It appears that Northvolt will enter Chapter 11 bankruptcy this week; a troubling development given that no other European startup has raised as much money and carried as much responsibility for Europe’s green industry ambitions. Europe has little chance of success in battery manufacturing and for the sake of decarbonization and for its own productivity it should reconsider its play in the battery space.
Yield
Making batteries is all about yield (the ratio of non-defective units to defective ones). Mature gigafactories, such as those in China, have a yield of up to 98%, while for new factories it can be as low as 40%. Chinese factories have 20 years’ experience in making batteries and have built up a density of supply, skills and robotics in the Shenzhen area. When a new battery factory starts up and it needs to increase its yield, it hires a bunch of experienced engineers who make incremental improvements to the production line…
Technology
In terms of technology, LFP (lithium iron phosphate) batteries have won out over NMC (lithium nickel manganese cobalt oxide). BYD with their new “Blade Battery” use the cell for structure in the vehicle in a cell to body concept that eliminates the need for a battery pack. The result is that LFP technology has achieved a similar energy density to NMC but at 80% of the cost. What’s more, LFP has a longer lifespan and better thermal stability than NMC; it is also not exposed to supply chain issues posed by cobalt.