China well ahead in global EV battery market race
HONG KONG -- While Asia dominates car battery production, China dominates the supply chain in terms of EV battery components, according to the global financial group, Natixis. "Most EV battery components are currently produced by the three Asian battery powerhouses (China, South Korea and Japan), but China's leading role in the "underneath" components is more obvious than EV battery supply." Natixis says.
The report says that while competition between China and Japan was neck-and-neck for some years, the gap has widened in China's favour since 2014, with China's market share of EV battery components surging from 43% in 2014 to 60% in 2020.
"China's dominance in EV battery technology and its key components is related to the trend and structure of EV demand," Natixis says.
"Before 2020, China had stronger demand for battery electric vehicles (BEV) than elsewhere, and this has spawned domestic battery makers, such as CATL and BYD. In contrast, Europe has opted for plug-in hybrid electric vehicles (PHEVs), which can be catered for with less powerful batteries.
Natixis says Japan remains competitive in innovation, having filed 41% of International Patent Families in battery technology from 2000 to 2018 according to the European Patent Office. But limited domestic EV demand is a drag for Japan versus China.
The report points out that challenges still exist for China in securing supply of new materials, such as lithium, cobalt and nickel. In Asia-Pacific, it says, Australia can be the winner with large reserves to feed such demand, "even though the main supply may come from other countries, such as Chile and Congo".