Economies of scale in battery cell manufacturing: The impact of material and process innovations

Abstract

One key lever to reduce high battery cost, a main hurdle to comply with CO2 emission targets by overcoming generation variability from renewable energy sources and widespread electric vehicle adoption, is to exploit economies of scale in battery production. In an industry growth currently supported by subsidies, cost-efficient battery plant sizes are vital for the establishment of a self-sustaining industry and a transition into a long-term climate-neutral society. For optimal plant sizing, no consensus has yet been achieved in the battery literature and a detailed analysis of economies of scale is unavailable. To close this gap, a process-based cost modeling approach is taken that reflects the determinants of economies of scale. In state-of-the-art, minimum viable plant sizes are demonstrated to be below 2 GWh year−1 but may exceed 15 GWh year−1 in the future. This study finds that economies of scale are related to the capacity of the roll-to-roll processes in electrode manufacturing and can be maximized if the respective equipment operates at its capacity limit. This capacity depends on materials, cell design and roll-to-roll process parameters. Since these parameters improve over time, increased plant sizes will become necessary to achieve cost-efficient production levels. Required plant investments are found to decrease on a per GWh basis, whereas significantly increased funds will become necessary to reach efficient plant sizes in the future. Finally, implications are presented that support future battery cost reductions and a self-sustaining market breakthrough of battery-powered products.