Electrification is happening far faster than many imagined just a few years ago. AlixPartners, an auto industry consultancy, expects about 28% of the world's cars to be electric by 2030. About a third of the $330bn that companies will spend on the global electric vehicle supply chain over the next five years is expected to be spent on batteries, mainly in China and Europe, with the US struggling to catch up.
The United States aims to make electric cars 50% of sales by 2030
As it stands, China is the world's largest market for electric vehicles; The sales volume of electric vehicles in Europe continues to climb. In the first eight months of this year, the number of electric vehicles registered reached 1.32 million, and the market share of electric vehicles in August even exceeded 20%. In contrast, the US is slightly behind in the electrification transition, with about 295,000 electric vehicles registered in the first August of this year, accounting for just 2.7 per cent of the US new-car market.
Although the horizontal comparison is slightly behind, but from a vertical perspective, the US electric car market is still promising. Three years ago, there were fewer than 1 million electric vehicles on the road. As electric vehicles make up an increasing share of total vehicle sales, analysts expect that number to exceed 8 million by 2025; By 2030, there will be 27 million electric vehicles on the road in the United States, and electric vehicle purchases will account for 20 to 30 percent of total vehicle sales.
The capacity of power batteries in North America will increase eightfold by tying us automakers to foreign battery makers
But U.S. President Joe Biden clearly has bigger ambitions. After taking office, Biden proposed a $174 billion investment to support the U.S. electric vehicle market, including $100 billion in subsidies for electric car buyers and another $15 billion to build 500,000 new electric vehicle charging stations. Biden's goal is to increase electric vehicle production and sales to 50 percent of all U.S. vehicle sales by 2030, while reducing U.S. dependence on imported batteries, battery components and materials. Biden bluntly said the U.S. currently lags behind China in electric vehicle sales, but the U.S. will set a new pace for electric vehicles and will try to win the electrification race.
With strong support from the Biden administration, automakers are also ramping up their presence in the U.S. electric car market. Ford increased spending on electric vehicles by more than a third to more than $30bn by 2030; Gm increased spending on electric and autonomous vehicles to $35 billion by 2025; Stellantis plans to make 40% of its U.S. sales in electric vehicles by 2030; Volkswagen is readjusting its U.S. operations to make and sell more electric cars in North America. Global demand for electric vehicle batteries and the materials they are made of is set to soar in the coming years, as the world's major automakers commit to increasing supply and sales of electric vehicles.
The capacity of power battery in North America will increase dramatically as US car companies tie up foreign battery manufacturers
Batteries are a key component of electric vehicles, and most of them are now made in Asia, with China accounting for more than 70 per cent of global battery capacity. Demand for batteries in Europe more than doubled last year, outpacing capacity. The US lags even further behind in battery production, with Kim Jun, CHIEF executive of SK Innovation, pointing out that "the current CAPACITY in the US is far from enough to meet demand. "A new battery factory takes 30 months, including site selection, construction and product testing." As a result, Mr. Kim said, the U.S. auto industry will continue to face battery shortages until 2025, a challenge to the Biden administration's ambitious electric-vehicle sales goals.
Haresh Kamath, energy Storage Program manager at the Electric Power Research Institute (EPRI), said, "Asia is way ahead in battery capacity simply because the existing lithium-ion battery production infrastructure in Asia has been there for the last 20 to 30 years. By comparison, battery makers have made relatively small investments in the U.S. and most of those investments have come from Asian companies." But with the Biden administration's electric vehicle incentives, more electric vehicles will be assembled in the U.S. in the future, and more battery manufacturers will announce investments in U.S. plants, leading to an increase in U.S. battery production.
LG chem's battery unit, LG energy solutions (LGES), has said it plans to build at least two plants in the U.S. and invest more than $4.5 billion in U.S. production operations by 2025, which would allow LGES to produce 70GWh of batteries in the U.S. by 2024. SKI plans to increase global battery capacity to more than 200 GIGawatt hours by 2025, with expansion focused on the United States. Carmakers are also spending billions of dollars to boost battery production, given the current shortage of chips. Stellantis has partnered with Samsung SDI and LGES to build two new battery plants in the U.S. Ford chose to partner with SKI to build three new us plants with 129GWh capacity. Gm is considering building two more battery plants, as well as two with LGES; Even Toyota, which has been slow to make the transition to all-electric vehicles, announced a $3.4 billion investment in the U.S. to boost its electric-vehicle batteries in the country.
There are 27 battery plants, including batteries and packs, that have been announced or are operating in the U.S., according to the Center for Automotive Research. Based on information released by automakers and battery manufacturers, Gasco has compiled a list of battery plants that have been built, are under construction or will be built in North America, including the United States, Mexico and Canada.
The capacity of power batteries in North America will increase eightfold by tying us automakers to foreign battery makers
Among them, the current capacity of battery in North America is less than 60GWh. Besides Tesla, the capacity of battery manufacturers in the United States is very small. It can be seen that the United States is really weak in the battery supply chain. However, thanks to Biden's electrification policy, global car and battery companies are building gigafaculas in North America, with 470GWh of battery capacity currently under construction or planned in North America, which has also started to expand the north American battery circle, which was once backward.
It's also worth noting that the vast majority of the 400 + GIGawatt hours planned/under construction will be tied up with Japanese and Korean battery makers by U.S. automakers, but that will bring some of the battery supply to the U.S. to appease Biden. As Arun Kumar, managing director of AlixPartners' automotive and industrial practice, says, "Electrification will happen soon, and the shortage of semiconductors due to the coronavirus pandemic has made us realize that we need to do more than just use batteries as a commodity. If you really think about mass manufacturing batteries, localization becomes an important factor."
