The podcast discusses the competition to control the lithium-ion battery supply chain as the world transitions to electric vehicles. It explores the winners and losers in the race, the involvement of different car makers and countries, and the challenges of managing the supply chain. The chapter also highlights the strategic importance of Europe's automotive industry and the need for strategic partnerships with mining companies.
Competition is intensifying among various players to secure their positions in the lithium-ion battery supply chain, which holds significant geopolitical and corporate power.
The key players in the battery supply chain include raw material producers, battery producers, car manufacturers, and governments, each pursuing their strategies to dominate the industry.
Deep dives
The Electric Vehicle Market Potential
The podcast highlights the enormous potential of the electric vehicle market, which is projected to reach $1.3 trillion by 2028. To fully capitalize on this opportunity, all players, including car manufacturers and countries like China and the US, need to find their place in the supply chain.
The Role of Lithium-Ion Batteries
Lithium-ion batteries have played a transformative role in various technologies, such as smartphones and wireless keyboards. Now, these batteries are central to the energy transition, particularly in electric cars. Producing these batteries and securing the raw materials required confers geopolitical power and forms the foundation of corporate and national power.
The Players in the Battery Supply Chain
The podcast identifies four key players in the battery supply chain: raw material producers, battery producers, car manufacturers, and governments. Raw material producers extract minerals like lithium and cobalt, which then go through chemical processing to be used in batteries. Battery production is concentrated in East Asian companies like CATL. Car manufacturers are diversifying their strategies, with some like Tesla leading the way, while governments, particularly China and the US, intervene strategically to build up their industries.
As the world transitions away from fossil fuels and the electric vehicle market grows, competition to control a piece of a new source of energy is brewing. From rival carmakers to raw materials miners, different groups are racing to carve out their spots in the supply chain of one important technology: lithium-ion batteries. How will it shake out? The FT’s commodities correspondent Harry Dempsey explains who’s likely to succeed, and what that could mean for the future of corporate and national power.