Bloomberg New Energy Finance (BNEF) recently released it’s second annual Global Lithium-Ion Battery Supply Chain Ranking. This ranking provides a snapshot of a country’s position in 2020 and where it will place in 2026, based on its current development trajectory.
The work ranks countries across five key themes related to the supply chain: raw materials, cell & component manufacturing, environment, RII(Regulation, Infrastructure and Innovation) and demand. The five key themes were given equal weightings in the overall ranking.
- Raw materials are ranked on resource availability, mining capacity and refining capacity.
- Cell & components are ranked based on the manufacturing capacity of electrolyte salts and solutions, anodes, cathodes, separators and cells.
- The environment is ranked based on electricity grid carbon emissions, renewable policy, environmental health and ecosystem health.
- RII is ranked based on infrastructure, policy, R&D investment and STEM education.
- Demand is ranked based on Lithium ion battery demand from transport and stationary storage.
China continues to dominate BNEF’s global lithium-ion battery supply chain ranking in both 2021, thanks to continued investment and strong local and global demand for its lithium-ion batteries. China hosts 80% of all battery cell manufacturing capacity today, with capacity expected to more than double to over two terawatt-hours, enough capacity for more than 20 million electric vehicles (EVs), in the next five years. Yet, as governments around the world recognize the strategic importance of the battery industry, local supply chains are emerging to challenge China’s dominance.
The U.S. moves up in the ranking to come second in both 2021 and 2026. As a country, the U.S. has the second-largest EV market globally, after China. Tesla and Asian cell manufacturers continue to make significant investments in the country, and the Biden administration’s policy to help establish a domestic battery supply chain. Moreover, it will support the EV growth which leads to further strengthen the country’s position.
European countries are also rising up the ranking as passenger EV sales steadily grow, attracting more investment in the supply chain. Nordic countries are increasingly important to Europe’s efforts, as their low-carbon power supplies make them attractive to environmentally conscious companies. Finland will soon be home to one of the world’s largest refineries for nickel and cobalt sulfate, both key ingredients for use in EV batteries. Battery material producers Umicore and BASF have also both invested in the country. Later in 2021, batteries are expected to roll off the production line from the first European-owned gigawatt-hour scale cell plant, when Northvolt commissions its Swedish facility.
Table: Top 15 Countries as per BNEF’s rankings
|Overall Rank||Country||Raw Materials||Manufacturing||Environment||Regulatory environment and infrastructure||Battery Demand|
South Korea and Japan rank lower in 2021 compared to last year, but Japan is on track to rise up through the ranking to take third place in 2026, as domestic demand increases alongside continued investments in materials refining and component production. However, Japan and South Korea’s environmental scores continue to hold them back, a result of the high carbon intensity of their power grids. While not everyone values sustainability when it comes to lithium ion battery manufacturing, automakers have increasingly high standards for the carbon footprint of battery cells.
Most resource-rich countries rank lower in the supply chain ranking as they generally lack a domestic battery supply chain and battery demand. However, some of these countries, such as Australia and Finland, have managed to move up the rankings.