Report from Columbia University, USA
Although the United States has introduced the Inflation Reduction Act (IRA) and poured massive subsidies to exclude China from the battery supply chain, it is expected to be difficult to escape China's shadow over the next decade.
On the 8th (local time), the Global Energy Policy Center at Columbia University in the U.S. released a report titled "IRA and the U.S. Battery Supply Chain: Background and Key Drivers" containing this information.
According to the report, the North American region currently cannot meet the demand for cathode and anode materials, which are key materials for electric vehicle batteries, solely through regional production. North America's own production of anode materials supplies about 18% of demand, and cathode materials supply about 8% of demand.
On the other hand, China dominates the electric vehicle battery minerals and materials market. The report analyzed that Chinese companies account for 60% of lithium production, known as the "white oil," which is a raw material for batteries. China supplies 69% of nickel and 75% of cobalt.
China also holds a dominant position in the materials market. China occupies 75% of the global supply of anode and cathode materials and 78% of the global battery cell supply. In particular, for LFP (lithium-iron-phosphate) batteries, which U.S. companies Tesla and Ford have announced they will use, China's market share reaches 99%. LFP batteries have so far been installed in low-cost Chinese electric vehicles, but as electric vehicle adoption expands, their use is increasing, and China's position in the electric vehicle market is expected to become even stronger.
The report stated, "Supply chain bottlenecks such as shortages of anode and cathode materials increase U.S. dependence on China," and predicted that "even by 2032, ten years after the passage of the IRA, North American supply will not keep up with demand, and without regional supply, imports will be relied upon." The Biden administration has set a goal to have 50% of new car sales be electric or other eco-friendly vehicles by 2030, but this goal is practically difficult to achieve.
Researcher Tom Morenhaut said, "China is ahead in terms of technology and supply chain security, and it is very difficult to overturn this within about 10 years," adding, "(Despite the IRA) import dependence on China, especially regarding anode materials, will not change (the current situation)."
Furthermore, the report recommended flexibility in implementing the IRA. Researcher Ahmed Medi stated, "Today, it is practically impossible to assemble batteries without going through China," and emphasized, "Policy flexibility and pragmatism are necessary in executing the IRA."
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