Although Chinese companies dominate the megafactory landscape today, the majority of this present and future capacity is coming from Tier 2 or Tier 3 suppliers, and not the Tier 1 quality and consistency needed by western automakers like VW.
It is a challenge all western automotive producers face: will there be enough Tier 1 battery cell producers to supply enough battery cells for their EV plans?
In 2019, only 38% of global capacity came from Tier 1 suppliers. Looking out to 2029 32% of global capacity in the pipeline is set to come from Tier 1 battery manufacturers, whereas only 19% of Chinese battery cell capacity in 2029 is set to be of Tier 1 quality.
Today, the situation for Chinese manufacturers is even more severe: only 11% of China’s lithium ion cell capacity in 2019 was from Tier 1 suppliers.
Current SP and any other thoughts, page-4233
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