DOE report examines opportunities for US battery manufacturers

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Asia currently dominates automotive lithium-ion cell production – it controls around 79% of the market. However, a recent report by the DOE’s Clean Energy Manufacturing Analysis Center (CEMAC) found that the US has a growing opportunity in the industry, which is expected to swell from the current $9 billion to $14.3 billion by 2020.

The CEMAC analysis found that competitive opportunities for automotive lithium-ion battery (LIB) cell manufacturing are mostly created, and are not inherent to specific regions. However, established LIB competitors have a huge advantage due to production expertise, supply chain optimization, and existing partnerships.

DOE's CEMAC Report Asia 660

Japan, Korea, and China benefit from a significant population of key suppliers (for electrodes, separators, electrolytes, etc), while the US has a relatively immature supply chain, and most US cell and battery plant operators are relatively new to the industry.

LIB cell manufacturing in the US currently amounts to around 3,770 MWh, or 7.3% of the global total. However, there is another 1,200 MWh under construction and 35,000 MWh (Tesla’s Gigafactory) announced. If all this capacity is fully realized, the US will have a total of 39,970 MWh, or 32% of the global market.

In all regions, automotive LIB capacity far exceeds production – global average utilization is estimated at 22% as of the beginning of 2014. However, if moderate demand estimates are met, supply and demand should come roughly into balance around 2017-2018.

“US cell producers appear to be disadvantaged in the current market, but the United States could become competitive in parts of the value chain with high potential value,” reads the report. “Cells represent 27% of the value added in complete automotive LIB packs, but 34% of the value added comes from electrodes and other processed materials, an area where the United States could possibly compete. The United States already assembles cells into battery packs for EVs manufactured domestically, which comprises 39% of total LIB pack value.”

DOE's CEMAC Report

The report notes that technological advancements currently under development by the DOE and its private-sector partners have a lot of potential to boost automotive LIB manufacturing in the US by reducing battery cost, enabling more people to purchase EVs.

SEE ALSO: LG Chem Power CEO: We have demonstrated that you can make cells as cost-effectively in the US as you can make them in Korea

 

Source: Energy.gov via Green Car Congress
Image: International Information Program (IIP) (CC BY-SA 2.0) 

  • Mark Benjamin David

    Our government is partly responsible by allowing start-ups to fail and get bought out by asian companies! Startup battery makers have asked for and been rejected loans to get going. Yet, big companies keep getting more tax breaks. This affects battery makers, everything pertaining to electric cars, also solar start-ups etc. etc. Our government needs to wake up and realize that we will lose our footing as economic leader if we keep holding on to the past and do not put our efforts into these new technologies.

    The only reason Tesla Motors did not go bankrupt when the big carmakers where having troubles (and got bailed out) before the Model S began production is because Elon Musk put millions of his own money into it. Yet, the government should be taking money away from big companies that make billions on their own, and put that money to good use for our future. Electric cars are going to take over the roads, but, how many will be built in America?