Global Supply Chains of EV Batteries INTERNATIONAL ENERGY AGENCY The IEA examines the full spectrum of energy issues including oil, gas and coal supply and demand, renewable energy technologies, electricity markets, energy efficiency, access to energy, demand side management and much more. Through its work, the IEA advocates policies that will enhance the reliability, affordability and sustainability of energy in its 31 member countries, 10 association countries and beyond. Please note that this publication is subject to specific restrictions that limit its use and distribution. The terms and conditions are available online at www.iea.org/t&c/ This publication and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Source: IEA. All rights reserved. International Energy Agency Website: www.iea.org IEA member countries: Australia Austria Belgium Canada Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Japan Korea Lithuania Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Slovak Republic Spain Sweden Switzerland Republic of Türkiye United Kingdom United States IEA association countries: Argentina Brazil China Egypt India Indonesia Morocco Singapore South Africa Thailand Global supply chains of EV batteries Executive summary Executive Summary Executive Summary Global supply chains of EV batteries As electric car sales continue to break records, supply chain considerations move to the fore Today’s battery and minerals supply chains revolve around China Batteries typically accounts for 30% to 40% of the value of an electric vehicles (EV), and the race to net zero will focus attention on the security of supply of the critical minerals and metals needed to China produces three-quarters of all lithium-ion batteries and is home to 70% of production capacity for cathodes and 85% for anodes (both are key components of batteries). Over half of lithium, cobalt and graphite processing and refining capacity is located in China. Europe is responsible for over one-quarter of global EV assembly, but it is home to very little of the supply chain apart from cobalt processing at 20%. The United States has an even smaller role in the global EV battery supply chain, with only 10% of EV production and 7% of battery production capacity. Korea and Japan have considerable shares of the supply chain downstream of raw material processing, particularly in the highly technical production of cathode and anode material. Korea is responsible for 15% of global cathode material production capacity, while Japan accounts for 14% of cathode and 11% of anode material production. Korean and Japanese companies are also involved in the production of other battery components such as separators. manufacture them. Electric car sales continued to break records in 2021, testing the resilience of battery supply chains Few areas in the world of clean energy are as dynamic as EV markets. In 2021, EV sales broke new records, with nearly 10% of global car sales being electric, four times their market share in 2019. Public and private spending on EVs doubled relative to 2020. More and more countries have pledged to phase out ICEs or have ambitious electrification targets. Five times more EV models were available in 2021 relative to 2015, and most major carmakers are announcing plans to further accelerate electrification of their fleets. China accounted for half of the growth of the EV market in 2021. More vehicles were sold in China in 2021 (3.3 million) than in the entire world in 2020. Sales in Europe continued to grow robustly (up 65% to 2.3 million) after the 2020 boom, and they increased in the United States as well (to 630 000) after two years of decline. The first quarter of 2022 showed similar sales trends. Most key minerals are mined in resource-rich countries such as Australia, Chile and the Democratic Republic of Congo, and handled by a few major companies. Governments in Europe and the United States have bold public sector initiatives to develop domestic battery supply chains, but the majority of the supply chain is likely to remain PAGE | 2 Executive Summary Global supply chains of EV batteries Chinese through 2030. For example, 70% of battery production for other parts of the supply chain – in some cases requiring more than a decade