A lot of people have been wondering how China came to dominate the lithium-ion battery to electric vehicle supply chain by building capacity in metal refining.
It, in fact, goes beyond that as battery-grade chemicals production and cathode and anode making are all being controlled by the same
country, according to new data from Benchmark Mineral Intelligence.
The data demonstrate China’s share of global total production in 2019 for each stage of the battery supply chain.
Combined in the chart are the key battery raw materials of lithium, cobalt, nickel, graphite, manganese, and where they are extracted through traditional mining or brine operations, based on location.
However, the origin country of the operator is not included.
Midstream refers to refining or battery-grade chemical production from these raw materials, cathode, and anode production from these chemicals while downstream breaks down lithium-ion battery cell production.
The research firm says while there is a misconception that China is a major producer of battery metals, only 23 per cent of the global supply of all battery raw materials comes from China.
But its dominance in the chemical production of battery-grade raw materials stands at 80 per cent of total global production as China has invested significantly in its lithium carbonate and hydroxide, cobalt sulphate, manganese, and uncoated spherical graphite refining.
Capacity ownership of this crucial chemical conversion refining step ensures the global raw material flows point towards China for value-added production, Benchmark says.
Meanwhile, the core building blocks of the lithium-ion battery – cathodes and anodes – are similarly dominant at a combined 66 per cent of global production in 2019.
This breaks down as 61 per cent for cathodes, but significantly higher for anodes: 86 per cent of all anodes (natural and synthetic graphite) are produced in China while 100 per cent of all natural graphite anode is made in China.
Another step down the value chain is lithium-ion battery cell manufacturing.
The rise of battery mega factories, says Benchmark, has predominantly been taking place in mainland China so it comes as little surprise that 73 per cent of output last year was within China.
Of the 136 lithium-ion battery plants in the pipeline to 2029, 101 are based in China.
Coming out of the coronavirus pandemic, China’s supply chain dominance puts it in the driver’s seat for the future of the automotive industry as EV investments scale and legacy ICE technologies falter.
The data demonstrate its dominance from last year, a picture that is set to grow in favour of China out to 2025.