China’s EV battery lead appears unassailable

Demand may be plateauing, but China’s electric vehicle sector isn’t hitting the brakes. – An article written by George Leopold for THE OJO-YOSHIDA REPORT, in collaboration with Claire Troadec and Shalu Agarwal from Yole Group.

What’s at stake:

If any nation can ride out a projected slump in EV demand, it’s China and its EV powerhouses, battery maker CATL and car maker BYD.

Demand for still-pricey battery EVs is plateauing, at least outside the booming Chinese market, but some industry analysts predict a rebound is possible over the next 18 months when a second wave of adoption gathers steam across Asia, Europe and the U.S.

An upturn in battery EV adoption is bound to solidify China’s stranglehold on the global EV battery and materials supply web. The sector is dominated by China’s Contemporary Amperex Technology Co., which currently controls 37 percent of the global battery market. Better known as CATL, the industry leader along with Chinese EV juggernaut BYD provide lithium-iron-phosphate (LFP) batteries for all Tesla EVs made in China. (…)

Expanding capacity

While industry watchers wonder whether CATL could encounter overcapacity issues if, in fact, battery EV sales slump, few see China’s battery makers surrendering their leading market position in the foreseeable future.

CATL and other Chinese battery makers “are rapidly increasing their battery manufacturing capacity as well as focusing not only on Li-ion batteries but also beyond Li-ion batteries such as sodium-ion,” says Shalu Agarwal, Yole Intelligence’s senior technology and market analyst for power electronics and battery technologies.

“The rapidly growing battery market in China will force battery costs down while resulting in long-term dependence on China,” Agarwal adds. “China could eliminate future competition and maintain global supply dominance.”

One reason is the pure scale of Chinese battery manufacturing that is now expanding to Europe. Stellantis, the multinational automaker that includes Chrysler and Jeep brands, announced plans last fall with CATL to build a European gigafactory to produce low-cost LFP batteries. Meanwhile, Yole predicts the Chinese battery maker is likely to gain market share across Asia and India, where adoption of EV adoption is in its early stages…

… Read the full article HERE.