Because China has the biggest lithium-ion battery manufacturing capacity and has greater direct and indirect control over most raw materials for batteries, it will maintain its leading role in the lithium-ion battery supply chain from now until 2025, James Frith said at the Lithium Supply& Market 2020 virtual conference hosted by Fastmarkets on Wednesday October 28.
Frith said Bloomberg NEF had published a lithium-ion battery supply chain ranking showing each country’s position in 2020 and where it will be in 2025 based on its current development trajectory in several key sectors including raw materials, fuel cells and components, the environment and demand, among other things.
Among 25 ranked countries in the battery supply chain, China is expected to remain the global leader until 2025 - not only because it has the largest industry overall, but also because it has the biggest end-user market, according to Bloomberg NEF.
Japan currently ranks second in the lithium-ion battery supply chain and is also expected to maintain its position through to2025, Frith said.
South Korea comes third in 2020, but by 2025 it will have fallen to eighth due to a “poor environmental score,” Frith said, largely due to its very high power transmission grid emissions - of about 400g carbon dioxide per kWh produced. Most other countries are reducing their grid emissions to become cleaner and greener, Frith added.
Sweden will rise from 10th now to fourth in 2025, while Germany, France and Finland are all in the top 10 from 2020 to2025 because of strong support from their governments in the new energy vehicles (NEV) sector.
The United States, meanwhile, is expected to move up from sixth place in 2020 to third in 2025, while the other top-10countries are the United Kingdom and Canada.
“In the US, [while] there is not as much government support as in Europe... the country will move up the rankings because so many manufacturing plants and component manufacturing[facilities are] being built there, and [the country] also has some [of the key] raw materials,” Frith said.
The ranking for the lithium-ion battery supply chain is mainly to better understand the lithium-ion battery supply chain and to gain some insight into where future opportunities might lie.
Frith said the world’s total lithium-ion battery manufacturing capacity was expected to be 525GWh by the end of the year in2020 with 78% of that manufacturing capacity located in China.
By 2025, however, the total capacity for making lithium-ion batteries will have more than tripled to 1,798GWh, and China will still have the majority of manufacturing capacity by then- although its share is expected to fall to 68%, with Europe likely to be making the most inroads in terms of increasing its market share.
In addition to its dominance in battery production, China has a major influence in the mining and refining of battery raw materials.
China greater direct and indirect control over the key battery raw materials than other countries and is the only country with direct access to captive supplies of all the key materials - including graphite, lithium, nickel and cobalt, among others - although only tiny amounts of some of these products are to be found in China.