‘Glocalization’ and the rise of American large battery manufacturing

On April 12, 1870, a telegram transmitted in England clicked through on a telegraph machine 7,000 miles away in India. It was the first message sent through a telegraph line that Siemens had helped to build, and a seismic advancement in the centuries-long rise of globalization.

I wasn’t alive to cheer on this accomplishment by our founders, obviously. What I?have?witnessed, in this century, is the emergence of digital technologies ushering in a period some have called “globalization on steroids,” an economic reality that remade supply chains and U.S. manufacturing.

In this market environment, supply chain management evolved to being largely guided by one factor – cost – as many American manufacturing activities shifted to other countries. Meanwhile, as the U.S. manufacturing base shrunk, other nations invested heavily in acquiring advanced manufacturing capabilities supporting the production of state-of-the-art, high-tech products.

But just when globalization as we have known it appeared to be on a fast-track, unchanging course, a new future took shape – one comprised of global supply chains supported by strengthened local and regional manufacturing networks:?glocalization.

Looking for evidence? Consider the forecasted growth in electric vehicles. Then think about the national imperative and strong business cases aligning in favor of increasing U.S. production of the large batteries that power them.

The need for batteries and rise of glocalization is a catalyst not only to increase domestic production, but to modernize the U.S. industrial base through digital transformation.

Trends driving glocalization and U.S. battery production

It started with a global pandemic. As the Covid-19 crisis unfolded, supply chains experienced massive disruption that spotlighted the importance of developing local and regional supply networks. These were needed to prevent shortages of critical items in the event of disruption and to rebalance global supply chains.

Second, as the drive to decarbonize society has accelerated, so has consumer demand for and investment in electric vehicles (EVs). All signs point to a future of transportation that’s electric: more than?half of U.S. car sales will be electric by 2030.

And as vehicles transition away from internal combustion engines, every EV produced will require a battery, a reality that has skyrocketed global demand for large batteries well beyond available supply. As EV sales in the United States outpace global sales, the corresponding global demand for EV batteries is projected to more than triple by 2025, according to a?White House report. Thus, without efforts to further increase American manufacturing of these batteries (U.S. manufacturers currently contribute only a small portion of global output), U.S. production capabilities will fall well short of?current?needs.

That leads us to another important trend: National industrial policies and investments are now being aimed at ensuring the U.S. industrial base is equipped to increase domestic production of the large batteries needed for electrified transportation, grid storage and much more. The Bipartisan Infrastructure Law, for example, is investing $3.1 billion to make EV batteries in the United States.

Looking ahead, battery production in the U.S. is estimated to increase from providing only 1 gigawatt hour to nearly?100?by 2026. More than 30 new battery manufacturing plants are planned to be built in the United States.

From these new greenfield sites to brownfield facilities intent on adapting, Siemens – as we now celebrate 175 years as a company – is ready to help all firms lead the way in an advanced manufacturing sector driven by glocalization.

The role of Siemens technology

The telegraph line is just one example of how Siemens has shaped the modern world – influencing every single industrial revolution, transforming communication and transportation, and helping to bring electricity to society.

Today at Siemens, we continue to support the industries and create the infrastructure forming the backbone of economies. Our core capabilities across electrification, automation and digitalization enable customers to drive digital transformation leveraging powerful technologies such as digital twins, edge computing, AI, 3D printing, and software that enables the Industrial Internet of Things. Supply chain management will be made smarter. And we are making all of these technologies available to industries through our digital business platform,?Siemens Xcelerator.?

When it comes to large battery production, Siemens has both the knowledge and end-to-end capabilities – these cover everything from raw material procurement to battery recycling and reuse – to help manufacturers leverage fast-moving opportunities in this short period of time. We also help battery factories avert unplanned downtime by deploying intelligent power systems that increase resiliency, safety, and flexibility and through modern analytics engines driven by IoT sensors, meters, and programmable logic controllers (PLCs).

One key partnership demonstrating the potential is?our work with the battery developer Northvolt. They’re working with us to digitalize their entire value chain – from the design of the battery cell to production and services. The use of software and automation will enable Northvolt to build an advanced battery factory capable of making batteries with a low carbon footprint. Similarly, Siemens is?working with LG Energy Solutions?to deploy digital transformation enabling more intelligent, leaner and cleaner battery production.

Siemens also encourages and enables others to join us in our efforts by providing?financing for large battery manufacturing projects. In Texas, we helped to finance Key Capture Energy’s growing pipeline of battery storage projects. And in San Diego, Siemens and partners advanced the financing for utility-scale energy storage projects built at 9 sites.

Electrification and glocalization are a growth engine for advanced manufacturing

Supply chain management is no longer only a math problem. Thus, finding the lowest-cost sources of material and labor is no longer the equation that needs to be solved. What we need today is?speed to need?– and we have the technology available to do it.

At the same time, shortened supply chains are greener, supporting sustainability goals, and can still be more cost-efficient. And as the nation, cities and companies alike pursue decarbonization, electric vehicles are clearly a vital part of the solution. That makes EV batteries – and expanded U.S. battery production – integral to America’s economy, to our economic competitiveness, and to a more sustainable future.

With the rise of glocalization, a new era for American manufacturing is here. And together, in this decade, we will build it.

Related Links:

• Creating the better battery
• How Siemens USA supports advanced manufacturing