EU, US to End Dependence on Chinese EV Batteries by 2030

According to the investment banking company Goldman Sachs, the EU and the US are investing over US$160 billion to boost electromobility by 2030. This move could end the heavy dependency that both regions have on China for EV batteries. Both regions seek to reduce their reliance on Chinese materials, as constant shortages keep affecting manufacturers across the world.

The global automotive industry is demanding more batteries as EVs and hybrid vehicles gain popularity across the world. However, over half of the market for batteries is taken up by Chinese suppliers, with Contemporary Amperex Technology Co, Ltd (CATL) having around 35 percent of market share in 2022, according to Bloomberg. 

Goldman analysts concluded that by 2030 the EU and the US could meet their demand for batteries without Chinese imports, as South Korean conglomerates LG and SK Hynix are forecasted to increase their market share from 11 percent to 55 percent, as reported by the Financial Times. 

The report states that countries that a self-reliant supply chain need to invest US$78.2 billion on batteries, US$60.4 billion on components, US$13.5 billion on the striping of lithium, nickel and cobalt and US$12.1 billion to process those raw materials to have a self-sufficient supply chain. 

During the International Automotive Industry Congress in Mexico (CIIAM) 2022, experts of the Mexican automotive industry said that the country has a unique opportunity to tackle this problem. However, much work has to be done to attract the necessary investment to achieve this.

“The US government recently approved an important investment that aims to develop microprocessors. Mexico also has great potential in this sector. However, it is necessary to create alliances with companies that currently produce microprocessors to understand the process and know-how, and from there take the advantage of Mexico’s highly qualified labor force,” said Oscar Domínguez, President Operations, Lear Corporations, as reported by MBN. 

Historically, Mexico has been a manufacturing powerhouse but more companies are betting on the country’s engineering capacity. This shift brings previously unseen opportunities for the creation and development of talent in the country, highlighted Alfredo Alonso, EVP and President, Fluid Business Unit Martinrea International, during this year's CIIAM.