Asian firms lead in automotive battery supply chain

7th November 2023
Sheryl Miles

The forecasted demand for lithium-ion battery packs, essential for PHEVs and BEVs, is set to rise markedly, from about 430GWh in 2022 to an estimated 1,500GWh by 2028, according to Yole Intelligence's analysis.

Demand surge and market growth

Shalu Agarwal, PhD., Senior Analyst at Yole Intelligence, part of Yole Group, states: "The annual market for Li-ion battery packs designed for BEVs and PHEVs is anticipated to expand from about $70 billion in 2022 to approximately $180 billion by 2028, showcasing a robust 16.9% CAGR during the period."

The 'Battery Pack for Automotive 2023' report from Yole Intelligence provides a comprehensive review of battery pack components for the automotive market, including detailed market forecasts and technology trends.

Asian producers at the forefront

"The global production of Li-ion batteries is predominantly led by Asian companies, with China holding a 57% market share," asserts Dr. Agarwal. She further notes that in 2022, CATL was the leading EV battery cell manufacturer, followed by LG Energy Solution and BYD, among others.

Expansion in response to EV demand

Battery production capacity is on the rise, with projections indicating a potential reach of over 6TWh by 2030 – quadruple the anticipated demand. However, there is caution that some announced projects may not come to fruition.

Challenges and strategic alliances

The EV battery sector sees Europe and the USA grappling with higher production costs than China, largely due to the latter's advanced and vertically integrated supply chains. The dynamic between car OEMs and cell suppliers is complex, often involving strategic partnerships for efficiency and supply chain security.

Advances in battery chemistry and recycling

The shift toward batteries with low cobalt content, such as NMC 811 and cobalt-free LFP cells, is evident, alongside the adoption of the cell-to-pack approach. Recycling has emerged as a strategic priority, with manufacturers and OEMs forming partnerships and joint ventures within the recycling industry.

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