16-10-2024

Beyond Replication: Why Copying Asia’s Playbook Isn’t Enough Right Now

The news coming out of Northvolt is important and difficult to watch. After observing it unfold over the past few days, here’s CEO, Will Tope’s key takeaways:

A strategy to replicate Asia’s lithium-ion dominance isn’t enough right now.

For the past 20 years, Asia has been the dominant force in scaling and growing the lithium-ion industry. Prices are falling and quality is outstanding – I love driving to work in my 21700 NMC powered EV every morning.

Northvolt’s core premise is to replicate the quality of this manufacturing with a more sustainable footprint in Europe. In practice, this doesn’t mean designing and building a plant from scratch, it means working closely with Asian equipment manufacturers and automators to import that same kit.

Once running, the best outcome is a battery cell that is as close to the quality of Asia as possible – is this really going to be enough?

The lithium-ion industry is chain-upon-chain-upon-chain and upstarts need to pick their lane.

Northvolt’s admirable and ambitious goals extend far beyond just cell manufacturing. To truly meet their sustainability targets, they also needed to establish upstream assets to produce the feedstocks for the cells, known as cathode active materials (CAMs).

The challenge is, where do you stop? It’s turtles all the way down. Once CAMs are secured, shouldn’t you also address the sourcing of raw materials, which eventually leads to involvement in the mining industry?

In the pre-revenue stage, I strongly believe in mastering one thing first -generating revenue – and then pursuing the rest.

Differentiated IP and Innovation is key

In addition to cell assembly, system integration, and CAM manufacturing, Northvolt is also focused on innovation. This is a crucial angle – ultimately addressing the challenge I mentioned earlier: ‘Is it really enough?’

In 2023, they announced their own sodium-ion battery. But if you look closer, they were developing a Prussian White chemistry – the same holy grail that China’s industry giant CATL had already announced in 2021. It’s hard to escape that shadow…

Europe and USA will continue to innovate – combining innovation and scale is a win-win

At LiNa Energy, we know our IP and innovative capabilities are what set us apart in the competitive landscape.

The future of batteries depends on sustained innovation and embracing leaders in manufacturing. The snowball effect we’ve seen in the industry has led to rapid advancements in battery technology, and it will continue to roll.

The rapid adoption of electrification may be the most important megatrend of my generation. We should recognise and embrace its scale – it has been 20 years in the making. But let’s not fall into the trap of self-discovery and waste another 20 years trying to do it all ourselves.

It’s good to see Northvolt are taking action to streamline and focus its goals, to give it the best chance of success.

As a sector, we should build on the progress already made, collaborate across industries and accelerate the transition. We have the momentum, so let’s innovate smartly and move forward together.