China continues to lead the world’s battery supply chain

For the third consecutive year, China continues to lead the world's lithium-ion battery supply chain according to BloombergNEF's (BNEF) projections for 2022 and 2027.
This dominance is due to investments in raw materials and sustained support for the demand for electric vehicles. 90% of anode and electrolyte production as well as 75% of total battery cell manufacturing capacity are now located in China.

Due to increased investments in carbonate and hydroxide refining facilities in the nation as a result of rising lithium prices, it is now the world’s top refiner of battery metals. In spite of this expansion, other nations are implementing laws to increase the demand for batteries and secure the raw materials they need to enable their switch to electric vehicles.

This year, Canada moved up to the second position in the list due to the country’s abundant raw material resources, mining activities, and strong performance in infrastructure, industry, innovation, and environmental, social, and governance (ESG) sectors.

Despite a significant increase in battery demand brought on by the Inflation Reduction Act, the US slid to third place in the rankings. With the exception of ESG, where it came in at number 16, the US landed in the top 10 in every category.

It will rank highly in the leaderboard because to the significant battery demand for stationary storage and the sharp increase in passenger car sales (from 5% in 2022 to 34% by 2027).

Despite having the largest increase in raw material consumption among all nations in 2022, the US will still need to import raw materials for batteries, particularly from its free-trade partners like Australia.

The majority of European nations saw a fall in their overall performance; Finland and Czechia were the only exceptions. The top-placed European nation was Finland, which came in at number four worldwide. The nation is positioned advantageously among top lithium-ion battery countries thanks to its expanding battery metals supply chain, reasonably clean grid, and high-quality infrastructure.

In 2022, Germany and Sweden’s ranks suffered due to a shortage of local raw materials. The continent’s battery production is expanding despite its poor raw material scores. With the opening of new cell and component manufacturing facilities in the upcoming years, Germany and Hungary will be able to produce batteries at a level with Poland.

According to all production indicators for batteries, China, South Korea, and Japan were the top three nations. Their manufacturing bases have historically been the most well-established, and they have industrial policies that are favourable.

In 2014, US cell manufacturing capacity overtook that of Japan, and in 2016, that of South Korea. The majority of multi-gigawatt-hour cell production plants that are now in operation throughout the globe are owned by Chinese, Japanese, or Korean firms (Tesla’s Nevada Gigafactory was created in collaboration with Panasonic).

South Korea and Japan both declared local and international increases in their capacity to produce cells in 2022, as well as supply chain plans to acquire essential components.

Source: BloombergNEF

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A color-coded chart titled "BNEF 2022 global lithium-ion battery supply chain ranking" showing rankings for countries. Categories include raw materials, battery manufacturing, ESG, industry, innovation, infrastructure, downstream demand, and overall ranking. China ranks first.

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