Worried about fire hazards in EVs and electronic gadgets? Take a lithium!

Monitoring and understanding battery health over the life cycle is a crucial aspect of risk reduction. Taking pre-emptive action when a battery sustains damage greatly reduces the potential for dangerous incidents. For example:

• Thermal runaway: When a lithium battery cell overheats, a condition can occur where the internal temperature of a battery cell rises uncontrollably due to internal short circuits, overcharging, excessive discharge or physical damage. The heat generated during this process can cause the electrolyte within the battery to break down, releasing flammable gases. These gases can ignite, leading to fires or explosions that can spread rapidly and are difficult to extinguish. In addition, thermal runaway cannot be reversed once it has begun. For example, in New York City, 92 Li-Ion-based fires injured 64 people and killed nine in 2023, nearly equal the combined fatalities for 2021 and 2022, according to data by the International Association of Fire and Rescue Services (CTIF). In South Korea, several Li-Ion batteries exploded in a factory in June, killing 22 people and injuring another eight. In Europe, countries such as the UK, Germany, France and Spain have each reported dozens of fire cases associated with Li-Ion batteries. According to data collated by QBE, UK fire services recorded 270 fires linked to electric bikes in 2023, up from 158 in 2022. Increasing incidents have led the London Fire Brigade to publicly characterize e-bikes as “London’s fastest growing fire risk”. Fires involving e-bikes and e-scooters have caused deaths to riders but have also caused significant disruption to by-passers when the emergency response to the incidents required evacuation of densely populated areas.

• Manufacturing defects and design flaws: Safety risks stemming from manufacturing defects and design flaws are multifaceted and potentially significant. Defects such as contamination of the cell components or improper assembly, can lead to internal short circuits. These defects may cause the battery to overheat, ignite, or even explode. For instance, microscopic metal particles left inside the battery during the manufacturing process can penetrate the separator, causing a short circuit. In a high-profile case involving a tablet model that was widely sold in recent years, manufacturing defects led to widespread battery fires and explosions, resulting in a number of injuries and a costly global recall for the manufacturer. Design flaws also contribute to safety risks, particularly when batteries are integrated into devices without adequate thermal management or protective features. Poor design can exacerbate the risk of thermal runaway. For example, inadequate space for thermal expansion, lack of sufficient cooling mechanisms or insufficient protective circuitry can all contribute to failures. In addition, batteries that have been used or are ‘returned’ to a business operating rental schemes are much more likely to suffer faults leading to thermal runaway. These risks are heightened in applications with larger batteries, such as EVs and large-scale energy storage systems, where the elevated energy density can amplify the consequences of design flaws.
• Sustainability factors: Overreliance on Li-Ion batteries may also pose operational risks for businesses. Lithium and cobalt are critical components of Li-Ion batteries, leaving supply chains vulnerable to delays or shortages. China, a dominant player in the raw materials market for lithium cell production, has an unpredictable impact on the global supply chain if trade wars and sanctions with the USA escalate beyond reason. Furthermore, as countries and multinationals rush to introduce new solutions in the market around clean energy technology (including batteries), there is a risk that associated political pressures may impact regulatory processes – ultimately compromising the robustness of safety protocols. In fact, the rapid evolution of Li-Ion battery technology has almost outpaced regulatory frameworks in recent years, leading to some degree of uncertainty for businesses. In the US, the Department of Transportation (DOT) and the FAA have established guidelines for the safe transport of Li-Ion batteries, but these regulations require continuous updates to address new risks. The EU, in its turn, introduced a regulatory framework in 2023, to address challenges across the entire battery lifecycle, from production to disposal. Its focus on safety and sustainability will likely set the agenda for other regions, as the significant adoption of Li-Ion batteries raises concerns regarding waste management. Other factors pertaining to eco-friendliness have been highlighted around the world but will require concerted global efforts and regulatory intervention to make a dent.

Despite the various risks posed to manufacturers and end users, lithium batteries will be around for a while before better technologies take their place. As long as we take a lithium and stay calm when planning safety, marketing and technical support policies to protect all stakeholders, the risks can be quantified and controlled, as spelled out in the QBE report:

• Manufacturer liabilities:

  Companies that manufacture, distribute and use of Li-Ion batteries are exposed to a range of associated risks. Manufacturers must ensure stringent quality control and compliance with evolving safety standards to prevent defects that could lead to battery malfunctions. Product recalls, legal liabilities and reputational damage can have huge financial implications. Insurers must evaluate these risks carefully, considering not only the direct costs associated with potential claims but also the broader impact on the company’s market position and operational continuity. This requires a comprehensive understanding of the technological and regulatory landscape, as well as close monitoring of emerging trends and incident data.

  Consumer and business precautions:

  Consumers and businesses must account for the possibility of large-scale incidents arising from Li-Ion-related accidents, which can occur in diverse settings, including business facilities, residences, during transportation, and in public spaces. On 23 June, an explosion of Li-Ion batteries in a waste recycling plant near Glasgow caused a massive fire, disrupting local businesses and residents for an extended period.

  If a Li-Ion device malfunctions while charging at home, it could harm occupants and cause damage, leading to personal injury and property damage. If an EV catches fire while being shipped, the blaze will propagate to the other vehicles on board, endangering the crew and leading to major logistical disruptions. If a battery fails in a crowded space like a shopping mall or an airport, this could spark panic, injuries, damage, and disruption. The resulting liability could involve multiple parties, including manufacturers and venue operators.

  The risks are complex and multifaceted, requiring a comprehensive approach to risk management. By staying informed about technological advancements and regulatory changes, insurers, consumers and businesses can better protect themselves from the potential hazards associated with Li-Ion batteries.

  Stakeholder diligence: Any person or organization that uses products containing lithium-cell batteries needs to be proactive in risk management. Those that properly anticipate both technological and regulatory trends will likely be able to best mitigate the associated threats. Businesses should work with the relevant stakeholders to mitigate disruption risks through robust supply chain management and compliance strategies. Ultimately, the successful integration of Li-Ion batteries into the global economy will require a collaborative effort between manufacturers, regulators, insurers, and end-users to ensure safety, reliability, and sustainability.