ASIA DOMINATES THE BATTERY MARKET

by Máté Litkei

THE EUROPEAN PARLIAMENT OFFICIALLY APPROVED THE REGULATION THAT REQUIRES MAJOR CAR MANUFACTURERS TO ONLY SELL CLIMATE-NEUTRAL VEHICLES DURING THEIR OPERATIONS FROM 2035. THE UNDISCLOSED AIM OF THE MEASURE IS TO ACCELERATE THE TRANSITION TO ELECTRIC VEHICLES. THIS MEANS THAT THE NEED FOR BATTERIES WILL DRAMATICALLY INCREASE SOON.

The share of Asian companies is enormous in the battery production market. 92 per cent of the batteries produced for electric vehicles are produced by Asian companies, 56 per cent of the market is covered by Chinese companies, 26 perc cent by South Korean ones, and 10 per cent by Japanese companies. The largest manufacturer, China’s Contemporary Amperex Technology, alone accounts for a third of the global market, serving Tesla, Peugeot, Hyundai, Honda, BMW, Toyota, Volkswagen and Volvo, as well as Chinese factories.

The development of Chinese dominance was helped by the policies of the Beijing government. Over the past decade, tax breaks and almost $15 billion in direct support have been provided to the sector, thus ensuring the country’s technical superiority. The great advantage of value chains built by Chinese companies is that they have an abundant supply of metals essential for battery production.

The European Commission estimates that to cover the EU demand alone, the battery market requires 20-25 Gigafactories to be established in Eu- rope. Another bottleneck for creating the entire battery value chain is the availability of raw materials. Currently, the EU is reliant on imports of primary battery raw materials from third countries.

By the end of the decade, Europe’s largest battery-producing country will also be Germany which is the strongest automotive industry. In addition to European investors, Tesla, and China’s CATL and SVOLT are also building factories in Germany.

Currently, less than one-sixth of the global battery production capacity is in Europe. By the end of the decade, this value may reach 20 per cent, which may be sufficient to meet the continent’s electric vehicle needs. Overall, it can be seen that Europe is currently competing with the USA for second place, not with China for first place.

The author is Director of Climate Policy Institute of Mathias Corvinus Collegium

Top 10 Ev Battery Manufacturers In 2022 And Their Market Share

1. Contemporary Amperex Technology Co. (34%, China),

2. LG Energy Solution (14%, South Korea),

3. BYD Co. (12%, China),

4. Panasonic (10%, Japan),

5. SK Innovation (7%, South Korea),

6. Samsung SDI (5%, South Korea),

7. China Aviation Lithium Battery (4%, China),

8. Gotion High-Tech (3%, China),

9. Sunwoda Electronic Co (2%, China),

10. SVOLT Energy Technology (1%, China).