Australia has all the ingredients to become a renewable manufacturing superpower, but some startups still see their future overseas.
- Battery material start-up Sicona is expanding overseas to capitalise on the EV boom
- The company says it is difficult to grow in Australia, where there is no mature battery manufacturing industry
- The company is calling for the federal government to offer competitive incentives to help start-ups remain in Australia
Australia currently supplies 60 per cent of the world’s lithium and boasts bountiful deposits of almost every raw material needed to create lithium-ion batteries.
But the majority of those materials are destined for International markets.
Sicona Battery Technologies is a startup based in the Illawarra region of New South Wales and hopes to carve out a slice of the renewable pie.
The company produces a silicon composite material that dramatically improves the performance of the fuel source powering the electric vehicle (EV) revolution.
“The materials that we are commercialising helps [lithium] batteries become better, effectively,” Sicona chief executive Christiaan Jordaan said.
“It has the ability to increase the range of an electric vehicle, reduce the up-front cost … and charge the battery faster.”
The composite material is expected to grow into a $55-billion-a-year industry.
It is just a small part of the global lithium battery industry, which is forecast to be worth half a trillion dollars a year by 2040.
“It is a fast-growing, enormous opportunity, and an enormous market,” Mr Jordaan said.
“It is the new industrial revolution, if you will.”
Sicona is commercialising technology that has been developed at the University of Wollongong (UOW) and is operating a pilot plant out of a warehouse in the Illawarra.
The company’s founders have met with major battery manufacturers and are convinced that their future growth lies overseas.
“The real big opportunity, fortunately, and unfortunately, at the moment, is in the US market,” Mr Jordaan said.
“In the new year, for commercial-scale manufacturing, we’ll be pushing into the US market in a big way and setting up over there.”
Big opportunities overseas
The global race to build lithium battery manufacturing capacity is heating up.
China currently leads the world with about 80 per cent of the world’s capacity, but other countries are spending big to bridge the gap.
The US has committed $2.8 billion to grow its domestic EV manufacturing industry.
The funding is targeted at the whole supply chain, from raw materials to supporting technologies, and it is enticing companies to move to the US.
“Governments like the US and Europe are looking at incentivising companies like Sicona to set up manufacturing there as opposed to doing it here in Australia,” Mr Jordaan said.
“The Australian government needs to incentivise local manufacturing as other governments like the US … there is a lot of protectionist trade policy being implemented.
“Australia is so blessed in all the raw materials and the resources, has everything else in terms of the skill sets to manufacture batteries and battery materials domestically, we just need to capture more of that value.”
Long-term bipartisan support
The director of the Energy Futures Network at UOW Ty Christopher has helped grow startups from the campus to the commercial lab.
He has also seen those companies leave Australia for greener pastures abroad.
“The reality is it is a globally competitive environment, for high technology and for clean energy,” Mr Christopher said.
“As we sit here today, nearly all this technology and the actual physical equipment, has to be imported and I think that’s a great shame for our nation.
“We need to be providing the same or greater incentives for the technology that’s developed here in Australia to stay here in Australia.”
Australia’s first commercial lithium battery plant is on track to be up and running in the NSW Hunter region.
It will produce batteries to power homes, businesses and heavy vehicles, but will not be making cells for passenger electric vehicles.
Mr Christopher said emerging Australian businesses were coming up against fierce international competition and need consistent public support spanning multiple governments.
“This is a challenge that requires a long-term and invested commitment from all levels of government,” he said.
“It requires that commitment to run through several election cycles, which is always a challenge.”