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GlobalData: Western weaknesses in Li-ion supply chains will slow EV adoption, show China’s dominance of the EV market

Electric vehicle (EV) production is set to skyrocket to 12.76 million cars produced each year by 2026—with more than half coming from China. China also dominates the lithium-ion battery supply chain, specifically in terms of battery cells, cathode and anode production, and chemical refining.

While the Biden Administration’s $1-trillion Infrastructure Bill clearly focuses on electric vehicle (EV) development, both the US and the EU will remain dependent on China’s lithium-ion battery supply chain for the foreseeable future, according to leading data and analytics company GlobalData.

You can’t just click your fingers and make a fully working lithium-ion battery supply chain appear—it takes time. The recent decision by Johnson Mathey to withdraw from UK battery manufacturing [earlier post] demonstrates just how hard building a supply chain can be.

Western economies are quite far behind China already, with the country having held an 80.5% share of lithium-ion battery capacity in 2020. Even with the US and EU’s best efforts, China will still dominate by 2026, with an expected 61.4% share. Further, China is strikingly dominant in both chemical refining and the production of cathodes and anodes—all critical parts of the supply chain. In the meantime, the US and EU remain vulnerable in this important future market.

—Daniel Clarke, Thematic analyst at GlobalData

GlobalData notes that the price of lithium carbonate is set to rise worldwide, from just over $10,000 in 2020 to nearly $14,000 in 2024.

The rising price of lithium demonstrates what many in the industry have warned about for some time: the growing divergence between supply and demand for lithium. Ultimately, this will lead to an increase in the price of EVs, as automakers pass the cost onto the consumer.

—Daniel Clarke

GlobalData’s report, ‘Thematic Research: Electric vehicle batteries (2021)’, notes that one of the core challenges for EV adoption is keeping the cost of a lithium-ion battery as low as possible.

Batteries are already the most expensive part of an EV. Cell costs would need to be notably below $100 per kilowatt hour for mainstream production to take off, but this isn’t looking likely. Any increases in cost will be a blow to the decarbonization agenda of advanced economies, as well as lead to a deceleration in the decarbonization of the automotive industry.

To reduce future bottlenecks, governments at COP26 need to incentivize investment into new mines for raw materials needed in EV production, as well further develop sustainable lithium-ion battery supply chains. Unfortunately, mines can take up to seven years to build, and demand for EVs is increasing by the day.

—Daniel Clarke



' Batteries are already the most expensive part of an EV. Cell costs would need to be notably below $100 per kilowatt hour for mainstream production to take off, but this isn’t looking likely. '

Just so.

The notion that mass adoption of economic as opposed to heavily subsidised premium long range BEVs are ready to go or will be shortly is quite false.

PVEVs with their greatly reduced materials demands could be done, or city BEVs.

Toyota is right, Tesla is not.


The less than $100 per kilowatt hour lithium-ion cell may not happen in the short term. This is what I posted here several years ago. Why not use sodium-ion batteries? A range on a full charge of 150-200 miles can be done with this battery. My EV has 160 miles range. I have been able to do well over 95% of trips during the last 2 years, and the rest of mainly very long trips using my wife's Vauxhall Corsa.




One thing you do not want to do is bet on the long term rise in prices of commodities. They have almost always gone down in price as extraction techniques get more efficient. Yes, there are short term disturbances in demand and supply. The price of batteries is affected by the cost of lithium but also the cost of cobalt and nickel. The main problem is that most of the world's cobalt come from the Democratic Republic of Congo which is not very democratic. However, the newer battery chemistries tend to minimize or eliminate cobalt which will reduce the cost of the most expensive ingredient. I know that you consider Lithium Sulfur to be magic chemistry but if it happens in the not so distant future (Lyten seems to think that they will have batteries ready for vehicles by 2025), the price will come considerably as sulfur is almost a throw away product. Lyten also claims that their supply chain is entirely North American. If they can even come close to the predicted 900 Whr/kg, they will more than triple what is now available with lithium ion using less expensive materials.

Also, I might note that there are at least 2 companies located on the Great Salt Lake, US Magnesium, and Compass Minerals. US Magnesium is the already the largest producer of primary magnesium in North America,

I assume that you meant PHEV and not PVEV. Anyway, HEVs and PHEVs are not going to be permitted to be sold in many markets after 2035 but by then I think that they will be a drag on the market anyway with about zero demand.


I meant to say that US Magnesium, and Compass Minerals are coming on line with separation of lithium salts from the other minerals recovered from their existing solar evaporation ponds. The lithium will be sold as high grade lithium carbonate.


The following is a documentary on low or zero cobalt batteries and how the price will decrease while the energy density will increase. A little long but generally good information.

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