China Will Account For Two-Thirds of the Global EV Battery Value Chain by 2030
A major priority in the global battery value chain is to eliminate linearity and promote circularity.
A circular chain would contribute to a more sustainable world, which, within a decade, is expected to be inundated with devices that run on lithium-ion batteries, including EV. The more we rely on batteries, the more the global battery value chain needs to go greener.
At the moment, five big names dominate the world of Li-ion batteries, with the order on the list in the last couple of years shifting in favour of Asian manufacturers due to the battery market developing at a fast pace.
Two Out of Five Top Companies Are Chinese
The Korean LG Chem, the Chinese CATL and BYD, the Japanese Panasonic, and the U.S. Tesla produce the largest global supply of batteries for electric vehicles. However, the battery value chain is not exclusively national or local.
Most of the companies on this list are dispersed worldwide, and Europe is lately a welcoming region for their expansion. The region has not only opened its hands to self-driving technologies but also has huge projects underway to grow the market of EV manufacturing overall.
One thing remains certain: in the fierce competition, China leads the way among the world’s biggest EV battery makers, mostly because of its liberal policies to expand manufacturing capacities in Europe but also because the country subsidizes EVs which are mainly sourced out from its Beijing factories, thus comprising a huge local purchasing power.
A bar chart of the top five Lithium-ion battery manufacturers by capacity. Image used courtesy of Benchmark Mineral Intelligence.
Europe’s Role in China’s EV Expansion
Keeping things in perspective by developing its own capacities, Europe plays its fair share in this expansion.
As reported by Benchmark Minerals, Europe currently has 115 EV battery mega and giga-factories, including a CATL subsidiary in Frankfurt, as well as the new plants by the China-based Ningde. Which is investing in a 14-GWh-a-year battery factory in Erfurt, Germany, following the recently signed deals with BMW and Volkswagen, and Svolt Energy Technology, which plans to add a European subsidiary with 24 GWh of production capacity a year by 2025.
In the race towards 2030, North America is lagging, with the only American company to compete on the market being Tesla.
Do U.S. trade tariffs play a role in this to shift the power in favour of U.S.-based manufacturers? Probably, but many factors are to be considered, and that’s not as easy because they are rapidly changing.
Additionally, China runs far and fast in the race for more sustainable natural graphite production, which exceeds synthetic graphite that is both expensive and environmentally unfriendly. Before 2030, China will make 69.3 % of the world’s Li-ion battery capacity, whereas Europe comes second with 17.2 %, and North America last with 8.1 %.
A schematic illustration of a battery's production chain. Image used courtesy of the European Commission.
Sustainable? Not Yet, But Possibly
Despite Li-ion battery disadvantages and concerns about cobalt scarcity which caused major cobalt mine operation suspensions (Glencore being one example), the efforts to replace them with more sustainable alternatives are still on the wayside.
Their future seems to be certain. Some progress in terms of sustainability has been made with the research on the Li-ion battery replacement with heavy metal-free cathodes built from an iodine-based cathode material. Lower charging times at EV power stations may be possible with the advancement of GBatteries, solving a nagging pain for EV owners who have to wait for hours to get their means of transportation fully charged.
In spite of their drawbacks, people love their electric cars and continue to purchase them, especially in China. If the value chain predictions turn out to be correct, China will cement its position as the leading manufacturer of batteries for EVs although sustainability remains an open wound in need of continuous attention.