The world is filling up. Full of battery manufacturing facilities, which have become the sinews of war between car manufacturers.
More and more countries have announced the end of sales of new petrol cars in the medium term. Car manufacturers are working hard to adapt to this new reality. All are announcing dozens of new all-electric vehicles by the end of the decade. The success or failure of this electric shift depends on the batteries that will power all these vehicles.
The race for batteries, in which Québec is participating with the ambition of positioning itself “from mine to mobility”, is already well underway. Currently, the value chain is a battlefield where some countries have a head start.
China remains by far the largest battery manufacturer, with nearly 80% of global capacity, according to S&P Market Intelligence. But the picture is changing fast and the most recent statistics are probably already outdated.
The Chinese have plans underway to build another 150 battery factories by 2030. Given that China is already and will remain the main market for the sale of automobiles in the world, the country is likely to maintain its lead in manufacturing batteries, although its share of the global market is expected to decline.
Elsewhere, the industry is organized around existing poles in the automotive sector. In Europe, Volkswagen alone wants to build six battery factories. All manufacturers have projects in the United States, where Tesla dominates the market. Mercedes-Benz has just inaugurated a battery factory in Alabama which will supply its automobile manufacturing facilities on American soil.
Tesla aims to manufacture its own battery cells, and this is also the trend among other car manufacturers who source their supplies from battery material specialists CATL (China), Panasonic (Japan) and LG (South Korea). ). The goal is to shorten supply chains and reduce their dependence on China.
It is in this spirit that GM and the Korean company POSCO decided to invest in a manufacturing plant for battery materials in Bécancour, Quebec.
minerals and mines
We talk less about it, but the proliferation of battery factories exerts enormous pressure to produce ever more lithium, nickel, cobalt and graphite, necessary for the manufacture of anodes and cathodes.
Where will all this raw material come from? Even with best practices, mining disrupts the environment and is not welcome everywhere. It takes time to increase mine production or bring new mine sites into production.
The demand for lithium, which is used in the manufacture of cathodes, will increase rapidly and dramatically to supply new battery factories.
The world’s leading lithium producers therefore already have a secure place in the battery value chain. Chile is known to have the largest lithium reserves in the world, while Australia is currently the country that produces the most. Bolivia could soon become a major producer of lithium at a lower cost.
The prices of the minerals most used by battery manufacturers will increase and so will the cost of batteries.
Since the ultimate goal of automobile manufacturers is to build the most efficient car at the best possible cost by the end of the decade, Quebec’s ambition to be part of each part of the equation, from mining to manufacturing, may not be realistic. We can even ask ourselves the question: what place will remain for Quebec in this sector which is developing at high speed?
- Number of battery factories expected to be built worldwide by 2030
Source: S&P Global Market Intelligence (2021)