LIB Mfg Supply Chain

In 2015, the world’s total LIB cell manufacturing capacity was primarily located in China, Japan, and Korea. Together, these countries hosted 88% of total global LIB cell manufacturing capacity for all end-use applications.1 These countries were also home to a significant share of LIB-specific materials manufacturing capacity, including that for cathodes (85% of global capacity), anodes (97%), separators (84%), and electrolytes (64%). This concentration of cell manufacturing capacity and upstream supply chains contributes to LIB industrial clusters in each of these countries. The numbers do not include new start up manufactures.

The United States is a slow developing  LIB Mfg supply chain, and most U.S. Mfg cell and battery facilities are relatively new, though notably some are owned by firms with experience in battery production (e.g., LG Chem). However, the United States is a leading nation in automotive LIB production capacity, and currently hosts 20% of global automotive LIB cell capacity, surpassing the auto-specific share of early-mover Korea. Nearly all U.S.-based LIB capacity is targeted at serving the emerging automotive market.

LIB Supply Chain:

Major components of the automotive LIB value chain include processed materials for electrodes and other components, cell manufacturing, and pack manufacturing. With respect to vertical integration, various manufacturers are employing different approaches. Pack design and production is typically performed by automakers themselves . In contrast, LIB electrode materials, other processed materials, and complete sealed cells can be shipped without significant cost penalty relative to current market prices, and can often occur in locations separate from pack production. The ability to ship these goods suggests that regions and firms producing competitively priced cells, components, and processed materials can effectively serve global markets.

The LIB manufactures are  made  up  of  several processing steps and  performed  in   separate  facilities; Raw  materials  such  as  lithium  and  graphite  are  mined,  then  processed   for  purity  or  specific  Composition,   The processed  materials  are  used  to  manufacture  electrodes,  which  are  key   components  of  LIB cells.  Electrodes  and  cells  are  typically  produced   in  the  same  facility, the Cells,  along  with  other  components,  are  assembled  into  a  complete   LIB module or packs.

Market Considerations:

The actual selling prices may be driven by market factors other than manufacturing costs, especially in early stages of high-growth industries such as large format LIB cells. For example, due to the relative immaturity of large format LIBs, manufacturers may have initially rated the cells below their actual capacities in order to ensure products would meet or exceed their marketed specifications. This had the effect of increasing the marketed capacity normalized price ($/kWh). Additionally, global overcapacity of LIB cell production may have led manufacturers to price products below MSP.

The majority of automotive LIB cell production is currently located in Asia, and is owned by firms with extensive experience in producing LIB cells for consumer electronics markets. Such incumbent competitors leverage significant advantages when competing in the automotive market, which include robust supply chains and leverage over suppliers, strategic partnerships and more diversified sales channels, higher yields, and other advantages stemming from manufacturing learning effects. However, while Asian firms currently dominate the market, price competitive production may be possible from other countries.

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