However, one country has seized the momentum and established a commanding market lead over its competitors in this space. But it’s not the U.S., where much of the critical research and development that created the lithium-ion battery took place.
China in the Driver’s Seat
According to an analysis by BloombergNEF, in early 2019 there were 316 gigawatt-hours (GWh) of global lithium cell manufacturing capacity. China is home to 73% of this capacity, followed by the U.S., far behind in second place with 12% of global capacity.
Global capacity is projected to grow robustly by 2025, when BloombergNEF forecasts 1,211 GWh of global capacity. Capacity in the U.S. is projected to grow, but slower than global capacity. Thus, the U.S. share of global lithium cell manufacturing is projected to shrink.
Tesla is trying to address this problem by building its own battery factories, but for companies that supply a wide range of these types of batteries, such as California-based OneCharge, finding local suppliers has proven to be challenging. I recently spoke with OneCharge CEO Alex Pisarev, who highlighted the challenges his company has faced:
“American manufacturers would be happy to use U.S.-made lithium-ion cells,” Pisarev told me, “but this is not realistic today. So we have to continue importing them from China.”
China is taking the same path that it did previously with solar panels. While solar cells were invented by American engineer Russell Ohl, today China dominates the global solar panel market. Now China is focused on controlling the world’s production of lithium ion batteries.