SMM Analysis: Why Do Chinese Lithium Battery Anode Material Overseas Deployments Mostly Target Europe And the US?

According to SMM statistics, currently overseas anode material production is dominated by Japanese and Korean companies, such as Posco, Mitsubishi, etc. However, the production capacity of these companies is insufficient to meet the growing demand for new energy overseas. Moreover, China's anode products are highly competitive in terms of cost performance and artificial graphite technology, resulting in the current overseas anode materials mostly relying on imports from China.
In recent years, under the background of new energy companies going overseas, in order to better serve local customers, anode companies have carried out supporting overseas production capacity construction. But why are they mainly concentrated in Europe and the US?
First of all, Europe is home to veteran car companies such as BMW, Daimler and Volkswagen. Due to the low local power battery production capacity in Europe, car companies mostly rely on imported batteries from Chinese, Japanese and Korean companies. In order to seize the European power battery market, Chinese battery companies mostly deploy in Europe.
In addition, in 2020, European automobile manufacturers ushered in the most stringent automobile carbon emission policy in the history of the EU. European countries have successively launched new energy vehicle subsidy policies in response to carbon emission reduction goals. From the perspective of national carbon emission targets, the zero-emission targets proposed by Sweden and Norway are earlier than the EU's 2050 target to achieve zero emissions. Affected by the EU's strict energy conservation and emission reduction standards, as well as various countries' subsidy policies for new energy vehicles, the European new energy vehicle market has accelerated since 2020.
To sum up, the main reasons why power battery companies frequently deploy production capacity in Europe are to speed up the close cooperation between battery companies and veteran European car companies, while seizing the European power battery market, as well as the power battery market dividends brought by booming European new energy vehicle market.
On the US side, in the year since the Inflation Reduction Act became law, it has announced $300 billion in investments in clean energy, much of it in battery factory construction, a field in which the US overtaken Europe. In addition, the US Inflation Reduction Act (IRA Act) has set strict exclusionary provisions for China’s power battery industry, including that starting from 2024, battery components produced in China will be completely banned, and mineral raw materials produced in China will also be prohibited starting from 2025, etc. The lack of the domestic lithium battery industry chain in the US has driven global anode companies to accelerate their production capacity deployment in the US.