China has a stronghold on the lithium-ion battery supply chain, according to a new market report.
Along with 72GWh of electricity storage demand, China also retains an estimated 80 per cent of the world’s raw material refining, 77 per cent of cell capacity and 60 per cent of component manufacturing.
The study claimed the US and Europe are both well positioned to close the gap in the next five years, but warned that Britain could slip behind by 2025.
Countries are desperate to increase their position in the sector – sales of electric vehicles have begun to surge and are likely to rocket in the coming years as governments introduce bans on the availability of petrol and diesel cars from 2030.
Stronghold: An employee works at a production line of lithium ion batteries inside a factory in Dongguan, Guangdong province. China has been ranked the top global market for electric-car batteries by a new industry study
China’s dominance of the lithium-ion battery market is a clear indicator for why Tesla set up shop with a 210-acre Gigafactory in Shanghai where it’s been producing Model 3s since last year and will also build Model Ys for the fastest-developing economy.
Analyst BloombergNEF has ranked it as the driving force in the sector, having overtaken former leaders Japan and South Korea – however, they remain in the top three ranking highest for battery and component manufacturing but lag behind China when it comes to the availability of raw materials, refining and mining.
James Frith, 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.’
But Frith said China’s stronghold could be challenged in the coming years from western markets.
‘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,’ he added.
‘While Europe is launching initiatives to capture more of the raw material value chain, the US is slower to react on this.’
Note: “Environ.” is environmental. “RII” is regulations, infrastructure and innovation. Red represents countries in the Asia-Pacific region, teal countries in Europe and Africa, and blue countries in the Americas. The symbol represents if country has moved up or down the rankings in comparison to its 2020 score, green represents up and red represents down. The number shows the number of places the country has moved
Countries are desperate to increase their position in the sector with sales of electric vehicles already starting to boom and will sky rocket in the coming years as governments introduce bans on the availability of petrol and diesel cars from a decade’s time
BNEF’s ranking provides a snapshot of a country’s position in the lithium-ion battery supply chain in 2020 and where it will place in 2025, based on its current development trajectory.
While the US today languishes in sixth place, the upcoming presidential election could change things.
If America were to increase its investment in raw materials and promote electric vehicle adoption, it could overtake both Japan and China to be number one in 2025.
In contrast, the UK – currently one place behind the US – could see its position in the rankings fall 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.
Europe is improving its position on the supply chain, with a boom in cell plants across the continent. Tesla is currently building its Gigafactory 4 vehicle plant in Berlin
A street sign reading ‘Tesla Street 1’ stands in front of the construction site of the electric car Tesla Gigafactory in Gruenheide
According to the Global EV Outlook 2020, the sales of electric cars reached 2.1 million globally in 2019, surpassing 2018s record to boost the stock to 7.2 million electric vehicles
As electric car demand grows in the next decade, 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 as nations look set to ban the sale of passenger cars with internal combustion petrol and diesel engines from as early as 2025 in Norway.
Polestar: ‘We want to be the most transparent electric car maker’
Polestar – the electric-car sister brand to Volvo, itself owned by Chinese firm Geely – will publish full details of the climate impact of its electric vehicles as part of efforts to become the ‘most transparent’ EV maker in the automotive industry’.
It criticised the wider industry for a ‘disturbing lack of transparency’, stating that it is ‘impossible for a consumer to compare the climate impact of different cars’.
As a result, the Swedish company will, with immediate effect, reveal a headline number that shows the climate impact of its EVs as they leave the production line.
It will also show the total climate impact of the car over its life cycle.
‘Car manufacturers have not been clear in the past with consumers on the environmental impact of their products,’ said Thomas Ingenlath, Polestar CEO.
‘That’s not good enough. We need to be honest, even if it makes for uncomfortable reading.’
Using its own analysis, Polestar found its new £50,000 ‘2’ leaves the factory with a 26-tonne carbon footprint.
Compared to a Volvo XC40 with a petrol engine, Polestar 2 has a larger footprint in the manufacturing phase, mainly due to the energy-intensive battery production process.
But once the EV reaches the customer, if charged with green energy, further CO2 emissions are ‘negligible’. And after 31,000 miles (50,000km) of driving, the fossil fuel car surpasses the EV in total CO2 emissions.
Pressure is mounting on UK Government decision makers to bring forward the current ban from 2040 to an earlier deadline of 2030, which would be in-line with countries including Denmark, Ireland, the Netherlands and Sweden.
This includes Tesla’s Gigafactory 4 that’s being built in Berlin, Germany, which the US maker says will be ‘the most advanced high-volume electric vehicle production plant in the world’.
In the UK, start-up Britishvolt is due to open the country’s first gigafactory rival in South Wales , which will be penned by legendary vehicle design house, Pininfarina, and open in 2023.
Sophie Lu, head of metals and mining at BloombergNEF, said that while nations with a monopoly of critical metals are in a good position, it is equally fundamental for other countries to leverage the availability of clear and cheap electricity and develop large-scale manufacturing sites with a ‘technically skilled labour force’.
According to the Global EV Outlook 2020, the sales of electric cars reached 2.1 million globally in 2019, surpassing 2018s record to boost the stock to 7.2 million electric vehicles.
China remained the world’s largest EV market, with 2.3million electric vehicles in active use, accounting for nearly half (45 per cent) of the global stock of zero-emission cars.
Europe and the US are relatively far behind with 1.2 and 1.1million EVs respectively in 2019 – but the latter is performing far better in relative terms,
While only 5.2 per cent of China’s vehicles are electric, over half (56 per cent) of cars in Norway were powered by electricity last year.
EVs also make up 26 per cent and 15 per cent of all motors in Iceland and Netherlands respectively in 2019, though in the UK represented less than 2 per cent of new registrations.
However, by the end of August 2020, one in 20 new models bought in the UK were battery electric cars, according to the latest sales figures published by the Society of Motor Manufacturers and Traders.