“Tesla is setting up a new factory in China to expand its market share in this geography, with the promotion of model 3 and model y in this market. This is expected to increase the demand for lithium-ion battery, which would infuse growth in the Battery Packaging market.
Battery packaging is a crucial stage in the lithium-ion battery value chain, which includes various stages such as cell casing & pack packaging, and transportation packaging. Tesla is amongst the leaders in lithium-ion battery technology, and majority of their batteries are manufactured in the Nevada facility; this development is expected to infuse growth in the casing and transportation packaging segment of the battery packaging market.”
Lakshmi Narayanan - Associate Vice President : Chemicals & Materials Research at MarketsandMarkets™, shares his point of view as mentioned below:
Battery packaging is one of the most important parameter in the battery manufacturing value chain. Packaging can be broadly classified into primary packaging and secondary packaging. Several packaging and transportation regulations are involved for batteries, right from production to the end of their life and recycling. Since batteries contain corrosive and hazardous electrolytes which are prone to explosion when subject to agitation or exposure to water. Because of this, batteries are classified under class 9 and class 8 of dangerous goods by the UN standards and considered as dangerous goods for transportation. The increasing usage of batteries and increasing awareness regarding sustainable energy generation and sustainable transport have increased the demand for batteries significantly in recent years.
Batteries can also be used to supply power to the remote locations where setting up power distribution plant is not viable. Batteries can be used to store energy generated from alternative power sources in remote locations generating clean energy. Such approaches can revolutionize the energy industry and result in a huge demand for energy storage systems, especially the lithium-ion battery.
Lithium-ion battery transportation and packaging regulations
At present majority of lithium-ion battery cells are being manufactured in China, South Korea, and Japan. The demand however is more from the European and North American region. Cell produced in China, South Korea, and Japan are shipped to various countries where they are assembled to form a battery module depending on the application. Lithium-ion battery cells are also shipped to several countries including US, UK, Australia, India, and Germany among others, where they are assembled in a module to be used in various application. This leads to increased focus on effective battery packaging.
Risks associated with inappropriate packaging
- Lithium batteries contains electrolytes and cathode materials which are corrosive, flammable, toxic and explosive in nature. Improper handling of batteries in transportation, including preconditioning, packaging, and handling, may result in fires, explosions, and the release of hazardous chemicals into the environment. For instance, in 2012, there was an incident involving UPS Air Cargo where lithium batteries on board of the aircraft caught fire. Similar incident took place in 2015, when the FedEx Air Cargo carrying lithium-ion batteries caught fire. These incidents occurred due to inappropriate packaging or handling of batteries that damaged them and triggered an electrical short. There was one incident in 2013 involving Boeing 787 Dreamliner, where the aircraft was grounded due to operational failure of lithium-ion batteries. Lithium-ion batteries were used as a backup to the on-board power system when they failed.
- Lithium-ion battery industry has several levels of packaging involved between cell manufacturing and point of use. These includes cell casing, module packaging, and transportation packaging which is creating opportunities at every stage.
Since batteries are classified as hazardous goods, their transportation is subject to various regulations set by various regulatory authorities including United Nations. These regulations enable safe and reliable transportation of these batteries. The regulations can be classified as below:
- Pre-Transport Regulations: Testing of batteries before transportation
- Battery Transportation Regulations
- Damaged or defective battery regulations
They are subject to several tests listed in the table below:
Battery Transportation Regulations:
Transportation of lithium-ion battery is subject to various regulations. Lithium-ion battery is classified under class 9 (hazard risk category), of UN 3480. International, national, and regional governments, as well as other authorities, have developed regulations for air, road, rail, and sea transportation of lithium batteries and the products that incorporate these batteries. Hazards associated with battery transportation include chemical hazards, electrical hazards, and failure of battery management system. These hazards also include electrolyte leakage, heat production, venting of gases, fire, and explosions. Hazards related to lithium cells show that aqueous extinguishing agents that contain water are the most effective at preventing thermal runaway propagation of Li-ion cells (heat transfer between lithium-ion cells); for extinguishing electrolyte fire steamed non-aqueous agents are effective as electrolytes contain salts like LiPF6 which can react with water and can result in potential damage to the battery.
There is no insurance cover for transportation of lithium-ion batteries, thus increasing the role of safe transportation. The ideal ambient temperature for the transportation of lithium-ion battery is between -20°C and +30°C. The maximum permissible ambient temperature is between -30°C to +45°C. Due to such high level of complexities associated with the transportation of lithium-ion batteries, local manufacturing of these batteries has gained momentum. However, this is still in the nascent phase with leading lithium-ion battery manufacturing companies identifying the location to setup the plant, availability of labour and availability of materials.
For the transportation of lithium-ion battery four modes are available namely air, sea, train, and road (truck). Each of these modes are subject to various regulations set by various regulatory bodies, these include:
- IATA DGR (International Air Transport Association Dangerous Goods Regulations)
- ADR (the European Agreement concerning International Carriage of Dangerous Goods by Road)
- IMDG (International Maritime Dangerous Goods),
- RID (the European Regulation concerning the International Carriage of Dangerous Goods by Rail).
Packaging is further classified into several types depending on the type of battery being transported. Every mode of transportation has various packaging instructions; these instructions have different sections based on the severity of the battery being transported. These sections are classified into Section I (Very Critical), Section II (Moderately Dangerous), and Section III (Not Critical). Various types of batteries include prototype batteries, defective or damaged batteries, or recycling batteries. Among them, defective batteries are not allowed to be shipped by air.
Damaged or defective battery regulation
Damaged or defective batteries cannot be transported via air, and thus, there are no regulations mentioned by IATA.
Packaging cost structure, stages in battery packaging and types of packaging:
There are various packaging materials involved at different levels that further increase the complexity of the packaging industry. The overall packaging cost contributes to around 25% to 30% of the total cost of a battery. This cost can be further broken down as per the stages of battery packaging. The stages in the value chain of packaging include:
- Cell casing stage
- Module packaging
- Transportation packaging
Cell casing is the preliminary level of packaging that provides protection against external damages caused to the battery. It also helps in containing the electrolyte inside the cell. Cell casing is also part of the primary packaging.
The second stage of battery packaging is the module packaging, when many lithium-ion battery cells are integrated/welded to form a large battery targeted at a specific application such as EV, or electric bike. Lithium-ion battery are prone to thermal heating, this increases the chances of explosion. To avoid the explosion due to thermal heating module manufacturers, use either a plastic holder or a phase change material so that when the battery heats up during thermal runaway the phase change material absorb that heat and prevent the thermal runaway from spreading. The phase change material has two components to it one being graphite and other is any phase change material like paraffin wax.
The third stage of battery packaging is the shipment packaging which involves aspects such as cushioning the battery, designing the container for transportation, thermal protection material, the type of battery being shipped, and the mode of transportation. Most commonly used outer packaging for lithium-ion batteries are boxes made from aluminium, fibreboard, natural wood, plastics, plywood, reconstituted wood, and steel; drums made from aluminium, fibre, plastics, plywood, and steel; and Jerricans made from aluminium, plastics, and steel.
Types of Battery Packaging
Packaging of Lithium-ion batteries can be classified as:
- Cylindrical packaging
- Prismatic packaging
- Pouch packaging
Cylindrical cells are the most widely used lithium-ion battery cells as they are convenient to manufacture and have good mechanical stability. Cylindrical cells are commonly used for wireless communications, biomedical instruments, and power tools. Assembly of cylindrical lithium-ion batteries are used in EV’s such as Tesla as power train. The material commonly used to make the casing of cylindrical lithium-ion batteries is aluminium and provide simpler cooling option for high power batteries.
Prismatic cells are used in the portable consumer electronics, as they provide best space utilization. Samsung SDI is the leading manufacturer of prismatic lithium-ion batteries which are also used in EV applications. They are packaged in welded aluminium housings and contained in rectangular cans. They allow flexible designing but are more expensive to manufacture and less efficient in thermal management.
Pouch cells have good packaging efficiency and reduces the weight of the battery by eliminating the use of metal enclosures. These batteries unlike other, uses conductive foil tabs welded to the electrode and sealed to the pouch. The pouch is made from aluminium and are used in the portable devices. They have a simpler design and offer lightweight solution to battery design. Pouch cell batteries have thin sheets of foam between to absorb the expansion of the cell during usage.
Battery Packaging Market a promising market with growth opportunities
The battery packaging market is witnessing steady growth due to the rising demand for batteries from applications such as electric vehicles, industrial backup, energy storage, and automotive.
Stake holders in battery industry are looking for cost-effective packaging solutions that they can trust. The rising demand for battery packaging across the globe has led to capacity expansions by manufacturers of battery packaging. The cost of battery packaging is estimated to decline in the near future, owing to the increase in the supply of packaging materials and advancement in technology. Cell casing and pack packaging market is witnessing good growth in the battery packaging market. Casing is part of the primary packaging for batteries and with the ever-increasing demand for batteries from electric vehicles and energy storage industry this market is witnessing good growth. Various governmental initiatives are also imbibing growth in this market, for instance, in South Australia which is a storm prone region, Tesla has installed a 100 MW lithium-ion battery to supply uninterrupted power supply. In India, the government has set an ambitious target of installing 175 GW of renewable energy capacity by 2022, this is expected to foster the demand in the battery market. Governments of leading countries are also working to improve the infrastructure to nurture the Electric Vehicle (EV) market. For instance, in India, the government has plans to provide approximately USD 140 million subsidy to build a nationwide EV charging infrastructure.
Similar efforts are undertaken by several other countries, for instance in China, the government has increased the incentives for electric cars with range beyond 400 kms to 50,000 yuan from the existing 44,000 yuan. Government incentives coupled with rising awareness have brought tremendous growth in the sustainable energy market, which is driving the battery market and creating exciting opportunities in the battery packaging market.
According to a market research firm MarketsandMarkets™ the battery packaging market is projected to grow from USD 20.6 billion in 2018 to USD 36.2 billion by 2023, at a Compound Annual Growth Rate (CAGR) of 12.0% during the forecast period. The lithium-ion battery packaging market is expected to grow from USD 14.1 billion to USD 28.1 billion by 2023.