Deglobalization trend gains pace in lithium battery supply chain

The COVID-19 crisis has exacerbated concerns across the lithium-ion battery industry about China’s dominance of the supply chain. The pandemic has also highlighted the need for local supply chains, in order to improve sustainability and work towards net zero targets. Despite some momentum, however, the development of regional supply chains still faces challenges that go beyond simply raising equity. Although there has been controversy about Chinese dominance, other regions such as South America and Australia are significantly more important than China in the lithium raw materials mining and extraction process. But it is evident that the vast majority of the downstream value-add activities are performed in China, largely due to an abundance of cheap energy and forward planning. This is a consequence of the Chinese government’s early push towards electrification, especially through subsidizing electric vehicles (EVs). The country currently accounts for more than half of global EV sales. This emergence of demand incentivized the development of the industry around it, combined with an important financial push from the Chinese government. As it becomes increasingly clear that the electrification trend will not reverse, the Western Hemisphere has been trying to catch up. In the case of the US, one of the… continue reading

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Source: CTRM Center

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