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CHART: Asian EV battery makers buy 94% of global battery metals
Introduction
As the electric vehicle (EV) market continues to expand, the global battery manufacturing landscape remains heavily dominated by companies based in China, South Korea, and Japan. This landscape has far-reaching implications for supply chains, economic strategies, and technological advancements in the EV sector. While the monetary value of battery metals in newly sold EVs shows a slight increase, the complexities of raw material sourcing highlight significant challenges and opportunities for manufacturers worldwide. In this article, we delve into the current state of the EV battery market, examining the financial dynamics, the role of prominent players, and the ongoing shifts in technology, particularly the rise of lithium iron phosphate (LFP) batteries.
The Dominance of Asian Manufacturers
Market Control and Spending Patterns
Current data indicates that over 94% of global spending on raw materials for EV batteries comes from Asian manufacturers, primarily Chinese, South Korean, and Japanese companies. Major players such as CATL, LG Energy Solution (LGES), BYD, and Panasonic dominate the landscape, with the "big four" accounting for approximately two-thirds of total expenditures. This concentration in spending not only emphasizes the scale of these companies but also their integral role in shaping the market.
Moreover, with Ultium Cells—a joint venture between LGES and General Motors—taking the lead in North America, it further cements Asia’s prominent position in the industry. Thus, the shift towards electric mobility does not just signify environmental progress but reinforces the economic power of these nations.
Growth of Battery Metal Consumption
Increasing Demand and Material Utilization
Between the first quarter of 2024 and 2025, the total weight of battery metals in EVs surged by 27%, reflecting the growing demand for key materials like graphite, lithium, nickel, cobalt, and manganese. The total reached approximately 428.2 kilotonnes, demonstrating robust growth despite stagnant prices in the EV metal market. It’s essential to note that these figures don’t account for materials lost during processing or production, implying that the actual demand for raw materials is much higher at the mining stage.
Regional Insights and Shifts in Battery Chemistry
China’s emphasis on lithium iron phosphate (LFP) battery technology, which has captivated a market share exceeding 50%, is transforming the dynamics of the global battery market. The benefit of LFP lies in its cost-effectiveness compared to nickel-cobalt-manganese (NCM) variants, allowing Chinese battery makers to reduce spending on more expensive raw materials. Consequently, their competitive edge has been reinforced further, intensifying their control over the global battery market.
Strategies for Global Expansion
CATL’s Global Footprint
Despite being a relatively recent entrant, CATL has become a formidable player in the Western market, particularly with its extensive manufacturing plants outside China. The company’s factory in Thuringia, Germany, and upcoming facilities in Hungary and Spain exemplify its ambitious expansion strategies focused on producing LFP batteries. These efforts aim to cater to the rising demand for clean energy solutions in Europe and beyond.
Challenges Faced by Western Competitors
Conversely, challengers from the West, such as Volkswagen’s PowerCo and Tesla, have faced hurdles in establishing competitive battery production capacity. These companies are grappling with delays and operational challenges, underscoring the complexities of shifting from traditional sourcing and manufacturing methods to more sustainable practices.
The Future of EV Battery Manufacturing
While European entities like France’s ACC (partially owned by Stellantis and Mercedes-Benz) have made significant strides, the failure of Northvolt—once viewed as Europe’s beacon of hope—illustrates the myriad challenges in achieving viable economies of scale. Furthermore, China’s stronghold on raw material supply chains sustains its dominance in the EV battery sector, underscoring the geopolitical ramifications inherent in the energy transition.
Conclusion
In conclusion, the current status of the EV battery market reflects an intricate web of technological advancements, regional dominance, and evolving consumer demands. Asian manufacturers, particularly those from China, South Korea, and Japan, not only hold the keys to battery technologies but also significantly influence global supply chains. As the need for sustainable energy solutions grows, the dynamics of this market will undoubtedly continue to evolve, and understanding these trends is essential for stakeholders aiming to navigate this critical sector.
