lithium-ion batteries – The OM Blog by Heizer, Render, & Munson

OM in the News: Running a Factory on Recycled EV Batteries

Electric-vehicle startup Rivian has found an unusual power source for its Illinois car factory: old batteries from its own cars. Rivian is reusing EV batteries for energy storage—the largest repurposed-battery energy storage system for an automotive manufacturer in the U.S., says The Wall Street Journal (April 14, 2026).

Rivian’s operation will be the largest repurposed-battery energy storage system for an auto manufacturer in the U.S

Once completed later this year, Rivian’s plant in Normal, Ill., will draw electricity from more than 100 Rivian EV batteries in an area the size of a small parking lot. It will reduce Rivian’s dependence on the power grid during peak demand hours. It saves Rivian money on what it takes to run the plant.

“It reduces the demand on the grid, which is great. These batteries are already built,” said Rivian’s CEO. “We need to integrate them and connect them together, but that can happen quite fast. They don’t have to get imported from some other place.”

This is the latest example of the battery-energy storage industry boom in the U.S., where lithium-ion packs—not dissimilar to those in EVs—are increasingly used to power businesses, industrial facilities, residential zones and artificial-intelligence data centers.

The AI boom is part of what’s driving unprecedented energy demand in the U.S. Electricity prices around the country are rising so quickly that they are outpacing inflation, rising 4.5% between 2024 and 2025.

Many automakers, including Ford and GM, are retooling battery factories once meant for EVs to meet that demand, rather than let those facilities sit idle. Meanwhile, energy storage was the fastest-growing business last year for Tesla, which has long supplied batteries for residential and commercial power. The setup is expected to initially provide 10 megawatt-hours of energy, equivalent to about 1,000 home-energy battery storage units linked together.

Classroom discussion questions:

What are the advantages and disadvantages of Rivian’s approach?
How do other firms handle the energy demands from the AI boom?

OM in the News: Salvaging Critical Minerals From Old Laptops and Phones Isn’t So Easy

While electronic waste (e-waste) seems almost infinite, from fried computers to dormant BlackBerry phones, securing discarded tech for metals recycling can be quite tricky.

Electronic waste is dropped on to a conveyor belt during a process to harvest rare earth and other metals in France.

Recycled lithium, copper and other critical minerals can find new life in everything from electric vehicles to battery storage. The push to recycle metals in the U.S. comes amid intensifying efforts to compete with China, which dominates the critical minerals market, reports The Wall Street Journal (Dec. 1, 2025).

“It’s like urban mining,” said one industry CEO, explaining the benefits of reusing metals from old electronics and scrap waste instead of procuring it directly from the earth. “Rather than going into the mines, we go into our communities,” he said.

Collecting e-waste can be tricky because there isn’t a strong infrastructure to retrieve devices directly from homes, scrapyards, manufacturers or collection sites, and some consumers have privacy concerns when handing over old hardware that could hold personal information.

Meanwhile, large quantities of e-waste are being shipped abroad. About 2,000 shipping containers of electronic waste are sent each month from the U.S. to countries in Asia, particularly Malaysia. But the need to increase the domestic supply of critical minerals has become more urgent, as is evident in the U.S.’s near-total reliance on Chinese imports for lithium-ion batteries.

Shipping e-waste abroad rather than recycling it in the U.S. is “a tragic lose, lose, lose proposition,” said a second industry expert. “The country misses out on the value from the critical metals going to waste, as well as recycling jobs for local workers.”

Most lithium-ion batteries on the market are likely to be hazardous when they are disposed of because they could catch fire or explode if not handled carefully. The environmental footprint of lithium-ion battery recycling emits less than half the greenhouse gases of conventional mining and refinement of metals, and uses about one-fourth of the water and energy of mining.

The global consumption of lithium was estimated to be 220,000 metric tons in 2024—a 29% jump from 2023. But tech recycling in the U.S. has a long way to go. E-waste recycling collection, from relying on municipal return sites to retailer take-back programs, is irregular and fragmented, so recyclers often cannot rely on steady, predictable volumes.

Classroom discussion questions:

Why doesn’t the U.S. recycle all its e-waste?
Could AI help in recycling? (See Supp. 5 of your Heizer/Render/Munson text).

OM in the News: The Mercedes-Benz EV on Fire

It took just seconds for an underground South Korean residential parking lot to be engulfed in flames. The culprit: a Mercedes-Benz EQE electric vehicle that had not been charging.

The blaze incinerated dozens of cars nearby, scorched a further 140 vehicles and forced hundreds of residents to emergency shelters as the buildings above the parking lot lost power and electricity. Nobody died, but the fire took eight hours to extinguish. Cars with internal combustion engines are more likely to catch fire than EVs. But when EVs do burst into flames, the rechargeable lithium-ion batteries get hotter and the fire takes longer to stamp out, writes The Wall Street Journal (Aug. 8, 2024).

In recent years, General Motors recalled tens of thousands of its Chevrolet Bolts in the U.S. over risk of battery fires. Hyundai pulled roughly 80,000 electric sport-utility vehicles after roughly a dozen caught fire. Last September, a Nissan Leaf ignited while charging in Tennessee, and the fire required more than 45 times the water needed for a gas-powered-car fire to be extinguished.

Automakers have grown more cautious about EV launches amid modest demand. Sales of fully electric models in the U.S. rose 6.8% through the first half of the year, a sharp deceleration from near 50% growth in 2023.

The perceived risk of EVs is particularly acute in tightly packed South Korea, a country about the size of Indiana with 52 million people. Outdoor residential parking lots are relatively uncommon. The nation’s ubiquitous high-rise apartments often feature underground parking, where firefighters must contend with restricted access. The country had already been on edge about battery-related fires, after a blaze at a lithium-battery factory in June that killed nearly two dozen people.

In recent days, LG Display recommended that employees at its main factory complex park their EVs outside. The country’s main international trade association, whose offices are located in central Seoul, said it would accelerate plans to relocate EV charging ports to its aboveground lot. One of the country’s largest telecommunications firms, KT, has held discussions about barring EVs from parking underground.

Classroom discussion questions:

Which of the 10 OM decisions in your Heizer/Render/Munson text deal with this issue?
What are the OM implications of the South Korean fire?

OM in the News: The Lithium Battery Dilemma

To the makers of smartphones, power grids and electric vehicles, lithium—the lightest metal—allows batteries to become supercharged, underpinning hopes for a greener economy and longer-lasting devices. But the very traits that make lithium game-changing for energy storage can pose overpowering challenges should the batteries ever catch fire, reports The Wall Street Journal (June 28, 2024). Incidents involving lithium-battery fires are becoming more common around the world, raising safety concerns.

A Tesla lithium-ion battery catches fire in Washington state

The world recently saw the risks of lithium-battery fires in South Korea, where at least 23 workers died. Video footage of the fire showed occasional flashes that produced thunderous booms like a detonated bomb.

Water isn’t always an effective combatant for certain types of lithium-battery fires, leaving little option other than waiting things out or using costly suppressants. The lithium produces searing temperatures. The fire’s ignition is more intense than an oxy-acetylene torch, which can be roughly 5,000 degrees, or about five times hotter than house fires. It will literally cut through a firefighters’ protective clothing and their leg if it’s coming out from underneath their vehicle. Battery fires are a growing concern for firefighters worldwide.

So-called “lithium-ion” batteries are rechargeable and widely used in smartphones, PCs and EVs—and are the subject of the bulk of such fires, often due to overheating. Extinguishing a lithium-ion battery fire for an EV takes longer and about three times as much water than a regular vehicle, on top of the exposure to carcinogenic chemicals.

Sometimes the safest option is to let a battery fire burn. That was the case in 2021, when a Tesla battery caught fire while being installed at an Australian power storage facility. Responders allowed the blaze to burn out over six hours, while keeping nearby units cool.

Lithium is widely viewed as a key future energy source, given its outstanding ability to retain high amounts of energy compared with other metals. The properties of lithium that make it suitable for energy storage also pose risks, but the metal in its various forms has been harnessed to operate safely for a variety of uses.

Classroom discussion questions:

How many lithium-ion batteries have actually exploded in the past few years?
How does this impact the growth of EVs? Is it a design issue?

OM Podcast #6: The EV Battery Supply Chain

Welcome to our latest Operations Management podcast! Today, Barry Render and his guest, Providence College Professor Jon Jackson, discuss an important issue facing the auto industry: the supply chain for electric vehicle batteries. Their talk includes battery end-of-life issues, recycling in the U.S., and a look ahead to 2035 when the E.U. and several U.S. states will ban gas-powered vehicles.

Transcript

A transcript in Word of this podcast is available by clicking on the word Transcript above.

Instructors, assignable auto-graded exercises using this podcast are available in MyLab OM. Contact your Pearson rep to learn more! https://www.pearson.com/us/contact-us/find-your-rep.html

OM in the News: The Looming Electric-Vehicle Battery Shortage

The auto industry could soon face a shortage of battery supplies for electric vehicles—a challenge that he says could surpass the current computer-chip shortage, reports The Wall Street Journal (April 18, 2022). Car companies are trying to lock up limited supplies of raw materials that are key to battery making, and many are constructing their own battery plants to put more battery-powered models in showrooms.

A Rivian truck being assembled at the company’s factory in Normal, Ill.

Rivian’s CEO states: “All the world’s cell production combined represents well under 10% of what we will need in 10 years. Meaning, 90% to 95% of the supply chain does not exist.” His comments are the latest alarm bell to go off across both the auto and battery sectors as the fast-rising demand for EV parts and a shortfall of critical materials and production could result in an acute supply crunch. (Rivian is sharply curtailing factory output this year, cutting its forecast in half to 25,000 vehicles because of constraints on getting parts and materials).

Building enough batteries will be among the biggest hurdles in trying to boost EV sales from a few million today to tens of millions within the decade. The shortages will occur everywhere from the mining of raw materials, to processing them, to building the battery cells themselves. Already, demand for lithium-ion batteries, which are the core power source for EVs, has surged to 400 gigawatt hours in 2021—up from 59 gigawatt hours in 2015—and it is expected to jump another 50% in 2022.

The semiconductor shortage that is disrupting the auto industry was a relatively small supply-demand imbalance that then led to aggressive overbuying and stockpiling, putting the car sector in the difficult position it is in now. With batteries, the problem is expected to be much, much worse.

The race to secure raw materials is growing increasingly competitive, in part because they are becoming more costly for battery makers. Raw materials account for 80% of the cost of a battery, up from 40% in 2015. Materials for the battery cathode, such as lithium, cobalt and nickel, have gained about 150% in the past year. Some companies, such as GM, are joining with mining firms to secure access to critical ingredients such as cobalt and lithium. Others are bringing more of their battery-cell production in-house, aiming to have more control over this core component for EVs.

Classroom discussion questions:

What can Rivian’s operations managers do to secure more battery cells?
What are the major OM issues facing EV makers?

OM in the News: Bad Supply Chain News for EV Makers

Last year was the year of electric vehicles—global sales are likely to have hit a record, in turn pushing up battery demand. Now too much of a good thing is causing problems: Many key battery materials, including but not limited to processed lithium itself, are in short supply and prices are rising sharply.

Adding to the geopolitical risks for global auto makers, writes The Wall Street Journal (Jan. 24, 2022), is the supply chain concentrated in a country determined to make itself the EV capital of the world: China.

Lithium is the most spectacular example: Prices of lithium carbonate have quintupled in China from a year earlier. Other battery materials from nickel to cobalt have also been rising and could remain elevated as new supply will take time to come online. The rapid rise in demand for EVs has also created shortages in some lesser known components that go into batteries. For example, supplies of binder material polyvinylidene fluoride or PVDF—used to enable connections between electrodes—will likely be insufficient to meet demand until 2025.

Shortages are adding to already substantial concentration risks regarding China’s dominance in the EV supply chain. Most of the value chain for mining materials like lithium and cobalt is in China. China in general has more than 60% market share in the chemical processing and refining of critical battery minerals and that might be above 80% for some materials like cobalt and graphite. While other countries will also invest in more localized supply chains, China’s head start—in part due to years of generous EV subsidies which helped nurture a robust battery supply chain upstream—means it will remain dominant for the next few years at least.

Securing material supplies is also getting more important for car makers. They will increasingly need to either vertically integrate or establish joint ventures with battery suppliers. Tesla, for example, signed an agreement with an Australian mining firm this month to secure graphite supply.

EV sales have been speeding ahead, but the supply chain has a lot of catching up to do. That will cause a lot of headaches for EV makers in the months and years ahead—and potentially geopolitical jitters.

Classroom discussion questions:

How can OM managers address this supply chain problem?
What are the geopolitical issues involved?

OM in the News: The Exploding Tesla

The San Francisco home burns after 2 Tesla Model S sedans erupted in flames in the garage.

Automakers face numerous challenges as they race to get electric vehicles to consumers ahead of regulatory and company deadlines for shifting production away from gas-powered vehicles. They face skepticism about the availability of charging stations, concerns about vehicle range and apprehensions over cost. Fires have drawn attention because of the high-profile recalls and blazes that followed product rollouts, writes The Washington Post (Aug. 4, 2021), further complicating the automakers’ calculations.

In San Francisco, a Tesla Model S (the expensive one) blew up in the owner’s garage, set fire to their second Tesla, and destroyed the million dollar home. “Gasoline driven cars don’t catch fire in the garage when they’re sitting there. And that’s the difference,” said the owner who has since witched brands. “I don’t worry about my Audi catching fire downstairs when it’s not running.”

The fire is one in a string of recent examples showing what can happen when electric cars are left parked in garages to charge overnight. The issue is causing mounting concern as a number of EV makers have warned owners not to leave the cars charging unattended in certain circumstances, or sitting fully charged in garages. “Battery fires can take up to 24 hours to extinguish,” Tesla’s website says. “Consider allowing the battery to burn while protecting exposures.”

Automakers including GM, Audi and Hyundai have recalled EVs over fire risks in recent years and have warned of the associated dangers. Chevrolet advised owners not to charge their vehicles overnight or keep their fully charged vehicles in garages. It recalled more than 60,000 of its Bolt EVs over concerns about the cars spontaneously combusting while parked with full batteries or charging, after reports of 5 fires. Hyundai advised owners to lower the maximum state of charge in their vehicles to 80%, and park outside until the state of charge is lowered. Battery-powered vehicles have not been shown to catch fire at rates higher than gasoline cars, but when fires do erupt, they burn longer and hotter, propelled by lithium-ion batteries that supercharge the blazes.

Classroom discussion questions:

Will incidents like this impact the transition to EVs?
How is this an issue for operations managers?

OM in the News: The Boeing 787 Lithium Battery Explosions

The damaged battery case from a Japan Airlines 787

“Flaws in manufacturing, insufficient testing and a poor understanding of an innovative battery all contributed to the grounding of Boeing’s 787 fleet last year,” according to a new report by the National Transportation Safety Board (see The New York Times, Dec. 1, 2014). The report assigned in the starkest terms yet the blame for the 787’s battery problems.

The first battery episode occurred after a Japan Airlines flight landed at Boston’s Airport on Jan. 7, 2013 and was traced to one of its 2 lithium-ion batteries. The following week, a smoking battery forced an emergency landing in Japan, and prompted regulators to ban the jets’ flights until the problem could be resolved.

The NTSB found a wide range of failings among manufacturers and regulators. The battery’s maker, GS Yuasa of Japan, used manufacturing methods that could introduce potential defects but whose inspection methods failed to detect the problem. Boeing’s engineers failed to consider and test the worst-case assumptions linked to possible battery failures. The FAA failed to recognize the potential hazard and did not require proper tests as part of its certification process. The planes were allowed to fly again after Boeing instituted new safety features which added internal components to reduce the chance of overheating.

This was the first time large lithium-ion batteries were used aboard a commercial jet. But the NTSB investigation found that the manufacturing process allowed defects that could lead to internal short circuiting. GS Yuasa, the report said, “did not test the battery under the most severe conditions possible in service, and the test battery was different than the final battery design certified for installation on the airplane.” Boeing had initially determined that a battery cell might fail in 1 out of 10 million flight hours. Instead, by the time the two episodes happened, the 787 fleet in service had logged fewer than 52,000 hours. Both Boeing and GS Yuasa also underestimated the risks of a catastrophic failure. They relied on a single test, known as a nail penetration test, to simulate a short circuit to find out under what circumstances the battery might ignite.

Classroom discussion questions:

1. Why was Boeing’s reliability estimate so inaccurate?

2. How is this an OM issue?

OM in the News: Just How Reliable are the Boeing 787 Batteries?

For an interesting discussion of reliability when you teach Chapter 17 in our text, we turn to The New York Times (Feb.27, 2013) article on how U.S. and Japanese aviation authorities have confronted a steep learning curve trying to unravel what caused last month’s battery failures on a pair of Boeing 787 Dreamliners. The lithium-ion batteries are commonplace in consumer electronics and electric vehicles, but despite being lighter and more efficient than older technology, they have never been used in aircraft as extensively as on Boeing’s flagship jetliner. After 7 weeks of nearly round-the-clock efforts, the National Transportation Safety Board has failed to find the root cause of the dangerous battery malfunctions that grounded the entire 787 fleet. Industry and government officials on both sides of the Pacific increasingly are skeptical a breakthrough is imminent.

Before approving the Dreamliner to begin carrying passengers in late 2011, regulators embraced Boeing’s risk assessment showing that the chance of a 787 battery meltdown was about one in 10 million flights (That means R= 0.9999999). That is roughly 100 times safer than some of the industry’s most reliable jet engines, which on average malfunction and have to be shut down roughly once every 100,000 flights.

But the U.S. Department of Energy (DOE) sees Boeing’s initial risk analysis as unrealistic, particularly considering variations among parts. “When carefully examining the nature of the material or the tolerance possible within the manufacturing process, it is difficult to arrive at those [risk] numbers,” writes DOE. In commercial use, the batteries have now ruptured and burned twice in less than 50,000 flights (or an R=0.99996). Contrary to FAA projections of an extraordinarily low likelihood of a serious airborne mishap, the Energy Department says the malfunction rate of the batteries has been higher than would be acceptable for uses on the ground. “That wouldn’t be a reasonable number for the auto industry.”

Discussion questions:

1. Why do Boeing’s reliability numbers differ so greatly from observed failures?

2. What are the options for operations managers at Boeing at this point?