How to make electric vehicle batteries without going to Congo
A tale of two battery startups
A lustrous, silvery-blue metal which most of us never gave a damn about just a few years ago. Fast forward to today, and this metal has not only captured the imaginations of large battery makers and automotive firms all over the world, but has also led to a wealth of opportunities for innovative startups.
Yes, cobalt is now the premier battery raw material.
A hot, yet troubled commodity
The story of cobalt’s ascendence in the battery universe is so intriguing as to be nearly impossible to ignore. Riding on the cusp of an imminent electric vehicle (EV) revolution, cobalt demand in batteries is expected to double in the next five years.
However, the real qualm about cobalt is on the supply side.
More than half of all global cobalt reserves are located in one of the poorest countries in the world — the Democratic Republic of Congo. Under the right circumstances, the presence of such natural wealth can lift a nation’s citizens out of poverty. Unfortunately, such circumstances have never existed in Congo. Since the late 19th century, the country has been continually exploited for its resources by foreign and local elites.
Today, the vast majority of Congolese cobalt flows into battery and EV makers in China, producing strikingly different outcomes for these two countries. Congo remains economically poor and socially vulnerable, while China occupies the driver’s seat of EVs.
Furthermore, 94% of the world’s cobalt production relies on copper, nickel and platinum mining, meaning cobalt merely plays a second fiddle, or by-product, role. Problem is, relying on a byproduct mined from a region as geopolitically unstable as Congo could spell supply chain disaster if primary metal extraction operations are compromised.
Given these supply side risks, bypassing the Congo-China cobalt link or, better still, engineering out cobalt from batteries, promises to be a potential game-changer for EV makers.
Two startups with uniquely different backgrounds are leading the way in these efforts.
An American newbie on the horizon
In 2013, Tobias Hanrath, then associate professor of chemical engineering at Cornell University, and his grad student, Ben Richards, set a rather unusual record: that of manufacturing the largest quantity of silicon nanowires (silicon structures with diameter of one billionth of a meter) in a lab.
Silicon, because of its higher specific capacity than traditional carbon anodes, has long been of interest among lithium-ion battery makers supplying to smaller products such as mobile phones. However, producing larger quantities of silicon to power EVs was a far tricker proposition.
(Electronics makers) are making thin films to put on a computer chip, but if you want to make one EV with a silicon anode, you need about 10 kilograms of silicon. The fabrication approaches established from electronics are simply not geared toward kilogram quantities.
Realizing that they had, in fact, invented something that could revolutionize the manufacture of batteries for EVs, the duo turned their invention into a start-up company called Conamix. A brave first step for the business novices, but bravery isn’t enough to be commercially successful. What Conamix needed was support in the form of money and mentorship.
Journey toward commercialization
Luckily for Hanrath and Richards, a clean energy seed accelerator program called NEXUS-NY was then in its inaugural year. They applied.
Out of 56 applicants, the group became one of 12 selected to receive $50,000 of equity-free financial support. Conamix was also paired with Charles Hamilton, a seasoned technology transfer professional whose background in clean energy startups proved to be an ideal match.
Working together, the Conamix team’s first major hurdle was to pass, as Hanrath called it, the stink test: talking to potential customers and finding out about their unmet needs. The team did some early prototyping and illustrated their product advantage to a group of venture capitalists and investors.
The response was positive:
We were selected to advance to Phase Two. That’s when you do work for proof-of-concept, to test out your product and see if it really can do what you theorized it could do when you created the prototype.
Conamix eventually closed two $50,000 funding, one each with High Tech Rochester and Excell Partners.
From silicon anodes to cobalt-free cathodes
With silicon anodes conquered, Hanrath and team have turned their attention to tackle a far more ambitious challenge: how to repurpose Conamix technology to manufacture cobalt-free cathode materials at scale.
Hamilton told Bloomberg:
The world needs lower-cost materials that drop in to existing manufacturing infrastructure to keep up with the growing demand for automotive.
Continuing on their fundraising spree, the company recently raised $2 million in Series A money (part of a larger $8 million commitment), with its main investor being Volta Energy Technologies, an Illinois-based fund looking to support energy solutions that reduce dependency on cobalt.
All of a sudden, Conamix now find themselves sharing stages with the top dogs of battery materials, because Volta itself is backed by the US utility major Exelon, and Albemarle, one of the world’s largest lithium producers.
The newbie has arrived on world stage.
Sweden leads the European fightback
Several thousands of miles away in Europe, two big developments have put its battery manufacturing on a collision course with Chinese dominance over battery supply chains.
One involves the creation of an initiative called the European Battery Alliance to support a competitive manufacturing value chain, and reduce technological dependencies on rivals. The other is the launch of Northvolt, a Swedish battery startup, which is backed by the Alliance.
A startup with big aspirations and operations
Northvolt has its roots in the Swedish penchant for clean air. Last year, the country’s lawmakers concretized this penchant into a policy framework called The Climate Act, committing to reach net-zero greenhouse gas emissions by 2045. However, establishing a battery manufacturing startup from scratch requires more than just love for all things green. It takes foresight, experience and drive.
Fortunately for the Swedes, Peter Carlsson is a man with such qualities.
A former Tesla global supply chain manager, Carlsson plans to build Europe’s largest lithium-ion battery firm, Northvolt, in Skellefteå, Sweden. The firm is expected to become operational in 2020 with a target capacity of 8 Gigawatt-hours per year, and will aim for 32 Gigawatt-hours once it is fully up and running in 2023.
How will he do it?
With a little help from European policymakers, and a group of nordic and Canadian suppliers. EU politicians are pushing for local development of batteries in order to crack Asia’s clout. Not surprisingly, the major bulk of Northvolt’s finances — a loan of up to 52.5 million euros — have come from the Swedish Energy Agency and the European Investment Bank.
Cobalt from Finland
Wired reported that Northvolt would obtain cobalt from a ‘huge refiner in Finland.’
Inferring from a range of sources such as Bloomberg New Energy Finance, this refiner appears to be Freeport Cobalt, which has a large scale refinery in Kokkola, western Finland.
Finland also has some of Europe’s largest cobalt reserves, producing about 2500 tons in 2016, which is about 3% of global production. According to the Geological Survey of Finland, the known reserves in Finland contain over 445,000 tons of cobalt.
Taking control of the value chain
The attraction of battery-cell manufacturing decreases as one moves down the different stages of the value chain. Northvolt is targeting the second stage (manufacturing of battery active materials), where barriers to entry are higher. For one, Carlsson told Wired of Northvolt’s plans:
We intend to make our own anode and cathode chemical mixes instead of buying them from European or Asian manufacturers.
This view was shared by COO Paolo Cerruti, formerly Carlsson’s colleague at Tesla:
By scaling up the battery production and taking control of the entire (value) chain, from raw material extraction to the finished product, we think we achieve a competitive business model.
Clearly, Cerruti and Carlsson also aim take control of the first stage of the value chain (extraction of raw materials). And this they will do not by turning Northvolt into a miner/refiner, but by forging alliances, as illustrated by Northvolt’s recent lithium supply agreement with Canadian mining company Nemaska Lithium.
With Sweden having an excess of hydroelectric power to run a battery factory, a competitive, yet green, battery manufacturing operation is beginning to look more and more feasible.
No easy way out
The biggest concern, however, about Northvolt’s ability to become the European battery bellwether is a maddening situation where carmakers are not willing to wait for a European industry, instead striking deals with Chinese firms in the region. For instance, Contemporary Amperex Technology Co. is set to choose Germany for building a battery-cell plant, and is in talks with Mercedes-Benz for a possible supply deal, while Chinese electric vehicle firm BYD is also said to be considering cell production in Europe.
And it’s not just the Chinese — Carlsson’s former boss Elon Musk has stated his desire to open a Gigafactory in Europe.
Faced with such a situation, Northvolt’s biggest trump card will be to carve out a niche by taking advantage of green-minded European sensibilities, and selling batteries produced with hydropower and ethically sourced raw materials.
Only time will tell if Northvolt becomes a stupendous success story, but for now, Carlsson should continue to push forward to give policymakers what they wish for: a greater balance in the value chain.