Batteries: US narrows gap with China

According to Global Lithium-Ion Battery Supply Chain Ranking, the US is closing the gap with China when it comes to the race to dominate the battery value chain.

The US has the second largest EV market globally, after China. Tesla and Asian cell manufacturers continue to make significant investments in the country, and the Biden administration’s policy to help establish a domestic battery supply chain and support EV growth will further strengthen the country’s position.

The US has many of the ingredients needed to foster a national lithium-ion battery value chain, but in the past, individual companies like Tesla have had to go it alone. Now that there is political support in place, however, there appears to be a coordinated effort by companies across the supply chain to anchor more value domestically.

But even as the US makes significant strides to build and strengthen its domestic battery supply chain, China continues to dominate the rankings throughout thanks to continued investment and strong local and global demand for its lithium-ion batteries.

China is home to 80% of all battery cell manufacturing capacity, with capacity expected to more than double to over two terawatt-hours, enough capacity for more than 20 million electric vehicles over the next five years. However, as governments around the world recognise the strategic importance of the battery industry, local supply chains are emerging to challenge China’s dominance.

European countries are moving up the rankings as sales of electric passenger vehicles grow steadily, attracting more investment into the supply chain. The Nordic countries appear to be leading the way as their low-carbon energy supplies make them attractive to environmentally conscious companies.

Finland will soon be home to one of the world’s largest refineries for nickel sulphate and cobalt, both key ingredients for use in EV batteries. Battery materials manufacturers Umicore and BASF have also both invested in the country.

Later, in 2021, batteries are expected to roll off the production line of the first European-owned gigawatt-hour cell plant, when Northvolt puts its Swedish plant into operation.

Europe has set an ambitious target to supply all its battery demand for the region by 2025 and has committed billions of euros in state aid to attract investment in the battery supply chain.

Like Finland, Australia, the largest producer of lithium by metric tonnes, has managed to move up the rankings by using its metal supply to attract more investment into its domestic battery industry.