The future of battery life cycle managementThe future of battery life cycle management
podcast
In Dialogue with Logistics

The future of battery life cycle management

Authors:

How the service life of batteries is affecting the electric vehicle sector

Florian Karlstedt is the Project Manager at Rhenus Automotive. He uses this podcast to talk about electric vehicles and the life cycle of lithium-ion batteries. He explains which concepts and conditions are required to store, assemble and recycle batteries and talks about the challenges that future electric mobility is creating for the logistics sector.

The Environment Ministers of the European Union agreed in the summer of 2022 that all new vehicles within the EU should be emission-free from 2035 onwards. This means that no new cars with an internal combustion engine may be manufactured and sold from that time onwards. Instead, only climate-neutral vehicles will be permitted. Electric cars in particular have become increasingly popular during the last few years; the number of new registrations is increasing. According to ‘statista’, more than three million electric cars were registered around the world in 2020 – over 870,000 more than in the previous year. In Europe alone, the number of new registrations of electric cars reached almost 880,000 in 2021. ‘statista’ states that there are now almost eleven million electric cars on the road all over the world (figure as of July 2022).

These developments are not only creating enormous changes for automobile manufacturers – logistics specialists, too, are having to adapt their processes to the new standards. Florian Karlstedt talks about the challenges of manufacturing electric cars and the various stages of a lithium-ion battery’s life, what is known as battery life cycle management (Logistics People Community has already reported on this). He explains the difference between the so-called first life and the second life of a battery. In addition, he reveals how the service life of a battery partly depends on consumers’ behaviour and why repairing batteries is the greatest challenge for the automotive and logistics sectors at the moment.  

This episode is currently only available in German. You can find the podcast with German and English subtitles here.

Podcast
Podcast Cover Florian Karlstedt
27.07.2022

Logistics People Talk | Episode 9

Florian Karlstedt talks about the opportunities and challenges posed by using batteries in electrically-powered vehicles and explains how it is possible to store and recycle batteries safely.

Transcript of our podcast episode

00:00:00
Gwendolyn Dünner: Welcome to Logistics People Talk, the Rhenus podcast for everyone who wants to stay up to date on logistics, presented by ...

00:00:07
Andrea Goretzki: Andrea Goretzki ...

00:00:08
Gwendolyn Dünner: and Gwen Dünner. Our topic today is logistics for e-car manufacturing and the challenge of battery life cycle management.

00:00:22
Andrea Goretzki: Battery life cycle management, that sounds rather unwieldy at first. But, in fact, it’s about something that is quite commonplace, it’s about lithium-ion batteries. They are installed in smartphones, e-bikes and even in electrically powered vehicles, and that’s exactly what we want to take a closer look at today: the advantages and disadvantages of lithium-ion batteries in vehicle production and also in the corresponding logistics processes. We have someone with us who can give us very precise information on the subject because he knows a lot about it. This is Florian Karlstedt. He is a Project Manager at Rhenus Automotive and our guest today. Welcome, Florian, it’s good to have you here.

00:01:05
Florian Karlstedt: Hello everyone. Nice to be here. It’s a pleasure.

00:01:08
Gwendolyn Dünner: Yes, Florian, if you’re standing at the petrol station right now, you don’t need to be particularly innovative to think to yourself, ‘Maybe an e-car would be quite a good alternative to the combustion engine after all.’ You work in Automotive Solutions, which means you have a very deep insight into the automotive industry. Have you ever thought about an electric car?

00:01:26
Florian Karlstedt: Actually, that’s a good question because the last two times I applied for my company car, I toyed with the idea of getting an e-vehicle. Unfortunately, as a city dweller, I don’t fall into that category. If you have to look for a parking space every evening, you have a bit of a problem finding one. But basically I’m very positive about the whole thing because we need a solution somewhere in the medium term to bring about a reduction in CO2. On the other hand, it has to be said that the more I deal with the topic, or we as the Rethmann Group deal with it, the greater the challenges we see, and the market is not yet ready for every customer to use it or for it to really make sense. The challenges that we see, to a small extent, don’t have so much to do with production because the OEMs are already relatively far along there. The exciting thing is: how do I deal with it when the customer comes into play? In other words, how do I deal with repairs? How do I deal with the fact that the value of a vehicle remains stable, as with a normal combustion engine? How do I deal with it when a vehicle breaks down? These are relatively big questions that have not yet been resolved.

00:02:34
Andrea Goretzki: You’ve already mentioned a few aspects that have a serious impact on the logistics process behind production. In your opinion, what are the biggest differences between conventional and battery-powered vehicles?

00:02:49
Florian Karlstedt: You basically have to look at the vehicle as such. The normal internal combustion engine doesn’t have a large value-added module in it, so the engine is perhaps the most valuable thing. Then there are the axles with the drivetrain. The difference is much greater in the case of the electric vehicle, i.e. the battery accounts for a significant proportion of the value of the vehicle, but from the outside it is the biggest black box and the greatest risk in the whole consideration. In pure production, this is currently already very well under control because all the car manufacturers have focused very strongly on it. But the moment the vehicle leaves the factory, there is still a huge question mark. And that’s what we’re seeing, together with our colleagues from REMONDIS, that there are still no sensible solutions on the market for many issues.

00:03:38
Gwendolyn Dünner: But let’s come back to the assembly steps now. So e-cars look relatively the same as other cars, but of course have different components, as you said. What requirements does that mean for you service providers? How do you deal with that?

00:03:52
Florian Karlstedt: Yes, there are two different requirements. One is that if you look at it purely from an assembly point of view, you have a very high level of automation requirements for the battery because the battery is very sensitive. That means you need a clean room. Issues that have to be taken into account so that there are no dust inclusions in the production ... Ideally, the processes would have to be highly automated, which means that, for us as a service provider, it rather takes away value creation and potentials. The e-car as such is therefore also a challenge for us and we tried to focus on it five years ago to see what would happen. Because typical modules such as an engine, which we normally assemble, or the axles change significantly. It’s good for us with the axles – they stay in permanently because every vehicle needs a wheel and an axle. But the engine, for example, is omitted. On the other hand, there are issues such as waste heat, which is normally used by the engine to heat the vehicle, but which is not present in the electric car. This means that you need appropriate air-conditioning modules in the vehicle. The axles have to be designed a little differently because now there may be direct wheel drives. This means that the variety in axle assembly is much more exciting. Conversely, engines are no longer needed and they are one of the major value-creating components for us as a service provider. In contrast, however, there are also a lot of new modules involved, and the complexity that the OEMs have right now is to build the normal combustion engines at the same time as the electric vehicles on the same line. This means that the complexity for the manufacturers has become much greater because they cannot be combined so easily, and you need much more support from outside to master the complexity.

00:05:26
Andrea Goretzki: If we go into this in more detail, what exactly does this mean for you as a logistics company and as a supplier and service provider?

00:05:39
Florian Karlstedt: The challenge for us is that the car plant itself is not able to build both production areas, if we call it that – combustion engine and electric vehicles on one line. A great deal of value creation has to be shifted to the outside in order to realise this at all in the existing plants. That is the challenge for them and, accordingly, it is of course a potential for us to get in there and offer services by offering on-site assembly of pre-modules, i.e. to adapt certain axle components or drive components or even modules that are then required for the electric vehicle to suit the special requirements of the vehicle in advance and to produce them in sequence so that the OEM no longer needs pre-assembly in their plant and can then use this freed-up space to achieve the standardisation of combustion engines and electric vehicles.

00:06:35
Andrea Goretzki: But turning to a completely different topic, also in connection with lithium-ion batteries, of course, keyword: spontaneous combustion. In the past, they were criticised and reported on because they caught fire and the fires were not easy to extinguish. How do you ensure the safe storage, handling and transport of these sensitive components within the sections of the supply chain for which you are responsible?

00:07:05
Florian Karlstedt: Yes, that is indeed one of the biggest challenges right now. On the one hand, there is a lack of legal framework conditions. There are no clear guidelines on what has to be observed, every district, every federal state, is different in part, and there are even more different requirements from country to country. This means that one is very much left to one’s own devices and of course tries to meet the respective requirements, depending on the situation. You can see that now in Germany. The danger alone ... It’s still relatively safe for vehicles, but if we look at e-bikes or scooters, for example, there’s a house fire almost every other day, simply owing to e-bikes that are handled incorrectly. So the problem is not the battery per se, but the user.

00:07:44
Andrea Goretzki: That’s usually the case.

00:07:46
Florian Karlstedt: That’s also the excuse we like to use with our IT: ‘The problem is 75 centimetres in front of it.’ So basically you can assume that, as long as the battery has not left the factory, it is in a very safe condition. After that, the user comes into play, which can then lead to problems with the battery as a result of various incorrect actions. This means using fast chargers too often can lead to problems, small accidents can lead to problems, and also discharging too deeply or other issues that simply arise from misuse by the customer.

00:08:24
Andrea Goretzki: But, for the logistics, i.e. transport and handling in the factory and during production, that also means that this is not such a critical product as one might think at first – or is the experience different?

00:08:40
Florian Karlstedt: Actually, this is the issue where you have different perspectives. From the point of view of the logistician who owns the warehouse, you are naturally a bit more critical about the whole issue. The OEM, who sees it as a product and says: ‘I have to sell it later,’ who also has the view that they are giving a safe product to the customer, sees the risk per se as zero. For us, we say: ‘Yes, but I still want to secure my warehouse for that very rare case. I don’t want to have the worst-case scenario of a battery blowing up and my whole warehouse going up in flames and being destroyed.’

00:09:12
Florian Karlstedt: Accordingly, I have to distinguish between two different cases in the life cycle and that is why we have defined the topic of battery life cycle for us in this way. That means you have to see the battery in two life stages: one is production until it leaves the factory, and as soon as the customer comes into play, I have the aftersales or second life, where completely different risks and also completely different causes of faults come into play, and that is precisely the issue. This means that in the first life I have to make sure that I have preventive measures in place. Temperature monitoring, I have to be able to monitor the condition of the batteries with care and realise if something happens, and also have the appropriate emergency equipment at hand. Appropriate containers with water and extinguishing agents have become established, to which batteries that have an elevated temperature can be evacuated. But I don’t have to consider every battery as critical per se. I just have to have emergency concepts. Whereas in the second life, I actually have more of an issue that I don’t initially know what the status of the battery is after the customer has used it. You can read it out, various branches can do that, they are trained by the customers, they have the appropriate diagnostic devices with which they can initially call up the status. But what about a vehicle that has been in an accident? Can I repair it if it has crashed into a tree, or can I even transport it safely? These are questions that no one can answer at the moment.

00:10:36
Florian Karlstedt: That means that if I have an accident and crash an electric vehicle into a tree, first the airbag is triggered, and when the airbag is triggered, the pyrofuse is also triggered. These are plug connections that take the earth from the vehicle to initially make the battery safe and seal it as a black box. Thus, the battery as a black box cannot really be analysed by anyone, and I don’t know whether it is now safe or whether it has been damaged and could blow up in the next few minutes. And these are the challenges that I actually have in the second life, that I simply have a used battery where I can no longer assume that it is in normal condition because I don’t know how the previous owner handled it. Then there are also things like the current discussions about a battery passport, which would of course be great, the data is all there, but data protection is of course also an issue. In other words, I would prefer to track the data, just as I do with insurance companies: How does Mr Mayer use his vehicle? Is he always in the fast lane, pressing on the accelerator, which of course a battery doesn’t like because that means very high voltage peaks or load peaks, or does he like to use the fast charger, or is he someone who actually always keeps to the treats the battery in the recommended way, which means charging to a maximum of 80 per cent, starting gently, in other words a really moderate and continuous load level, and that of course gives me a completely different life expectancy for the battery.

00:12:06
Andrea Goretzki: This teaches us that an electric vehicle is perhaps not an option for every driver; it always depends on the driving style. On this subject, I actually have two questions running through my mind. One question is: Is measuring the temperature of batteries a job in logistics?

00:12:28
Gwendolyn Dünner: Where do you apply?

00:12:29
Andrea Goretzki: Exactly, I think that’s good, and the other question, actually, to get serious again: What do your warehouses and your locations actually look like when batteries are stored there in order to meet the corresponding safety regulations or safety requirements?

00:12:50
Florian Karlstedt: Yes, indeed, when it comes to storage regulations, we have set ourselves a relatively high standard that goes far beyond what is often required by local authorities. The challenge is basically first of all to get a permit. Getting a fire protection permit for a hall really depends on the local authorities. Some are more interested in setting up industry there, others are a bit more conservative because a warehouse with lithium-ion batteries is not without its problems. In the past, it was difficult to get a warehouse for tyres because the fire load is extremely high. But with batteries it is seen even more critically. And due to the lack of empirical values, it is very difficult to find clear, consistent guidelines that the local authorities and the fire brigade, which also approves the final fire protection concept, can follow. These are the current challenges. For us, we see it in such a way that we provide for appropriate sprinkling, the ground must be sealed accordingly so that, if there is a fire or at least a smouldering fire, it can be extinguished accordingly and the water, which is then contaminated, must be retained because it must be disposed of again as hazardous waste. This means that you can’t just conduct it out of the hall, you have to have containment systems and the floor has to be sealed accordingly so that it doesn’t penetrate into the ground. It’s the same problem when a vehicle has an accident. The fire brigade cannot simply extinguish it. Instead there are these extinguishing containers, similar to a construction container with extinguishing agent, so that the extinguishing water can be drained off separately afterwards because otherwise it could lead to contamination of the soil. Secondly, we have preventive heat monitoring from the outset, i.e. infrared cameras that manually track what employees regularly go through. But this does not, for example, cover the issue of a battery leaking during the night shift. In parallel, we often have permanently installed infrared cameras that regularly track in the background with appropriate AI software as soon as a heat source rises above a setpoint or is outside the tolerance range, and then forwards the relevant information to the emergency call or to a fire protection officer, who then has to take care of it.

00:15:03
Andrea Goretzki: That was quite a lot about building specifications and how you adjust to them technically. What about the staff? Are they also specially trained? Do they have to be able to do anything special, as opposed to others?

00:15:17
Florian Karlstedt: For the employees in logistics, this doesn’t really mean any further training. We only need a clean fire protection concept, an evacuation concept and an emergency plan. We have to train the employees accordingly so that they know what to do in case of fire. But otherwise as such there is no special training. But if we later move on to other topics, such as dismantling batteries or repairing batteries, then we need appropriate training for high-voltage technicians because the employees then work under voltage. As soon as the battery is deeply discharged, it is destroyed, i.e. it is simply dead. This means that attempts are made to keep repairs and dismantling live, where attempts are made to remove individual modules in order to possibly use them for the spare parts market or for repair topics, and that is like open-heart surgery – you can’t switch it off and say: ‘Okay, I’ll charge it again later.’ Instead, once it is deeply discharged, it is dead. And then you can only recycle it.

00:16:13
Gwendolyn Dünner: That’s a good comparison with the heart. Before we completely leave the assembly step in this life cycle, of course, lithium-ion batteries, as we have already heard, have other components besides lithium, such as nickel, manganese, cobalt, which of course all have to come from somewhere and which, for current reasons, can probably also cause problems in supply chains. Of course, the automotive industry at present has other areas where there are problems or where there are problems in supply chains. Are these lithium-ion batteries the biggest challenge at the moment or what others are there?

00:16:49
Florian Karlstedt: From my point of view, the issue of raw materials is not the critical element at the moment. It’s much more exciting that a battery like this consumes an endless amount of semiconductors, so of course all the bottlenecks or delivery delays are being made worse at the moment.

00:17:04
Andrea Goretzki: Do you have any approaches to solving this problem or are we just waiting like everyone else at the moment?

00:17:12
Florian Karlstedt: We actually came up with the idea together with our colleagues from REMONDIS that we should take a broader approach to this and we realised almost four years ago that, apart from these issues of having to deal with hazardous materials, there is also a problem of how to stabilise the used car market again by procuring or making spare parts available. And semiconductors are also an issue here. This means that dismantling is not simply taking a battery apart and preparing it for recycling or making it available as an energy storage device, but rather that valuable components that are still fully functional possibly still being tested – we are active in various projects, on the one hand development projects, but also projects with customers, which are headed in different directions. One is the repair of batteries because there is currently no solution. This means that if I have an accident with my vehicle, at least in the case where the airbag is triggered, the pyrofuse is triggered – then I cannot currently repair the battery because the normal branches of the OEMs would not be certified to do so. The requirements for this are relatively high because I have to open a battery and therefore of course have a completely different risk that the battery will blow up afterwards and that is exactly the issue.

00:18:30
Florian Karlstedt: That’s why we need service providers who can offer a neutral service in this area, who can offer appropriate repair locations across the board, and if a battery cannot be repaired, but there are at least parts that are still good and can be removed and used later for battery storage, but also as a donor of spare parts, then we need the possibility to dismantle the batteries in a non-destructive way or in a way that preserves their value. And that’s not so easy because every OEM uses different architectures, one glues them, another screws them from above. Sometimes there are 200 screws that hold a lid in place, and depending on the platform, they have to be loosened and the requirements met. When I repair, I naturally have immense documentation requirements, which means that I not only have to document how each individual screw was retightened, I also have to document when bearings come in, when new seals come in, when certain pyrofuses come in. I have to document everything, which parts are in it, which processes have run and how, and I have to carry out endless documentation and tests afterwards, i.e. leak tests on the cooling system, I have to check the dielectric strength, I have to balance the newly installed modules so that their state of charge corresponds with that of the existing battery modules. In other words, the requirements are very high and no branch office can meet them because the investments are simply too high, the training costs for the employees on site are too high, and on top of that there is the issue of approval, which means that the jungle of authorities also applies because a branch office is usually in the city, and that would be too risky if batteries were opened there regularly because then the risk of fire is simply too high. These are the issues we are working on right now, where I think we can form a very good team together with our colleagues from REMONDIS and offer a very broad portfolio as the entire Rethmann Group.

00:20:18
Gwendolyn Dünner: Actually, that would have been a question: Do you offer that as well? But indeed we already know that because last year we published an article on the subject of battery life cycle management and especially on this recycling part, which is done together with REMONDIS. Now, after the production process, as you already mentioned, there is the first life, the second life and then, as I said, this recycling part. Which of these topics is most important to you? Where do you see the biggest construction site?

00:20:44
Florian Karlstedt: Well, currently the biggest construction sites are actually the topic of repair because there are almost a five-digit number of vehicles on the market at the moment that are economic complete write-offs. Not long ago there was an article in the Handelsblatt where the value of used cars was simply explained using the example of a Tesla. A Tesla with a battery and a mileage of 100,000 kilometres costs about € 30,000, without a battery it costs € 6,000. That means that as soon as the battery is defective, I have a huge problem.

00:21:18
Andrea Goretzki: And just to reiterate, you’ve just said that the battery is basically already defective if you’ve had an accident, you can just assume that ...

00:21:28
Florian Karlstedt: A major accident at the very moment that triggers the airbag to go off.

00:21:31
Andrea Goretzki: Okay, is that fundamentally coupled?

00:21:33
Florian Karlstedt: They are coupled, exactly. These are sensors that are coupled together. The moment the airbag is triggered, the pyrofuse is also triggered because you have to assume that this is a major crash and then I have the issue that the battery is first hermetically sealed as a black box. It’s not defective, only the connection is dead, but I can’t get to this pyrofuse connector without opening it and repairing it. And not everyone can do that, and after an accident I would have to check whether everything actually works. And that is one of the main issues, which is why there are already a relatively large number of vehicles on the market that are total write-offs, even though the batteries can be repaired – and this is an issue not only for the customers, but also for the insurance companies and for the entire market.

00:22:16
Gwendolyn Dünner: And a sustainability issue.

00:22:18
Florian Karlstedt: Right. Sustainability, that starts even before. It’s an issue that batteries are currently manufactured in a very complicated way. That is to say, a simple example, the cells, which are the smallest modules, come in different architectures. There are pouch cells or prismatic cells, there are quite different models. In any case, they are partly manufactured in China or Poland or Norway. The main thing is where electricity is cheap because it is a very complex process in which, similar to the production of semiconductors, a lot of energy is used to produce cells on a very small scale. These cells are then brought to the USA, where they are used to build larger modules, and these modules are then brought to Europe to build the vehicles. This means that there is a huge chain of events, which is not yet taken into account in the CO2 assessment because the battery passport is simply missing. These are issues, such as the battery pass for the customer – how it has been used – which does not yet exist, and which would make it possible to know how the vehicle has been used and what the condition of the battery is or how carefully the vehicle has been treated. But there is also no overview of the supply chain, i.e. there is still no overview of sustainability: where, for example, the lithium comes from, as well as which supply chain or which chains were in-between to ensure production. And that is a huge topic at the moment, where no one really has an overview yet and where there is simply still a lack of clean logistical solutions.

00:23:50
Gwendolyn Dünner: Yes. And is there already a timeline, for example, for this battery pass, or do you know if something will happen in the next few months?

00:23:57
Florian Karlstedt: Definitely not in the next few months. It’s a lengthy process. For example, there are now amendments for recycling. From 2025, batteries must be at least 50 per cent recyclable and increasingly more so after that. And there is also a requirement from 2025 on as to how much recycled material must already be present in batteries. This means that it is a requirement, possibly a small bottleneck in the market, that batteries that are already there must be recycled so that they can be reused as recycled rare earths, for example manganese, copper and cobalt, via this black water, which is then this shredded base material where the rare earths are and so on. And here again there are challenges because the countries have introduced certain export restrictions for waste in the interest of keeping their thumbs on the material flow. This means that a battery that has just been transported to the Netherlands can no longer be brought to Norway so easily in order to make a new battery out of it.

00:25:02
Andrea Goretzki: Florian, that was a really deep insight into this topic. Thank you very much for that. I can see that the topic is still much broader and we can certainly talk about it one or two more times. Whether it’s about sustainability or about recycling and disposal, we haven’t even touched on that yet today. You can see what I’m getting at.

00:25:25
Florian Karlstedt: It’s not just going to be today.

00:25:28
Andrea Goretzki: We would like to invite you a second or further time so that we can deepen these topics. First of all and for today, thank you very, very much for taking the time to visit us and talk to us about this.

00:25:44
Florian Karlstedt: Thank you very much!

00:25:45
Andrea Goretzki: We had a lot of fun and it was really exciting. Thank you very much.

00:25:48
Florian Karlstedt: I’ll be happy to come back and I have a lot to tell you. I’m glad when people listen to me.

00:25:53
Gwendolyn Dünner: We’re not just listening, we’re actively thinking. I think in the background like, ‘Oh my God, what? Where do we go from here?’ So especially the themes of second life and recycling – I’m definitely looking forward to when we get into this again.

00:26:07
Gwendolyn Dünner: That was the end of today’s episode of Logistics People Talk, the podcast of the Rhenus Group. Thank you also to our listeners. If you like, you can share this episode with your colleagues and friends. You can find the latest posts about our podcasts on our LinkedIn channel Logistics People Community and, of course, new episodes wherever podcasts are available. So take care of yourselves. All the best from ...

00:26:32
Andrea Goretzki: Andrea Goretzki ...

00:26:33
Gwendolyn Dünner: and Gwen Dünner.

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