The Digitized Battery

As digitization sweeps the transportation sector, OEMs looking to avoid costly recalls and drive profits should look to the battery.

The battery-powered electrification of our economy, incubated in our personal and IoT devices, is now revolutionizing mobility and power grids. A wave of world-altering innovation is being driven by dramatic decreases in the cost of battery power, and accelerated by a surge in demand for electric vehicles.

Automobile manufacturers have bet their futures on electric and autonomous vehicles, and yet the performance of the most important individual component, the battery, remains largely overlooked. With batteries expected to make up 25–40% of the price of future vehicles, understanding batteries at a deep level, across the product lifecycle, is now mission-critical for organizations electrifying vehicle platforms and product lines. Happily, the broader industrial trend around digitization has illuminated a path forward.

While batteries have become ubiquitous, the modern lithium-ion battery is still an immature technology. Understanding battery properties and performance is vital for product and financial viability of electrified businesses. Missing the boat on diagnostics will literally sink the ship. Over 160,000 electric vehicles were recalled in the second half of 2020 from Hyundai, General Motors and Ford. These recalls — primarily tied to tier-1 battery cell suppliers — have cost these companies billions in replacement expenses, fines, lawsuits and collateral brand damage. The timing couldn’t have been worse. Just as auto OEMs are pledging huge investments to transition away from internal combustion engines, early-adopters are being told not to park their EVs in the garage for fear they’ll explode.

“Every auto OEM talks about digitizing the automobile, but to date they’ve underinvested in digitizing the battery, the single most complex and expensive component that will ultimately drive profitability”

- Thilo Koslowski, Former Founder & Head of Gartner Automotive and Founder & CEO Porsche Digital

For OEMs looking to ensure success on the road to electrification, the time has come to digitize the battery. In this context, digitizing the battery means creating a comprehensive digital record of every battery in every vehicle you ship. Which cells make up the pack, the supplier, lot number, and constituent materials for every cell, all information about the pack design, assembly, and quality control testing, as well as the full record of the battery’s performance in use. Everything. Organizations that do this now will build significant competitive advantage across the full product lifecycle.

Why OEMs must invest in digitizing the battery

This emerging trend toward digitizing the battery is embodied in a maturing software category known as Enterprise Battery Intelligence (EBI). EBI is the ability to marshal data from throughout your organization and across the product lifecycle to optimize the impact of batteries on every part of your business: bring new products to market faster; improve performance, quality, and reliability; decrease manufacturing ramp time and defect rate; optimize systems in the field, and maximize the financial performance of every battery-enabled product or service.

Fundamentally, there are three major drivers that underlie the need to digitize the battery:

• Batteries are like living organisms: Batteries are unlike any other component in our modern devices, which are comprised of mechanical subunits and systems (buttons, springs, engines) and semiconductor electronics (processors, screens). Conversely, batteries are made up of billions of electrochemically active components that are extremely sensitive to subtle changes in how they are assembled, used and operated.
• Batteries are constantly evolving: State-of-the-art battery technology is ever-evolving, undergoing continuous and constant change in the underlying materials, chemistries and manufacturing processes, as scientists push to increase the energy density (the amount of energy that can be stored in a small volume) and other properties around performance and safety.
• Batteries are dangerous: Storing large amounts of energy in a small volume makes batteries unsafe if not manufactured safely or managed correctly in use.

Key lifecycle stages for digitizing the battery

To manage these risks, companies must digitize the battery, not just in-use but across its entire lifecycle. Tremendous value can be gained at each stage through a digitization initiative, or lost if you wait too long.

• Next-generation technologies: With seemingly dozens of breakthrough battery innovations announced every month, organizations must sift out the winners from the losers so that they can shepherd them into their products. Early qualification data is key to qualifying and benchmarking these new technology innovations.
• Product engineering: Organizations must ensure a high-quality supply of battery cells and engineer them into high-performing products. With long qualification and validation times, analytics are key to accelerating (or maintaining) time-to-market goals.
• Production: Scale-up of new factories can create a major bottleneck on the path to electrification. With long end-of-line production qualification times, data analytics that can identify problems early and tie them to upstream root causes — be they materials inputs or production variables — are needed to accelerate costly factory scale-up, increase yield and ensure high quality, safe products.
• After-sales: Uncertainty around usable battery life is limiting EV resale value and opportunities for fleet optimization. Connected vehicle data over a vehicle’s lifetime can surface opportunities for early service intervention and a comprehensive, data-driven state-of-health assessment that can increase the lifetime value of EVs.
• End-of-life: To meet sustainability targets and address resource constraints around precious metals found in batteries, the battery industry must create a circular market. Organizations like the World Economic Forum and proposing a “Battery Passport” to securely share information and data across the battery lifecycle to facilitate cost-effective recycling.

Just as the battery has come for every major industrial sector, digitization has come for the battery. Enterprise Battery Intelligence will enable forward-thinking companies to capitalize on these trends, developing competitive advantage through a digital core competence around the battery.