As automakers continue to struggle with chip shortages, there is another looming threat of the global battery supply for electric vehicles with an estimation of running dry by 2025. Battery supply hasn’t quite matched up with the fast-growing electric vehicle sales.
EV sales will continue to surge
Bank of America Global Research(BAC) lifted the estimation for global EV penetrations to reach 23%, 40%, and 67% for 2025, 2030, and 2040, respectively. This number also reflects that the world is moving faster to meet the more stringent carbon emission goals by 2030.
Xiaopeng Motors, NIO, and Tesla have all mentioned the bottleneck in the second half of the year for the EV industry to be the battery. In fact, Audi admitted e-tron was discontinued temporarily due to the battery supply last February. Jaguar’s I-PACE is also in face of discontinuing due to battery supply reasons from LG.
On the battery side
Currently, numerous battery production lines are overloaded. A report has shown that Energy Very Endure(EVE), China’s largest lithium thionyl chloride battery supplier, is operating on fully loaded capacity, and demands will largely outgrow supply next year.
What measures are taken
To overcome the shortfall of batteries, the battery manufacturer Contemporary Amperex Technology Co.(CATL) stated it is currently enlarging the manufacturing capacity, which will take three years to operate. And automakers such as Tesla, BMW, and BYD are investing in the upstream lithium, cobalt, and nickel resources that are vital for electric vehicle batteries in the hope to be self-sufficient in the future. Automakers such as GM, Volkswagen, and Hyundai are planning to build their own battery supply chain.
Ridding the bottleneck of semiconductor and battery shortages becomes the main issue for automakers to thrive.