The great news is that sales of electric vehicles are surging, and the battery industry is rising as well. The unfortunate thing is that batteries, as well as the raw resources necessary to create them, may soon become a bottleneck, stifling progress. More bad news: Asian companies make practically all of today’s electric vehicle batteries, and it will require years for the United States and Europe to close the gap.
As per Adamas Intelligence, 3 million new electric vehicles were registered worldwide in 2020, equating to 134.5 gigawatt-hours of battery capacity. That’s a 40% rise over 2019, and the trend continues: the overall sum of battery capacity deployed during the first 5 months of 2021 was higher than in the entire year of 2018. Not only are more electric vehicles being marketed, but their battery capacity has increased as well.
The businesses that presently dominate the battery market are described in a recent piece in IEEE Spectrum, as well as some of the technological difficulties that could define the race to increase production over the next several years. Six Asian businesses contributed 87 percent of the batteries used in electric passenger vehicles as of the second part of 2020.
China’s Contemporary Amperex Technology (CATL) was the largest battery manufacturer, supplying Tesla, Stellantis, BMW, Volvo, the Volkswagen Group, Honda, and other Chinese manufacturers. CATL increased by 3,400 percent between 2016 and 2020, accounting for 26% of the worldwide battery market.
LG Energy Solution, a Korean company that provides Tesla, GM, Groupe Renault, the VW Group, Stellantis, and Volvo, is ranked second. It also has a global market share of 26 percent. Panasonic, a long-time Tesla partner that serves Toyota and possess a 17 percent market share, is in third place. Samsung SDI (Korea, 7 percent share of the market), BYD (China, 7 percent market share), as well as SK Innovation are the next three companies on the list (Korea, 4 percent market share). The remaining ten companies in the top 10 are all Asian as well.
Tesla is by now the biggest consumer for batteries, having installed 22.5 gigawatt-hours in the second part of 2020, about as much as the subsequent 5 largest EV manufacturers combined (Renault, BYD, Hyundai, Mercedes, Volkswagen).
Prices of nickel, cobalt, lithium and rare earth elements dysprosium, neodymium, praseodymium, and terbium have all risen due to increased demand for electric vehicles.
According to Venkat Srinivasan, who serves as the Director in charge of Argonne Collaborative Center for Energy Storage Science, the US will need to develop between 20 – 40 new battery plants within the next 15 years, possessing a cumulative terawatt of the new battery capacity, to be able to meet predicted demand. “At the moment, the United States does not have enough resources to do that, so material substitution and recycling are going to be critical to getting this off the ground.”