BASF Electrifies the Market with Battery Materials

As the head of BASF’s Battery Materials business unit, Dr. Jeffrey Lou is responsible for recognizing opportunities and positioning the company to best succeed in a highly competitive marketplace. In the interview below, he outlines his strategy for ensuring BASF is a winning force as the race toward electromobility continues.

We believe that by 2020 approximately 5~8 percent of car production will be pure electric or plug-in electric vehicles, on top of other systems like stop-start and micro-hybrid.

What is your view on electromobility?

Automotive battery materials is a promising industry. Currently, consumer electronics account for the largest lithium ion battery market share. However, the growth of this market has slowed and the demand for automotive battery applications is rapidly expanding. We expect electromobility will surpass the demand for batteries in consumer electronics in the future and become the largest lithium ion battery application globally.

The global demand for electrified vehicles including battery electric vehicles (BEV), plug-in hybrid vehicles (PHEV) and hybrid electric vehicles (HEV) has been on the rise over the past few years, thanks mainly to two driving forces:

  1. Regulations on CO2 emissions
    It is estimated that about 25-30 percent of CO2 emissions results from the transportation segment. Therefore, all major industrialized countries have implemented emission regulations and fuel consumption targets.In China, car manufacturers are expected to achieve a target of 5L/100KM by 2020. Yet some OEMs in China are finding it challenging to meet these targets through engine efficiency and lightweighting alone. The launch of electric vehicles (BEV, PHEV, and HEV) becomes a necessary strategy and we have seen many recent announcements by automotive companies regarding strengthened investments in the development of electric vehicles. In fact, in 2015, the demand for electric vehicles and plug-in hybrid electric vehicles in China increased by about 300 percent compared to the previous year, which in turn resulted in a greater demand for lithium ion batteries.
  2. Government support through policy changes and subsidies
    China has announced a full range of supporting policies that are boosting the overall demand for electrified vehicles, including the promotion of infrastructure development and R&D, as well as giving non-monetary support to end users such as free license plates or lower down payment requirements for car loans. Additionally, governments have started to offer subsidies in Europe, North America and other Asian countries. For example, recently, the German Ministry of Finance announced 1.2 billion euros in subsidies to promote the development of electric vehicles.

It’s not enough for governments and car manufacturers to promote the industry alone; it’s the responsibility of all players in the value chain to contribute to this positive development.

How does this trend affect the industry as a whole?

We believe that by 2020 approximately 5~8 percent of car production will be pure electric or plug-in electric vehicles, on top of other systems like stop-start and micro-hybrid.

It’s not enough for governments and car manufacturers to promote the industry alone; it’s the responsibility of all players in the value chain to contribute to this positive development.

At BASF, we believe that electromobility needs to be convenient, safe, powerful and affordable to be an effective long term solution. Therefore, we’re focused on the development of the next generation of battery materials that will provide higher energy and longer driving range while being safe to use and cheaper on a $/Kwh basis.

The performance of cathode materials directly impacts the performance of lithium-ion batteries including their energy density, voltage range and cycle life. In the past, the batteries used in electrified vehicles in China were essentially lithium iron phosphate batteries. Now, by using higher nickel content instead of cobalt, the energy density of the battery is increased, while the cost of the cathode material is decreased.

The new generation of high nickel ternary cathode materials has been already applied to batteries of many well-known electric vehicles. For example, Tesla Motors has launched a range of new E-mobility models by using NCA (Nickel Cobalt Aluminum Oxide) cathode material, which has won wide recognition in terms of driving range, life time and safety.

The need to innovate within the auto industry will continue to drive rapid developments of our battery materials industry as a whole. BASF is committed to offering these innovative solutions to support the next generation of electrified vehicles.

What is the strategic focus for BASF’s Battery Materials?

BASF’s global Battery Materials business unit was established in 2012. In the last five years, we have invested hundreds of millions of euros in research and development, strategic cooperation and mergers and acquisitions in the battery materials sector, as well as establishing and expanding our production base. To further focus on the Asia-Pacific region, the leader in the electromobility market, we moved our global headquarters to Shanghai, China in 2015.

In addition to our global business unit in Shanghai, China, we have been operating a state of the art application center in Amagasaki, Japan. In the Q1 2015, our BASF TODA Battery Materials (BTBM) joint venture was established to produce, market and sell a broad range of cathode materials, particularly Nickel Cobalt Aluminum Oxide (NCA), Nickel Cobalt Manganese (NCM) and Lithium Manganese Oxide (LMO). This joint venture is a successful step toward establishing our company as a market leader in high energy cathode materials.

Further, through the integration of R&D, production and commercial resources in America, Europe and Asia-Pacific regions, our team offers innovative, convenient and responsive solutions to our customers in a more tailor-made and customer-friendly way.

What makes BASF battery materials offerings unique?

Through enhanced products and technical processes, we provide sustainable solutions to cope with global challenges.

In addition to our significant investment in R&D, we have also accumulated numerous patents and are currently licensing important intellectual property from reputable third parties such as Argonne National Laboratory and CAM-X Power.

Additionally, BASF works with partners in the industry and academia to develop materials and technologies for current and next generation lithium ion batteries, as well as for future battery systems. This provides us with access to top talent who are developing tomorrow’s ideas. And through mergers and acquisitions, we have further expanded our talent pool in the battery materials industry over the last several years.

Finally, as a result of BASF’s history in the automotive space, we can bring a variety of resources to our clients including technical capacity, experience, team power and cooperative ability. Moreover, BASF provides auto manufacturers with sophisticated technology including solutions for interior & exterior decoration, lightweight materials, engine emission control catalysts and the latest battery material technology making us a very reliable partner.

Dr Jeffrey Lou_BASF Battery Materials_ElectromobilityJeffrey Lou was appointed as the Senior Vice President, Battery Materials for BASF’s global Catalysts division, in December 2015. In this role, Dr. Lou is leading BASF’s efforts to become the world’s leading supplier of functional materials for high-performance batteries. He has more than 10 years of experience at BASF, including strategy, marketing and business management roles of increasing responsibility. Prior to this role, he was Vice President, Business Management Transportation, BASF China, and before that, he was Vice President, Business Management, Performance Materials & Industry Teams. Dr. Lou earned a Ph.D. in chemical engineering from MIT, an MBA from the Wharton School at the University of Pennsylvania, and a BS in chemical engineering from Zhejiang University (Hangzhou, China).