Solving the challenge of the climate crisis will require the collaboration of diverse parties working toward a common goal. Industry – from mining companies to manufacturing facilities – must work together with government agencies and policymakers to share ideas and accelerate deployment.
Last month, BCSE and member FREYR Battery convened a roundtable discussion in Washington, DC to highlight the challenges faced by the U.S. battery industry in particular. In response to FREYR’s recent article on the 3 C’s of Battery Success, industry leaders and policy experts discussed the challenges confronted by the industry in pursuit of capacity, competence, and competitiveness.
Above: Industry leaders and policy experts discuss the challenges confronted by the battery industry in pursuit of capacity, competence, and competitiveness at BCSE and FREYR Battery’s roundtable in Washington, DC.
Here are the top takeaways from the discussion:
1) As the United States works to become globally competitive in the battery industry, China’s dominance will continue to be a challenge.
China’s dominance poses a unique challenge for the U.S. battery industry. China now produces the vast majority of the world’s lithium battery supply. The scale of this production far outpaces global demand, which keeps prices low and difficult to compete with.
“It can’t be understated what a task it will be to compete with China,” said one roundtable attendee. “Their pain threshold is stronger than ours.”
If U.S. companies hope to build up their capacity quickly, it will be difficult to avoid relying on China’s well-established industry and knowledge base. This tension between the need to build a battery supply chain independent of China and the need to scale up quickly is top of mind for many.
Throughout the conversation, the roundtable participants emphasized the importance of confronting China’s dominance of the global battery market head-on. The U.S. battery industry must learn from and compete with China’s dominance of battery production and its aggressive, comprehensive approach to investments in order to expand.
2) The battery industry will play a key role in educating the government and the public about the transition to clean energy.
Although electric vehicle adoption has been trending upward over the last several years, a sense of apprehension about EVs still lingers in the general public. As one attendee put it: A sizable “proportion of America is just not sold on EVs, for a variety of reasons — safety concerns, lack of infrastructure. There is a visceral pushback.”
FREYR has found that this apprehension often stems from a lack of knowledge, and one battery executive highlighted the industry’s role as an educator. As part of the ongoing construction of their battery factory in Coweta County, GA, for example, FREYR held meetings with local municipal authorities about safety concerns and procedures, many of which are unique to battery production. These meetings taught the company about the importance of working with local communities to reassure and familiarize them with the new technology.
As technology evolves, the battery industry will also need to serve as a guide to both the government and those involved in mineral production. The industry will have the most up-to-date insights on the materials needed for manufacturing. An ongoing conversation between all three parties will be key to the industry’s continued success.
3) The battery industry must be forward-thinking and innovative as it prepares its workforce to fulfill the rising demand for “green” manufacturing skills.
Demand for “green” skills has already grown at a rapid pace and will only continue to rise. In the recent “Global Green Skills Report” published by LinkedIn, job postings with “green” skills have increased by 15% since 2022, and the hiring rate for workers with at least one “green” skill has increased by 29% since 2022.
Nevertheless, the existing pool of workers skilled in clean energy manufacturing still remains limited. “Industry is going to have to get really creative, and this is going to cost a lot,” a data expert said.
For its factory in Georgia, FREYR has already announced partnerships with local colleges and vocational schools. One roundtable attendee took this idea further, proposing a dedicated “battery academy” to equip the workforce with the necessary skills for the industry. With the southeast U.S. increasingly becoming a “battery belt,” such an idea has momentum behind it.
4) Investors will need to be encouraged to accept the risk and the long-term timeline required for battery industry projects.
The roundtable participants were unanimous in their praise of recent U.S. policies like the Inflation Reduction Act, but they agreed that these policies are only the starting point. More active investment needs to be encouraged, but the equity market has its own reluctance and lack of knowledge regarding the risks and the scale of investment required for battery projects.
An energy advisor emphasized this point: “What’s the return on investment going to be [for a new battery factory project], and how sure are we that the credits will be monetized? How are you looking at the move from a pilot to a two to three billion [dollar] factory? Three billion dollars is money most people don’t know how to spend.”
To mitigate the extremes of scale, some roundtable participants expressed interest in medium-sized projects, where the investment is smaller and the target is more short-term. Such projects would also be a good opportunity to combine production goals with R&D. The continual need to update technology and the potential risks this need can present to a large-scale project would be mitigated by reducing scale. Funding may also be more easily secured for a pilot-scale project as opposed to a full-scale facility.
An Optimistic Future
As it looks toward the future, the U.S. battery industry must adopt a global perspective. “We need a global, system-level approach,” said one attendee, “not just supply, not just technology.”
In working to achieve this, employing government resources to bring together funding and expertise could provide powerful stimulation to the battery industry. Acting as offtaker for large scale manufacturing projects and advancing regulatory requirements for carbon credits – which could be a strong source of funding for battery industry projects – are impactful moves the U.S. government could take today.
Although the headwinds faced by the U.S. battery industry are strong, the gaps in resources, knowledge, and coordination also represent an opportunity. One attendee compared the U.S. EV industry to the early years of the automotive industry, when the infrastructure was in its infancy and public understanding was limited, before it rose to the prominence we see today. This comparison characterizes the roundtable’s sense of optimism for the present moment. All the required pieces are at hand — they just have to be put together.
About the author: FREYR Battery is a developer of clean, next-generation battery cell production capacity. The company’s mission is to accelerate the decarbonization of global energy and transportation systems by producing clean, cost-competitive batteries.