Challenges during lithium ion cell manufacturing plant set up – Part 3

Possibility of Localisation and Securing Raw Materials

Rahul Bollini is writing a series of articles explaining the challenges faced during Lithium-ion cell manufacturing plant setup, which should be relevant to any company entering this field. This article (part 3 of the series) discusses the challenges faced during securing the raw materials for the Lithium-ion cell manufacturing plant setup.

Any company setting up Lithium-ion cell manufacturing will work towards securing the raw materials and look for possible options to localise its supply chain. Below is the list of the components that go into manufacturing Lithium-ion cells, the challenges in locally sourcing these raw materials in India and the possible supply chain-related issues.

• Cathode Active Material – Lithium Iron Phosphate (LFP) cathode uses raw materials that are easier to source as compared to other cathode materials. LFP cathode is made of a combination of Iron Phosphate (FP) precursor and Lithium Carbonate. The FP precursor is made of a combination of Iron Oxide and Phosphoric Acid. The acquisition of these materials is simpler as compared to Nickel and Cobalt in Sulfate form (battery grade) and converting them into precursor as per NMC or NCA ratio requirement and then adding Lithium Carbonate or Lithium Hydroxide. The focus is on LFP because it simply works out to be cheaper, lasts long, needs lesser thermal management and is safer than the other cell chemistries out there (except LTO).

• NMP Solvent (solvent for cathode slurry) – NMP (N-methyl-2-pyrrolidone) solvent is already produced by companies catering to the pharmaceutical industry. Most (>90%) of the NMP is recovered during production through an NMP recovery system (which has heavy power consumption, but it’s unavoidable for Cathode Slurry production with present technology). Recovered NMP is reused, so the procurement requirement for future production becomes much lower.

• PVDF  (cathode binder) – PVDF binder localisation takes time. In fact, even China (with many years of established Lithium-ion cell manufacturing industry) took many years to make a decent PVDF binder but still lacks the kind of performance that one can expect from the binder manufactured by Western countries. A cell manufacturer has to pick whether they want to go with suspension-based or emulsion-based binder material. There are no obvious favourites when it comes to choosing one. There was a shortage of binder in 2022, and the price shot up multiple times. As long as PVDF binder is used for cathode slurry making, NMP solvent is the only way to make slurry because PVDF has a hard time dissolving in water.

• Conductive Carbon Additive (for Cathode and Anode) –  There are top companies in the West that stand out when it comes to conductive carbon. A few companies have been focussing on conductive carbon additives for lead-acid batteries. Although the properties vary, localising this in any country shouldn’t take very long.

• Anode Active Material – Graphite (Natural and Synthetic) is about achieving the purity, particle size and certain other critical parameters right. The plant setup cost is also not very high and can be localised comparatively easily. However, when it comes to Silicon-Graphite (Si-Gr)/Silicon-Carbon (Si-C) anode, things become complex because it is a quickly evolving technology. An increase in the silicon content will result in a significant increase in the specific capacity of the anode material. LFP cell manufacturers are very much working with only Graphite, but NMC 811 and NCA work with SiGr/SiC and have to be more careful about their procurement. Petroleum coke, which is used to make synthetic Graphite, is among the cheapest in India, giving India an edge to become a market leader in this space.

• Solvent for Anode Slurry (Deionized Water) –  Water is processed in a deionized water filter to make it suitable for use in Anode Slurry. It can be produced in the cell manufacturing plant.

• Anode Binder [Carboxymethyl Cellulose (CMC) and Styrene Butadiene Rubber (SBR)] – These materials are already locally manufactured, but they need some more work to match the battery grade specification.

• Separator – It is the only plastic-based material in the list of major components of a Lithium-ion cell. Choosing a separator from available options can be complex. The most basic type is Dry process-based PP (polypropylene) separator, which is the easiest to localize. It also happens to be the least expensive and is commonly used in LFP cells. However, things get complicated when cell manufacturers want to differentiate themselves and decide to step up to other separator options. The alternatives include dry process-based PP separator with ceramic coating (one or two sides), wet process-based PE (polyethylene) without any coating or with ceramic coating (one side or two sides) along with or without PVDF coating. Dry PP separator with ceramic coating can be the next easiest type of separator to localize. However, the production of wet separators may require significant capital expenditures that are only justifiable when catering to a large number of high-capacity cell manufacturing facilities.

• Electrolyte Salt in EC (Ethylene Carbonate) and other Carbonate-based organic solvents along with additive(s) – To localize electrolyte production, the initial step involves importing the necessary salt and formulating the electrolyte locally. This is a preferred method and doesn’t involve much complexity. The second step of localization would be to manufacture the electrolyte salt domestically, which would require importing Lithium Hydroxide Salt. Organic solvents for electrolyte making are available locally, and localization of electrolyte additives, such as Vinylene Carbonate (VC), Fluoroethylene carbonate (FEC) etc., would be another great step. Due to the risks involved in transporting the complete electrolyte solution, it is highly advised to start with the first basic step immediately.

• Cathode Current Collector (Aluminium Foil) – Any local aluminium foil manufacturer who can make foils as low as 10-micron thickness with a high level of consistency would be suitable to work with.

• Anode Current Collector (Electrodeposited Copper Foil) – The plant setup for anode current collector can be very expensive because of the electrodeposition method of manufacturing copper foil. Such a high CAPEX plant is only justified when the plant caters to a large number of big-capacity cell manufacturing plants. Until then, it has to be imported. Furthermore, it is anticipated that there will be a copper shortage in the near future due to its rapidly increasing demand in multiple industries. Hence, it is imperative to secure this essential raw material.

• Cathode Tab (Aluminium) – Cathode tab comes in rolls and can be made available locally. Shapes and dimensions vary for each form factor (cylindrical, pouch and prismatic).

• Anode Tab (Nickel Coated Copper) – Anode tab can also be procured locally. Shapes and dimensions of the tab vary for each form factor (cylindrical, pouch and prismatic). It’s crucial for the Nickel coating to be consistent to prevent any performance issues. Any coating that comes off during charging or discharging can cause problems.

• Nickel-Coated Stainless Steel/Aluminium Cylindrical Can Assembly Kit for Cylindrical Cell – Until recently, cylindrical cells have typically been housed in nickel-coated stainless steel cans. However, there is now a growing demand for aluminium cans to be used for cylindrical cells. There is a difference in their tabs, and according to the preference of welding, the type of metal for cylindrical can is selected. For example, an aluminium can not be grooved like a nickel-coated stainless steel can, so its cap is different. Moreover, it comes with laser welding-friendly tabs on both ends. But aluminium cans tend to experience dents. On the other hand, nickel-coated stainless steel cans are friendly for spot welding (a method favoured by many in the industry due to ease of operation).

• Aluminium Prismatic Can Assembly Kit for Prismatic Cell – Prismatic cans are made of aluminium with high strength to withstand any bulging that tends to happen with ageing. But the bulging does show up eventually. The cap of the prismatic can has a flat type tab, which is generally made for laser welding purposes. But with special orders, it is also made to be threaded. Localisation for this needs careful validation before mass deployment.

• Aluminium Laminated Film for Pouch Cell- Easiest of the three casings to manufacture, it has a multilayer of materials combined together. It is made in sheets and sold in square meters. It is customised according to the requirement.

Note – All metal-based products (Cathode Current Collector, Cathode Tab, Anode Tab, Assembly Kit for Cylindrical Cell, Prismatic Cell and Aluminium Laminated Film for Pouch Cell) can be localised comparatively easily. The only exception is Anode Current Collector (Electrodeposited Copper Foil) due to commercial viability and very high CAPEX.

Upcoming parts of this series:

• Part – 4 (Plant Setup Planning)
• Part – 5 (Process Optimisation and Skilled Man Power)
• Part – 6 (Expansion and Diversification of Portfolio)
• Part – 7 (Evolving to Newer Technologies)
• Part – 8 (Backward Integration)

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Also Read :

Part 1 – Understanding the Market

Part 2 – Product meeting technical expectations of the market

Part 4 – Plant Setup Planning

Part 5 Process optimisation and skilled worked force

Part 6 Expansion and diversification of portfolio

Part 7 Evolving to Newer Technologies

Part 8 Backward Integration