The shift to electric vehicles (EVs) is undoubtedly gaining momentum worldwide, though the transition depends significantly on the production of reliable and long-lasting batteries that can provide extended ranges for EVs.
As of 2021, China remains the dominant force in EV battery production, assembling over two-thirds of the world’s EV battery cells. Meanwhile, the United States remains deeply reliant on foreign batteries and lags far behind China in battery production. The US must learn from China’s success and seek ways to build its domestic EV battery industry.
Building a domestic EV battery industry is difficult due to safety testing, specific chemicals and materials, and long development cycles. EV batteries require specific materials such as anodes, cathodes, separators, and electrolytes. China is the global leader in producing these components, giving it an edge in EV battery production. The US must work to overcome these challenges to compete in the growing EV market.
US automakers have historically preferred nickel and cobalt batteries, but some are turning to lithium-iron-phosphate (LFP) batteries due to volatile mineral prices. LFP batteries are cheaper to make, less prone to fires, and last longer than nickel and cobalt batteries. However, the US currently does little chemical processing and mineral mining for EV battery production, while China has strong relationships with countries that provide the necessary raw materials. For instance, China controls the bulk of the world’s lithium and rare earth metals used in EV batteries.
Building chemical processing facilities in the US can be difficult due to bureaucracy, local opposition, and labor/supply chain issues. Raw materials are only useful once they can be processed, and it can take up to a decade or more to get new mines up and running in the US. Therefore, the US must invest in local raw materials and chemical processing plants to ensure long-term competitiveness in the EV market.
Furthermore, some companies are focused on salvaging minerals from scraps and dead batteries as an alternative source of materials. Recycling batteries is a cost-effective way to secure a sustainable supply of raw materials, reduce environmental impact, and reduce dependence on foreign imports. The US must take advantage of this opportunity to create a circular economy in the EV battery industry.
The US government has begun to take note of the importance of EVs and batteries to the future of the auto industry. The Biden administration has proposed a $174 billion investment to boost the production and sales of EVs. The plan includes $15 billion to build 500,000 EV charging stations across the country and $100 billion in consumer rebates to incentivize EV purchases. The plan also includes $46 billion for the manufacturing and development of EV batteries, including research and development of new battery technologies. This investment is a step in the right direction to grow a domestic EV battery industry, but more needs to be done to catch up with China.
Meanwhile, China’s government has provided significant support to its EV battery industry, including subsidies, low-interest loans, and tax incentives. The government has also invested heavily in research and development of battery technologies, and it is now reaping the benefits of its investment. China is not only producing EV batteries for its domestic market but is also exporting them to the rest of the world. Chinese companies, such as CATL and BYD, have emerged as major players in the global EV battery industry.
China’s dominance of the EV battery industry has both benefits and drawbacks. On the one hand, it has positioned the country as a key player in the transition to a low-carbon economy, boosting its international influence and reputation. On the other hand, it has also raised concerns about the security of the global EV supply chain. Dependence on a single country for key components creates vulnerabilities and risks, particularly given the geopolitical tensions between China and the US. This has prompted some in the US government and industry to call for greater domestic production of EV batteries and the raw materials that go into them.
However, building a domestic EV battery industry is easier said than done. The process involves a variety of complex and time-consuming steps, including safety testing, chemical processing, and mining. The US currently does little chemical processing and mineral mining for EV battery production, while China has strong relationships with countries that provide the necessary raw materials.
Building chemical processing facilities in the US can be difficult due to bureaucracy, local opposition, and labor/supply chain issues. Raw materials are only useful once they can be processed, and it can take up to a decade or more to get new mines up and running in the US. In the meantime, the US remains heavily reliant on imports from China and other countries for key EV battery components.
Some companies are looking for alternative sources of materials, such as salvaging minerals from scraps and dead batteries. This could help reduce dependence on imports and support a more sustainable circular economy for EV batteries.
Source: Wall Street Journal
