How will e-mobility reshape the lithium ion battery supply chain?
The rechargeable lithium ion (Li-ion) battery market will grow strongly and steadily, with a 20% compound annual growth rate (CAGR) from 2016-2022
Li-ion batteries have become the technology of choice for many applications. The rechargeable Li-ion battery cell market will be worth $59.1 billion by 2022, thanks to a 20% CAGR from 2016–2022, as shown in Figure 1. Consumer electronics, the traditional Li-ion battery market segment, has been overtaken by electric mobility, which includes electric and hybrid electric vehicles (EV/HEV), electric buses, trucks, and bikes. In 2022, e-mobility will represent 72% of the total rechargeable Li-ion battery cell market’s value.
According to Yole Développement’s analysis, the global demand for battery cells in GWh will rise by more than 400% between 2016 and 2022. To satisfy such huge demand for Li-ion batteries, large manufacturing facilities have to be built in coming years. This provides an opportunity for new players, which can take part in a growing market more easily, and will also result in accelerated implementation of innovations in materials, equipment and processes. The Li-ion industry might therefore experience accelerated technology consolidation and supply chain reshaping, as happened in the photovoltaic industry.
e-mobility provides opportunities for players already present in the battery industry, but also from other industries
There are numerous business opportunities within the Li-ion supply chain, from raw material mining to material preparation, cell component production, cell manufacturing, integration of battery cells into battery packs and final battery systems.
Rapidly growing demand for e-mobility applications will mean that access to and prices of raw materials will be the focus of leading battery players. The most critical materials are cobalt, lithium and graphite. Yole Développement’s report provides a focus on those materials and their main suppliers. It also gives insights into battery recycling as an additional source of raw materials and second-life batteries, which can help to reduce the need for manufacturing of new batteries, namely for stationary battery applications.
The Li-ion battery industry is refocusing from consumer applications to e-mobility, which needs different battery characteristics. One example is in the cathode material. LiCoO2 (LCO) is mainly used in consumer electronics and was the dominant Li-ion cell cathode material in the past. Today, the largest cathode material segment is LiNiMnCoO2 (NMC), which better matches the needs of the huge EV/HEV market, but also of most other applications, as shown in Figure 3. Therefore, material suppliers and cell makers today focus on NMC technology. The players with the necessary IP and know-how could rapidly increase their revenues by positioning themselves in this market early. Similar trends can be expected for separators, where the trend is toward ceramic separators providing better thermal stability, anodes and electrolytes.
Further innovations are needed both in battery cell and pack manufacturing. As shown in the report, material costs and equipment depreciation represent a large part of battery cell cost. New materials, equipment and processes are being introduced to the battery industry from chemical, microelectronics, power electronics and other industries, providing opportunities for the technology leaders well-established in those industries. Several players such as Manz, F&D Delvotec and Schunk Sonosystems have already developed specific tools for battery manufacturing.
Other players involved in wire bonding, ultrasonic welding, laser processing and other technologies will follow, by providing equipment and processes for high-speed, highly-automated battery cell and pack manufacturing.
The Li-ion supply chain will be significantly reshaped
As the dominant market segment, e-mobility will drive battery technology development and reshape the Li-ion battery supply chain. EV/HEVs are the main focus of both new entrants and established players, but there is growing interest in other applications, like electric bikes, buses and forklifts.
Many small players and newcomers are trying to minimize the competition they face by focusing on battery market segments that are non-mainstream or have very specific battery characteristic needs, as shown.
As new Li-ion battery markets mature, the supply chain will become increasingly vertically and horizontally integrated. The report analyses the different integration drivers and main trends in detail, and provides the examples of partnerships, mergers and acquisitions.
High cell material costs and the increasing pressure on the cell prices motivate some cell manufacturers to seek higher margins through vertical integration towards cell material manufacturing. Other companies are integrating vertically towards battery pack applications to offer complete product solutions.
Horizontal integration secures cell manufacturers sales in different markets, making their business less susceptible to growing competition.
EV/HEV players like BYD, Tesla, Daimler, BMW and Nissan have already entered the stationary battery storage market. BYD and Daimler are also focusing on other e-mobility applications such as e-buses and trucks.
As the stationary battery storage business matures we expect further vertical integration, as happened in the photovoltaic industry.
Objectives of the Report
This report’s objectives are to:
- Provide an overview of the rechargeable Li-ion battery market covering the three main application segments: consumer electronics, electric mobility and stationary energy storage.
- Furnish market data for different Li-ion cell applications.
- Offer deep insight into Li-ion chemistries, their future application potential and how their market share will evolve.
- Present the main technology trends for Li-ion battery cell materials, formats, sizes and cell components.
- Deliver a detailed overview of Li-ion battery supply chains, ranging from raw material supply, cell components, manufacturing and testing equipment, to applications.