WR1 General Discussion, page-32911

Western market has no economy of scale when it comes to battery production costs. China leading the way dropping battery costs by 90% from intense market players competition...

https://gulfnews.com/special-reports/global-battery-race-800-surge-in-production-90-drop-in-price-know-the-leaders-and-laggards-1.1726222194649

Global battery race: 800% surge in production, 90% drop in price, know the leaders and laggards

Multi-billion quest for the best battery technology is key to a renewable future

Published: September 14, 2024 07:06

Success in the global battery race, currently led by China, could define the world’s energy future and reshape transportation for the next decade—if not longer.

Image Credit: Shutterstock

The future of electric vehicles (EVs) and VTOL air taxis hinges on one thing: batteries.

It's a battle fought on both economic and technical fronts, with the greatest challenge being to achieve the highest energy density, fastest charging, longest cycle life, best safety features, and lowest cost.

Amid a ferocious battery price war, this high-stakes race is a complex, decades-long balancing act, involving multiple technologies and global players.

Global competition

US battery production capacity is projected to grow 10x in 5 years from 2022.

By 2027, when the world battery production jumps to 8,945 gigawatt hours (GWh), from 1,163 GWh in 2022 — a nearly 800-per cent jump — Bloomberg expects China to further cement its dominance.

The mainland will account for 69 per cent (or 6,197 GWh) of the global battery production, by 2027.

And despite the expected 10x growth of the US battery production capacity by then, America (with 908 GWh battery production capacity expected by 2027) it will account for only up 10 per cent of the global production.

Germany, the erstwhile automotive powerhouse, will get just 6 per cent at 502 GWh. Hungary (195 GWh), Sweden (135 GWh) and Poland (112 GWh) will each account for between 1 to 2 per cent; the rest of the world will share the crumbs.

How did this come about?

China’s edge is due in part to its policy that encourages domestic ultra-competition among producers. A big part of it is policy push – which has led to its dominance in cathode, anode, and refined battery materials production.

By 2030, China’s leadership in batteries (thanks to CATL and BYD, with a combined market cap of $214 billion as of Friday, September 13, 2024), with nearly 70 per cent of the global production, will remain, according to a Benchmark Mineral Intelligence estimate.

The competition in the battery market is fierce. The US government recently reported that EV battery prices have dropped by a whopping 90 per cent in just 15 years.

Has complacency over this strategic industry, in the West as a whole, slowly but surely eroded its position, leaving it vulnerable to the relentless rise of global competitors?

Government support

Sheer market forces don't hack it anymore. Policy initiatives play a crucial role in driving the renewable lifestyle through research funding, incentives.

Why? With each new technology, new rules and standards emerge.

Government support

Sheer market forces don't hack it anymore. Policy initiatives play a crucial role in driving the renewable lifestyle through research funding, incentives.

Why? With each new technology, new rules and standards emerge.