Building a state-of-the-art gigafactory for automotive battery production isn’t cheap. Today, investments range between $3.5 and $5.5 billion, depending on the size of the project. But only a small part of this goes to building up the PLM pieces, while the connected automation solutions to achieve a super-rational production are significantly larger than the PLM bets.

In terms of total figures for these projects, however, it is still a question of a relatively small percentage. The exact investment sizes are trade secrets, but my qualified guess—based on list prices and expected large customer discounts—is that the PLM investments in Siemens Digital Industries' Closed-Loop Manufacturing concept, and a gigafactory the size of Northvolt One's Skellefteå, Sweden location, have so far been in the range of $1.9 million to $2.3 million, depending on the size and more specific details of the layout.

A project like that needs more than a thousand Teamcenter licenses and around a hundred NX CAD seats. In addition, there are a number of special licenses for things such as battery simulation, and– a larger number of MOM (Manufacturing Operation Management) and MES licenses which connect PLM to the production side. For the latter, a couple of hundred licenses for a gigafactory-sized facility is a reasonable estimate.

At the same time, a normal relationship between PLM and automation costs is a factor of 10—which means that the automation pieces, in terms of investment, are somewhere in the range of $20 to $25 million.

“Volvo Cars and Polestar are industry leaders in the transition to electrification, and perfect partners on the upcoming journey as we strive to develop and produce the world's most sustainable battery cells,” says Peter Carlsson, co-founder and CEO of battery developer and manufacturer Northvolt.

Founded By Former Tesla Employee, Peter Carlsson

That said, the high investment costs do not prevent development from accelerating in recent years, and the competitive situation in Europe has intensified—particularly with Northvolt's entry into the market.

Founded by former Tesla employee Peter Carlsson, Northvolt has taken a firm grip on the development of European gigafactories in the battery field. This has led to a number of interesting alliances in this capital-intensive construction of sustainable battery production. In addition to the automotive giant Volkswagen's Northvolt Zwei facility, companies such as Volvo Cars, Scania, ABB and Siemens are among stakeholders who have invested significant sums in becoming project partners for Northvolt, with investments ranging from $10.0 million and higher. At the top end is Volkswagen, which so far plans to invest €1 billion (equivalent to $1.1 billion) in battery factory ventures. The Northvolt Zwei plant is one of them.

This factory will be up and running in 2024.

Pilot production has already started on a small scale in Volkswagen’s Northvolt factory in German Salzgitter. In 2024, the plant will produce battery cells with a capacity of 16 GWh, but it is still unclear when the expansion to 24 GWh will take place. All in all, VW will have to continue to purchase cells from suppliers on a massive scale. With an average battery capacity of 50 kWh in their vehicles, the planned 16 GWh production is only enough for 320,000 electric cars, which is roughly only the capacity of one of their electric car manufacturing sites; for example, the factory in Zwickau.

In total, the Northvolt project includes the Northvolt One factory mentioned above, which is well on its way to production; a R&D Lab in Västerås, Sweden; the Volkswagen Northvolt Zwei site, located in German Salzgitten; and a plant for the manufacture of system-configured battery cell combinations in Polish Gdansk, the Northvolt Battery System Jeden. To this we can add the planned gigafactory together with Volvo Cars, which will be ready in 2024.

Simcenter Battery Design Studio is a part of Northvolt’s design software arsenal. It supports engineers in digitally validating Li-ion cell design thanks to details of geometrical cell specifications and cell performance simulation. Extensive components of a battery cell are available, as well as a material database to support model development. Simcenter BDS offers several levels of performance models: a physics-based macro-homogeneous model to get insights into the cell’s electrochemical mechanisms, and an equivalent RCR circuit model, which is an empirical approach to modeling the cell’s behavior in a very computationally effective way.

Siemens PLM Market Leader in Battery Design and Production

The interesting thing about Peter Carlsson's project is that it is built as a concept solution where the first factory, Northvolt One, functions as a blueprint–or digital twin, if you will–and general working model for how it all should function. This, in turn, is based on Siemens Digital Industries' concept, called Closed-Loop Manufacturing.

With this as a basis and Peter Carlsson's business approach to production, Northvolt has quickly achieved a dominant position and can today be regarded as a market-leading player on the European battery front.

Closed-loop manufacturing is tantamount to closing the product realization circle, with the digital twin as the central concept carrier and where all processes—from development to physical manufacturing—are held together using digital threads and tightly integrated, real-time based PLM, IT and Operative Technology (OT) systems. At the end of the day, this is about flexible “beyond Industry 4.0 solutions”—from digital product ideation, definition and design to digitally-built manufacturing management on the shop floor, which then transitions into the physical production processes.

With the digital twin at the center, everything is possible to simulate at every stage. This means that manufacturers are able to digitally make sure that things work as intended—both in terms of the product and the production—before moving on to the physical equivalents, where any changes or detected errors become expensive to fix.

Big Investments by Siemens

Siemens has invested big money and development resources to create solutions that "transform data into value from a holistic point of view."

On one hand, it is about the product development tools in the Xcelerator portfolio, such as NX CAD, Battery Design Studio, Simcenter (CAE) and Teamcenter as the cPDm (collaborative Product Definition management) backbone with the Mendix low code platform on top.

On the other hand, it is about the factory and manufacturing-related tools, such as Tecnomatix, Mindsphere (IoT operative system) and OpCenter. Everything is interconnected and data can flow from the digital environments to the physical, and back.

Siemens’ virtual commissioning is an excellent example of what can be done within the framework of the company’s holistic approach. Siemens has invested heavily in its virtual commissioning solutions. They have created the necessary APIs between the virtual and the physical machine worlds and have already developed the entrance code that—based on what has been done in the product development phase—can connect directly into PLCs to simulate, manage and run equipment on the shop floor. This took Siemens years to develop and refine, and therefore poses a tough challenge for any combination of players on the market who want to compete in the cutting-edge world of PLM and beyond.

The factory automation solutions side also has a massive Siemens presence. For example, Siemens’ automation system, Simatic, includes control system, integration and safety solutions, while motor motion control of servos is handled in Siemens’ Simotion.

The collaboration with Northvolt secures deliveries of high-quality, more durable battery cells for our fully electric cars, says Håkan Samuelsson, CEO of Volvo Car Group. The collaboration with Northvolt will also enable us to strengthen our development capacity internally.

Volvo Cars Last in The Row to Join the Northvolt Concept

The latest in the line to join the Northvolt concept is Volvo Cars, which so far has followed the German vehicle giant Volkswagen into the electrified future, while the French company Renault has taken a different path and allied itself with the Chinese-Japanese Envision AESC and Verkor (more on this below).

Volvo Car Group decided only a few weeks ago to form a joint venture company with Northvolt to develop and sustainably produce batteries that are tailored for the next generation of fully electric Volvo and Polestar cars. In total, this project is estimated to involve $3.5 billion in building a gigafactory plant in Sweden with a potential capacity of up to 50 gigawatt hours (GWh) per year. As part of the plans, Volvo Car Group also aims for 15 GWh of battery cells per year to be purchased from the existing Northvolt plant in Skellefteå, starting from 2024.

Production is scheduled to start in 2026.

Volvo’s electrical performance brand Polestar.

100 Percent Clean Energy

As a first step for the half-owned joint venture company, Volvo Car Group and Northvolt aim to set up a research and development center in Sweden that will be put into operation in 2022. In the next step, there are also plans to build a gigafactory in Europe with a capacity of up to 50 gigawatt hours.

“By collaborating with Northvolt, we secure the delivery of high-quality, more durable battery cells for our fully electric cars,” says Håkan Samuelsson, president and CEO of Volvo Car Group. “The collaboration with Northvolt will also enable us to strengthen our development capacity internally.”

The whole thing is a very interesting development in light of the fact that the Swedish battery giant has previously been rated.

The new gigafactory, which is planned to be operated with 100 percent clean energy, is estimated to employ about 3,000 people. Where the new factory will be built has not yet been decided. The first car to be equipped with battery cells developed by the joint venture company will be the electric successor to Volvo Car's best-selling XC60 model.

“Volvo Cars and Polestar are industry leaders in the transition to electrification and perfect partners on the upcoming journey, as we strive to develop and produce the world's most sustainable battery cells,” says Peter Carlsson.

On June 28th the French president, Emmanuel Macron, confirmed that a “gigafactory” for electric batteries will be built in Douai, France. This site is located thirty-three kilometers from Douvrin, where the first giant plant for ACC, a joint venture founded by Total and Stellantis (born this year from the merger between PSA and Fiat-Chrysler) is planned.

Renault Builds Giga Factory with Chinese-Japanese Company

Battery production in European automotive operations has reached full speed. Just a few days after Northvolt's and Volvo Car Group's announcement of an investment in a gigafactory for vehicle batteries, French Renault Group announced that it will build a gigafactory in Douai, near Renault ElectriCity. Previously, as engineering.com reported, Volkswagen has also entered into a partnership with Northvolt to build its own battery production.

Right now, Renault is investing; soon it will be players other than Northvolt and, on the PLM side, Siemens Digital Industries in the lead roles. As part of its electric car strategy, Renault Group is collaborating with Envision AESC, which will develop the gigafactory mentioned above in Douai with a capacity of 9 GWh by 2024 and with the goal of reaching 24 GWh by 2030. On the PLM side, engineering.com learned that they will work with solutions from Dassault Systèmes.

As always, when it comes to battery development and manufacturing, the costs of setting up these factories are staggering. The technology company Envision Group, with Sino-Japanese roots, will invest up to 2 billion euros to produce state-of-the-art batteries that are cost-effective, carbon-efficient and safe for electric cars, including the upcoming electrified Renault 5.

“The latest strategic partnerships with Envision AESC and Verkor greatly strengthen our position when we secure the production of one million electric cars in Europe by 2030,” commented Luca de Meo, CEO of Renault Group.

This plant is the work of Envision, a Chinese specialist in so-called “intelligent” energy networks based on wind turbines, which has quite naturally led to work on the storage of electricity in batteries. In 2018, Envision bought 80 percent of AESC, the subsidiary created by the Japanese NEC and Nissan—the latter of which is keeping the remaining 20 percent. This allows the Élysée to remind us in passing that the technology and the head office of AESC are Japanese and not Chinese.

French PLM developer, Dassault Systèmes, provides battery solutions for all scales. The BIOVIA brand provides chemistry modeling capabilities to optimally design battery materials for aging. Furthermore, CATIA provides battery libraries to efficiently use 1D simulation for cells, modules and packs. In this system-level representation, the aging, thermal and electrical behaviors of each cell are combined to understand how an entire module of cells behaves. With the molecular level modeling characteristics, the mechanical, thermal, diffusion and electrical behavior of the individual cell can then be simulated in 3D. SIMULIA capabilities are used on cell and full battery modules to improve strength, stiffness and safety in abuse test scenarios. Finally, battery packs integrated into full vehicle models, which can be simulated for realistic test conditions. The connection between these scales of information is key and requires a unified engineering platform, such as the one provided by the 3DEXPERIENCE platform.

A $2.5 Billion Investment in ElectriCity

The investment is significant, estimated at $2.5 billion to build Renault’s plant, along with sites in Maubeuge and Ruitz, France. Altogether, this will form the ElectriCity subsidiary.

The Maubeuge site, which currently uses only 8 percent of its capacity with 25,000 vehicles per year will, according to Archyde online magazine, assemble the replacement for the Zoé—whose Korean LG batteries are now assembled in Poland. This model has been at the top of the ranking of the best-selling electric cars in Europe for the past ten years.

“The deployment of the Envision plant, on part of the 270 hectares of the Renault site in Douai, is planned in two stages. In 2024, the 1,000-employee plant will reach a capacity of 9 gigawatt hours (GWh), which is enough to equip just under 200,000 vehicles per year. Then to increase to 2,500 jobs by 2030, with 24 GWh of capacity—that is to say, the equipment of 400,000 to 500,000 vehicles, which corresponds to the ramp-up of Renault,” writes Archyde.

Aiming at a 25 Percent Market Share

Not everyone is following the path of Siemens and Northvolt, but as developments so far show, these two companies have created an excellent defensive position to stay at the absolute top of European battery development and manufacturing. As always, competition is fierce, and there are other companies who are looking at gigafactory solutions and are further ahead in realizing those plans. Tesla is the most prominent example, of course, with its Berlin, Germany facility soon to be in production. The facility and its Berlin location were announced by Tesla CEO Elon Musk in November 2019 at the Das Goldene Lenkrad award show. The factory is planned to produce batteries, battery packs and powertrains for use in Tesla vehicles, and also to assemble the Tesla Model Y, with a proposed start of production in late 2021.

The Northvolt founder, Peter Carlsson, said to engineering.com that he aims at a 25 percent market share in Europe, which means he has to build more gigafactories. Today the world consumes about 250 GWh of batteries. The expectation is that in ten years this number will go up to 3,000 GWh. One GWh represents an investment cost of € 100 million. To reach the objective of a 25 percent European market share, Peter Carlsson has to build 150 GWh over the next ten years.

The most interesting thing about Siemens Digital Industries' solutions is the holistic approach taken to product development and connected manufacturing automation. No one has done it better, and when the battery economy takes over in automotive, the company's intention is to handle the design and manufacturing management.

It's a tough job, but together with Northvolt’s business model and capability to scale, the industrial processes of Siemens’ PLM and automation solutions can achieve this.