MOBILITY
EV BATTERY SUPPLY CHAIN Trends, risks and opportunities in a fast-evolving sector
Global electric vehicle demand has risen rapidly over the past five years and the increase in sales will be exponential over the next decade. Electric vehicle battery supply chains are under immense pressure to scale and keep pace with the heightened demand. BY FITCH SOLUTIONS*
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itch Solutions forecasts global electric vehicle (EV) sales to reach over 26.7-million units in 2030, representing yearon-year growth of 379% from 2021. More importantly, the annual global demand for EV batteries, in terms of total global capacity, is expected to reach 1 925GWh by 2030, an increase of 688% from 244.7GWh in 2021. In response to this demand, automakers have been pressured to adapt their model line-ups and associated supply chains (especially as it pertains to EV batteries and their sub-components) to ensure that they are best placed to capitalise on this elevated demand outlook over the coming decade and beyond. EV demand has also been bolstered by the global drive towards decarbonisation. Many auto manufacturers have established clear targets that aim for either total or partial electrification of their fleets.
Commitments were made by some automakers at the COP26 conference, including GM, Ford, Mercedes, BYD, Volvo and JLR, which all committed to entirely zero emissions new car and van sales by 2040. Governments have also driven global demand for EVs, as EV adoption is a critical component of governments’ climate targets. Disruptions caused by pandemic-related shortages and price spikes in the commodities used in lithium-ion batteries (LiBs) have created bottlenecks and heightened competition among automakers to secure necessary stocks of these components. EV supply chain resiliency will be a chief concern in the near term as it will be essential for automakers to employ a range of strategies at the upstream, midstream and downstream stages if they are to secure sufficient materials and components necessary to meet their electrification targets.
Annual averages based on comissioning year Illustrative trend
Announced capital costs per unit of new EV and energy storage battery manufacturing capacity, 2010-2019.
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www.iea.org
USD/Wh capacity
