They power our smartphones, laptops, tablets, and the growing number of electric cars. Batteries are everywhere. But The Toronto Star has some bad news about them; the world might not be producing enough batteries to keep up with the consumer demand of the “smart” era.
The paper asserts that “All of the new demand from North America, Europe and Asia is constrained at the moment by a market that remains heavily dependent on a few producers.”
A large contributor to the new demand comes from the electric car market.
“Today, there are more than 3 million electric vehicles on the road worldwide; by 2025, Volkswagen AG alone plans to build as many as 3 million electric vehicles per year. Those vehicle batteries — in addition to storage batteries for homes, businesses and utilities — will have to come from somewhere,” says The Toronto Star.
The Star says that a key player in the battery shortage is South Korea: because of some change in government policy, the country’s main battery producers Samsung SDI and LG Chem – two of the leading international manufacturers – are “prioritizing sales in their home country.” Meaning, relying on batteries coming out of South Korea might have disappointing results in the future. The Star explains that U.S buyers in particular “often rely on Korean-made batteries. Almost 60 per cent of the utility-scale batteries deployed in the U.S. last year were made by Samsung SDI and LG Chem.”
Larash Johnson, chief technology officer of Stem Inc, one of America’s largest U.S battery companies, told The Toronto Star that “There is definitely some tightness in the global market. It’s one of the reason we’re looking for new suppliers.”
Another large battery supplier is Tesla, which has a sizeable battery factory in Nevada. Despite its high capacity for production, Tesla “can pick and choose who they want to deliver to” and “they are not delivering to everyone.” As The Star says, “Together, Tesla and the Korean battery-making giants can expect to enjoy intense demand.”
These three companies might have a near monopoly on battery production, but another potential source for production expansion is China. New factories are popping up across the country with huge capacity for production.
Source: thestar.com – For now, at least, the world isn’t making enough batteries
Published: October 5, 2018