Carmakers fighting for battery supply need ways to track EV ingredients. A new kind of 'passport' could be the answer.
Car companies are desperate for EV batteries — but they need to be sourced and made sustainably.
A "battery passport" that traces everything from a battery's mining to recycling could help.
Experts say using the battery passport could separate auto-industry winners from losers.
Car companies across the globe are scrambling for battery supplies — and on top of critical materials shortages, they're facing governmental regulations that restrict how and where they get what they need to turn away from the internal-combustion engine.
That challenge could be alleviated by the "battery passport," a new way of documenting where all the bits of a battery come from and where they're going. The idea comes from the Global Battery Alliance, a public-private partnership formed at the World Economic Forum in 2017.
Experts say even if having this passport isn't a requirement for those building electric vehicles and their batteries, it could be a must-have for automakers looking to stay on top of a fast-growing market.
That's because the pressure is on to ensure EV production is done responsibly. For one thing, lithium, nickel, cobalt, and other key metals have long come from places with shaky human-rights records and murky carbon footprints.
For another, this summer's Inflation Reduction Act reserves critical EV tax credits for automakers that use materials sourced domestically or from countries with which the US has free-trade agreements. In Europe, newer regulations have increased scrutiny of battery sustainability and safety.
"There are all these hoops to jump through," Pavel Molchanov, a Raymond James analyst, said.
The battery passport could make it easier to get through them.
Where has your battery been?
The Global Battery Alliance, composed of various public stakeholders and car companies, battery-cell makers, and mining firms, introduced the battery-passport concept in 2020 and plans to launch a proof of concept early next year.
The idea is to trace a battery's journey from raw-material mining to processing to cell manufacturing, all the way to recycling or second-life use, to help battery makers and car companies meet production goals and comply with sustainability guidelines.
The passport comes in the form of a "digital twin" that pulls together three components: technical data about a battery, like its manufacturing history or its recycled content; tracking of battery materials used like lithium, manganese, graphite, and cobalt; and the battery's sustainability-performance indicators, related to its carbon footprint and any human-rights issues.
"Given especially some of the regulations and the legislation that have been passed in the US recently, and relating to ethical sourcing and second life of batteries and tracking the minerals and materials as they enter the waste stream," Peter Maithel, an automotive-industry principal analyst at Infor, said, "these battery passports are going to become important."
Early adopters brewing
One challenge, though, is getting companies to opt in to something that might require releasing confidential information or technical competitive advantages. But some are jumping on the opportunity as a chance to get a leg up.
Ford, alongside the digital-transparency company Everledger and the recyclers Cirba Solutions and Li-Cycle, is piloting a passport to track its batteries' life cycle with artificial intelligence and blockchain tech. Meanwhile, startups like Circulor are providing tech that tracks materials, emissions, and compliance-related needs for a given material.
"This is going to become a regulatory requirement one way or the other," Inga Petersen, the executive director of the alliance, said. "Bringing transparency into the supply chain is step one."
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