Machinery / Industrial Parts & Tools

Recently, a report by the information company Roskill pointed out that the global competition for control of lithium battery production has intensified, and news about new lithium battery plants and expansion of production capacity has continued to spread. For example, Nissan officially confirmed in early July that Envision AESC will establish the first Two 9GWh factories.

The analysis agency said that the geographical distribution of lithium battery production capacity is still centered in Asia, with China being more concentrated. It is expected that by 2030, China will account for more than 58% of global production capacity. At the same time, data shows that in addition to meeting domestic demand, Chinese lithium battery manufacturers have been working hard to expand their international customer base. On the other hand, Europe is actively building its own lithium battery industry. Government incentives and stricter emission regulations are playing an important role in the rapid expansion of the electric vehicle industry.

Roskill predicts that Europe's share of global lithium battery production capacity will increase from less than 6% in 2020 to 26% in 2030. At the same time, North American countries are likely to join the competition in the construction of lithium battery production capacity, but to catch up requires effective cooperation between the industry, investors and regulatory agencies.

In this context, due to the strong demand for electric vehicles, consumer electronics and energy storage systems, the report believes that the raw material market will be under pressure, which will cause supply chain problems, especially in the absence of incentives for projects and expansion investments.

The report explains that it is this possibility that drives battery manufacturers to actively participate in mining and mineral processing through joint development and equity investment, and to deepen existing business relationships through long-term purchase agreements to ensure the supply of raw materials for battery production. The commentary pointed out that in the midstream area, battery material factories have established their own affiliated factories to ensure the supply and quality of raw materials.

Roskill predicts that by improving the quality and scale of lithium battery products and obtaining long-term procurement contracts, some battery manufacturers will improve their competitive position in the next two years. Automakers that produce batteries are not expected to enter the competition anytime soon. The report points out that battery production involves a lot of complexity. Automakers may face challenges if they want to produce batteries from scratch and accumulate expertise within the company. Roskill believes that cooperating with powerful battery manufacturers is the best choice for most automakers. In the long run, internal battery production will enable automakers to have their own supply chain, which can guarantee battery supply. Make the vehicle cost-competitive.