Despite the continuing use of lithium-ion batteries in billions of personal devices in the world, the energy sector now accounts for over 90% of annual lithium-ion battery demand. This is up from 50% for the energy sector in 2016, when the total lithium-ion battery market was 10-times smaller.
Supply chain analyses of the battery sector highlight the direct, indirect and hidden material flows associated with total material requirements of a global energy transition , and the dynamic interactions between renewable power generation, electricity grids and battery storage .
Two battery applications driving demand growth are electric vehicles and stationary forms of energy storage. Consequently, established battery production networks are increasingly intersecting with – and being transformed by – actors and strategies in the transport and power sectors, in ways that are important to understand.
They pay only limited attention to organisational and geographical relations, and they overlook critical areas of intersection between battery production and OEM manufacturing for automotive and power sectors. As a result, supply chain approaches do not fully account for emergent properties of battery production networks.
Just as analysts tend to underestimate the amount of energy generated from renewable sources, battery demand forecasts typically underestimate the market size and are regularly corrected upwards.
Their overall effect is likely to be a shortening of supply chains and a regionalisation of production networks, as evidenced by Europe’s accelerating efforts to establish a full domestic battery value chain.