RISK FOCUSTechC@RE liability

Lithium-ion Batteries

Lithium-ion batteries are ubiquitous in all areas of everyday life and are rapidly gaining ground in the electric vehicles market as well as in industry and research.

Lithium-ion batteries are rechargeable energy storage devices that convert electrical energy into chemical energy (charging phase) and, in the reverse process, release electrical energy from the chemical reaction (discharging phase).

Lithium-ion batteries contain flammable liquids, highly reactive chemical components, and plastics. Inadequate design or improper use or handling can lead to situations where the release of stored energy is generating uncontrolled thermal energy. This can result in fires or explosions, and even damage with a catastrophic extent is not excluded.

Whether you are manufacturer, user, or carrier, your liability is at stake.

Impact on your Liability

300,000

250,000

200,000

150,000

100,000

50,000

0

2005 2008 2015 2020 2025

Electric scooters/New mobility

Electric vehicles

Hybrid vehicles

Mobile phones

Smart PCs/Cloud terminals

Netbooks (low-end PCs)

Notebook PCs

Electric scooters

Electric vehicles

(1 million units)

(Year)

Actual Demand and Forecast for Lithium-ion Secondary Batteries and Cells

Lithium-ion Batteries

Any company taking part in the trade of lithium-ion batteries may be exposed to liability risks: manufacturers of the cells, manufacturers of products using them, and/or the retailers of any of the two.

Different types of liability risks are to be considered:

Lithium-ion batteries can be a direct cause of personal injury.

A victim died after a smartphone exploded in his shirt pocket. He was found dead at his desk with burns on his chest and broken ribs and spine.

A victim suffered severe burns on her thigh when her smartphone suddenly exploded in her trouser pocket and caught fire.

Apart from these direct impacts, there are also examples of personal injuries caused by indirect effects.

Smartphone Electric vehicle

Aircraft

E-bikes

From the hazards described above, a considerable risk of product recall can be derived, especially in the consumer electronic area. Although the battery itself often represents an insignificant part of the manufacturing cost for each device, the huge number of potentially affected devices would raise the costs of the recall to a considerable amount. The recent case of a popular cell phone, for example, affected millions of devices worldwide for a recall cost of over $5 b.

Product recalls are often broadly communicated by the media as consumers need to be alerted of safety issues. As a consequence, the reputational impact is a loss of consumer confidence firstly in the batteries in general and secondly in the company or brand concerned by a particular case. However, consumers are generally not aware of the battery brand. What they will keep in mind is the brand of the device.

If a laptop or PC is destroyed due to a faulty lithium-ion battery, there may also be claims for data loss, in addition to bodily injury or property damage.

Since the battery cells are gas-tight sealed, there is no environmental risk in normal operation. Only when the integrity of the battery is affected can hazardous chemical content be released. For example, if a fire occurs in a storage of large quantities of batteries or products containing batteries, flue gases or contaminated fire-fighting water could be harmful to the environment.

Environmental exposure is also prevalent when used batteries are improperly managed before reaching their final disposal. Waste batteries may include damaged cells that could release their chemical contents while being

Two cyclists charging their e-bike batteries in their hotel room got trapped in a fire caused by one of the batteries.In another case, the battery of an e-bike started to burn while being driven.

In all these cases, the victims would claim liability.

Two pilots were killed in a cargo aircraft crash due to a fire caused by lithium-ion batteries.

An electric car battery caught fire, killing two.

What impacts on your liability?

Bodily injury

Product recall and reputational risks

Data loss

Environment

Lithium-ion Batteries

Safe handling of lithium-ion batteries requires compliance with certain conditions when storing and while charging/discharging. The manufacturer is responsible for instructing battery users.

Separator layers that are too thinly designedSize of the battery case: in use, each lithium battery expands with increasing time and needs more space than in its initial state right after production

A detailed damage analysis reveals that several construction or design errors can occur, such as:

Separator of poor quality or mechanically weakenedThe manufacturing tolerances of the cells installed in a rechargeable battery are too high and cannot be compensated by the charging electronicsSEI layer (Solid Electrolyte Interphase) inadequately developed and corrosion of electrodesUse of inconstant raw material due to insufficient quality controls

Temperatures below 5°C and exhaustive discharge should be absolutely avoided.

Temperatures above 40°C should be absolutely avoided.

Batteries should be recharged to 80% of their maximum capacity no later than within 3 months. Only chargers supplied or provided by the manufacturer should be used. Excessively high or low currents could damage the battery during charging.

Counterfeits are to be absolutely avoided and brought to the manufacturer’s attention.

When collecting and storing lithium batteries, ensure that no short circuit between the two poles can occur. This could lead to the explosion of the cell.

How to mitigate your liability risks

At planning and design stage

At manufacturing stage

Through adequate user instructions

Lithium ion batteries are to be considered as dangerous chemical goods representing a high fire and explosion hazard. Depending on the types of these batteries (low, medium or high capacity) and on the storage volumes, specific precautions and protections based on a case-by-case hazard analysis are recommended.

The following measures are to be considered as good practices:

Precautions include strict compliance with international regulations for the transport of dangerous goods, such as the International Maritime Dangerous Goods Code (IMDG), the European Agreement concerning the International Carriage of Dangerous Goods by Road (ADR), the Regulation for the Carriage of Dangerous Substances on the Rhine (ADNR), Regulations concerning the International Carriage of Dangerous Goods by Rail (RID), and the IATA Dangerous Goods Regulation (DGR).

Storage in areas separated in a fire-resistant manner and separated by a sufficient spatial distance (e.g. hazardous substances storage, containers).

Avoid mixed storage with other products.

The storage area to be protected by suitable sprinkler protection designed as for flammable liquids.

Batteries should be stored with a charge between 30% and 50% of their full capacity.

Special attention should be given to waste batteries’ management that may require adequate training actions for the staff.

Precautions for storage and transport

Lithium-ion Batteries