INTERVIEW: Battery materials is the largest new chemicals sector – BASF CEO

Author: Joseph Chang

2021/09/22

NEW YORK (ICIS)--BASF aims to become a larger player in battery materials to enable the global electric vehicle (EV) transition, the most exciting and disruptive development in the automotive industry since its creation.

“E-mobility is one of the biggest challenges for industry. It totally converts a major pillar of the [chemicals] industry – the automotive industry – in a very, very disruptive way,” said Martin Brudermuller, CEO of BASF, at a fireside chat during the ICIS Power Players Awards virtual event.

“The key for that transformation is battery materials. We should remind ourselves that a battery is nothing else than a chemical reactor,” he added.

Brudermuller is the winner of the 2021 ICIS CEO of the Year Award, having been selected by his peers among the ICIS Top 40 Power Players.

BASF is rapidly building its capabilities in cathode active materials (CAM) for automotive lithium-ion (Li-on) batteries worldwide. These materials include Nickel Cobalt Aluminum Oxide (NCA) and Nickel Cobalt Manganese Oxide (NCM).

“With the speed the transformation has on a global scale, it is a very fast growing market. So there is a huge opportunity. To my knowledge, this is by far the largest new chemical segment that is actually emerging,” said Brudermuller.

BASF has been making a flurry of deals in 2021 to strengthen its global position in battery materials.

On 16 September, BASF announced a strategic partnership on battery materials, including CAM and battery recycling, with China-based CATL which is building its first European Li-on battery factory in Arnstadt, Germany.

In late August, BASF and China-based Shanshan formed a joint venture called BASF Shanshan Battery Materials (BASF 51%, Shanshan 49%) to boost CAM capacity in China to 90,000 tonnes/year by 2022. BASF is targeting an industry-leading global CAM capacity of 160,000 tonnes/year by 2022.

In July, BASF announced a partnership to exclusively supply Porsche with high-energy CAM for its high-performance vehicles, and to recycle production waste from battery cell production at Cellforce Group, a joint venture between Porsche and Customcells. Cellforce’s battery plant in Tubingen, Germany is expected to start up in 2024 with initial capacity to power 1,000 motorsport and high-performance vehicles.

In June, BASF announced plans to build a battery recycling prototype plant in Schwarzheide, Germany at the site of its CAM plant under construction. There it will seek to optimise the recovery of lithium, nickel, cobalt and manganese from end-of-life batteries and off-spec material from battery cell and materials producers.

The Schwarzheide CAM project, which broke ground in November 2020, is slated for start-up in 2022 and will be able to supply around 400,000 EVs/year, according to the company. It will use precursor CAM (PCAM) materials from BASF’s plant in Harjavalta, Finland under construction and also scheduled to start up in 2022.

CAPTION: BASF’s cathode active materials plant in Schwarzheide, Germany is scheduled for start-up in 2022

Photo credit: BASF

Battery materials “also fits nicely to what BASF’s capabilities are, and that is why we decided we wanted a major part in that transformation and position ourselves”, said Brudermuller.

The automotive sector is BASF’s largest customer end market accounting for around 20% of total sales, he pointed out.

Ensuring a robust supply chain in battery materials will be critical, especially with the recent widespread raw materials shortages across multiple industries.

“Because of the large growth, this will be a challenge for the build-up of that business. It is about safeguarding and ensuring the access to the metals like nickel and lithium, so there are many, many supply chain issues that come with this, together with the huge investments. It is a very capital intensive business,” said Brudermuller.

On 27 September, BASF will host an investor update on its battery materials strategy and new Verbund cracker site in Zhanjiang, China.

Click here to view the replay of the ICIS Power Players Awards

Interview article by Joseph Chang