China dominates BloombergNEF’s (BNEF) global lithium battery supply chain ranking, for the third time in a row, the research body said. This applies to 2022 and its projection for 2027, thanks to continued support for electric vehicle (EV) demand and raw materials investments.
BNEF said China currently hosts 75% of all battery cell manufacturing capacity, and 90% of anode and electrolyte production. The increasing prices of lithium has also led to higher investments in carbonate and hydroxide refinery facilities in the country, making it the leading refiner of battery metals globally.
The ranking sees Canada rise to second spot this year. This reflects its large raw material resources and mining activity, as well as its good positioning in environmental, social and governance factors (ESG) and infrastructure, innovation, and industry, said BNEF.
Countries that are not necessarily the largest producers or manufacturers but have significant battery metals and minerals extraction, as well as manufacturing, fared better than countries that excel mostly in a single commodity or component, it said. Success in the battery supply chain is increasingly determined by more than one category or metric.
The ranking showed the US drop to third place despite the strong growth in battery demand due to the Inflation Reduction Act. The US recorded the biggest improvement among all countries in raw materials for 2022, but is reliant on raw material imports for batteries, especially from its free-trade partners, such as Australia.
Yayoi Sekine, head of energy storage at BNEF, said: “The Inflation Reduction Act is a major upside for battery demand in the US but, more importantly, it will change the supply landscape in the coming years. The law is the closest thing to industrial policy for batteries that the US has ever had and makes this the most exciting decade yet for the American battery industry.”
Most European countries declined in their overall performance this year, said BNEF. Finland and the Czech Republic were the only exceptions. Finland has a growing battery metals supply chain. Germany and Sweden’s lack of domestic raw materials led to a drop in their rankings in 2022.
Despite Europe’s low raw materials scores, its battery manufacturing is growing. Germany and Hungary will increase their battery manufacturing capability to match Poland, as cell and component plants come online in coming years.
China, South Korea and Japan were the top three countries across all battery manufacturing metrics.
Table: BNEF 2022 global lithium-ion battery supply chain ranking
Source: BloombergNEF.
