The outbreak of coronavirus COVID-19 is putting China lithium-ion manufacturers into the ‘high risk’ supplier and production category.
Industry analysts Wood Mackenzie believe prices will not fall as much as predicted as lithium-ion battery production in China drops around 10% (26GWh), with the Hubei province most impacted by the outbreak.
The firms hit hardest by the outbreak are BYD, CATL, Lishen, Guoxuan High Tech, CBAK, according to WoodMac.
The region is home to 162GWh of battery cell production in 2020, equivalent to 61% of China cell manufacturing capacity.
Xu Le, a senior analyst from Woodmac’s Singapore office, told BEST that as a result of the outbreak some of the country’s biggest manufacturers had had their operations placed into the high risk manufacturing supplier and production category.
He said: “Both of the EV and ESS markets are reliant on this supply chain. Most of the demand— over 90%— comes from EVs and this market has more contractual and financial clout, so it should have better access to supply. However, the larger demand also means it may feel a greater pinch in the round.
“Lack of supply will obviously hit prices, and reductions in cost will not be as predicted last year.
However, Le says that because the majority of manufacturing is still based in China it will be difficult to ramp up in other regions such as Europe and the US with their nascent lithium-ion battery supply chain.
Le said: “Other regions such as Europe still have a very small manufacturing base, just in the process of ramping up, so it won’t have capacity to make up any significant shortfall.”
Image: This illustration, created by the Centers for Disease Control and Prevention (CDC), shows the virus’ spiky, crown-like fringe that shrouds each viral particle—giving it a “coronated” appearance.