China will continue to dominate the lithium-ion battery materials supply chain for the forseeable future, according to a report by BloombergNEF (BNEF).
Up to 2025, China will not weaken its grip on the materials’ supply chain while the US and Sweden could rise to third and fourth respectively, found BNEF in its inaugural ‘Global Lithium-Ion Battery Supply Chain Ranking’ report.
Having quickly surpassed the previous decade’s leaders Japan and Korea, China now controls 80% of the world’s raw material refining, 77% of the world’s cell capacity and 60% of the world’s component manufacturing, according to data from BNEF.
Dominance comes from necessity as China’s domestic battery demand has risen to 72GWh.
Where this year’s number two (Japan) and three (Korea) ranked countries are leaders in battery and components manufacturing, they do not have the same influence in raw materials refining and mining as China, says BNEF.
However, what they lack in the control of the raw materials supply chain, they make-up for in higher environmental and RII (regulations, innovation & infrastructure) scores compared to China.
BNEF suggests the US presidential election could push the US up the rankings from sixth this year, if the country increases investment in raw materials and promotes EV adoption.
James Frith (pictured), BNEF’s head of energy storage, said: “China’s dominance of the industry is to be expected given its huge investments and the policies the country has implemented over the past decade.
“Chinese manufacturers, like CATL, have come from nothing to being world-leading in less than 10 years. The next decade will be particularly interesting as Europe and the US try to create their own battery champions to challenge Asian incumbents who are already building capacity in both places.
“While Europe is launching initiatives to capture more of the raw material value chain, the US is slower to react on this.”
BNEF’s lithium-ion battery supply chain ranking is based on its development trajectory. Countries are ranked across five key themes related to the supply chain: raw materials, cell & component manufacturing, environment, RII and end demand (across electric vehicles and stationary storage).
As EV demand grows there is an increasing need for cell manufacturing facilities close to automotive production. This has led to a boom in European cell plants, and the rest of the supply chain is also slowly making its way to Europe. The growing industry within the region and Europe’s strong environmental credentials helped five European countries place in the top ten ranking for 2020.
The UK could see its position in the rankings fall in 2025 if it becomes unable to access the large demand in continental Europe, which, at 152GWh, will be around five times the size of its domestic market.
Read our indepth review of the global battery materials supply chain in the Autumn edition of BEST. Subscribe HERE and receive your copy of the magazine in October.
