: MU Ionic Solutions, a leading battery material supplier, is expanding production to meet the soaring demand for lithium-ion batteries (LIBs), particularly in the electric vehicle (EV) market. Their goal is to secure 25% of global LIB demand by 2028. Additionally, the company is actively involved in recycling initiatives to promote sustainability in the battery industry. As EVs and green energy gain traction, MU Ionic Solutions sees opportunities for synergy in Japan's journey to carbon neutrality. They are focusing on regional supply chains and collaborations to ensure a stable supply of premium battery materials. With a strong commitment to innovation, MU Ionic Solutions is shaping the future of battery technology.
Japanese manufacturing is experiencing an exciting time. The past three years have seen supply chain disruptions due to COVID-19 and the ongoing US/China trade disputes. As a result, corporate groups are looking to diversify supplies for reliability. Japanese firms, being known for their reliability and advanced technology, are in an interesting position due to the weak JPY. Do you agree with this sentiment? What advantages do Japanese suppliers hold in this current macro-environment?
The global business environment has changed to include the sustainability element in addition to technology and profitability. I believe that there will be a big part for Japanese companies as well as Japanese technologies to contribute to society. In that sense, I agree with your sentiment.
You mentioned sustainability as a keyword, and I think when we talk about your field electrolytes for lithium-ion batteries (LIB), supply is also a very keyword. There is an insufficient supply of these critical, rare Earth materials for LIB manufacturing, which has persisted as a key bottleneck in the mainstream rollout of electric vehicles. This need has emerged to exponentially increase the supply of these materials or to meaningfully reduce the required amount to make functional and effective batteries. How do you believe that the lithium-ion battery material supply chain can best adapt to this shortage in supply, and secondly, how do you see its evolution over the next year?
It is true that EV and LIB customers as well as suppliers are expanding their production capacity at this time, and I would say that we are well aware of this situation. As a battery material supplier company, we believe that this growth in demand will give us a huge opportunity for business growth. Among this expected demand growth both MU Ionic Solutions and Mitsubishi Chemical would like to bring their own business growth in line with this market demand and benefit from the slipstream. That is why we are expanding our own production capacity so that we can better provide supplies, and this process is currently in the planning stage.
Our target is to capture 25% of the world’s demand and at this time market demand for electrolytes for xEV on the basis of LIB-equipped Vehicles is 500,000 tons per year, but it is expected to actually exceed 2 million tons by 2028. I talked about better-providing supplies, and we believe there are several options to achieve this target, one option is to expand our production capacity within our own operating facilities. The second option is to work together within an alliance framework with upstreamers who produce raw materials for our products. Thirdly, we could probably even work together with our customers through alliance frameworks. Our fourth option is similar to something we did recently which is called straight licensing which we did with a company called Neogen, an Indian company. These options are all viable but we would like to take the option that best suits the situation. All of this is designed to reach that 25% goal I mentioned.
You mentioned the importance of sustainability. We would like to know more about the recycling schemes you have in place for your own manufacturing activities. When we’ve spoken to some firms in Japan that are involved in battery recycling they’ve said that even from the outside perspective, Japan seems very carbon-neutral focused, but actually on the ground there isn’t a good framework connecting manufacturers like yourselves with governments and raw material producers. This creates a very frustrating situation as achieving a true circular system is just not possible right now. What is your take on Japan’s recycling scheme for lithium-ion batteries and what are MU Ionic Solution’s policies, initiatives, and solutions to contribute to a sustainable and circular economy?
Lithium is one of the major components we are talking about here, and because of Japan’s lack of natural mining capabilities, sustainability is very important. Therefore, many firms feel that battery recycling needs to be proliferated in Japan.
In Europe they already have battery directives and that enables them to regulate the percentage of recycling. The US and other countries are also working towards more regulations that will stipulate the recycling percentage of battery materials. EV makers, who are our major customers, will need to think about recycling so that they can survive the market.
There are two ways of recycling, the first being the reuse of LIBs are storage batteries and the other being the straight recycling of LIBs, bringing them down to their raw materials again. Many companies are working on both areas but we still have to wait for a while before this is a feasible business. The reason why this isn’t yet feasible as a business is because lithium-ion technology is still under development and there are some issues that still need to be addressed. I personally believe the other reason is because of low appreciation by society as well as consumers towards products that are sustainable and recyclable. In addition, there aren’t enough makers who are willing to purchase these kinds of recycled products. Finally, another factor to consider is that there is no collection scheme to collect used batteries. In order to have a feasible business using recycled raw materials you have to have many stakeholders in the supply chain who can work together.
You mentioned how regulation is coming soon, and it’s just a matter of time before certain percentages of materials have to be recycled. How long do you believe that kind of infrastructure will take to be built in Japan?
That is a very difficult question to answer, however, if we can gain appreciation from consumers and if we can get strong commitment from companies I would say that 2030 might be a feasible target date. Should things go even smoother, that time frame can even be moved to within the next 5 years.
There are some exciting, overlapping technologies emerging within the energy sector recently, with some firms utilizing spent batteries and energy power storage for green energy. What are your personal thoughts on the potential synergies that may exist between green energy in Japan and Japan’s automotive sector?
In order to reach carbon neutral targets set for Japan I believe there are three critical elements. One is the pursuit of green energy generation and storage, the second is the usage or leverage of renewable energy, and the third is the proliferation of EVs. With all these three elements in sync, we will be able to achieve carbon neutrality for the first time. They all have to be working in parallel.
You’ve mentioned the importance of a collaboration scheme in order to achieve these goals including working with upstream raw material suppliers and manufacturers as well as straight licensing. To what degree are you looking to partner or collaborate with foreign companies?
At this time we have our own global production facilities in many regions and that is because we try to put our supplying capabilities close to our customers in each market so that we can have better accessibility to customers, or customers can have better accessibility to us. Despite this sentiment, currently, our product supply chains are located in Asia, and we believe that we will be leveraged as a supply source in Asia moving forward. It is important in my opinion to have a supply chain in each region in addition to Asia, especially now as the EV battery market is expected to grow so much.
We believe it is very important to have these kinds of supply chains in each region so that we can provide and supply our competitive products in each region. There is a sense of strategic autonomy in thinking about each region and society. Regarding the metal sources for batteries, their development is going on in other areas besides Asia, therefore, in order to expand our business it is very important to work together and collaborate with upstream partners. Of course, one option is to just expand our own production capacity to cover more, but there are other options such as working together with customers to install new production facilities. These are the key elements we believe to provide a stable, competitive, and profitable business.
Is there a region you’re putting more energy into or is a greater focus as part of your international strategy?
At this point in time, our focus is Europe and that includes the UK, as well as the USA, China, and Japan. Despite this focus, I believe that Southeast Asia countries such as India will be our future targets.
Imagine that we come back 7 years from now to celebrate your company’s 10th anniversary by having this interview all over again. What goals or dreams would you like to achieve by the time we come back for that new interview?
We started this joint venture by combining UBE Corporation and Mitsubishi Chemical’s strengths in both the technological area and batteries for automobiles and the non-auto markets. We put them together to leverage each other's strengths. We have good technologies and those patents such as formulations of electrolytes withvery good additives which improve the performance of batteries. We believe that our value proposition equals essentially the solution for battery makers.
At this point in time, the electrolyte and EV market has really started to pick up steam. Electrolytes used to be regarded as a specialty chemical, but nowadays we are seeing more and more mass productions utilize the chemical. That trend is accelerating fast, so in order to stay in our position as a top player in producing electrolytes we need to ride this wave of momentum. We must adapt to changes quickly in order to survive. That requires adapting our supply chains to fit each region's specific needs and wants. The next step is to evolve our technology further, and this requires putting in more resources as well as acquiring more patents, and developing industry-standard technology that can contribute to LIB performance.