An Assessment by our Partner and Mobility Expert PEM Motion
The success of Tesla puts more faith in electric cars than ever. One challenge that comes with the further development of electric vehicles is the production of battery cells.
Lithium-ion-cell production is currently one of the hottest industry topics with numerous new production projects being announced all around the world, but especially also in North America. To showcase this development, ”Battery-News.de” and Christoph Lienemann, Managing Director of the consulting and engineering service provider „PEM Motion North America“, created a map with the announced battery cell production plans. In addition to that, Christoph Lienemann also gave an interview explaining this US market and its potential for German SMEs.
PEM Motion USA, Inc. is supporting the clean mobility transition by bringing together talented consultants, engineers, researchers, industry thought leaders, and companies to facilitate the development of groundbreaking e-mobility solutions that are affordable and can be industrialized rapidly. In 2019, PEM Motion helped launch the California Mobility Center based on their tried-and-true innovation ecosystem approach together with the Sacramento Municipal Utility District (SMUD) and other partners.
As partners and supporters of PEM Motion’s activities here in the US, we wanted to learn more about their opinion on the future of battery cell development and production as well as the market potential for German SMEs.
As a person that has been constantly involved and active in battery production in North America, what is your perception of the developments there?
Christoph Lienemann: At a first glance: in North America, as in Europe, the electrification of mobility is something that has come with huge inertia and can’t be stopped. Therefore, this can only mean that value chains have to be modified and there is a huge need to produce battery cells locally. With changes and news about cell production in North America, you can sense that it is happening something like what had been seen in Europe a few years ago. We are at an early stage of market development in North America, I can sense that many regions are struggling to attract potential projects and investments which are the same problems that regions in Europe were having.
Developing a sustainable workforce with relevant skills in electrochemical areas, process know-how and quality measures are things to be taken into consideration, […]
[…] without leaving aside building up a supply chain for raw materials as well as logistics and recycling. Other than the struggles that are being tackled, I perceive that the development of battery production in North America has a huge potential and will grow very quickly.
North America is more than twice as large as Europe, with very heterogeneous regional structures. Where is it possible to find the most significant focus on battery production and development?
Christoph Lienemann: Historically, as the innovation driver and the largest market for electric mobility in the U.S., California is a crucial figure for new technology development, regulation, and talent. But in the last few years, the area of influence grew from Silicon Valley to include other regions like Los Angeles and Sacramento. Because Sacramento is also California’s capital, it gained influence as a central player, where laws and regulations regarding future mobility are written that shape the direction of these industries on the entire continent. In this zone of influence, projects like the California Mobility Center in Sacramento allow for deepened cooperation between industry, research, education, investors, and politics.
Outside of California, with the relocation of Tesla’s Headquarters to Austin, a significant pull effect was created to establish Texas as a new automotive region. This is strengthened by many initiatives in the south of the U.S. that also create previously unknown levels of traction not just in Texas but also in Nevada and Arizona. The three large traditional incumbent OEMs of the U.S. automotive market and their respective suppliers are also transitioning in the last few years toward electric mobility. As such, exciting developments can also be seen in the Midwest, especially around Detroit. Windsor-Essex in Ontario, Canada which has borders with Detroit benefits from this proximity to the major plants while also offering an attractive business climate with strong local players in automation.
This makes it an interesting spot for us at PEM Motion. Here we can provide unique training for the already skilled local labor to gain knowledge on battery development and production that can assist in shaping the ongoing shift towards BEVs.
To produce these large amounts of batteries, new supply chains for raw materials are needed. Have you noticed differences in the procurement strategies between North America and Europe?
Christoph Lienemann: Of course, it depends on the size and age of the company. We see that startups can decide usually quicker and are more agile in their planning. Also, the different compliance and procurement guidelines in each company and country are very different. In general, we see for the equipment procurement 3 different main strategies. Either buying a turn-key solution from a line builder or splitting the production into different specialties (e.g. electrode manufacturing, cell assembly, cell finishing) and buying a turn-key solution for each or to really pick for each process step the best equipment separately.
With all the investment into new battery projects in North America, what opportunity do you see for German machine manufacturers?
Christoph Lienemann: With the strong reference projects built in the last years in Europe as well as the strong network and knowledge exchange (e.g. with the VDMA and university collaborations) the German machine manufacturers have a good position to address also the American market. With multinational companies like for example Dürr-Megtec, one of the leading coating and drying equipment suppliers, there are already several examples of successful collaboration between German and North American companies.
Many companies are working closely with German equipment manufacturers such as Britishvolt. Such companies are eager to establish in North America. Do you think the German manufacturers have chances in this market?
Christoph Lienemann: The automotive market in North America is structured differently than the European market. Some players are active in North America since the beginning of the automotive era. Particularly speaking of the three big OEMs: Ford, GM, and Stellantis (Chrysler).
Other players, driving electric mobility forward, have been shaking up the industry around the world, specifically talking about Tesla.
New companies are emerging, following the steps of Tesla, with highly innovative technology, unimaginable budgets, and huge market values such as – “Lucid Motors”, “Xos”, and “Zoox” all based in California. Nevertheless, all these innovative companies working on electric mobility need battery cells. The market for locally produced cells will grow strongly because the quality, availability, and price of the cells will become a huge factor for these companies. This opens a huge door for European cell manufacturers and suppliers to enter the market, at the moment only “Britishvolt” and “Saft” are the first European competitors in North America.
Overall, this showcases that there is enormous potential. How can startups and smaller medium-sized companies also utilize this potential?
Christoph Lienemann: Due to high costs, having an office directly in Silicon Valley or a larger American sales team on staff scares away most companies. Additionally, many regional market differences combined with varying business cultures are also challenging.
Because of these reasons, we recommend focusing on establishing a local network as a first step.
Many initiatives exist in the US which help companies with this process by organizing business trips and meetings and performing initial market soundings. Two examples of such initiatives that focus on assisting German companies are the German Chamber of Commerce Abroad (GACC West) and the German Accelerator. We at PEM Motion established representation in 2017 in Mexico, 2019 in the US, and 2021 in Canada. In this time, we had in all three countries very positive experiences. Due to this, we are also supporting companies interested in taking this exciting step. Personally, I can say that this journey alongside PEM Motion has been a great adventure so far that I can recommend to everyone because of both the enormous potential and personal learning effects.
Could you describe how PEM Motion is helping the industry transition towards future mobility concepts in California?
Christoph Lienemann: We are one founding member of the California Mobility Center (CMC), which orchestrates commercially meaningful interactions between future mobility early-stage companies and industry-leading members. The CMC provides future mobility innovators and industry incumbents with access to programs and resources that accelerate the pace of commercialization in California and worldwide. Of course, battery technology is one key focus area we look at there. CMC brings together industry, academia, research, funding, and legislation to work together with Members and clients of the CMC.
With the CMC we can offer innovative companies a great pathway to successful industrialization of their sustainable mobility solutions and thus helping also the whole economy and community to transition towards future mobility. For us, California is one the most innovative regions in the world and here we witness people, legislation, and companies pushing for better and more sustainable solutions every day. What better place to base our PEM Motion US Headquarters than the Capital of this great state, Sacramento!
About Christoph Lienemann
After finishing his master’s degree in business engineering in Aachen (RWTH Aachen University) as well as a master’s degree in industrial engineering at Tsinghua University in Beijing, China, and initial work in the automotive industry, Christoph joined the chair of Production of E-Mobility Components at the RWTH Aachen University as a research associate and group leader for battery production. In this capacity, he led numerous research and industry projects with a strong focus on lithium-ion batteries and their industrialization and worked on his Ph.D. for battery remanufacturing solutions.
He was also part of the first team of StreetScooter a German EV Startup founded in 2010, supporting production planning and industrialization.
Today Christoph is responsible for the North American operations of PEM Motion, a consulting and engineering company focused on future mobility solutions and their industrialization. Here he manages the teams in Canada, Mexico, and the USA. Also, he is a director of the Automobility Enterprises in Windsor-Essex.
