Currently, Asia has capitalised the market on producing lithium ion batteries by manufacturing more than 80% of the demand. In 2019, the number 1 lithium ion battery manufacturer was Korea’s LG Chem which has agreements with Volkswagen, Nissan and Hyundai among many others. Coming up behind LH Chem, being the world number 2 battery manufacturer, was China’s CATL and in 3rd place was China’s BYD. Closely following behind these companies is Japan’s Panasonic. Unfortunately European manufacturers don’t even come close to competing with these huge companies in the world market for EV batteries.
Importing batteries from China, Korea or Japan has huge implications on the price for our European automakers. This is clearly an area for improvement so that car companies can decrease the price of EVs to compete with the price of combustion engine vehicles and increase their popularity among the average population.
Looking into the future, this could all change for Europe as the EU have said they are confident that Europe could produce enough batteries by 2025 to supply its automotive industry and could even be enough to export to other counties.
At the moment, Europe has 15 large scale battery cell factories under construction. This includes, a Swedish company called Northvolt’s which has plants in Sweden and in Germany and SK Innovation’s plant in Hungary which is a South Korean company. China’s CATL even has a facility under construction in Germany.
The development of these plants to manufacture Lithium batteries are part of the EU’s plan to be carbon neutral by 2050. Local production of the “building blocks” for green industries is integral in their strategy to meet their strict targets and could see huge economic benefits as well as environmental benefits for Europe.
While the coronavirus pandemic has put a spanner in the works for EV sales, the future sales of battery EVs and plug-in hybrids are expected to double in 2021 according to NGO Transport and Environment. With this huge increase in demand comes the extra pressure on supply chains which provide the essential materials for these cars, and so, the construction of these battery plants are needed to support the boom in sales that is expected in the near future.
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