As demand for electric vehicles (EVs) soars, driven by government incentives and promoting decarbonisation in the transportation sector, the global battery industry will attract significant interest and investment. . Rystad Energy forecasts total electric vehicle sales this year will reach close to 10 million units, up 43% from 2021 sales. On the back of this, demand for the battery’s cathode and anode – components core in the production process – also inflated.
On the current trajectory of electric vehicle sales and other li-ion battery demand, total battery anode material (BAM) demand will increase by 300% by 2025, reaching 2.9 million tons from around 774,000 tons. last year. The cathode market is expected to experience a similar rally. However, concerns around meeting demand for these components are unequal. Cathode manufacturers are concerned about the availability of raw materials and potential shortages of important metals such as lithium, nickel and cobalt, while anode manufacturers are more concerned about the basic nature of the raw materials. .
The anodes are mainly composed of natural or synthetic graphite, both of which have their own advantages and disadvantages. A synthetic graphite anode is generally more efficient and of high quality, supporting higher end applications. Natural graphite has outstanding Environmental, Social and Governance (ESG) certifications because its manufacturing process does not require heavy graphitization – converting the synthetic graphite raw material into a grade material. battery – uses a lot of energy and increases production costs and emissions.
Today, about 14% of global BAM raw materials are natural graphite and 78% are synthetic. However, by 2025, due to increased demand and increased ability to produce synthetics faster and more efficiently than natural production, the market share of synthetic graphite is expected to reach 87%. Rystad Energy’s forecasts for synthetic graphite growth are at odds with prevailing market sentiment, but our data – the first comprehensive review conducted in years – has been supported by China’s largest cell manufacturer, anode manufacturer and an influential researcher.
“Battery manufacturers are frantically building up production capacity to meet demand. Manufacturers need to go from 0 to 100 at breakneck speed, so it’s no surprise that they’re leaning toward the more immediate fix, synthetic graphite, despite its inferior ESG implications. . “Without an increase in synthetic graphite production, it is difficult to know how timely the EV adoption target can be met,” said Edison Luo, senior analyst at Rystad Energy.
Expanding Europe’s leading production capacity, but China still dominates
To meet the growing demand, global BAM production capacity will increase dramatically. China will dominate capacity growth, led by anode manufacturers BTR and Shanshan, with the country’s total production capacity reaching 4.6 million tons by 2025 (92% of projected global capacity). ), up from 1.2 million tons last year. Production capacity in Japan and South Korea – the two traditional hubs of anode production in Asia – is stalling as investments shift to cell production amid fierce Chinese competition.
As the continent’s decarbonization efforts increase, the European market will witness the strongest growth in BAM production capacity. Global capacity is expected to grow at an average annual rate of 38% through 2025, but European capacity will increase significantly, albeit from a low starting point. Total European capacity will reach 200,000 tonnes by 2025, up from an unrealistic figure this year.
This growth is in line with plans by some car manufacturers to build gigafactories in Europe, which requires a localized supply chain, which often leads to higher prices. Most announced anode plants in Europe are slated to use natural graphite as a feedstock due to the advantages of ESG materials, including fewer greenhouse gas emissions and low operating costs. than.
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