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China dominates BloombergNEF’s (BNEF) lithium-ion battery supply chain ranking in 2020, having quickly surpassed Japan and Korea that were leaders for the majority of the previous decade. China’s success results from its large domestic battery demand, 72GWh, and control of 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.
Japan and Korea rank number two and three respectively In the year 2020. While both countries are leaders in battery and components manufacturing, they do not have the same influence in raw materials refining and mining as China. 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 stated Bloomberg.
“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 U.S. 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 U.S. is slower to react on this.”, said James Frith, BNEF’s head of energy storage.
BNEF’s lithium-ion battery supply chain ranking provides a snapshot of a country’s position in 2020 and where it will place in 2025, based on its current development trajectory. The work ranks countries 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, observed BNEF.
BNEF’s 2025 rankings are based on a country’s current trajectory, but if a country enacts targeted policy and regulations there is ample time to improve their position.
“A key concern of many raw materials producing countries is how to leverage resource wealth into more value-add, and attract further downstream investments, like battery manufacturing. Key distinguishing factors are the environmental footprint of industry, the availability of cheap but clean electricity, a technically skilled labor force, and incentives driving battery demand. These factors may be more important than a monopoly on one specific critical metal.”, Sophie Lu, head of metals and mining at BloombergNEF, added.
Kwasi Ampofo, BNEF’s lead analyst covering battery raw materials, said: “Access to raw materials, talent and infrastructure are vital in attracting investment into the value chain. In addition to making significant investments into mining of critical minerals all around the world, China is also the dominant player in materials refining. This has given it the advantage over Japan and Korea. Other countries seeking to be dominant players in the overall value chain may need to support upstream metals mining and refining development, while also formulating policies that will safeguard the environment.”
Lithium-ion battery supply chain rankings, 2020 and expected in 2025 predicted by BNEF is as below: