High concentration from resources to market heightens risk for power lithium-ion battery supply chains globally

Abstract

Global low-carbon contracts, along with the energy and environmental crises, have encouraged the rapid development of the power battery industry. As the current first choice for power batteries, lithium-ion batteries have overwhelming advantages. However, the explosive growth of the demand for power lithium-ion batteries will likely cause crises such as resource shortages and supply-demand imbalances. This study adopts qualitative and quantitative research methods to comprehensively evaluate the power lithium-ion battery supply and demand risks by analyzing the global material flow of these batteries. The results show that the processes from resources to market of the power lithium-ion battery industry are highly concentrated with growing trends. The proportion of the top three power lithium-ion battery-producing countries grew from 71.79% in 2016 to 92.22% in 2020, increasing by 28%. The top three power lithium-ion battery-demand countries accounted for 83.07% of the demand in 2016 and 88.16% in 2020. The increasing concentration increases the severity of the supply risk. The results also imply that different processes are concentrated within different countries or regions, and the segmentation puts the development of the power lithium-ion battery industry at significant risk. It is urgent to address this situation so that this severe risk can be ameliorated.