The growing demand for electric vehicles (EVs), coupled with the critical demand for the surging energy storage systems (ESSs) to support transitioning to renewable energy sources, is disrupting how we generate and store energy. The push for electrification is disrupting several industries as businesses, governments, and consumers alike are seeking cleaner alternatives to fossil fuels. 

For automotive companies, this has led to a growing investment in the advancement of lithium-ion batteries (LIBs). This new EV economy is driving the development of high-volume production battery plants, also known as gigafactories. These large-scale production facilities typically span acres of land and hold the promise of more-efficient, cost-effective battery manufacturing. 

The gigafactory boom has incumbent battery suppliers, original equipment manufacturers (OEMs), and national governments making large investments in the battery-powered future. According to market research, in recent years, the United States has made $154 billion worth of EV investments, which have generated approximately 188,000 jobs. Further research shows that over half (54%) of European and US automotive, battery manufacturing, and energy organizations are building or have plans to build one or more gigafactories within the next five years.

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Now that the gigafactory race is in full swing, many automotive enterprises, technology providers, and systems integrators have begun working closely together to speed up and scale battery production. By taking advantage of state-of-the-art technologies and innovative solutions, they aim to boost efficiency, optimize processes, and drive industry transformation.

The battery industry is ripe for innovation, specifically as legacy organizations take steps to modernize their manufacturing operations. In addition, the push to secure domestic supply of batteries and decrease dependency on international battery manufacturers is driving the adoption of smart manufacturing approaches and the establishment of an ecosystem of mutually beneficial partnerships. 

Developing strong ecosystem partnerships is key to unlocking new levels of innovation in the manufacturing, supply, and distribution functions and building modern, efficient, and cost-effective capacity. In fact, 93% of organizations in the automotive, battery manufacturing, and energy industries that are currently building or planning to build one or more gigafactories are establishing all or most gigafactory(s) through joint ventures/partnerships.

Strong ecosystem partners will also help solve two key challenges: bringing a gigafactory online quickly—at a lower cost per kilowatt-hour (kWh)—and improving yield points.

At a high level, there are strong incentives for battery suppliers and OEMs to swiftly build and scale gigafactories. Beyond the nationwide push, government interest, and monetary investments being poured into production, industry and consumer demand for energy storage has never been stronger. 

Because demand outpaces supply and the Li-ion battery landscape is still in the early stages of maturity, many of these gigafactories are greenfield facilities being built from the ground up. This presents a massive opportunity to bring capacity online through innovative solutions. 

By leveraging software and other technologies, transformation partners, EV manufacturers are accelerating the speed at which they can bring gigafactories online. As new gigafactories are built, processes become more streamlined, and consistent improvements are made.

But the work does not end once the gigafactory is built—it then must rapidly ramp up production, operate efficiently, and be nimble in its ability to swiftly adapt to the newest battery chemistries, such as solid-state battery technology. For many battery and automotive companies trying to scale gigafactories, yield rates and waste reduction present a large challenge. These challenges are critical because they directly impact profitability and sustainability goals. This is where leveraging the partner ecosystem is key. Partners are helping solve this problem by creating a data infrastructure that connects the IT/OT systems. This IT/OT connection is crucial for the collection and analysis of operational data, enabling the identification of yield loss points and the development and validation of intelligent models that help continuously monitor and optimize battery manufacturing.

Success in the digital era 

In today’s business landscape, the convergence of the digital and physical worlds is at the core of every boardroom discussion. In the gigafactory space, this digital thread is the determining factor between success and failure. 

Even as leaders learn how to leverage new technologies to build and scale their facilities, the digital mindset does not stop there. A digital thread drives the level of consistent change that is necessary for long-term impact. Specifically in an industry that is constantly innovating, it is critical to streamline change management from design all the way through manufacturing and distribution to achieve end-to-end traceability. 

This can be achieved by implementing end-to-end solutions spanning digital twins, automation technologies, and internet of things (IoT). Integrating this technology into a fully digital enterprise supports the connection between the physical and digital worlds with a scalable IT/OT system. This accelerates product design and validation as well as factory commissioning.

Manufacturers should also leverage technologies such as digital twins and artificial intelligence (AI) to build a closed-loop manufacturing strategy that will endure across the gigafactory’s lifespan. Digital twins can be used for key processes such as battery and plant design as a way for manufacturers to virtually proof their proposals before investing in physical models. 

Digital twins can also be used as a part of a larger talent strategy. Worker readiness is a challenge many gigafactory operators are facing. Digital twins provide a technology-based digital framework for training and upskilling talent. 

With these digital technologies at play, battery suppliers and OEMs can better enforce compliance, make swift alterations, reduce waste, and seamlessly connect data across manufacturing, logistics, and finance. 

Contributing to the green future through sustainable manufacturing

When undertaking a project as large as building a gigafactory, sustainability should be embedded at the core. While the gigafactory output itself will help the world become more sustainable, the technology and strategy should focus on reducing waste in production. 

Engineering resilient and sustainable supply chains for gigafactories will require that several parameters be put in place, including:

• A single thread to connect bills of materials and trace carbon emissions across manufacturing processes. 

• Partnerships with reliable, environmentally conscious suppliers.

• Local sourcing to reduce travel emissions. 

• Signing long-term contracts for ongoing delivery.

• Designing packaging to protect battery components during shipping.

Leveraging data and the digital core will play a large role in executing these green initiatives as they allow manufacturers to manage production parameters to reduce waste and monitor energy consumption across the value chain. 

Key takeaways for engineers

For battery engineers and leaders, there are several ways to support the development of gigafactories to ensure success. These include: 

• Cultivate ecosystem partnerships and integrated teams: Fostering cross-functional teams and external partnerships is critical. Collaborative efforts between engineering, manufacturing, business units, and technology partners will accelerate innovation and optimize battery manufacturing processes.

• Leverage data-driven optimization: A ‘deploy and learn’ approach, combined with the integration of OT and IT systems, will enable real-time data collection and analysis to continuously improve battery performance, yield rates, and overall process efficiency.

• Promote a collaborative culture: A strong, collaborative culture that extends across internal teams and international partnerships is essential for solving complex challenges in the global battery supply chain. This will lead to faster problem-solving and streamlined production.

• Utilize digital twins for talent and operational efficiency: Digital twins can play a crucial role in both operations and workforce development. By simulating battery and plant designs and upskilling workers through virtual training, gigafactories can enhance operational efficiency and talent readiness. 

• Embed sustainability practices: Sustainability should be at the core of gigafactory operations. From utilizing data to minimize waste and energy consumption, to adopting transparent systems such as battery passports, sustainable practices will ensure long-term viability and environmental responsibility. 

The world as we know it is rapidly shifting, and with each passing year organizations across industries are tasked with becoming more agile, resilient, and sustainable. The growth of gigafactory investments globally has left many leaders carefully strategizing ways to stay competitive and mitigate the risks associated with quickly building and scaling these high-volume battery plants.

Battery suppliers and OEMs will benefit most by partnering with experts who understand the unique challenges of battery and gigafactory production. This collaborative approach is essential for advancing the EV market and the BESS sector, ensuring flexible throughput, highest first pass yield, and a sustainable energy future.