By 2030 demand for electric vehicle traction batteries will increase

By 2030, demand for electric vehicle traction batteries will increase more than tenfold

If the plans of the governments of different countries for the pace of the transition to electric vehicles are to come true, the market must use traction batteries with a total capacity of 3500 GWh annually by 2030. That’s more than 10 times current levels, despite the fact that EVs already accounted for 10% of the global auto market last year.

    Image source: Tesla

Image source: Tesla

Similar statistics leads International Energy Agency (IEA). According to the source, the share of electric vehicles in the automotive market increased fourfold to 10% in 2021 compared to the year before the pandemic. Half of the EVs sold last year were sold in China (3.3 million), followed by Europe with 2.3 million EVs sold and a 65% increase over the previous year.

It is worth noting that at the same time in 2021, companies manufacturing traction batteries were loaded on average with only 43% of their design capacity. Many of them were recently built and therefore have not yet reached the planned production volume, which is gradually being increased. Last year, nickel-based batteries accounted for 75% of the traction battery market, and 25% was lithium iron phosphate (LFP) batteries. As already mentioned, the share of the latter will grow steadily in the coming years and will be able to exceed the 50% mark next year. The transition to new methods of arranging cells in a battery made it possible to increase the charge storage density.

The high level of concentration in the production of LFP batteries in China is explained not only by the developed infrastructure for the delivery and processing of raw materials. Local companies like CATL hold many of the patents for these batteries, leaving competitors outside of China with limited ability to manufacture LFP batteries. The patents expire next year, which will help expand LFP battery production outside of the PRC. Tesla and Mercedes-Benz are already using them, and Ford Motor and many other western automakers are showing interest in this type of battery.

While China does not have the largest reserves of minerals used to manufacture lithium batteries, it does dominate the production of the necessary raw materials. For example, China controls 70% of the world market for cathode materials and 85% for anode materials. Japan, for example, is content with 14% in the first case and 11% in the second, and South Korea with 15% and 3% respectively, although local battery manufacturers are willing to challenge Chinese competitors on expansion rates.

Experts predict that by 2030, up to a quarter of all battery production will be concentrated in the US and Europe. The production of cathodes is also being actively expanded here, while China remains the leader in anodes. The cost of raw materials has risen sharply in recent years. In the last year and a half, the cost of lithium has increased sevenfold or more, the prices of nickel and cobalt have doubled. If the prices for these metals remain at the current level until the end of the year, then traction batteries will become more expensive by an average of 15%.

By 2030, China will begin to lose its position as the largest electric vehicle market. Depending on the success of government programs to develop alternative energies, their share can be reduced from 60 to 40% or even 25%. The fastest growing market is likely to be the United States, as the country’s auto market capacity and need to travel long distances will create local demand for long-range electric vehicles.

About the author

Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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