A short study of the electrictric vehicle battery supply chain

Michal Sura michsoora@gmail.com

As part of reducing CO2 emissions in the transport sector, all car manufacturers
in the world focus on the development, production and sale of battery electric vehicles
(BEV). Truck manufacturers are also considering electric powertrain, which they want to
install in trucks. BEVs use electricity stored in a battery pack to power an electric motor
and turn the wheels. The vast majority of electric batteries today are lithium-ion
batteries. Lithium-ion batteries have become a center of interest for car manufacturers
as well as buyers. The range of BEVs, their price and other issues have become very
much discussed. It is estimated that BEVs will be cost-competitive with internal
combustion engine-based cars when lithium-ion battery technology achieves the price
of 100 USD/kWh.
As BEV demand grows here in the EU, it is more important than ever for
manufacturers whether supply will be able to keep up with demand throughout the
lithium-ion battery supply chain. Problems with the supply of batteries to manufacturers
could lead to many problems, such as the reduction or even interruption of production
BEV. Such issues would lead to lost sales and lower profits for car makers.
We estimate that global LIB production capacity will increase from 455 GWh in
2020 to 1,447 GWh in 2025. China and the EU will be the largest contributors to LIB
capacity increases.
 The battery supply chain is very complicated, involving a number of important
minerals, materials, and components. The locations for materials for the production of
lithium-ion batteries stretch across regions, including China, Africa, Australia and South
America. The production of lithium-ion cells is also largely concentrated in Asia. Large
car makers are establishing new supply partnerships and joint ventures to increase
lithium-ion batteries production with companies that are relatively new to the automotive
sector. Tesla has a plan for almost complete vertical integration, starting with lithium
mining through lithium-ion batteries production to BEV production, the aim is to reduce
the price of BEVs. Such integration is unusual in the automotive industry, and the only
company that comes to mind is the Chinese company BYD – BEV and lithium-ion
batteries manufacturer.
Battery manufacturers and startups have announced construction of more than
100 new gigafactories worldwide to produce lithium-ion cells and batteries. The EU and
America are still far behind China, South Korea and Japan in battery and cell
production. China produced 80% of global battery grade raw materials in 2019. China’s
share in cell component manufacturing accounted for 66% of global production in 2019.
China produced 73% of battery cells globally in 2019. It is obvious that China is the
leader in processing of raw materials, in cell component manufacturing and cell
manufacturing, but only 23% of the global supply of all battery raw materials came from
China. A share of global cell component manufacturing in the EU accounted for only 6%
in 2019. China plays a major role in the global battery supply chain, and China goes
even further and will likely become a dominant player in case of finished BEVs. The
transition to electromobility brings new opportunities for new companies, which are new
in the automotive industry but also worries for suppliers who have supplied components
for internal combustion engines, as the production of cars with internal combustion
engines will gradually slow down.

Lithium-ion battery types

Lithium-ion battery could be defined as a type of rechargeable battery in which

lithium ions move from the negative electrode to the positive electrode during discharge,
and vice versa during charging. Lithium-ion batteries vary according to their chemical
composition, performance, price, purpose, etc.
The most used lithium-ion battery types in BEVs are:
Lithium Nickel Manganese Cobalt Oxide
(LiNiMnCoO2) - NMC
NMC batteries have long life cycle and very high
energy density. There is possible to reduce the
expensive cobalt content with some compromise in
performance. A successful combination is NCM532
with 5 parts nickel, 3 parts cobalt and 2 parts
manganese. Other combinations are NMC622 and
NMC811. The main disadvantages are slightly lower
voltage than cobalt systems and higher cost. Adding
a silicon to graphite anode makes it to grow and
shrink through charging and discharging, leading to
mechanical instability of the cell. LMC batteries are
widely used in electric vehicles and energy storage
systems (ESS) that need frequent cycling

Cycle life: 1000 - 2000

Specific energy: 150 - 220 Wh/kg
Lithium Iron Phosphate (LiFePO4) - LFP
LFP batteries have very long life cycle, durability,
excellent safety and low cost. The main
disadvantage are lower nominal voltage which
reduces the specific energy and higher self discharge
than other types lithium-ion batteries which can
cause balancing issues with aging. The cleanliness
in manufacturing process is very important for
longevity.
LFP batteries are used in electric buses or trucks,
where volume or weight is not a problem.

Cycle life: 2500 - 5000

Specific energy: 80 -120 Wh/kg

Lithium Nickel Cobalt Aluminum Oxide

(LiNiCoAlO2) - NCA
NCA batteries have very high specific energy, good
specific power and an average life span. The main
disadvantages are less safety than other Li-ion
battery types (they require extra safety features and
circuits for use in electric cars) and relatively short
life span. NCA batteries cost more in comparison to
other Li-ion battery types. They are used in different
applications like electric cars, power grid
applications, etc.. Tesla deploys NCA batteries in
their electric vehicles.

Cycle life: 500 - 700

Specific energy: 200 - 260 Wh/kg

Lithium-ion battery supply chain

For a purpose to analyse the automotive lithium-ion battery supply chain, we

have broken the value chain into several key stages. We would like to make it clear that
it is necessary to create a closed-loop lithium-ion battery supply chain in case we want
to make lithium-ion production sustainable. Batteries that have reached the end of their
life cycle are necessary to recycle, and the obtained raw materials are used at the start
of the supply chain to ease possible shortages of raw materials.
We will not deal with all stages of this value chain, we will discuss only some of them which we
consider important.

Battery raw materials suppliers

Major global lithium suppliers

Company
Jiangxi Ganfeng Lithium (China)
Albemarle (USA)
Tianqi Lithium (China)
Sociedad Química y Minera (Chile)
Mineral Resources Limited (Australia)
Major global cobalt suppliers
Company
Glencore (Switzerland)
China Molybdenum (China)
Vale (Brazil)
Gecamines (Congo)
Eurasian Resources Group (Luxembourg)

Major global manganese suppliers

Company
Vale (Brazil)
Norilsk Nickel (Russia)
Jinchuan Group (China)
Glencore (Switzerland)
BHP Group (Australia)

Battery component suppliers

Major cathode materials manufacturers

Company Country
Umicore Korea
Nichia Japan
Toda Kogyo Japan
Reshine China
L&F South Korea
ShanShanTech China
Sumitomo Japan
Shanshan Energy China
Beijing Easpring China
Ningdo Jinhe China

Major anode materials manufacturers

Company Country
Mitsubishi Chemical Japan
Shenzhen BTR China
Ningbo Shanshan China
Jiangxi Zichen China
Guangdong Kaijin China
Nippon Carbon Japan

Major electrolyte materials manufacturers

Company Country
Mitsubishi Chemicals Japan
Shenzhen Capchem Technology China
Guangzhou Tinci Materials Technology China
GS Yuasa China
Panax-Etec China
Ningbo Shanshan China
UBE Japan
LG Chem South Korea
Guotai-Huarong China

Major separators manufacturers

Company Country
Toray Industry Japan
Asahi Kasei Japan
SK Innovation South Korea
Ube Industries Japan
Cangzhou Mingzhu Plastic China
Jinhui Hi-tech China
BNE China
Celgard USA
Freudenberg, Entek International Germany

Battery cell manufacturing

Battery cell manufacturers become very important within automotive supply

chains because they produce the key component of BEVs – lithium-ion batteries. Some
of these companies are new in the automotive industry. The largest BEV battery cell
 manufacturer by current capacity is a Chinese company CATL that supplies and a range
of OEMs across the world. The second largest is a South Korean company LG Energy
Solution. Other manufacturers are fast adding their producing capacity. In 2020, the
total battery market (according to SNE Research) was around 142.8 GWh.

Top 10 lithium BEV battery cell manufacturers

Rank Company Country Capacity in 2020 OEMs supplied

BAIC, BMW, Daimler, Dongfeng, Foton,
GAC, Geely, Honda, Hyundai-Kia, Nanjing
Golden Dragon, RNM, SAIC, Stellantis,
Toyota, Volvo, VW Group, Xiamen King
1 CATL China 34.3 GWh Long, Yutong Bus, Zhongtong Bus
FCA, Ford, Geely, General Motors,
LG Energy South Hyundai, Jaguar, Renault-NissanMitsubishi
2 Solution Korea 33.5 GWh (RNM), Tesla, VW, Volvo

3 Panasonic Japan 26.5 GWh BMW, Ford, Honda, Tesla, Toyota,

4 BYD China 9.6 GWh BYD, Toyota

South Akasol, BMW, Hyundai-Kia, JAC, Stellantis,
5 Samsung SDI Korea 8.2 GWh Volvo, VW Group
South Daimler, BAIC, Hyundai, Jaguar Land
6 SK Innovation Korea 7.7 GWh Rover, Ferrari, Kia, VW Group

Envision
7 AESC China 3.8 GWh Nissan

8 CALB China 3.4 GWh Geely, GAC-Toyota

Ankai Bus, BAIC Motor, Dongfeng Motor,
JAC, Jianghuai Automobile, Jinlong,
Shanghai Sunwin, Shenwo, Zhongtong
9 Guoxuan China 2.5 GWh Bus, Zoomlion

10 PEVE Japan 2.0 GWh Toyota

Other 11.2 GWh

Source: SNE Research

 Some 74% of current battery cell manufacturing capacity is in Asia, and that
dominance is likely to continue. Around 13% of capacity and 10% in the USA is
produced in the European Union. However, increasing demand for BEV in the European
Union will lead to the construction of new manufacturing plants. There is predicted that
the European Union will increase its plant capacity share from 13% in 2020 to 33% by
2030 and reach a capacity of 1000 GWh.
There were nine gigafactories for batteries in the European Union in 2020. It is
estimated that there are planned around 30 new plants. Some of them are under
construction, some have been announced. However, there does not exist guarantee
that all of the announced plants will come to reality or reach the capacity levels
promised.

Current lithium-ion battery plants in European Union

Company Location Start date

LG Energy Solution Wroclaw, Poland 2018

SK innovation Komarom Plant 1, Hungary 2020

Samsung SDI Goed, Hungary 2020

Envision AESC Sunderland, UK 2010

Leclanche Willstatt, Germany 2020

AMTE Power Thurso, Scotland 2013

Bollore Ergue-Gaberic, France 2009

Akasol Langen, Germany 2018

Ottendorf-Okrilla, Dresden,
Liacon Germany 2019

Announced lithium-ion battery plants in European Union

It is possible to expect rapid BEV growth there in the EU, China and possible in
the USA in the 2020’s. This increase will require the growing of battery gigafactory
capacity.
Without a properly working lithium-ion battery supply chain in the EU, major car
manufacturers will risk problems in making BEVs. That why it is necessary to create a
well-developed and secure battery supply chain here in the EU, otherwise BEV
production will depend on the supply of batteries from Asia.