In the high-stakes race to dominate the electric vehicle (EV) market, the lithium-ion battery supply chain is the new oil, and China is currently the undisputed heavyweight champion. A recent study published in the Journal of Power Sources Advances, led by Tim Greitemeier from the University of Münster, Institute of Business Administration at the Department of Chemistry and Pharmacy, sheds light on the intricate web of global competition and control over this critical resource.
The research, which translates the journal name to English as Journal of Power Sources Advances, delves into the complex supply chain of lithium-ion batteries, which are the lifeblood of the EV revolution. The study identifies lithium, nickel, manganese, and cobalt as the key raw materials, with China holding a commanding position in the production of lithium iron phosphate (LFP) batteries, boasting a staggering market share of over 98%.
“China’s dominance in the LFP sector is particularly striking,” Greitemeier notes. “This level of control raises significant questions about supply chain vulnerabilities and the potential for other regions to capture a larger share of the market.”
The study also highlights the substantial output of South Korea, Europe, and Japan in the production of lithium nickel manganese cobalt oxide (NMC) batteries, suggesting that these regions could serve as viable targets for mitigating supply chain vulnerabilities and achieving greater growth and sovereignty.
The commercial implications of this research are profound. As the global push towards electrification accelerates, the control over the lithium-ion battery supply chain will become increasingly critical. For energy sector professionals, this means navigating a complex landscape where geopolitical tensions, technological advancements, and market dynamics intersect.
The study underscores the need for strategic investments and partnerships to bolster domestic production capabilities and reduce reliance on foreign suppliers. As Greitemeier puts it, “The future of the EV market will be shaped by those who can secure a stable and sustainable supply of critical raw materials.”
The research also raises important questions about the environmental and ethical implications of the lithium-ion battery supply chain. As the demand for EVs continues to surge, so too does the pressure on the environment and the communities that live near mining sites. The study calls for greater transparency and accountability in the supply chain, ensuring that the transition to a more sustainable energy future is equitable and just.
The findings of this study are likely to shape future developments in the field, as policymakers, industry leaders, and investors grapple with the challenges and opportunities presented by the lithium-ion battery supply chain. As the race to dominate the EV market intensifies, the stakes have never been higher, and the need for strategic foresight and bold action has never been more urgent.