Northvolt, Siemens and “A Goddamn Good Digital Twin”
Verdi Ogewell posted on February 28, 2020 |
PLM and smart factories characterized by closed-loop manufacturing will win the battery battle.

As the world moves away from gasoline and diesel-powered vehicles towards electric, there are few things that sends shivers up the spines of European automotive executives more than the current one-sided dependence of Asian battery manufacturers.

These European automotive companies don’t want the progress of this key electric vehicle technology to depend solely on decisions made in remote boardrooms where the possibility of control and influence is low. During the next phase, limiting factors such as technology development, pricing, trade wars, Brexit, raw material supply and others will affect output and price formation on the vehicle side. In this situation, the question becomes how to take control?

It’s clear that competition, partnerships and the ability to invent the future can change the picture. This is why we see a number of initiatives related to battery production in Europe.

PLM and smart factories characterized by closed-loop manufacturing will become the trump cards in this battery battle. Peter Carlsson, ex-Tesla man and now CEO and founder of the battery company Northvolt, has taken the lead in this with his initiative to build the world’s most modernand Europe’s largestbattery plant. Siemens Digital Industries and ABB will play key roles in terms of PLM and IT support, manufacturing automation and plant electrification.

"Europe will have at least ten gigafactories in a few years," said Carlsson, during Siemens’ “Beyond Industry 4.0” event in Stockholm, Sweden. His gigafactory projectbased in Sweden, but with branches in Germany and Polandis one of the strong contenders in the battery battle, and one that has come the furthest. The Northvolt gigafactory is a costly project demanding investments in the neighborhood of $4.5 billion. But between partners and coming customers including Volkswagen, BMW, Scania, Siemens and ABB, the financial resources are secured and the gigafactory is planned to be in full production by 2023.  

“A GODDAMN GOOD DIGITAL TWIN.” Peter Carlsson (left), CEO of the battery manufacturer Northvolt, and Ulf Troedsson, executive advisor at Siemens Nordics. The connection between these companies makes it clear that Siemens will become a technology partner. The technical and commercial partnership includes two main areas of cooperation. First is Siemens’ product range within the Xelerator PLM portfolio (NX, Teamcenter, Tecnomatix and more) and Siemens OpCenter on the OT side. Second is that Siemens intends to purchase batteries from Northvolt as soon as the large-scale production facility is completed 2023. During an event in Stockholm, Sweden, Peter Carlsson noted that the ongoing European battery factory battle is a tough arena where demand is soon expected to go through the roof. In ten years, he aims to take a 25-percent European market share. But this is a costly bet, because every GWh is surrounded by investments of around $100 million and in ten years the predicted need globally lies on the 3,000 GWh level. This means that Carlsson’s Northvolt will have to invest for a total of 150 GWh capacity. How do you do that in an environment that is extremely complex in terms of product development and manufacturing building blocks? “You build a goddamn good digital twin,” Peter Carlsson concluded.

“A GODDAMN GOOD DIGITAL TWIN.” Peter Carlsson (left), CEO of the battery manufacturer Northvolt, and Ulf Troedsson, executive advisor at Siemens Nordics. The connection between these companies makes it clear that Siemens will become a technology partner. The technical and commercial partnership includes two main areas of cooperation. First is Siemens’ product range within the Xcelerator PLM portfolio (NX, Teamcenter, Tecnomatix and more) and Siemens OpCenter on the OT side. Second is that Siemens intends to purchase batteries from Northvolt as soon as the large-scale production facility is completed 2023. 

During an event in Stockholm, Sweden, Peter Carlsson noted that the ongoing European battery factory battle is a tough arena where demand is soon expected to go through the roof. In ten years, he aims to take a 25-percent European market share. But this is a costly bet, because every GWh is surrounded by investments of around $100 million and in ten years the predicted need globally lies on the 3,000 GWh level. This means that Carlsson’s Northvolt will have to invest for a total of 150 GWh capacity. How do you do that in an environment that is extremely complex in terms of product development and manufacturing building blocks? “You build a goddamn good digital twin,” Peter Carlsson concluded.

When the first plant, Northvolt One, in Skellefteå, Sweden, is completed it will consume 2 percent of the country's total energy production.

“Still, we’re building the most modern, environmentally friendly and largest battery factory in Europe,” Carlsson added, pointing at closed-loop manufacturing (CLM) methods as a mean to reach these ambitious goals. But, what does the CLM term stand for? How is PLM involved? What are the roles of Siemens and ABB, and how will they come into play in Peter Carlsson’s Northvolt project?

Closed-loop manufacturing is tantamount to closing the product realization circle, with the digital twin as the central concept carrier and where the processes, from development to physical manufacturing, are held together using digital threads and tightly integrated, real-time based PLM/IT and Operative Technology (OT) systems. At the end of the day, this is about flexible “beyond Industry 4.0 solutions”—from digital product ideation, definition and design to digitally-built manufacturing management on the shop floor, which then transitions into the physical production processes.

With the digital twin at the center, everything is possible to simulate at every stage. This means that you are able to digitally make sure that things work as intended–both in terms of the product and the production–before moving on to the physical equivalents, where any changes or detected errors become expensive to fix.

Since this is key to Northvolt’s bet, I will take a closer look at CML before moving on to the case story.

Simplicity on the Surface – Complexity in the Depth

Closed-loop manufacturing may sound “super cutting edge” and complex, and in some respects, it is. On the other hand, this thinking is already translated into real solutions in Siemens’ world, and at present many signs point to the fact that this way of organizing product realization will revolutionize the world's manufacturing industries. 

On the surface, the point is to create manageability and, as far as possible, simplicity. However, complex capabilities at the depth where most of the product realization process happens are controlled and run by automated, interconnected and often cloud-based system solutions where Artificial Intelligence (AI) plays a leading role.

“Everything is relative in some way,” summed up Mats Friberg, the head of Siemens Digital Industries’ Nordic PLM movement. “Closed-loop manufacturing concepts are nothing you produce overnight, but today there are both technology and methodology that can get you started. Everyone also knows today that development is going very fast and anyone who is proactive can already help to create really sharp competitiveness with CLM procedural arrangements. It's about getting started.”

VARIANT MANAGEMENT REQUIREMENTS CHANGE EVERYTHING. Siemens Digital Industries COO, Jan Mrosik, discussed the company's Digital Enterprise portfolio from the stage in Stockholm. Among other things, he asserted that future production will be characterized by

VARIANT MANAGEMENT REQUIREMENTS CHANGE EVERYTHING. Siemens Digital Industries COO, Jan Mrosik, discussed the company's Digital Enterprise portfolio from the stage in Stockholm. Among other things, he asserted that future production will be characterized by "consumer-centricity." Customers want individually designed products, which place enormous demands on production facilities, production equipment and capacity for variant management. 

"At the same time, consumers expect to have their products delivered quickly, and in addition to this, there are increasing demands for environmentally friendly production and distribution," he said. He added that this is a situation where automation levels must be high, and where there must be processes with machines controlled by AI and solutions that make them increasingly capable of making their own, autonomous decisions to produce the huge amount of variations the market requires.

Siemens Invested More than $10 Billion on CLM

“Getting started is important, absolutely; but let us not forget that implemented and working CLM concepts exist as of today,” Siemens COO Jan Mrosik clarified in his keynote.

“CLM–which, in most perspectives, touches on the Industry 4.0 concept–is already a reality in several advanced industrial projects,” he said, and offered the example of Siemens’ own famous electronics factory in Amberg, Germany.

“An exciting aspect around what we can put on the table when it comes to Industry 4.0-related systems is that the large Siemens group, with a total of 385,000 employees, has a number of manufacturing units in everything from high-tech electronics and energy devices to advanced medical and industrial machines,” Mrosik said. “Everything we produce in terms of digital development and automation solutions we can test ourselves in our own plants. This means that what comes out of SDI in the form of digital product development tools is always industrially proven. Things work, in short.”

He went on to say that the company has invested tremendous amounts of money and development resources to create solutions that "transform data into value from a holistic point of view."

On one hand, it’s about the product development tools in the Xcelerator portfolio, such as NX CAD, Simcenter (CAE) and Teamcenter as the cPDm backbone with the Mendix low code platform on top. On the other hand, it’s about the factory and manufacturing-related tools such as Tecnomatix, Mindsphere and OpCenter. Everything is interconnected and data can flow from the digital environments to the physical, and back.

Siemens virtual commissioning is an excellent example of what can be done within the framework of the company’s holistic approach. The German PLM developer has invested heavily in its virtual commissioning solutions. They have created the necessary APIs between the virtual and the physical machine worlds and have already developed the entrance code that—based on what has been done in the product development phase—can shoot directly into PLC’s to simulate, manage and run equipment on the shop floor. This took Siemens years to develop and refine, and therefore poses a tough challenge for any combination of players on the market who want to compete in the cutting-edge world of PLM and beyond.

“Gathering IT/PLM and OT is resource-intensive development work. For example, we have bought 35 companies for more than $10 billion. We integrate these in a way that combines the virtual and physical worlds, back and forth in coherent loops: design, simulate, optimize, go to manufacturing, simulate again, optimize again and produce flawlessly. This is the idea in our CLM set up,” Mrosik commented.

SOFTWARE IS IN A KEY ROLE. Siemens IoT and IIoT solution, MindSphere, plays an important role in the company's Digital Enterprise solutions. The program captures data from machines in production, analyzes, and can provide feedback with actions. In addition, you can connect the software with the new low-code platform Mendix, which makes it easy to build individually tailored apps linked to production and product development management, thereby capturing the digital thread. The connections can easily be set up in order to create your own custom dashboard with the help of ‘drag-and-drop’ and a plethora of ready-made APIs. You can connect to all of Siemens’ own software, and of course also to other developers' solutions, such as SAP or ANSYS, for example.
SOFTWARE IS IN A KEY ROLE. Siemens IoT and IIoT solution, MindSphere, plays an important role in the company's Digital Enterprise solutions. The program captures data from machines in production, analyzes, and can provide feedback with actions. In addition, you can connect the software with the new low-code platform Mendix, which makes it easy to build individually tailored apps linked to production and product development management, thereby capturing the digital thread. The connections can easily be set up in order to create your own custom dashboard with the help of ‘drag-and-drop’ and a plethora of ready-made APIs. You can connect to all of Siemens’ own software, and of course also to other developers' solutions, such as SAP or ANSYS, for example.

The Crucial Role of the Digital Twin

This is where the digital twin comes in and plays a leading role. In several ways, the digital twin is the smallest common denominator in a process that starts with product development, leads into the factory floor and then out of the factory.

Siemens divides the idea of ​​digital twins into three parts:

  • The twin of the product
  • The twin of the production units
  • The twin for the product in the user's hands, with feedback abilities to the PLM system twin. For example, one should be able to simulate a pump in operation to optimize flows—or if something breaks or needs improvement, to be able to go back to the PLM system with field operation data in order to use this data to correct and improve the product.

“Everything can be connected via IoT and IIoT, which in Siemens’ case goes through our MindSphere software,” explained Mrosik, once again reminding us of the importance of simulation capabilities. “In the digital enterprise, you simulate. Things don't work as you intended? Improve and optimize by going back and simulating again. It’s all about quick loops, which in this context symbolically doesn’t cost anything. That is an important point of the CLM idea.”

The results this can deliver are impressive, continued Mrosik, pointing to several real Siemens-related cases, which are ongoing:

  • Dulux, Australia's largest color manufacturer. Using Siemens tools, they were able to reduce the batch sizes from the 5,000 liters that their old manufacturing model demanded, to more realistic 100-liter batches. Additionally, they could do the process loops eight times faster.
  • Chinese vehicle manufacturer Mino. Via MindSphere and a digital twin of the production line, Mino reduced the time for engineering work by one-third, and cut the "commissioning time"—the time needed to start the assembly in a production line—from more than two months to less than one. To save one month in running a complex unit like a car factory represents a lot of money, and furthermore proves the value of what new CLM-related solutions can mean.

This list of good examples could be made longer—such as including bearings manufacturer SKF or pump developer Grundfoss—but it all boils down to faster product realization processes, higher quality, remote monitoring and control, and how these gains in turn are connected to radically improved financial performance.

As a side note, it should be mentioned that Siemens’ MindSphere software is identified as one of the world's four leading solutions, in the analyst Forrester's latest so-called “IIoT Wave.”

INTENSE INVESTMENT. Peter Carlsson, the Northvolt founder and CEO, told us from the stage about this gigantic project, which is Sweden's single largest industrial project ever. In terms of money, we’re talking about a $4.5 billion venture.
INTENSE INVESTMENT. Peter Carlsson, the Northvolt founder and CEO, told us from the stage about this gigantic project, which is Sweden's single largest industrial project ever. In terms of money, we’re talking about a $4.5 billion venture.

The CLM Case Book: Peter Carlsson's Northvolt Battery Project

The battery company Northvolt is one of the companies Jan Mrosik pointed to as an outstanding example of CLM. Right now, Northvolt is in full swing developing its production apparatus according to a closed-loop manufacturing set-up. When Northvolt’s founder Peter Carlsson took the stage at the “Beyond Industry 4.0” event, the project appeared in all its grandeur.

Northvolt’s battery factory is a $4.5 billion investment that will lead to Europe's largest, the world's most modern and most environmentally sustainable, battery production. Furthermore, this project is perhaps Sweden's largest individual industrial project to date. Once the new factory in Skellefteå is finished, Northvolt One will consume two percent of Sweden's total energy production.

Clearly, it is quite energy-intensive to produce and charge lithium-ion batteries.

However, this project includes more than this single production plant. The Northvolt group has a nearly-completed up-and-running R&D Lab in Västerås, Sweden; a planned factory for Volkswagen, Northvolt Zwei, located in German Salzgitten; and a plant for the manufacture of system-configured battery cell combinations in Polish Gdansk, Northvolt Battery System Jeden.

The Västerås R&D Lab produces 400 MWh, which is a very small production compared to what the Skellefteå plant will deliver.

“It has been a very valuable $105 million ‘training ground’ for us,” says Carlsson. “Equipment from all over the world, different systems, integrators and other parts are not easy to get in place and up and running. It is in its own right the most advanced related R&D lab in Europe. So, this meant a lot to build great experiences for the big Skellefteå plant, which will be our most important exam.”

An example of the interface in Siemens Battery Design Studio during a connected simulation session in STAR-CCM+.
An example of the interface in Siemens Battery Design Studio during a connected simulation session in STAR-CCM+.

Siemens Has a Leading Role, But ABB is There Too

In the product development and manufacturing automation tracks, Northvolt works with software and hardware mainly from Siemens. However, ABB is also heavily involved in areas such as plant electrification and some manufacturing process areas, including solutions from the Ability family.

A look at the arsenal of tools, however, reveals that Siemens plays a dominating role on the product development side. Applications such as Siemens Teamcenter (cPDm-backbone), NX (CAD), Battery Design Studio, Simcenter Structures/STAR-CCM+ (CAE and flow simulation) and Amesim (1D simulation) will all be used. The production side includes software such as Tecnomatix for plant simulation.

The factory automation solutions side also reveals a massive Siemens presence. For example, we can find Siemens’ automation system, Simatic, which includes control system, integration and safety solutions, while motor motion control of servos is handled in Siemens’ Simotion.

When it comes to ABB's role, their concerns are things such as process automation and the electrification of the plants.

Peter Carlsson did not include in his speech on-stage what “the feast” would cost, but in a previous press release from 2017, the total investment has been set at $4.5 billion.  This includes Northvolt One, the Northvolt Battery Systems plant in Gdansk, Poland, and the R&D lab in Västerås.

“Boardroom Decisions in Korea and China are Too Uncertain,” According to Volkswagen

In Germany, an additional battery factory project has also been initiated—Northvolt Zwei—which will supply the Volkswagen Group with batteries. This will be built on blueprints, or digital twins, from the Skellefteå unit as construction progresses there. However, processes, application structures, production infrastructure and other things will also be copied.

100 SOCCER FIELDS. The Northvolt One factory in Skellefteå, as it will appear when it’s ready. The factory building covers an area equivalent of 100 soccer fields in size. The 2023 production will be sufficient for between 250,000 and 300,000 cars. In term of energy, the gigafactory will consume two percent of Sweden’s total energy production.
100 SOCCER FIELDS. The Northvolt One factory in Skellefteå, as it will appear when it’s ready. The factory building covers an area equivalent of 100 soccer fields in size. The 2023 production will be sufficient for between 250,000 and 300,000 cars. In term of energy, the gigafactory will consume two percent of Sweden’s total energy production.

“The first 16 GWh production of batteries in Skellefteå will reach between 250,000 and 300,000 cars,” Peter Carlsson said. Regarding the product development, he added that, "digital twins are a heavy feature in the factory building, as well.  These digital twins will then form ‘factory copies’ to be used when building, equipping and operating the Northvolt Zwei plant in Germany, which will primarily supply the Volkswagen Group with batteries for their electric vehicles.”

Carlsson added that Volkswagen approached him a year ago, and explained that because they were going all-in on electric vehicles, they needed a dedicated battery factory.

“The switch is irreversible,” VW said, and asserted that everything that comes with a transition like this means dramatic changes—for example, when it comes to the supply chain.

In other contexts, Volkswagen executives have made it clear that they do not find the circumstances—that is, relying on unilateral decisions made in remote boardrooms in Korea and China—particularly attractive; even if they are careful not to express this publicly. "It's too uncertain," they say.  So far, Volkswagen has invested € 1 billion (equivalent to $1.1 billion) in battery factory ventures. The Northvolt Zwei plant is one of them.

This factory will be up and running in 2024.

The Idea of the Gigafactory is Born

It is clear from the reasoning discussed above that the idea of ​​starting a gigafactory for battery production is based on deep insights into how need and demand will develop when the transition to electric vehicles is realized. But having the need is one thing; to develop sharp solutions is quite another. From the stage in Stockholm, Carlsson shared his history as one of the senior members within Elon Musk's Tesla organization—which of course is an excellent background for making a venture.

"One of the insights that became very clear when we counted on new electric car models was that not even the world's total battery production in certain segments would suffice to meet the needs that new models would require," he said.

In light of this, it’s easy to see how the first seeds of the idea for a new state-of-the-art and environmentally friendly production unit took form.

So, what do you do? Realize that the limitations in production capacity will put a stop to the project, bury it and instead work with what you have?

For super-entrepreneur Peter Carlsson, this was no alternative. He analyzed the situation, pondered solutions and when the time was ripe, he took on the challenges which have led to today’s gigantic Northvolt project.

Of course, many of the details of the technical and commercial arrangements are business secrets and not public ones. However, a summary of what Carlsson said on the stage in Stockholm offers a good picture of the basic content.

There are three primary pieces:

  • The need to push down production costs.
  • Creating the technical and energy availability-related conditions necessary to meet the volumes, environmental requirements and, of course, also reduce production costs properly.
  • Financing the project.

“We needed to reduce the price of the batteries to half of the ‘normal’ manufacturing cost. This meant a need to think in new terms. For example, how could we change the value chain and do a possible vertical integration with more rational processes included, thereby reaching a lower cost of manufacturing? Secondly, what would be the absolute, most optimal scale if you take all your different investment resources and judge them from an efficiency angle and work out ways to optimize that too?” Carlsson said.

The conclusive answer was in line with an economy of scale concept: it turned out that factories four to ten times bigger than those currently existing would make it possible to “swallow” the challenges they had defined.

Environmental Demands Drive the Transition

“We started to look in Europe,” said Carlsson, explaining that environmental demands, such as lower or zero emissions of CO2, had a lot to do with why they decided to bet on this region. The North European (Sweden, Norway, Iceland and Finland) energy prices were also a key point.

He and his coworkers predicted a dramatic growth in demand for batteries as a result of the zero greenhouse gas emission trend—not only in terms of the dismantling of coal and oil-fired electric power generation, but also the transition to electric vehicles on the transport and passenger car side of the industry, which could really result in a market boost for battery solutions.

In the light of this, and the fact that Europe has a lack of volume battery producers, Carlsson started his journey.

“It’s not an easy production to set up. It is as close to semiconductor manufacturing as you can get. Or even better: imagine the combination of a chemical factory and a semiconductor factory. This is how complicated it is,” he commented. “This industry is really a scale industry and it’s hard to build it step-by-step. In order to drive cost efficiency, you need to almost instantly scale up.”

Siemens is Both a Technology Partner and a Customer

Given Carlsson and his crew’s new and more extensive processes, Siemens’ ideas and solutions around closed-loop manufacturing fit perfectly. During 2017, they signed an interesting agreement containing not only a technological partnership, but also product development cooperation and commercial agreements:

  • On the technology side, Northvolt will utilize Siemens’ product range, which as noted above includes everything from design software such as NX CAD and the PLM suite Teamcenter, manufacturing planning and automation solutions, including industrial communications networks and cloud solutions.
  • The second point is that Siemens intends to purchase batteries from Northvolt as soon as the large-scale production facility is completed, and that Siemens is also exploring opportunities for development cooperation.

“European industry is moving rapidly towards increased electrification. With world-class expertise in electrification, automation and digitalization, Siemens becomes a valuable technical partner, supplier and customer to Northvolt in this move. As soon as we start the large-scale production, we intend to deliver the greenest lithium-ion batteries in the world,” commented Carlsson. This is the case example connected with his presentation at the "Beyond Industry 4.0" event.

It’s not unreasonable to assume that Peter Carlsson and his team will be able to take this project to success. Siemens and ABB are great partners, and according to some sources, Northvolt has already secured battery delivery contracts worth more than $10 billion.

VOLKSWAGEN’S MEB PLATFORM. German car manufacturer Volkswagen’s bet on electrical vehicles is not news. The business plan “Together - Strategy 2025” included 30 new electric-powered car models until 2025. Central to the electric car investment is the new platform MEB, which is tailor-made for electric power. MEB is a platform that has been talked about in presentations of concepts like I.D. Concept, I.D. Buzz, I.D. Crozz and I.D. Vizzion. These VW plans clarify and explain the need for a productive battery factory capacity. Northvolt is a key partner in this, along with the plant that VW will build together with Peter Carlsson’s company in Germany (Northvolt Zwei).
VOLKSWAGEN’S MEB PLATFORM. German car manufacturer Volkswagen’s bet on electrical vehicles is not news. The business plan “Together - Strategy 2025” included 30 new electric-powered car models until 2025. Central to the electric car investment is the new platform MEB, which is tailor-made for electric power. MEB is a platform that has been talked about in presentations of concepts like I.D. Concept, I.D. Buzz, I.D. Crozz and I.D. Vizzion. These VW plans clarify and explain the need for a productive battery factory capacity. Northvolt is a key partner in this, along with the plant that VW will build together with Peter Carlsson’s company in Germany (Northvolt Zwei).

Obstacles That Need to Be Overcome

But there are obstacles that must be overcome. The car industry in Europe has initiated its transition to hybrid or full-electric line-ups, and have also started to think in platforms. Volkswagen’s MEB platform is a good example, starting with the ID3 model. Ultimately, we will see a whole range of midrange products being rolled out. This in turn indicate the need for a potential six gigafactories to supply coming models on that platform in five to six years.

“Related to the automotive industry we can see two or more electrical platform principles right now: basically, a low ‘skateboard’ for traditional cars and a high ‘skateboard’ for SUV’,” Carlsson said. “On each respective ‘skateboard’ they want to have us fitting in as much energy as there possibly is room for in the powertrain structure. This means that we can’t just produce standardized battery solutions, but have to adapt different solutions to different platforms and variations within the range of those platforms, which really makes the production more complicated.”

Another problem is recruiting local know-how. “It simply doesn’t exist,” asserts Carlsson. So far, they have recruited this competence from Asia—mainly Korea and Japan—but in the long run this must be solved both locally and in other parts of the world. As of today, Northvolt employs more than 50 different nationalities.

Jan Mrosik’s Big Smile

The Northvolt founder is an ambitious man. He aims at a 25-percent market share in Europe, which means that he has to build more gigafactories. Today the world consumes about 200 GWh of batteries. The expectation is that in ten years this number will go up to 3,000 GWh. One GWh represents an investment cost of €100 million. To reach the objective of a 25-percent European market share, Peter Carlsson has to build 150 GWh over the next ten years.

“Meaning that we need to be super good at building manufacturing blocks of highly complicated set-ups. How do you do that? Well, you build a goddamn good digital twin,” Carlsson concluded.

And Siemens’ COO, Jan Mrosik, fired off a big smile. It’s not hard to understand why.


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