The Great Battery Bake Off and the Shift Upstream
Securing battery raw materials and supply chains is the unsexy yet critical challenge for EV makers in the coming decades
Imagine for a moment that the world collectively agreed that eating a slice of toast every day was an essential part of a healthy lifestyle. Then imagine that in actioning that plan we discover that over 90% of the world’s bread industry — from growing the wheat, making yeast, making flour, manufacturing ovens to bake the bread, baking the bread and shipping it, was concentrated in China. Suddenly a single market could control the global price and supply of bread whilst also leaving a gaping hole of dough related skills elsewhere in the world.
One of two scenarios might unfold.
Supermarkets and restaurants outside of China spot the opportunity. To hedge their bets, they start securing supply at source, or partner with farmers to make their own local wheat farms. After much campaigning from new bread makers and suppliers, as well as from consumers who want a healthy lifestyle enabled by bread (we can dream), governments respond with funding and policies to support bakeries, farms, and associated skills development.
Alternatively, nothing changes, and the industry remains concentrated in China who spotted the bread trend 5 years earlier (at least) than the rest of the world. Demand outstrips supply and bread becomes a luxury item reserved only for the mega rich or extremely special occasions. Reaching our healthy lifestyle ambitions remains a pipe dream reserved for the minority of wealthy individuals who can afford it.
Yet this is the situation we find ourselves with batteries for electric vehicles. Swap out the term “eating a slice of toast” for “driving an electric car”, wheat and flour for “battery raw materials”, supermarkets and restaurants for “OEMs and Cell Manufacturers” and healthy lifestyle for “good air quality” and once again we have a laboured analogy that hopefully sort of does the trick.
Today we know we need electric vehicles to hack away at the 30% of global CO2 emissions that transportation currently ladens on our fragile planet and governments and OEMs have made commendable targets to realise that…