork for roll-out across the continent. In addition, projects such as the California Mobility Center promote cooperation between industry, research, education, investors and politics.
Battery-News.de: And what does a look at Mexico, where PEM Motion is also active, reveal?
Lienemann: There have been very few announcements for Mexico in the battery sector so far. However, we are convinced that due to the strong automotive industry and especially the very present Mexican suppliers, a corresponding battery industry will also establish itself here. Overall, the continent is on the verge of a huge change and investment push for the battery field.
Battery-News.de: How can smaller medium-sized companies and start-ups from Germany best approach this enormous potential?
Lienemann: An office in Silicon Valley or a large American sales team scares most companies away, and not just because of the high costs. The many regional differences and the very different business culture also bring challenges.
That’s why we recommend focusing first and foremost on the appropriate local network. Many initiatives such as the German Chamber of Commerce Abroad (GACC) or the Geman Accelerator support companies with initial market soundings and organize business trips and meetings. We as PEM Motion have been represented in Mexico since 2017, in the USA since 2019 and in Canada since 2021 and are always happy to report on our very positive experience and to support interested companies in this exciting step. In any case, I can say that it is a great adventure that I would recommend to everyone, because both the potential and the personal learning effects are enormous.
Battery-News.de: What events and news should readers of „Battery-News.de“ not miss if they want to follow developments in North America?
Lienemann: The topic of „networking“ is particularly important in the USA, and so there are numerous opportunities here to meet experts and decision-makers from industry, politics and research. We are a big fan of the Battery-Brunch. We can also recommend The Battery Show in Novi (Michigan), where there is also a German pavilion.
Ultium Cells, OH & TN
Ultium Cells Battery Plant Is Almost Complete: June 1, 2021 (insideevs.com)
Construction of Ultium Cells LLC Battery Cell Manufacturing Plant in Spring Hill, Tennessee Progressing on Schedule
GM and LG Announce New Ultium Battery Plant in Tennessee (motortrend.com)
SK Innovation, GA
Stellantis & LG Energy Solution, TBD
Tesla & Panasonic, NV