High purity Mn market update
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Volkswagen Power Day Announcements Summary
15 March 2021
Today the auto maker Volkswagen held is first ever "Power Day," being an equivalent to the well known "Battery Days" held by Tesla. The event was devoted to VW's transport electrification strategy and action plan and contained many statements crucial for anybody involved in the high purity manganese business. This summary concentrates on the important points relative to manganese use in lithium-ion batteries, particularly in Europe.
The unified battery cell
VW announced an introduction of a "unified battery," which it said will be used in 80% of its vehicles by 2030. All "unified batteries" will have the same physical dimensions but will differ in their chemistries and the ‘electronic intelligence' inside, depending on the vehicle. This will allow VW to lower the battery cell cost between 30-50%.
These batteries are scheduled to go into production in 2023 and by 2030 should be powering 80% of VW's EVs. A significant proportion of them will be classified as "high manganese" in that their cathodes might contain 50% – 70% Mn (see below).
The remaining 20% of vehicles would use high-nickel NMC chemistries, also using manganese.
High-Manganese battery for the mass market
Entry-model, short-range vehicles will use Lithium Iron Phosphate (LFP) technology (not using Mn), but mainstream vehicles will use the new high-manganese chemistry lower on nickel, not using cobalt at all in any of these cells.
Frank Blome, the Head of Battery Cell and System, Volkswagen Group Components described these High-Mn batteries as being used for the ‘volume segment,' i.e. for majority of the cars produced by VW. The Mn-rich battery was also described as a mainstream chemistry for VW. Mr Blome said "High manganese, from our point of view, is a long-term promising technology (…) and [its] range is on the same level as today's state of the art technology."
The EU's "Green Deal" boosts VW BEV production
As a result of the European Union's "Green Deal" the BEV share of VW's vehicle production in 2030 (for VW only) is to increase from the 30% previously projected to 60%, creating the need for additional cell production capacity in Europe. VW alone would need 240 GWh of cell-making capacity. This equates to six Gigafactories of 40 GWh p.a. capacity each.
Four more Gigafactories announced, existing two plants being built to be expanded
As just stated, to meet its current EV targets VW would need 240 GWh worth of batteries annually by 2030. All of them would come from factories either owned by Volkswagen or co-owned with partners like Northvolt. Ultimately VW will own or co-own six battery cell factories by 2030. This means four more factories in addition to the two announced before. Thomas Schmall, Board Member Technology for Volkswagen AG who announced the new factories said in their context that VW will have a "solid localisation strategy to secure volume and timing". The full list is of the previously announced and newly announced battery cell factories is shown below:
1) Skelleftea (Sweden) w/Northvolt – start of prod. in 2023, original plan: 14 GWh,
2) Salzgitter (Germany) [Northvolt Zwei]: – start of production in 2025, original plan 16 GWh,
3) New factory in Western Europe (Spain, Portugal, or France) – production start in 2026, capacity ~40 GWh,
4) New factory in Eastern Europe (Poland, Slovakia, or Czech Republic) – production start in 2027 – capacity ~40 GWh,
5) New factory in Europe – location to be announced, capacity ~40 GWh, production by 2030,
6) New factory in Europe – location to be announced, capacity ~40 GWh, production by 2030.
Local supply chain support and upstream engagement
Jorg Teichmann, Chief Purchasing Officer Volkswagen Group Components, stressed the importance of the local supply chain for Volkswagen. He said that VW "will extend its scope to the entire value chain, competing for the most interesting chunks of the business," signalling that possibly VW will be making direct investments into raw materials production facilities as well as in battery factories. He commented that two-thirds of the battery system costs come from its chemistry, hence to lower the cost cheaper chemistries need to be used (like the ones using manganese, which is far less expensive than nickel and cobalt).
Regarding the supply chain structure, he said that VW will "redesign the traditional supply chain setup" applying a new strategy of "Buy-Partnership-Make" implying that VW will also be making its own batteries (not just in partnership with Northvolt), and possible even invest in or acquire raw materials producing plants. Strategic partnerships may be developed throughout the whole value chain. "All options are on the table" and mentioning "vertical integration" were also strong pointers to VW's willingness to get directly involved in precursor making or even mining.
Mr Teichmann said that the supply chain should be "transparent and as sustainable as possible" and that a "supply chain with a high degree of the local content" is one of the pillars of VW purchasing policy.
Other important announcements included many new initiatives regarding VW's involvement in the charging infrastructure and energy storage.
The visuals (VW's slides) corresponding to the above information can be found below.
Prepared by Andrew Zemek, CPM Group LLC
15 March 2021