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  • Writer's pictureMoshiel Biton

3 Reasons Why Automotive OEMs Have to Become Battery Makers

Manufacturing. Design. Performance. Three facets that original equipment manufacturers (OEMs) focus on when building EVs and that all have a common spec: batteries. From supply chain to materials to cost, and from technology to space utilization to performance, the battery used determines so much that not only are OEMs rethinking their strategy, they’re going as far as revisiting the basics, with an increasing amount of them partnering with battery companies to achieve this.


Supply Chain

With many OEMs investing in new battery factories, having a seamless supply chain and battery creation process is not only one of their top aims, it’s also their biggest pressing issue. Tesla realized this almost a decade ago when in 2014, they signed an agreement with Panasonic who invested between US$1.5–2 billion in Gigafactory 1, Tesla’s first factory dedicated to producing lithium-ion batteries for EVs. Following this, Tesla went on to build and open another five Gigafactories across the world.

Since then, more OEMs, including Ford, have followed Tesla’s lead. As such, Ford announced a $11.4 billion investment to bring EVs at scale to American customers with the largest, most advanced and efficient auto production complex in its 118-year history. Furthermore, the American car manufacturer signed a non-binding MOU with SK On Co., Ltd. and Koç Holding to create one of the largest commercial vehicle battery production sites in Europe. Additionally, Toyota also announced plans to build a $1.3 billion US battery plant for EVs and that it would spend $3.4 billion on battery investments in the US up until 2030.


At the same, prospective supply shortages could affect the EV industry. Indeed, with supply chain disruptions and ongoing geopolitical conflicts, essential battery materials including lithium, nickel and cobalt all face running on the low side. As a result, OEMs are looking for battery alternatives that use less materials and smaller amounts; this can include a different battery chemistry and different battery architecture.


One of the main challenges preventing the widespread adoption of EVs is cost. While the average transaction price for an EV stands at $56,437, batteries currently account for around 30% of the final cost for the customer. With these costs so high, more and more OEMs are seeking partnerships with battery companies with the aim of mitigating the final price.


With a large amount of energy needed to propel a car, EVs require thousands of batteries divided into battery packs. In the case of the Tesla Model S, it has an 85 kWh battery pack that weighs 540 kg and contains 7,104 lithium-ion battery cells divided into 16 modules wired in series. Moreover, when it comes to technology, and having understood the importance of better battery technology, more and more OEMs are investing in battery-making companies. As such, GM is investing $6.6 billion on EV plants and created Ultium, its next-generation batteries and EV platform and technologies. Indeed, GM estimates that the proprietary cells created through this will be capable of a range of up to 724km or more on a full charge with 0-96kmh acceleration in three seconds.


While EVs need high power abilities for fast charging times and for moments like accelerating, they also need high energy to be able to drive for extended periods of time and cover long distances. After investing in Sila Nanotechnologies in 2019, Mercedes-Benz announced that it achieved a breakthrough with high silicon automotive batteries. As a result, starting mid-decade, the German car manufacturer plans to provide the option of equipping the upcoming electric Mercedes-Benz G-Class with next-generation battery cells with silicon anodes. Indeed, the Sila cells will offer higher capacity and range than the default solution which will be a more conventional lithium-ion battery chemistry.

Future Plans

Battery-Making Facilities

Hyundai recently announced that it would be spending $5.5 billion on facilities dedicated to manufacturing EVs and batteries in Savannah, Georgia. Furthermore, the South Korean OEM will receive an additional $1 billion investment from its suppliers towards the project. This will be Hyundai’s first EV-only plant in the US and it’s expected that production at the 2,923-acre site will start in the first half of 2025, with construction beginning in early 2023. The aim of these facilities? To make 300,000 vehicles per year (25,000 per month) and will create over 8,000 new jobs.

Similarly, car manufacturer, Stellantis, is planning on investing over $2.5 billion in partnership with Samsung SDI to build the automaker’s first US EV battery manufacturing facility. The new plant will be located in Kokomo, Indiana, where Stellantis already has a supplier base. This new facility is part of Stellantis’ goal to achieve annual sales of 5 million battery-electric vehicles by 2030.

Battery Technology

With OEMs always looking to improve their batteries, finding one that ​​has high energy density, a fast charging rate and is safer is a constant aim. Currently, many OEMs are using existing battery chemistries, mainly Li-ion, while certain are focussing on NMC. The adoption of LFP is also becoming wider due to its cost, safety and supply chain advantages. For now, most entry-level EVs use LFP batteries while the more advanced ones use NMC due to their higher energy and cost. At the same time, car companies are looking for the next generation of these existing Li-ion chemistries, by changing and optimizing the mixture, and adapting the manufacturing process.

In parallel, new emerging chemistries like solid state and silicon are also trying to solve the most pressing battery issues of charging time, range, and safety. In the case of solid-state batteries, they have the potential to fulfill these requirements while being a safer option at the same time. As a result, more OEMs and battery manufacturers are keeping an eye on them. Battery-maker, QuantumScape, is working to develop a solid-state battery, which would be smaller and lighter than a traditional lithium-ion battery pack of similar capacity, and without the liquid inside that makes them more likely to overheat and catch fire.

In addition to this, OEMs and battery manufacturers are moving their focus more towards battery design and cell architecture. Indeed, the industry understands that focusing on chemistry is reaching its performance limit and is realizing the potential of advanced battery design. Also, new battery architecture, such as 3D electrodes, has the potential to allow for the adoption of next generation chemistries, which are being helped by today's traditional 2D structures.

Addionics Technology

With batteries determining and influencing overall EV performance and capabilities, this makes them the most important component of the car. With Addionics’ technology, more active material is loaded into the battery, allowing a longer driving range and the reduction of charging time thanks to the lower internal resistance. This process is both low-cost and drop-in ready, and can seamlessly be added to any manufacturing process. Furthermore, Addionics could be the key to enable the adoption of emerging battery chemistries such as silicon and solid state, and even the next generation of LFP battery chemistry.

Discover Addionics’ technology and contact us for collaboration opportunities.


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