Features
6 Apr 22

Picturing the Asian dominance in EV battery supply chain

As the demand for electric vehicles continues to rise, it’s time to look at the supply chain that powers (no pun intended) the EV manufacturing supply chain. Long story short: it’s Asian, and its dominance is massive.

Listing the main vendors*

It’s a great time to be a battery manufacturer; not only do we want more EVs, but we also want these EVs to be high-performance, long range and fast charging. The market demand is therefore not only for high volumes, but also incentivizes the supply chain to develop a better product.

Ranking

Name

Country

Market Share

Supplies to

 

Contemporary Amperex Technology Co.

China

26%

BMW, Dongfeng Motor Corp., Honda, SAIC Motor Corp., Stellantis, Tesla, Volkswagen Group, Volvo Car Group

 

LG Energy Solution

South-Korea

26%

General Motors, Groupe Renault, Stellantis, Tesla, Volvo, VW Group

 

Panasonic

Japan

7%

BMW, Ford, Stellantis, VW Group

 

BYD Co.

China

7%

BYD, Ford

 

SK Innovation

South-Korea

4%

Daimler, Ford, Hyundai, Kia

 

China Aviation Lithium Battery

China

3%

GAC Motor, Zhejiang Geely Holding Group Co.

 

Gotion High-Tech

China

2%

Chery Automobile Co., SAIC, VW Group

 

Automotive Energy Supply Corp. (AESC)

Japan

2%

Groupe Renault, Nissan

 

Ruipu Energy Co.

China

1%

Dongfeng, Yudo Auto

 

*Sources: IEEE Spectrum/Adamas Intelligence, BusinessKorea, Electrive, BMW, Ford, Honda, Volvo

Pressure on competition

The current supply of batteries does not satisfy future demand. In other words, there’s room for more capacity, either by the same supply chain or by a new, competing supply chain. But there’s an issue: ground materials are not widely available.

Battery cells require a mix of rare earth materials, many of which are sourced from Asian countries. In order to create competition, new manufacturers will not only have to catch with years of experience, but they will also need to enter in competition with the existing suppliers when sourcing for raw materials (lithium, nickel, cobalt, neodymium, praseodymium, dysprosium, and terbium) leading to price surges that will eventually translate into price increases for consumers.

New technologies

One way out of the conundrum is to develop new battery technologies. Tesla, for instance, is preparing for a shift to zero-cobalt batteries. This could keep the price down, as “there’s plenty of iron in the world,” as Musk says.

Another new technology changes the way the battery cells are packed; when replacing cylindrical cells with larger prismatic cells, it simplifies cooling and connections.

Finally, if EV buyers would be happy to buy cars with a lower range, which statistically could work as only few people actually need vehicles with a range of 400-500 km, more EVs could hit the road.

Authored by: Yves Helven