Shanghai lockdowns continue to impact the battery supply chain, as the trend of EV manufacturers moving upstream to secure metals supply strengthens.
Here is Rystad Energy’s weekly battery metals and EV market note from our analysts, Echo Ma and Abhishek Murali:
Shanghai lockdown impacts the battery supply chain
Widespread Covid-19 lockdowns in Shanghai continue to negatively impact the battery supply chain and broader EV industry, despite some reports of loosening restrictions.
Uncertainty surrounding the length of the lockdowns and their effect on the batteries market will persist until there is light at the end of the tunnel.
Operations at Tesla Shanghai Gigafactory have been intermittently suspended since late March, resulting in a production capacity loss of at least 24,000 units.
On 9 April, China EV manufacturer NIO announced it suspended operations because its suppliers of EV components are unable to deliver finished products due to the ongoing pandemic in Jilin, Jiangsu and Shanghai.
On the upstream battery material supply chain, challenging logistics have delayed deliveries of various battery metals both on the domestic market and abroad, as well as accessory materials required during processing.
The price momentum for battery raw materials against the weakened sentiment caused by the pandemic means a slow production pace for the EV battery supply chain is likely in the short term, including precursor, cathode and batteries.
- Echo Ma, analyst
Electric Vehicles: Metals supply concerns drive automakers to explore upstream solutions
EV manufacturers continued focus on upstream deals for core battery component supply strengthened this week as Ford Motor Company made a deal to secure lithium supply for their electric vehicles.
The American automaker signed a memorandum of understanding with Australian lithium miner Lake Resources, securing supply from the Kachi project in Argentina, which has an annual supply of 25,000 tonnes of lithium.
Interest in Ford’s F150 Lightning EV offering has gone through the roof in recent months, with order backlog well into 2024, and with the company targeting 40% EV sales in the US by 2030, there is pressure to secure a stable and consistent lithium supply.
A lithium shortage continues to be a major bottleneck in the supply chain and rising costs combined with a directional push to lithium iron phosphate (LFP) chemistries will continue to see more automakers take this approach.
BYD entered into an agreement with Xianju county in China to build a battery production facility, focusing on their blade chemistry, with an annual production capacity of 22 GWh.
The project is expected to finish construction of its first line by 2023, with the entire project scheduled to be complete around June 2024.
As a result of soaring Chinese sales, BYD is now the second-largest automaker globally by EV sales, overtaking Volkswagen, but still behind Tesla in first.
BYD has also pushed its entire development plans to focus on LFP battery chemistries.
Indian automaker Tata Motors Ltd, one of the few automakers to sell EVs in the country, reported a strong March with close to 7000 EV sales.
Citing increasing demand, both from the private and government sectors, the company claims to have a major backlog of orders that have outpaced their manufacturing and will focus their next few years of R&D on increasing the production output of their EV plants
- Abhishek Murali, analyst
