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Charging ahead in Gothenburg: Alelion opens Sweden’s first large-scale lithium-ion battery factory

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Battery plants are tomorrow’s gold mines. The race to power electric vehicles and billions of connected devices means that Sweden is plugging into a thriving new industry. The spotlight is on Gothenburg where Alelion’s new, 500MWh/a factory for lithium-ion battery production will initially focus on the market for forklift trucks and industrial vehicles.

he battery boom – driven by the increasing shift to electric vehicles – is intensifying and expanding well beyond the shores of frontrunning manufacturing countries such as South Korea, Japan, the U.S. and China.

To find a shining example of how battery production is changing the face of manufacturing, look no further than Gothenburg, Sweden, a region currently bustling with activity in the field of electromobility.

In addition to the cross-disciplinary research of initiatives such as the Swedish Electromobility Centre, Volvo Car Group’s former maintenance premises in Torslanda, located 10 km from downtown Gothenburg, are undergoing a full re-construction. Here, the company Alelion Energy Systems is gearing up to open Sweden’s first, large-scale lithium-ion battery production plant which is expected to reach full capacity by the end of 2018. 

According to Daniel Troedsson, CEO at Alelion, the 4,000 sqm, 500MWh/a capacity plant will be equipped with a highly automated and modular production line. His goal is to meet the rapidly growing demand for next generation lithium-ion batteries in electric forklifts and industrial vehicles.

This niche segment alone, he says, is valued at EUR 5 billion worldwide and, more importantly, is “ripe for disruption”.

“About 95 per cent of the electric forklifts and industrial vehicles being used today for materials handling, are run on lead-acid batteries. This is an outdated, inefficient and dirty technology compared to lithium-ion. Our growth opportunities are huge,” he explains.

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Alelion leads the way 

Sweden’s future in battery production has been a hotly discussed topic. In 2017, Northvolt – the company founded by former Tesla Motors executive Peter Carlsson – announced its decision to establish Europe’s largest battery factory in the northern municipality of Skellefteå. This multi-billion euro project is expected to get underway in 2020.

While Northvolt’s plans made international headlines, Daniel Troedsson was working quietly behind the scenes on his considerably smaller, yet groundbreaking investment in lithium-ion battery manufacturing – which now beats Northvolt to the chase in Sweden.

“Sweden is well-positioned to compete in the battery industry which I believe will grow astronomically,” he continues. “The country’s combination of low cost renewable energy, access to raw materials and a large customer base makes it a sweet spot not just for us, but for different battery specialists.”

With an order intake jumping up to 400 per cent in the past two years, Alelion has already tasted success in its industrial vehicles niche where it counts Toyota Materials Handling and Jungheinrich as key customers. But Troedsson doesn’t rule out the possibility of expanding the product range for new application areas.  

In fact, Alelion’s recent acquisition of Caterva in Germany is a strategic step toward building a larger portfolio, in an investment that adds competence in solar power storage systems with 20 new employees based in Munich. 

Gothenburg – a vibrant electromobility hub

Alelion’s choice of location for its battery plant was a “no brainer” says Troedsson. The availability of highly skilled engineers and close proximity to customers, as well as Gothenburg’s well-connected port were just a few main drivers.

Sweden’s west coast is also a cluster for the automotive sector where collaborations between manufacturers, academia and public institutions are pushing the boundaries in electric vehicle research. As a partner in the Swedish Electromobility Centre, Alelion helps to set criteria for testing cutting-edge battery cells and solutions.

“The rise of lithium-ion batteries is still in the early stages. New technologies and business models will emerge. I am convinced that the joint investments taking place in Gothenburg can advance Europe’s efforts to improve performance and environmental sustainability of these batteries,” says Troedsson.

Another promising initiative in Gothenburg is Lindholmen Science Park which, as of 2018, will host a new test bed for electromobility, bringing together partners such as Volvo Cars, Chalmers University of Technology, Scania and the Geely Group-owned automotive development centre CEVT (China Euro Vehicle Technology). Approximately EUR 100 million will be dedicated until 2023 to testing of components, transmissions, chassis, energy efficient systems and data analytics for electric vehicles. 

Batteries get greener

According to the World Economic Forum, the global battery market will be worth USD 100 billion by 2025. Moreover, the forecast is that 95 per cent of the batteries powering electric vehicles will be based on the lithium-ion technology. 

“Lithium-ion batteries are about four times more expensive to buy. At the same time, our calculations show that investments are quickly offset by lower energy consumption, longer service life and reduced maintenance costs.”

In one such calculation, Troedsson outlines a scenario where six electric forklifts are operated using lithium-ion batteries instead of conventional lead-acid, which results in a EUR 172,000 cost saving over five years. But that’s not all.

“Then you have the environmental benefits on top,” he adds. “With lithium-ion batteries you eliminate battery changes that release harmful gases. You also get an energy reduction of 80,000 kWh, 80 kg less metals required per year and 50,000 tons less CO2 released into the atmosphere. And that’s just for six forklifts.”

To remain at the forefront of innovation, Alelion sources its battery cells from 15 different sub-suppliers worldwide which combine 4,000 active researchers.

On a final note, Troedsson says:

“I often say to customers half-jokingly, ‘if you’re fine with polluting the environment and if you’ve got tons of money, then continue with lead-acid. But if that’s not the case, you should immediately switch over to lithium-ion batteries.”

Alelion’s new factory, which brings the company’s number of employees to 70, not only marks Sweden’s debut in the battery race. Material handlers, it seems, are now getting fully charged up over the prospect of a technology shift.

Read more: www.alelion.com