Texas: EV Manufacturing Fuels Expansion in Lithium-Ion Battery Production
Feature Photo: A May 2021 view of the SK Battery America gigafactory under construction in Commerce, Georgia. The auto industry’s transition to electric vehicles is spurring huge investments in lithium-ion battery manufacturing plants across the nation and Texas cities are competing to get a share of those new plants. Image: Google Streets.
by Adolfo Pesquera
San Antonio (Bexar County) — Several automotive vehicle manufacturers recently announced plans to build lithium-ion battery factories in the United States and local officials are preparing their sales pitches in hopes of making the Alamo City home to at least one of them.
On Oct. 18, Toyota Motor Corporation, Stellantis N.V., Foxconn, Ford Motor Company and Volvo issued separate announcements about their plans to build electric vehicles. Prior to that news cycle, Ford and General Motors announced plans to build five U.S. battery factories, the Associated Press reported.
The battery electric vehicle (BEV) market it blowing up. According to Deloitte, total global BEV sales will likely have grown from 2.5 million in 2020 to 31.1 million in 2030.
Almost since its inception, the industry has been dominated by Chinese companies, which control 73% of the global capacity. The U.S. lags at all stages of the battery supply chain; it has 12 battery gigafactories compared to 156 battery gigafactories in China, according S&P Global Platts.
Consequently, about 80% of BEV batteries installed in new vehicles must be imported.
The U.S. Department of Energy, through the Federal Consortium for Advanced Batteries (FCAB), is spearheading a coordinated approach to ensure a sufficient domestic supply. The vision of the FCAB is to establish, by 2030, “a secure battery materials and technology supply chain that supports long-term U.S. economic competitiveness and equitable job creation … and meets national security requirements.”
President Joe Biden signed an executive order Aug. 5 that sets a goal of having 50% of domestic vehicle sales be zero-emissions by 2030. Ford, General Motors and Stellantis signed voluntary pledges to have 40% to 50% of U.S. sales come from electric vehicles by 2030.
Toyota Motor Corporation’s October announcement was that it would invest roughly $3.4 billion in automotive batteries in the U.S. through 2030. This localization of battery production is part of the global total of $13.5 billion being earmarked for battery development and production that Toyota announced in September.
Toyota Motor North American will establish a new company and build an automotive batter plant with Toyota Tsusho America Inc. somewhere in the U.S. and start production in 2025. Toyota Tsusho is a supplier of automotive parts to Toyota brands. The new company will employ an estimated 1,750 workers.
The venture will first focus on producing batteries for hybrid electric vehicles.
San Antonio leaders have an accomplished economic development team. They’ve been instrumental in bringing numerous automotive industry manufacturers to Bexar County, most notably the Toyota Tundra truck factory and the Navistar semi-truck factory.
On Sept. 29, Ford announced a deal with South Korea-based battery manufacturer SK Innovation to invest $5.8 billion to build Blue Oval SK Battery Park, a 1,500-acre battery manufacturing campus in Glendale, Kentucky. The locally assembled batteries will power electric Ford and Lincoln vehicles and production is expected to begin in 2025.
SK Innovation already has another U.S. factory under construction. A $2.6 billion factory in Jackson County, Georgia is scheduled to start production in early 2022 and will produce enough batteries to supply 200,000 electric vehicles. A second plant adjacent to the first will start production in 2023.
A week earlier, on Sept. 22, Ford announced its collaboration with Redwood Materials to create a closed-loop battery recycling supply chain. Ford will invest $30 billion in electrification through 2025 and $50 million in Redwood to help expand Redwood’s manufacturing footprint. Redwood’s recycling technology can recover, on average, more than 95% of the elements like nickel, cobalt, lithium and copper. These materials can be reused in a closed-loop with Redwood moving to produce anode copper foil and cathode active materials for future battery production.
The Tesla Gigafactory 1 outside of Reno, Nevada was a project that San Antonio made a major effort to land when Tesla was scouting for a location.
In the week prior to the Ford announcement, Redwood Materials said it plans to build a massive battery materials manufacturing plant to produce 100 gigawatt-hour per year of cathode active materials for one million electric vehicles by 2025. Redwood expects to announce a site for the new factory by early 2022. The company’s goal is to produce enough materials to power 5 million BEVs by 2030.
Redwood is controlled by JB Straubel, the co-founder of Tesla. Meanwhile, Tesla has been collaborating with Panasonic on battery production. Five states–California, Arizona, Nevada, New Mexico and Texas–competed to host their gigafactory, with San Antonio offering the largest incentive. A site near Reno, Nevada was chosen, however, and construction began in 2014.
Stellantis N.V. is a corporation formed earlier this year from a merger between Fiat Chrysler Automobiles and the French PSA Group. It is based in Amsterdam, Netherlands. On Oct. 18, Stellantis announced a joint venture with LG Energy Solution to establish a new battery manufacturing facility.
Targeted to start project the first quarter of 2024, the plant is to have an annual production capacity of 40 gigawatt hours or sufficient capacity to meet 40% of sales of vehicles in the U.S. market. The batteries produced will supply assembly plants in the U.S., Canada and Mexico.
“With this, we have now determined the next ‘gigafactory’ coming to the Stellantis portfolio to help us achieve a total minimum of 260 gigawatt hours of capacity by 2030,” Stellantis CEO Carlos Tavares told EV Day.
The location of the new facility is currently under review and further details will be shared at a later date. The groundbreaking for the facility is expected to take place in the second quarter of 2022.
On Oct. 22, Stellantis made a second battery production announcement, this one involving a joint venture with Samsung SDI. The companies announced their memorandum of understanding to form a joint venture to produce battery cells and modules for North America. Targeted to start in 2025, the plant is to have a starting annual production capacity of 23 gigawatt house, with the ability to increase to 40 gigawatt hours.
As with its deal with LG Energy Solution, Stellantis said the location of the new facility is under review.
Recycling companies are playing a significant role in the demand for lithium-ion batteries. WasteDive reported today that Redwood was but one of four recyclers that made expansion announcement in September:
American Battery Technology Company in Reno, Nevada raised $39.1 million to support a new Nevada facility. Li-Cycle received a $100 million investment from Koch Strategic Platforms to build out new recycling centers in North America and elsewhere. Battery Resources raised $70 million in funding to expand operations in Europe.
Another recycling venture, announced this week, is a combined battery management and recycling business by Retriev Technologies Inc. and Indianapolis-based Heritage Battery Recycling. The combined company, they claim, creates the largest lithium-ion battery recycler in North America. Heritage Battery Recycling will operate under the Retriev Technologies brand. No new facilities are planned since there is sufficient capacity at Retriev’s Ohio and British Columbia sites.
VBX will use San Antonio as a placeholder location for a possible Texas battery gigafactory project. If another Texas city is selected, the project file will be revised accordingly. See VBX Project ID: 2021-774A
Adolfo Pesquera (Reporter/Editor) is a veteran news journalist. He has worked for Hearst Corp., American Lawyer Media, News Corp and Freedom Communications. His work has been published in newspapers and magazines across the USA. He is a journalism graduate of UT-RGV. He writes, edits and creates digital pages for VBX.