Summary
- BYD founder and CEO Wang Chuanfu believes Chinese new energy vehicles are 3-5 years ahead of the rest of the world
- Chinese automakers have developed extended-range EVs that far exceed the battery-only range of most PHEVs
- China dominates the global EV battery supply chain, from raw materials extraction to battery production
- Europe is highly dependent on China for battery supplies, particularly in the LFP battery sector
- Researchers suggest investments in expanding Europe’s own refinery capacities to secure a sovereign battery supply chain
Article
At a recent industry conference in China, BYD founder and CEO Wang Chuanfu emphasized that Chinese new energy vehicles are ahead of the rest of the world, calling for less restrictive trade policies to allow more people to experience them. He highlighted the importance of openness and innovation in developing competitive products. With a strong emphasis on innovation, green development, and a large team of engineers, BYD has been a leader in the new energy vehicle market, offering models with impressive battery-only ranges that outperform those from other countries.
While China faces resistance in some countries regarding the sale of electric vehicles, it remains the dominant player in the global EV battery supply chain. Researchers from Fraunhofer FFB and the German University of Münster found that China leads in the extraction of raw materials, production of batteries, and ownership structures along the supply chain. Chinese companies, such as CATL and BYD, account for a significant portion of the global market share for installed battery capacity in electric cars. The study highlighted the importance of countries like China, Australia, and the Democratic Republic of the Congo in producing battery materials.
The study also discussed the impact of ownership structures and geopolitical dependencies in the global battery supply chain, pointing out that European dependency on imports makes the region vulnerable to geopolitical tensions. China’s dominance in the production of battery materials, such as lithium, nickel, cobalt, and manganese, underscores the global competition for critical resources. The researchers suggested that Europe should invest in expanding its own refinery capacities and promoting strategic raw material partnerships to ensure a secure and sovereign battery supply chain.
In terms of specific raw materials, the researchers noted that China has a significant lead in the production of lithium iron phosphate (LFP) batteries, with a share of over 98 percent. This dominance means that Europe is entirely dependent on China for batteries using LFP chemistry. The study highlighted the need for Europe to strengthen its local circular economy and consider investments in expanding its own refinery capacities to reduce its dependency on Chinese battery production. By understanding the power structures in the industry, the researchers aimed to provide insights into securing a sustainable battery supply chain.
Overall, the research underscores the importance of understanding the global dynamics of the EV battery supply chain, particularly in light of geopolitical tensions and strategic realignments of value chains. The dominance of Chinese companies in key battery materials underscores the need for countries to assess their vulnerabilities and explore options for diversifying their supply chain sources. As the global transition to electric mobility continues to accelerate, securing a stable and sovereign battery supply chain will be crucial for countries looking to maintain a competitive edge in the EV market.
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