China Has Perfectly Tangled The Battery Value Chain With Electric Vehicles, Leading To A Combo The U.S. And Europe Will Find Hard To Beat

It can be done, though. But first things first.

Batteries are the single most valuable part of an electric vehicle (EV), representing 30–45% of the cost for light duty vehicles and ~50% for heavy duty. More than that, they are a key technology required to reach the climate neutrality goals of the Paris Accord. And in doing so, capture a massive market along the entire battery value chain, which in Europe alone is worth €250 billion per year by 2025 and shall create more than 4 million jobs.

Introduction

It would therefore be accurate to think of the battery as the beating heart of the EV supply chain, encompassing the entire process from raw material production to battery manufacturing and recycling.

The Race for Market Share

And the race is on from the U.S. to Europe to China to not only grab market share, but also secure a cost-competitive supply chain. One is not possible without the other.

China’s Dominance in Battery Costs

If things turn out as projected — and China is quite good at meeting long-term targets — production costs for a new battery plant in China are expected to come down from $60 million/GWh currently to $50 million/GWh by 2030, with huge impacts on the prices of battery packs. Today, China already has a roughly 30% cost advantage over Europe and the U.S., with an average battery pack priced at $127 per kWh. In comparison, production costs in Europe are set to stay around $100-120 million/GWh or above partly due to high industrial electricity prices.

China’s Dominance in EV Market

Several months ago, Bloomberg reported that China’ EV market has passed the inflection point for EV uptake — signaling a change from early adopters to early majority. To drive this home,

SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 7: Affordable and Clean Energy
• SDG 9: Industry, Innovation, and Infrastructure
• SDG 12: Responsible Consumption and Production
• SDG 13: Climate Action
• SDG 17: Partnerships for the Goals

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 7.2: Increase substantially the share of renewable energy in the global energy mix.
• SDG 9.4: Upgrade infrastructure and retrofit industries to make them sustainable.
• SDG 12.2: Achieve sustainable management and efficient use of natural resources.
• SDG 13.2: Integrate climate change measures into national policies, strategies, and planning.
• SDG 17.17: Encourage and promote effective public, public-private, and civil society partnerships.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Percentage of renewable energy in the global energy mix
• Investment in infrastructure and industries for sustainability
• Resource efficiency in battery production and recycling
• Integration of climate change measures in policies and strategies
• Amount of funding and investments in EV supply chains

4. Table: SDGs, Targets, and Indicators

Note: The indicators provided are examples and may not cover all possible indicators for measuring progress towards the identified targets.

Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.

Source: forbes.com

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