CNBC Warns of "US Supply Chain Vacuum"
Dependence on China and Others Directly Threatens National Security
K-Battery Dispute Makes Supply Disruptions Inevitable
[Asia Economy Reporter Kim Suhwan] As automakers around the world rush into electric vehicle (EV) development, making EVs a core industry, concerns are growing that the domestic EV industry in the United States could face a crisis due to a shortage in the battery supply chain. In particular, attention is being paid to the impact of the recent dispute between LG Energy Solution and SK Innovation on the U.S. battery industry.
On the 8th (local time), CNBC broadcast a special report titled "Why is the U.S. EV industry facing a battery shortage?" warning that "the U.S. virtually has no battery supply chain."
Although major U.S. automakers such as Ford and GM have recently announced their entry into the EV market, they are struggling to secure even key components. The U.S. currently relies heavily on imports from foreign countries, including China, for most EV batteries. According to CNBC, as of last year, the U.S. had four battery factories, while China had 93. If the current trend continues, by 2030, the number of battery factories in the U.S. and China is expected to be 10 and 140 respectively, widening the gap further.
With China accounting for 77% of global battery cell production and 60% of component manufacturing, the U.S.'s dependence on overseas batteries is also being pointed out as a national security issue. Simon Moores, Senior Director at Mineral Intelligence, a battery ore investment advisory firm, said, "Electric vehicles are expected to become the most critical growth industry of the 21st century," adding, "The U.S.'s reliance on overseas battery supply chains is not a desirable security strategy at the national level."
Additionally, there is analysis that the battery dispute between LG and SK is negatively affecting the U.S. EV industry. As the U.S. EV sector is signing contracts with LG and SK to secure battery supplies, any disruption caused by the patent dispute between the two companies could lead to a chain reaction of damages within the U.S. EV industry. Moores said, "The biggest victims of the dispute between LG and SK will be the U.S. automotive industry."
The fundamental cause of the battery crisis in the U.S. is attributed to insufficient government support policies. Ram Chandrasekaran, an analyst at Wood Mackenzie, criticized, "There has been a lack of systematic federal government support efforts for energy transition." Although the U.S. has more lithium deposits, a key battery raw material, than China, the lack of government support policies has resulted in virtually no mining operations.
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