Technology-smart industrial policy for batteries: Insights from intra-technology knowledge flow analysis

• In Event: Innovation, competition, and tariffs: insights from EV value chains across batteries, vehicles, and charging infrastructure

Abstract

Electrification is at the core of the strategy to decarbonize transport and the broader energy sector, with lithium-ion liquid electrolyte (Li-ion) batteries emerging as the foundational enabling technology. Li-ion batteries constitute a subset of metal-ion liquid electrolyte battery technology, a technology that also encompasses, for example, sodium-ion (Na-ion) and potassium-ion (K-ion) battery chemistries. Each of these chemistries promises different socio-techno-economic characteristics (e.g., ecological impact, energy density, supply security) across various applications while sharing design and manufacturing knowledge. Given the projected expansion of the global battery market, governments are increasingly concerned with cultivating a domestic industry to ensure economic competitiveness and security of supply. The design of industrial and innovation policy to boost domestic economic competitiveness, therefore, needs to decide on what level of specificity to target batteries (chemistry-specific or broader). This raises critical questions regarding the extent to which knowledge transcends each chemistry, and the distinct knowledge base required to innovate in each chemistry. However, existing literature has primarily explored inter-sectoral or inter-technological knowledge flows, offering little guidance on how knowledge accumulates within and across the chemistries that constitute the technology.

In this paper, we develop a novel method of mapping knowledge flows within the metal-ion liquid electrolyte battery technology based on patent citation network analysis of the core components (cathode, anode) that differentiate the chemistries. Using an original patent dataset consisting of over 82,000 patent families, we map the evolution of knowledge communities that define the core components of the commercialized chemistries. We categorize the knowledge flows into product and process innovations. We find that product and process knowledge for the Li-ion core components are continuously drawn from other components of the chemistry that are experiencing simultaneous innovation efforts. When we extend the analysis to other chemistries, exceptions emerge. In the case of a few core components of Na-ion, initial development relies on Li-ion component knowledge, and sustained innovation requires the development of an independent knowledge base.

These results yield two key insights about the design of industrial policy for establishing a domestic battery industry: 1) Supporting selected emerging chemistries can create entry opportunities, however, innovation capabilities in the current generation of components are necessary to overcome barriers to entry and lock-in into a given chemistry. This makes leapfrogging difficult for metal-ion batteries. 2) Diversification across multiple chemistry families enhances supply security but generally requires foundational knowledge of Li-ion chemistry. In cases of limited knowledge flows, supporting a new chemistry requires targeted investment to help it travel down its learning curve, while forgoing the benefits of learning spillovers from the dominant chemistries that are improving simultaneously. The results of our study directly inform technology-smart industrial policy for cultivating a domestic battery industry.

Authors

• Anurag Panda, ETH Zurich
  Presenting Author

• André Hemmelder
  Non-Presenting Co-Author

• Tobias S Schmidt, ETH Zurich
  Non-Presenting Co-Author