I am seeing main stream media in China is becoming aware of Novonix in the graphite sector.
Chinese batteries are under siege by Europe and the United States
Automotive Business Review 2023-12-29 10:26
Written by Ma Xiaolei Editor /Tu Yanping Design /Shichao Source /Financial Times, author: Harry Dempsey
Chinese batteries are under siege by Europe and the United States.
On the other hand, the United States released guidance on foreign sensitive entities under the Inflation Reduction Act. Starting in January 2024, electric vehicles containing battery components made in China will lose their eligibility for tax credits in the United States; by 2025, electric vehicles that use key battery raw materials extracted and processed in China will also lose their eligibility for subsidies.
On the other hand, the EU is also busy establishing a battery supply chain independent of China, thereby reducing its dependence on Chinese imports and stimulating EU manufacturers to invest in improving EU battery manufacturing capabilities.
Nearly 70% of the world's battery production capacity is in China, and Europe is the main market for China's battery product exports.
The European Parliament voted in September 2023 to adopt a plan to diversify the supply of key raw materials. According to reports, in order to reduce dependence on China, the proposal plans to ensure that by 2030, no more than 65% of its strategic raw material supplies will be imported from a single country, and encourage automakers to establish partnerships directly with mining companies.
Just when the EU is busy trying to "de-China" the battery supply chain, a top manufacturer issued this warning: "Under the call of clean energy subsidy policies, companies are turning their attention to the United States. Europe’s plans to create a battery supply chain for electric vehicles independent of China will face significant delays.”
In August 2022, the United States launched the Inflation Reduction Act (IRA), which is the largest climate bill in U.S. history. It will invest US$369 billion in new energy and climate change projects and provide subsidies and taxes for a series of green industrial products. discount.
"We have been considering expanding to Europe, but financing has become the biggest problem," said Chris Burns, a former Tesla engineer and head of Australian battery materials maker Novonix.
Novonix factory in Tennessee, USA. The group produces battery material - graphite, and plans to focus on the US market ▼
Novonix, which produces graphite, an important battery material, plans to focus on the US market because the incentives in the IRA are so attractive that neither the EU nor the UK can match them.
"Our current focus is to deliver the Riverside, Tennessee, plant as soon as possible and produce graphite there, and then start the next plant in North America. Before 2030, our schedule is full." Burns said.
Novonix's goal is to produce 20,000 tons of graphite per year at its Riverside plant in Tennessee, and then further expand production in North America to reach 150,000 tons per year. Investors behind the company include South Korean battery maker LG Energy Solutions and U.S. refining group Phillips 66. The coke produced by Phillips 66 is an important component of the "non-Chinese sources" of raw materials required for graphite production at the Humber refinery in the UK.
"We've looked at the idea of sourcing Humber products in Europe and the UK," Burns said. "But those plans will be implemented in the future." He said Novonix could start making plans for a European factory before 2030, but that would be It depends on whether automakers and battery makers commit to purchasing the company's products in the future.
Novonix's plan further highlights the great difficulties faced by Europe in establishing an electric vehicle battery supply chain independent of China under the threat of huge US subsidies. At the same time, China is the world’s main supplier of graphite and even other raw materials needed for batteries.
Graphite, known as "black gold", is relatively concentrated around the world, with only a few countries possessing abundant graphite minerals. As of the end of 2022, the world's proven natural graphite resource reserves are approximately 330 million tons. Among them, China ranks third, accounting for 15.8%.
Data from Benchmark Minerals Intelligence (BMI) shows that Europe faces a particularly severe challenge when it comes to the anode components of batteries, which are made of graphite, as China controls 75% of this part of the supply chain. In October 2023, China implemented export controls on specific types of graphite.
Europe will rely heavily on China’s anode materials▼
According to reports, after the United States imposed stricter restrictions on Chinese manufacturers, Chinese companies began to target more operations in Europe and nearby regions.
Shanghai Putilai announced in May 2023 that it planned to invest US$1.3 billion to build a factory in Sweden. Its competitor Ningbo Shanshan is also considering making similar investments in Finland.
In addition, Canadian battery materials group SRG Mining, which is partnering with Chinese technology group C-One, said it plans to invest US$300 million to US$500 million to build a factory in Morocco to serve the US and European markets.
This not only highlights China's leading position in the clean technology industry, but also demonstrates the current situation of Chinese lithium battery companies accelerating their overseas expansion. It will deepen Western countries' dependence on China's clean technology and further promote the international development of China's lithium battery equipment industry.
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