Electrification is much faster than many people thought a few years ago. AlixPartners, an automotive industry consultancy, predicts that by 2030, about 28 per cent of the world's cars will be electric. Companies will invest $330 billion in the global electric vehicle supply chain over the next five years, of which about 1/3 is expected to be spent on battery investment, mainly in China and Europe, while the United States is trying to catch up.
The latecomers want to catch up, and the United States aims to make electric car sales account for 50% of sales by 2030.
In terms of the current situation, China is the world's largest market for electric vehicles; sales of electric vehicles in Europe are rising, with 1.32 million electric vehicles registered in the first eight months of this year and a market share of more than 20 percent in August; by contrast, the United States lags slightly behind in the electrification transformation, with about 295000 electric vehicles registered in the United States in the first eight months of this year, accounting for only 2.7 percent of the new car market in the United States.
Although the horizontal comparison lags slightly, but vertically, the American electric car market is still promising. Three years ago, there were less than 1 million electric cars in the United States. As electric vehicles account for a growing share of total car sales, analysts expect the number to exceed 8 million by 2025 and 27 million electric vehicles on the road in the US by 2030, accounting for 20 to 30 per cent of total car sales.
However, it is clear that President Joe Biden's ambitions are more than that. After taking office, Biden proposed to invest $174 billion to support the development of the US electric vehicle market, of which $100 billion will be used to subsidize consumers who buy electric cars, and another $15 billion will be allocated to build 500000 new electric vehicle charging stations. Biden's goal is to increase production and sales of electric vehicles, making them account for 50% of total u.s. car sales by 2030, while reducing u. S.dependence on imported batteries, battery components and materials. Biden said bluntly that the United States currently lags behind China in electric car sales, but the United States will set a new pace for electric cars and will strive to win electrified races.
With the strong support of the Biden government, car companies have also stepped up the U. S. electric car market. Ford raised its spending on electric vehicles to more than $30 billion by 2030, an increase of more than 1/3; general motors raised its spending on electric and self-driving cars to $35 billion by 2025; Stellantis plans to achieve 40% of its u.s. sales by 2030; Volkswagen is therefore restructuring its u.s. operations to make and sell more electric cars in north America. Global demand for electric vehicle batteries and their manufacturing materials will soar in the coming years as the world's major carmakers promise to increase the supply and sales of electric vehicles.
American car companies bind foreign battery manufacturers, North American power battery production capacity will soar
Batteries are one of the key components of electric vehicles. At present, most batteries are made in Asia, and China accounts for more than 70% of global battery capacity. Last year, European demand for batteries more than doubled, exceeding capacity. Battery production in the United States even lags behind, SK Innovation CEO Kim Jun pointed out, "the current battery capacity in the United States is far from enough to meet demand." It takes 30 months to build a new battery factory, including plant location, construction and product testing. " As a result, Kim Jun said that the US auto industry will continue to face battery shortages until 2025, which is undoubtedly a challenge to the Biden administration's ambitious electric vehicle sales target.
Haresh Kamath, project manager of (EPRI) Energy Storage at the US Power Research Institute, said, "Asia is far ahead in terms of battery capacity simply because the existing lithium-ion battery production infrastructure in Asia has been in place for the past two or three decades. By contrast, battery makers have previously made relatively small investments in the United States, and most of these investments have come from Asian companies. " However, under the Biden administration's incentives for electric vehicles, more and more electric vehicles will be assembled in the United States in the future, and more and more battery manufacturers have announced investment in factories in the United States, which will lead to an increase in battery production in the United States.
LG Chemical's battery division LG Energy Solutions (LGES) said that it plans to build at least two plants in the United States and invest more than $4.5 billion in American production operations by 2025, which will enable LGES to produce 70 GWh of batteries in the United States by 2024; SKI plans to increase global battery capacity to more than 200 gigawatt hours by 2025, while the expansion is mainly concentrated in the United States. Given the current shortage of chips, carmakers are also spending billions of dollars to boost battery production. Stellantis has reached a partnership with Samsung SDI and LGES to build two new battery plants in the United States; Ford has chosen to cooperate with SKI to build three new factories in the United States with a capacity of 129GWH; GM is considering building two more battery plants while partnering with LGES; and even Toyota, which has a slow transition to pure electric vehicles, has announced an investment of $3.4 billion in the United States to promote the development of electric car batteries in the United States.Even Toyota, which has a slow transition to pure electric vehicles, has announced an investment of $3.4 billion in the United States to promote the development of electric car batteries in the United States.
According to (Center for Automotive Research), a total of 27 battery plants have been announced or are in operation in the United States, including batteries and battery packs. According to data released by car companies and battery manufacturers, Galaxy collates battery plants that have been built, are under construction and are about to be built in North America (including the United States, Mexico and Canada).
Among them, the current battery capacity in North America is probably less than 60GWH. With the exception of Tesla, the capacity of local battery manufacturers in the United States is very small, which shows that the United States is indeed relatively weak in the battery supply chain. However, riding on the east wind of Biden's electrification policy, global car and battery companies have come to North America to build battery superfactories, bringing the capacity of batteries currently under construction and planning in North America to 470 GWh, which has also led to the expansion of the once lagging battery circle in North America.
It is also worth noting that of the more than 400 gigawatt-hour planned / under construction capacity, the vast majority are American car companies bundling Japanese and Korean battery manufacturers, but they have finally brought part of the battery supply chain to the United States. to some extent, it's a comfort to Biden. As Arun Kumar, Managing Director of Automotive and Industry at AlixPartners, said, "electrification will happen soon, coupled with the shortage of semiconductors caused by the coronavirus outbreak, we need to do more than just use batteries as a commodity. If you really consider mass production of batteries, localization has become an important factor. "
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