25/07/2021 Tight Battery Market Is Next Test for EVs After Chip Crisis - Bloomberg

Hyperdrive

Tight Battery Market Is Next Test for EVs

After Chip Crisis
By Annie Lee
22 de julho de 2021 18:00 BRT
Updated on
23 de julho de 2021 02:30 BRT

China’s SVolt sees raw material constraints, rising demand

Producer is adding production lines in Europe as market booms

SVolt’s battery factory in Changzhou

Source: SVolt Energy Technology Co.

Rising demand from electric vehicles and challenges in securing raw materials will deliver a
battery supply crunch for automakers already grappling with a chip crisis, according to a key
Chinese manufacturer.

“When the chip shortage is over, the major supply shortage the industry faces would be
batteries,” Yang Hongxin, chairman of SVolt Energy Technology Co., which has struck an
agreement with Jeep-maker Stellantis NV, said in an interview. “The production capacity of
battery cells will be tight in the next few years because expansion takes time.”

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25/07/2021 Tight Battery Market Is Next Test for EVs After Chip Crisis - Bloomberg

Global automakers are rapidly adding electric models as battery prices plunge and as
governments set deadlines to phase out sales of new combustion-engine cars to help meet
climate targets. Demand for lithium-ion batteries from transport and energy storage will
surge to as much as 5.9 terawatt-hours a year in 2030, putting a strain on supply chains,
BloombergNEF said in an annual New Energy Outlook report published Wednesday.

Availability of sufficient lithium products, copper foil and some cathode materials could
become a constraint on the battery sector’s efforts to keep pace with demand, according to
Yang. Current high raw material prices may not ease until the second half of next year and
“the price pressure will have to be shared along the supply chain,” he said.

All key battery metals have seen prices advance over the past year, with lithium carbonate in
China more than doubling. Gains in cobalt sulfate prices indicate a bottleneck in production
of the material, according to BNEF.

To read BNEF’s Battery Metals Price Tracker, click here

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“Batteries could be the next EV component facing a potential shortage,” said Dennis Ip, a
Hong Kong-based analyst at Daiwa Capital Markets. Lithium materials could be in deficit for
the next 2 to 3 years, a factor that would potentially add to the cost of an electric vehicle, he
said.

Changzhou-based SVolt, a spin-off of carmaker Great Wall Motor Co., is seeking to add further
exposure to lithium production, and is examining potential targets including mines and salt
lake operations in China, Yang said.

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25/07/2021 Tight Battery Market Is Next Test for EVs After Chip Crisis - Bloomberg

SVolt Chairman Yang Hongxin Source: SVolt Energy Technology Co.

The producer is planning an aggressive expansion in manufacturing and aiming to have

capacity of more than 200 gigawatt-hours by 2025 from less than 1 gigawatt-hour in 2020.
That compares to proposals from Contemporary Amperex Technology Co., the industry
leader, to lift capacity to 550 gigawatt-hours, including joint projects, by the same date,
according to BNEF data.

Read more: China’s SVolt Joins Europe’s EV Race With $2.4 Billion Factory

SVolt has announced four new expansion projects worth about $4.6 billion since the start of
the year, including a 2 billion euros ($2.4 billion) facility in Germany that will be the firm’s
first factory in Europe. The company is also considering the addition of one or two further
production bases in China, Yang said.

The company is continuing to plan to list on the Star board of the Shanghai stock exchange in
late 2022 or early in 2023, Yang said.

— With assistance by Ying Tian

(Adds details on raw material prices in fifth paragraph)

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25/07/2021 Tight Battery Market Is Next Test for EVs After Chip Crisis - Bloomberg

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