Lithium ion battery value chain and related opportunities for Europe.
Date: 2018-03-14
Institutions: Joint Research Centre
Subjects: electric vehicle, electricity storage device, energy efficiency, energy policy, energy research, energy technology, report, research and development

Lithium ion battery value chain 
and related opportunities for 
Europe 

Natalia Lebedeva 

Franco Di Persio 

Lois Boon-Brett 

EUR 28534 EN 

This publication is a Science for Policy report by the Joint Research Centre (JRC), the European Commission’s 
science and knowledge service. It aims to provide evidence-based scientific support to the European 
policymaking process. The scientific output expressed does not imply a policy position of the European 
Commission. Neither the European Commission nor any person acting on behalf of the Commission is 
responsible for the use that might be made of this publication. 

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JRC105010 

EUR 28534 EN 

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ISBN 978-92-79-66948-4 

ISSN 1831-9424 

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How to cite this report: Lebedeva, N., Di Persio, F., Boon-Brett, L., Lithium ion battery value chain and related 
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978-92-79-66948-4, doi:10.2760/6060, JRC105010. 

All images © European Union 2017 unless otherwise specified 

Title: Lithium ion battery value chain and related opportunities for Europe 

Abstract  
Outline of automotive Li-ion battery value chain identifying current market volumes, leaders and status of the 
EU industry. The EU industry is far from being self-sufficient in all segments of the value chain.  R&I investment 
are essential to respond to new opportunities presented by the EV market. 

This is a re-edition of: Lebedeva, N., Di Persio, F., Boon-Brett, L., Lithium ion battery value chain and related 
opportunities for Europe, European Commission, Petten, 2016 

Contents 

Acknowledgements ................................................................................................ 1 

1  Introduction ...................................................................................................... 2 

2  Automotive lithium-ion battery value chain ........................................................... 5 

3  Value chain segments – status, recent developments and opportunities ................... 7 

3.1  Raw and processed material .......................................................................... 7 

3.1.1  Cobalt ................................................................................................ 9 

3.1.2  Natural graphite .................................................................................. 9 

3.1.3  Silicon metal ..................................................................................... 10 

3.1.4  Lithium ............................................................................................. 10 

3.2  Cell components manufacturing ................................................................... 12 

3.2.1  Cathode materials .............................................................................. 12 

3.2.2  Anode materials ................................................................................ 15 

3.2.3  Electrolytes ....................................................................................... 17 

3.2.4  Separators ........................................................................................ 19 

3.2.5  Future cell chemistries ........................................................................ 21 

3.3  Cell manufacturing ..................................................................................... 26 

3.3.1  Cell manufacturing – current status ..................................................... 26 

3.3.2  Projected market growth .................................................................... 34 

3.3.3  Global cell production over-capacity ..................................................... 35 

3.4  Battery pack manufacturing ........................................................................ 39 

3.5  Electric vehicles manufacturing .................................................................... 45 

3.5.1  Production volumes and deployment .................................................... 45 

3.5.2  OEMs Tier 1 and Tier 2 supply chain ..................................................... 52 

3.6  Recycling .................................................................................................. 55 

4  Conclusions .................................................................................................... 62 

5  References ...................................................................................................... 65 

List of abbreviations and definitions ....................................................................... 73 

List of figures ...................................................................................................... 74 

List of tables ....................................................................................................... 76 

i 

Acknowledgements 

Authors  gratefully  acknowledge  helpful  discussions  with  C. Pillot  (Avicenne  Energy), 
M. Krausa (Kompetenznetzwerk Lithium-Ionen Batterien e.V. (KLiB)), D. Chung (National 
Renewable  Energy  Laboratory),  V. Ries  (DK  Recycling  and  Roheisen),  A.D. Devaney 
(Albemarle  Lithium),  T. Buhrmester  (Rockwood  Lithium  GmbH  an  Albemarle  Company), 
D. Klanecky (Albemarle Corporation). 

Authors 

Natalia Lebedeva 

Franco Di Persio 

Lois Boon-Brett 

1 

 
 
1  Introduction  

Europe  is  on  the  cusp  of  an  energy  transformation  -  a  transformation  reducing  energy 

demand, improving energy use efficiency and moving away from a high reliance on fossil 

fuels  to  an  increased  use  of  renewable  energy  sources  for  power  and  heat  production 

and  for  transportation.    The  economic  impacts  of  the  energy  transformation  are 

important to consider as it should not hinder growth of the European economy - on the 

contrary  Europe's ambition is to  exploit  its energy transformation as an opportunity  for 

high  value  job  creation  and  increased  economic  output,  in  addition  to  creating  a  more 

secure and resilient energy system with an ambitious climate policy. 

Against this backdrop  Europe has adopted the  Energy Union Framework Strategy (COM 

(2015) 80 final) as part of its commitment to bring about the transition to a low-carbon, 

secure and  competitive economy.   The Energy Union  Strategy is structured around five 

closely  interrelated  and  mutually  reinforcing  dimensions  addressing  (i)  energy  supply 

security,  (ii)  a  fully-integrated  energy  market,  (iii)  energy  efficiency,  (iv)  decarbonising 

the economy and (v) research, innovation and competitiveness.  

In  September  2015  the  Commission  published  a  Communication  on  an  Integrated 

Strategic  Energy  Technologies  Plan  (SET-Plan)  [1].  This  Communication  defines  a  new 

European R&I Strategy for the coming years and as such is the first deliverable on which 

the  fifth  (v)  dimension  of  the  Energy  Union  will  be  built.  It  provides  the  overall 

framework  for  promoting  strengthened  cooperation  in  R&I  between  the  European 

Commission,  Member  States  and  stakeholders  such  as  research  institutes,  universities 

and  industry  (e.g.  car  manufacturers,  chemical  industry,  mining  industry,  battery 

manufacturers, collectors and recycling industry), in order to step up the efforts to bring 

new and more  efficient low-carbon technologies faster to the  market  and  to deliver the 

energy  transition  in  a  cost-competitive  way.  Based  on  an  integrated  approach,  going 

beyond  technology  silos,  the  Integrated  SET-Plan  identifies  10  R&I  Key  Actions  to 

accelerate  Europe's  energy  system  transformation.    The  Integrated  SET-Plan  is 

supported  by  the  EU  Industrial  policy  (COM(2014)  14  final),  which  aims  to  stimulate 

growth and foster competitiveness in the manufacturing sector and the EU economy as a 

whole,  by  encouraging  innovation  through  the  support  of  actions  related  to  innovation 

and research. 

Key Action 7 of the Integrated SET-Plan (Become competitive in the global battery sector 

to drive  e-mobility forward)  is  one of two Key  Actions dedicated to  the pursuit of more 

sustainable,  efficient,  low-emission  transport  systems,  explicitly  identified  in  the  fifth 

dimension  of  the  Energy  Union.  Strategic  R&I  targets  and  priorities  up  to  2030  have 

been set in Key Action 7 to strengthen European competences and capacities to become 

competitive in the global battery sector. 

2 

 
Similar as in other Key Actions these targets have been agreed in consultations between 

the  European  Commission  and  European  experts  from  industry,  academia  and  Member 

States.  The targets are enshrined in a so-called "Declaration of  Intent" [2]. Targets set 

in Key Action 7 aim at fostering research and innovation in the European battery sector 

to  make  EU  industry  more  competitive.  Unlike  the  other  Key  Actions,  which  cover 

exclusively 

research  and 

innovation  aspects,  Action  7  explicitly 

considers 

competitiveness  with  respect  to  scaled-up  manufacturing  of  higher  performance 

batteries.  Accordingly,  targets  set  in  Action  7  cover  not  only  battery  technology 

performance and cost parameters, they also cover battery manufacturing and recycling. 

Ratified  by  the  national  representatives  from  the  SET-Plan  countries  and  the 

Commission,  these  targets  help  define  the  expected  actions,  deliverables  and  time 

frames for a co-ordinated R&I&C agenda in the European battery sector. 

Related to the competitiveness aspect of Key Action 7, a number of questions arise when 

considering ways for Europe to co-ordinate its R&I efforts and where to invest available 

research  resources.  For  example,  is  it  reasonable  to  assume  that  Europe  could  be 

competitive  in  all  segments  of  the  battery  value  chain  or  should  European  R&I&C 

investments focus on certain segments only?  Which segment could offer the best return 

on investment, in terms of the overall return to the European economy? 

Answering  such  strategic  questions  demands  judicious  consideration  of  the  current 

status  and  market  outlook  for  electric  vehicle  batteries,  but  also  for  batteries  used  in 

other  applications,  as  well  as  of  the  position  and  competitive  edge  enjoyed  by  the 

various  global  economies  active  in  this  sector.    The  European  Commission's  Joint 

Research  Centre  (JRC)  has  prepared  the  current  report  for  this  purpose.    This  report 

outlines  the  Li-ion  battery  value  chain,  and  indicates  for  each  segment  current  market 

volumes  and  leaders  as  well  as  the  status  of  the  EU  industry.  This  report  does  not 

provide an  exhaustive  economic assessment  with a detailed entry barrier analysis (e.g. 

evaluation  of  market  centralization  rate,  capital  requirements,  human  resources, 

consumer purchase behaviour) for the return of the investments in terms of productivity 

and  global  competitiveness.  Nevertheless  the  information  can  be  used  to  help  underpin 

decisions  regarding  where  R&I  investments  having  the  biggest  impact  in  terms  of 

boosting  European  competitiveness  can  be  made.    In  this  context  the  global  dimension 

of the battery sector should be considered bearing in mind the competition from the US 

and  Asia,  delocalization  of  manufacturing  capacity  and  potential  dispersion  of  the 

knowledge base which has the tendency to move where production sites are located [3].  

The  scope  of  this  report  largely  matches  that  of  the  Key  Action  7  Declaration  of  Intent 

which  considers  lithium  ion  and  post  lithium  ion  chemistries  the  most  promising  and 

relevant  chemistries  for  electrochemical  energy  storage  in  the  time  frame  up  to  2030. 

3 

 
Contrary  to  the  Declaration  of  Intent,  this  report  considers  only  automotive  traction 

battery applications for which  relevant data on  the current market situation,  position of 

the main global players and future market outlook has been sourced.  Doing so does not 

preclude  the  need  or  importance  of  battery  R&I  to  advance  the  European  position  in 

other  applications  such  as 

for  stationary  energy  storage,  where  European 

competitiveness  can  be  further  improved  and  enhanced.    Indeed  development  of 

affordable  and  integrated  energy  storage  solutions  to  accelerate  full  integration  of 

storage devices (including electrochemical) into a low-carbon energy system is explicitly 

mentioned,  in  addition  to  electro-mobility,  in  the  Accelerating  Clean  Energy  Innovation 

Communication  (COM(2016)  763).    As  such  it  is  one  of  the  priority  areas  where  future 

EU  funding  under  Horizon  2020  will  be  focused.    Notwithstanding  this,  competitiveness 

of the European battery sector for applications other than e-mobility is beyond the scope 

of this report. 

4 

 
2  Automotive lithium-ion battery value chain  

Figure  1  illustrates  the  value  chain  for  automotive  Li-ion  batteries*.  The  value  chain  is 

divided  into  6  segments  spanning  the  spectrum  from  raw  material  mining  to  battery 

recycling.  Mining  and  chemical  industries  provide  the  myriad  of  raw  and  processed 

materials  used  in  the  production  of  the  various  cell  components  including  the  anode, 

cathode,  electrolyte and separator.  These components are  then assembled  in individual 

cells.  Some materials are produced and used exclusively in  Li-ion cell production while 

others  can  be  used  for  other  purposes.    While the  majority  of  the  produced  Li-ion  cells 

are assembled for use in portable electronic devices, a fast growing share is destined for 

use  in  battery  packs  for  electric  vehicles.  When  batteries  reach  the  end  of  life  in  their 

first  application  they  can  be  recycled  or  alternatively  employed  in  a  second  use 

application (e.g. for stationary energy storage).  

In  the  following  section  each  battery  value  chain  segment  is  discussed  highlighting  key 

figures and relevant industry revenues.  Revenues provided for cell component, cell and 

pack  manufacturing  refer  to  the  global  Li-ion  battery  industry,  whereas  for  other  value 

chain segments the relevant EU industry revenue is provided. While revenues specific to 

the Li-ion traction battery industry are still marginal, its Compound Annual Growth Rate 

(CAGR) for the upcoming years is quite significant. 

Where possible, key global and European players have been identified for each segment.  

It  is  worth  noting  that  activities  of  some  companies  cover  different  segments  of  the 

value  chain.  For  instance  some  cell  manufacturers  also  manufacture  cell  components 

especially  for  the  cathode,  while  other  players  active  in  the  recycling  sector  are  also 

active  in  the  materials  processing  segment.  Furthermore,  the  US  electric  vehicle 

manufacturer Tesla, demonstrates an approach to also lay claim on the manufacturing of 

cells and battery packs.  

The  data  presented  for  all  segments  was,  at  the  time  of  publication  of  this  report,  the 

most up-to-date representative data retrievable by the authors. However the extremely 

dynamic  nature  of  the  market  being  considered  is  such  that  the  absolute  and  relative 

magnitude of the data reported is changing rapidly. 

* In this report, the term "Automotive batteries" refers to batteries on-board a vehicle used for traction and is 
used as a synonym of "industrial batteries" as defined in the Battery Directive 2006/66/EU. 

5 

 
 
                                           
Raw and 
processed 
materials 

Cell 
component 
manufacturing 

Cell 
manufacturing 

Battery pack 
manufacturing 

Electric vehicle 
manufacturing 

Recycling  

s
c
i
t
s
i
t
a
t
S
t
n
a
v
e
l
e
R
t
s
o
M

s
e
u
n
e
v
e
R

51 % 

43 % 

88 % 

40 % 

31 % 

50 % 

.

Democratic Republic of 

Congo's share of global 

cobalt  production [4] - 

a critical material for Li-

ion technology 

EU Mining and 

quarrying industry 

revenues: B$ 19 [1] 

EU  Chemical  industry 

Revenues: B$ 28 [1] 

Cathode revenue 

as share of cell 

components 

market [5] 

Asian share of Li-ion 

cell manufacturing 

market [6] 

Share of pack 

assembly cost over 

the total battery pack 

cost [7] 

Automotive share of 

Li-ion cell market in 

volume (MWh) [8]  

Recycling efficiency 

for Li-ion batteries set 

in the Battery 

Directive [9]  

Global Li-ion cell 

Global Li-ion cell 

Global automotive 

components 

manufacturing 

battery pack 

Industry revenues: 

revenues: B$ 16.7 

manufacturing 

B$ 7 [5] 

[5]  

revenues: B$ 22 [5] 

EU Automotive  

industry  

Revenues:  B$ 900  

[10]. 20% of 

worldwide  [11] 

EU Waste collection & 

Recycling Industry  

Revenues: B$ 150 

[10]. 

75% of worldwide  

[12] 

Figure 1: Automotive lithium-ion battery value chain (data from 2015). 

6 

 
 
 
 
 
 
 
 
 
 
 
 
3  Value chain segments – status, recent developments and 

opportunities 

3.1  Raw and processed material 

A wide range of elements is used in Li-ion battery cells including lithium (Li), nickel (Ni), 

cobalt  (Co),  manganese  (Mn),  aluminium  (Al),  copper  (Cu),  silicon  (Si),  tin  (Sn), 

titanium (Ti) and carbon (C) in a variety of forms, e.g. natural graphite.  These elements 

are harvested from raw materials mined from the earth's crust or recovered from surface 

water.   

Some of these materials have a high economic importance while at the same time have 

a high supply-risk and as such are termed "critical raw materials (CRMs)" [4], [13], [14]. 

The European Commission publishes a list of CRMs which is reviewed and updated every 

three  years.    As  explained  in  the  EC  Communication  [4]:  "The  purpose  of  the  list  is  to 

contribute to the implementation of the EU industrial policy and to ensure that European 

industrial  competitiveness  is  strengthened  through  actions  in  other  policy  areas.  This 

should  increase  the  overall  competitiveness  of  the  EU  economy,  in  line  with  the 

Commission´s aspiration of raising industry’s contribution to GDP to as much as 20% by 

2020. It should also help to incentivise the European production of critical raw materials 

and  facilitate  the  launching  of  new  mining  activities.  The  list  is  also  being  used  to  help 

prioritise  needs  and  actions.  For  example,  it  serves  as  a  supporting  element  when 

negotiating  trade  agreements,  challenging  trade  distortion  measures  or  promoting 

research and innovation" [4]. A new CRM list is expected to be published in 2017. 

Among  the  materials  used  in  Li-ion  cells,  three  are  listed  as  CRMs  namely,  cobalt, 

natural graphite and silicon (metal) [4]. Uses, current supply and forecasted availability 

of  each  of  these  materials  are  reported  in  this  section.  Similar  information  is  also 

reported  for  lithium  even  though  it  is  not  considered  a  CRM.  However  for  obvious 

reasons  availability  and  supply  of  lithium  has  a  high  impact  on  the  Li-ion  battery 

industry.  Table  1  lists  the  main  producers,  main  European  import  sources,  the 

substitutability  index † and  the  end  of  life  recycling  input  rate ‡ for  each  CRM  and  for 

lithium. 

† ‘Substitutability index’ is a measure of the difficulty in substituting the material, scored and weighted across 
all applications. Values are between 0 and 1, with 1 being the least substitutable. 
‡ ‘End-of-life recycling input rate’ measures the proportion of metal and metal products that are produced from 
end-of-life scrap and other metal-bearing low grade residues in end-of-life scrap worldwide. 

7 

 
 
                                           
Table 1: Main producers, main source of import into EU, substitutability index and recycling rate 
of cobalt, natural graphite, silicon metal and lithium. [4, 15-18] 

Raw material 

Main 

Main sources 

Substitutability 

End-of-life 

producers 

of imports 

index 

recycling 

(2014-2015) 

into the EU 

input rate 

(mainly 2012) 

Critical raw materials used in Li-ion batteries 

Cobalt 

Democratic 

Russia:  96  % 

0.71 

16 % 

Republic 

of 

(cobalt 

ores 

Congo: 51 %  

and 

China: 6 % 

Russia: 5 % 

Canada: 5 % 

Australia: 5 % 

concentrates) 

USA: 3 %  

(cobalt 

ores 

and 

concentrates) 

Natural 

China: 66 % 

China: 57 %  

0.72 

0 % 

graphite  

India: 14 % 

Brazil: 15 % 

Brazil: 7 % 

Norway: 9 % 

Silicon metal 

China: 68 % 

Norway: 38 % 

0.81 

0 % 

Russia: 8 % 

Brazil: 24 % 

USA: 5 % 

China: 8 % 

Norway: 4 % 

Russia: 7 % 

Non-critical raw material used in Li-ion batteries 

Lithium 

Australia: 41 % 

n.a. 

n.a. 

Chile: 36 % 

Argentina: 12 % 

China: 7 % 

8 

 
 
 
 
3.1.1  Cobalt 

Cobalt  is  used  for  a  number  of  industrial  applications  such  as  in  batteries,  superalloys, 

hard materials – carbides, diamond tooling, pigments, catalysts, magnets etc. [14]. Use 

in batteries has the biggest  share  among these applications,  equivalent to around  37% 

[4].  In  Li-ion  batteries,  cobalt  is  a  component  in  several  widely  used  cathode  active 

materials.  

Identified  world  terrestrial  cobalt  resources  are  about  25  million  tons  (for  definitions  of 

resources and reserves please see [19]). More than 120 million tons of cobalt resources 

have  been  identified  in  manganese  nodules  and  crusts  on  the  floor  of  the  Atlantic, 

Indian, and Pacific Oceans [15]. At the beginning of 2016 world reserves were estimated 

to  be  7,1  million  tons  and  total  world  production  of  cobalt  in  2015  amounted  to  0,124 

million tons [15]. Just as in previous years, production of cobalt in 2014-2015 was highly 

concentrated.  Democratic  Republic  of  Congo  (DRC)  continued  to  be  the  world's  leading 

source of mined cobalt, supplying 51 % of the cobalt market volume (see Table 1) [15], 

with China, Russia, Canada and Australia each having a much lower share (see Table 1) 

[15].  In  addition  to  the  high  concentration  of  cobalt  production,  there  are  further 

concerns  regarding  the  social  aspects  of  cobalt  mining  in  the  DRC  such  as  forced  and 

child labour and unsafe working conditions [20]. 

The vast majority of cobalt import into the EU comes from Russia (96 %).  Cobalt has a 

low substitutability (substitutability index for all applications is 0.71 and for batteries it is 

0.8) and a reasonably low end-of-life recycling input rate for all applications of 16 % [4]. 

The forecasted market balance for cobalt, covering all applications until 2020, indicates a 

small  surplus  while  the  market  is  forecasted  to  be  balanced  in  2020  (i.e.  supply 

matching  demand  within  1  %)  [13].  Longer  term  projections  for  penetration  of  electric 

vehicles  up  to  2050  show  that  the  cumulative  demand  for  cobalt  would  require  all  the 

resources known today, even considering its relatively high recycling rate in the battery 

sector.  However  this  estimation  is  based  on  the  assumption  that  NMC  technology 

continues to be widely used up to 2050 [21], which is unlikely as gradual introduction of 

other cobalt-free chemistries is expected in this time frame (see Future cell chemistries 

section). 

3.1.2  Natural graphite 

Natural  graphite  is  used  in  a  number  of  industrial  applications:  electrodes,  refractories, 

lubricants,  foundries  and  in  batteries  as  anode  active  material  [13].  Application  in 

batteries has a relatively low share of 4 % [13].  

World's  inferred  resources  exceed  800  million  tons  of  recoverable  graphite,  reserves  of 

natural graphite are estimated to be 230 million tons and world mine production in 2015 

9 

 
amounted  to  ca.  1,2  million  tons  [16].  Production  of  natural  graphite  is  highly 

concentrated  with  China  producing  66  %,  India  14  %  and  Brazil  7  %  of  the  natural 

graphite market volume (see Table 1) [16]. The majority of natural graphite import into 

the EU comes from China (57 %) followed by Brazil (15 %) and Norway (9 %). In some 

applications  natural  graphite  has  a  (very)  low  substitutability  (substitutability  index  for 

all  applications  is  0.72),  but  in  batteries  substitution  of  natural  graphite  by  other 

materials  is  feasible  (substitutability  index  is  0.3)  [13].  The  end-of-life  recycling  input 

rate of natural graphite is 0 %. 

It is forecasted that the natural graphite market in 2020 will experience a large surplus 

of production (i.e. supply exceeding demand by more than 10 %) [13]. 

3.1.3  Silicon metal 

Silicon  metal  is  widely  used  in  the  chemical,    pigments,  metallurgy  and  electronics 

industries  [13].  Silicon  metal  and  silicon  alloys  are  also  emerging  as  anode  active 

materials  for  Li-ion  battery  cells,  but  at  present  their  share  is  negligible  compared  to 

other applications.  

World  resources  for  making  silicon  metal  and  alloys  are  abundant  and  adequate  to 

supply  world  requirements  for  many  decades.  The  source  of  silicon  is  silica  in  various 

natural  forms,  such  as  quartzite.  The  reserves  in  most  major  producing  countries  are 

also  ample  in  relation  to  demand,  but  no  quantitative  estimates  are  available  [17]. 

World's  production  of  silicon  metal  in  2015  amounted  to  8,100  tons  and  was  highly 

concentrated with China producing 68 %, Russia 8 %, USA 5 % and Norway 4 % of the 

silicon  metal  market  volume  (see  Table  1)  [17].  The  majority  of  silicon  metal imported 

into  the  EU  comes  from  Norway  (38  %)  followed  by  Brazil  (24  %),  China  (8  %)  and 

Russia  (7  %).  Silicon  metal  has  a  (very)  low  substitutability  having  a  substitutability 

index of 0.81 for all applications [13]. The end-of-life recycling input rate of silicon metal 

is 0 % [13]. 

It  is  forecasted  that  the  silicon  metal  market  in  2020  will  be  balanced  (i.e.  supply 

matching demand within 1 %) [13]. 

3.1.4  Lithium 

Although lithium is not classified as a critical raw material it is an important element in 

lithium-ion battery technologies. Lithium has a relatively high average abundance in the 

earth’s  crust  of  17  ppm  [22],  making  it  the  27th  most  abundant  element  in  the 

lithosphere.  For  various  reasons,  outlined  in  [22],  exact  data  on  global  resources, 

reserves and production of lithium is not available, figures cited below are best estimates 

available.  A  comprehensive  overview  of  lithium  resources,  reserves,  production  volume 

and producers is given in [22]. Global resources and reserves are estimated to be 39.5-

10 

 
45.2  million  tons  and  12.2-14  million  tons  Li metal  equivalent§ (LME),  respectively  [18, 

21, 22]. Geographical distribution of resources and reserves is shown in Figure 2. 

55% 

Figure 2: Geographical distribution of Li resources and reserves. Source: [22] 

Major  Li  resources  and  reserves  -  nearly  25  million  tons  Li  metal  equivalent  (LME)  and 

8.5 million tons LME, respectively - are identified in South America, notably in Argentina, 

Chile,  Bolivia  and  Brazil,  where  55%  of  the  global  resources  and  69%  of  the  global 

reserves are located [22]. China possesses the biggest part of Li resources and reserves 

found  in  Asia  (ca.  5.3  million  tons  LME  and  2.1  million  tons  LME  respectively) 

corresponding  to  around  12%  of  the  global  resources  and  nearly  17%  of  the  global 

reserves [22]. EU's share of the global Li resources and reserves is limited – slightly less 

than  0.4  million  tons  LME  and  0.013  million  tons  LME,  respectively  [22].  However, 

unique deposits of jadarite – lithium boron silicate – were discovered in 2004 in Serbia. 

So  far  only  one  such  deposit  is  known,  its  resource  is  1.5  million  tons  LME,  which 

corresponds to ca. 2% of the global resources [22]. Significant Li resources and reserves 

are  identified  in  North  America  –  nearly  6  million  tons  LME  and  0.8  million  tons  LME, 

respectively. More than half of these is located in the USA, corresponding to nearly 8% 

of the global resources and 5 % of the global reserves [22]. 

Global  supply  of  lithium  has  been  historically  dominated  by  hard-rock  mineral  sources, 

however  development  of  large-scale  lithium  brine  operations  in  South  America 

commenced in the early 1980’s. The actual global supply market for lithium products is 

§ Lithium is found in nature in a number of mineral forms and compounds with different Li metal content. To 
account for this, numbers for Li resources and reserves are given in literature recalculated to Li metal 
equivalent, i.e. amount of Li contained in ores, brines etc.  

11 

 
 
 
 
                                           
around  200,000  tons  of  lithium  carbonate  equivalent  (LCE)  (1  kg  LCE  =  0.1895  kg  Li), 

with almost 83% of it being sourced from four major producers: Albemarle (USA), SQM 

(Chile),  FMC  (USA)  and  Sichuan  Tianqi  (China)  with  main  fields  located  in  Chile, 

Australia, Argentina and China (see Table 1) [23].  

In 2015 Li-ion batteries  consumed  around 40 %  of the global LCE production, of which 

14% was used for electric vehicle battery packs. Projection for 2025 shows that electrical 

vehicle demand alone will utilise 200,000 tons of LCE, which equates to the total current 

global  LCE supply [23]. 

Therefore the known lithium reserves are sufficient to cope with this foreseen increase in 

demand  even  without  recovery  of  lithium  from  the  recycling  of  Li-ion  batteries.  Today 

the recovery of lithium from batteries is technically feasible, but is still not economically 

viable.  However,  foreseen  long  term  lithium  price  development  or  new  practices  may 

make lithium recovery more viable in the future [21].  

3.2  Cell components manufacturing 

3.2.1  Cathode materials 

Aluminium foil is used as a current collector for cathodes in Li-ion cells. Market leaders in 

aluminium  foil  production  for  battery  applications  are  Sumitomo  Light  Metal  Industries 

(JP) and Nippon Foil Mfg. (JP) [24]. 

Complex  transition  metal  oxides  and  phosphates  are  currently  the  main  cathode  active 

materials used in Li-ion battery cells. These include: Lithium Cobalt Oxide (LCO), Lithium 

Nickel  Manganese  Cobalt  Oxide  (NMC),  Lithium  Nickel  Cobalt  Aluminium  Oxide  (NCA), 

Lithium Manganese Oxide (LMO) and Lithium Iron Phosphate (LFP).  With the exception 

of  LCO,  all  these  materials  are  currently  used  in  automotive  Li-ion  battery  cells 

[25],[26].  The  total  market  demand  for  cathode  materials  for  all  applications  of  Li-ion 

batteries  was approximately  140,000 tons in 2015; revenues generated were  B$ 3 and 

the  market  showed  a  sustained  growth  with  compound  annual  growth  rate  (CAGR) 

amounting  to  16%  between  2005  and  2015  [27]  (see  Figure  3).  It  is  estimated  that 

approximately  25%  of  the  total  global  demand  of  the  cathode  active  materials  or  ca. 

5,000 tons was used in Li-ion batteries for HEVs, PHEVs and EVs. 

12 

 
 
Figure 3: Left – Development of the cathode active materials market in 2000-2015 (Used with 
permission from Avicenne Energy [5]). Right –demand division per material type (Used with 
permission from Avicenne Energy [5]) and regional distribution of the manufacturers (according to 
the location of the headquarters) in 2015 (based on data from [5]). 

Production  of  cathode  active  materials  is  dominated  by  Asia,  with  China  manufacturing 

ca. 39 % (by weight) of the total amount of cathode materials in 2015, Japan – ca. 19 % 

and South Korea – ca. 7 % (see Figure 3). 

Suppliers from the EU – Umicore** (BE) and Johnson Matthey (UK) – together produced 

ca.  13 %  (by  weight)  of  the  total  amount  of  cathode  materials  or  ca.  17,700  tons  in 

2015.  Umicore produced ca. 5,550 tons of LCO (note however that LCO is less relevant 

for  automotive  applications)  and  ca.  9,600  tons  of  NMC  and  Johnson  Matthey  (UK) 

produced ca. 2,560 tons of LFP. 

The  cathode  materials  market  remains  very  dynamic  and  is  currently  seeing  "de-

concentration"  with  more  and  more  companies  entering  the  market  and  providing  a 

share of the global supply. For example, in 2011 61% of the global market for cathode 

materials was shared by only three (3) dominating suppliers, namely Umicore (BE) with 

32%,  Nichia  (JP)  with  24%  and  Toda  Kogyo  (JP)  with  5%  [24].  In  2014  six  (6)  main 

suppliers  together  had  a  market  share  of  ca.  45%  with  Umicore  (BE)  having  11%, 

Reshine (CN) 8%, L&F (KR) 8%, ShanShanTech (CN) 7%, Nichia (JP) 7% and Sumitomo 

** Umicore is considered an EU-based company in this report, despite the fact that the actual production of the 
cathode active materials takes place at the Umicore's facility in South Korea. 

13 

 
 
                                           
(JP)  5%  [27].  In  just  one  year,  each  of  these  main  producers  further  increased  their 

production volume and together they held a 52% share of the total market in 2015 [5].  

Companies such as BASF (DE), Dow (US), 3M (US), DuPont (US), Mitsubishi (JP) and LG 

Chem (KR) have recently shown interest in this market but do not play a significant role 

in the global supply of the cathode active materials yet [27]. 

Based  on  a  number  of  assumptions  [5],  the  market  for  cathode  active  materials  is 

expected  to  grow  from  ca.  140,000  tons  in  2015  to  ca.  400,000  tons  in  2025  with  the 

relative fraction per material changing as  shown in Figure 4. The highest growth rate is 

expected  for  NMC  (almost  5  times),  NCA  (ca.  3  times)  and  LMO  (2.4  times),  and  EU 

suppliers  have  the  opportunity  to  increase  their  supply  of  NMC.  Production  of  NCA 

material,  currently  dominated  by  Japan,  may  also  present  an  opportunity  for 

existing/new EU manufacturers. 

2015 

2025 

Expected 

growth 

% 

ktons  % 

ktons 

times 

LCO 

26 

37 

16 

64 

1.7 

NMC 

29 

40 

48 

192 

4.8 

LFP 

23 

32 

16 

64 

2.0 

LMO 

12 

17 

10 

40 

2.4 

NCA 

10 

14 

10 

40 

2.9 

Total  100  140 

100  400 

2.9 

Figure 4. Expected market volume per material type in 2025 (left) (Used with permission from 
Avicenne Energy) [5] and as compared to 2015 (right) (based on data from [5]). 

However,  the  potential  of  technical  breakthrough  that  leads  to  use  of  different  cathode 

materials/chemistry,  intensive  competition  and  government  policy  interference  will 

continue to affect global cathode manufacturing sector [23].  

The quality of the cathode material impacts the overall performance  of the cell. Quality 

control  starts  in  the  raw  material  production  stage  and  this  is  particularly  true  for 

cathode  manufacturing.  For  this  reason  many  of  the  major  battery  cell  manufacturers 

such as Panasonic (JP), LG Chem (KR), BYD (CN)  have chosen to develop their own  in-

house cathode materials production capacity [23]. 

14 

 
 
 
 
3.2.2  Anode materials 

Copper  foil  is  used  as  a  current  collector  for  anodes  in  Li-ion  cells.  Market  leaders  in 

copper  foil  production  for  battery  applications  are  Furukawa  Electric  (JP),  Nippon  Foil 

Mfg. (JP) and Nippon Denkai (JP) [24]. 

Various carbonaceous  materials such as natural and artificial graphite, meso-phase and 

amorphous carbon and more recently tin and silicon oxides and alloys, as well as Lithium 

Titanium Oxide (LTO) are used as anode active materials [5, 27]. 

The  total  market  for  anode  materials  for  all  applications  of  Li-ion  batteries  exceeded 

76,000 tons in 2015;  revenues generated were  B$ 1 and the  compound annual growth 

rate (CAGR) amounted to 14% in the period from 2005 to 2015 [5].  

Approximately 40% of the total global demand of the anode active materials (ca. 30,400 

tons) was used in Li-ion batteries for HEVs, PHEVs and BEVs [5]. 

Development  of  the  market  in  2006-2015  and  the  division  of  the  market  per  type  of 

anode material is shown in Figure 5. It can be seen that the largest share of the market 

– ca. 91% - is taken by graphite and is almost equally divided between natural graphite 

and  artificial  graphite,  49  %  and  42%  (by  weight),  respectively,  of  all  anode  active 

materials for all Li-ion battery applications [5].  

Figure 5: Development of the anode active materials market in 2006-2015, market division per 
material type (Used with permission from Avicenne Energy [5]) and regional distribution of the 
top-12 manufacturers of natural and artificial graphite anode materials in 2015 (based on data 
from [5]). 

15 

 
Historically  the  production  of  anode  active  materials  has  been  dominated  by  Japan  and 

China  (see  Figure  5)  [5,  24,  25].  In  2011  three  (3)  producers  together  had  a  market 

share of 65 % with Hitachi Chemicals (JP) having a share of 34 %, Nippon Carbon (JP) – 

19%  and  BTR  Energy  (CN)  –  12%  [24],  [25].  In  2015,  these  3  companies  remain  the 

leaders in the market of anode active materials supplying 61% of the market [5]. Hitachi 

Chemicals (JP) remains the largest producer (31% of the market) with BTR Energy (CN) 

following  in  second  place  (19%)  and  Nippon  Carbon  (JP)  in  third  place  (7%).  Other 

producers of anode active materials include Mitsubishi Chemical (JP), LS Mtron Carbonics 

(KR), ShanshanTech (CN), Tokai Carbon (JP) [5].  

EU-based  companies  such  as  SGL  (DE),  Imerys  (CH)  and  Heraeus  (DE),  as  well  as  3M 

(US),  DuPont  (US),  Dow  (US),  Dow  Corning  (US),  Envia  (US),  ShinEtsu  (JP)  have 

recently  shown  interest  in  the  anode  active  materials  market  for  Li-ion  batteries  but 

currently do not play any significant role in the global supply. 

The  market  for  anode  active  materials  is  expected  to  grow  from  76,000  to  more  than 

250,000  tons  in  2025.  The  expected  distribution  of  the  market  among  various  anode 

active materials in 2025 is shown in Figure 6. The forecast is that the share of artificial 

graphite will increase to 52%, that of natural graphite decrease to 24% and the share of 

other anode active materials will grow to 24% [5]. 

2015 

2025 

Expected 

growth 

% 

ktons  % 

ktons  times 

49 

36.75  24 

60 

1.6 

42 

31.5 

52 

130 

4.1 

6 

4.5 

10 

25 

5.6 

Natural 
graphite 

Artificial 
graphite 

Amorphous 
carbon 

LTO 

1 

0.75 

8 

20 

26.7 

Si compounds 

2 

1.5 

6 

15 

10 

Total 

100  75 

100  250 

Figure 6: Forecast market division per anode active material type in 2025 (left) (Used with 
permission from Avicenne Energy [5]), and as compared to 2015 (right) (based on data from [5]). 

16 

 
 
 
 
 
 
3.2.3  Electrolytes 

The  global  market  for  electrolytes  for  all  applications  of  Li-ion  batteries  was  slightly 

bigger  than  62,000  tons  in  2015;  revenues  generated  were  B$  0.9  and  the  compound 

annual growth rate (CAGR) in 2005 to 2015 amounted to 20% [5]. 

The  market  for  electrolytes  for  HEV,  PHEV  and  BEV  batteries  has  experienced  a  rapid 

growth in the period from 2010 to 2015, with electrolyte demand for these applications 

increasing from ca. 200 tons in 2010 to ca. 20,500 tons in 2015 (or ca. 33 % of the total 

market volume for Li-ion batteries) [5, 28]. 

Similar  to  cathode  and  anode  active  materials,  the  production  of  electrolytes  for  Li-ion 

batteries  is  dominated  by  the  Asian  suppliers,  with  China  currently  producing  close  to 

60 % (by weight) of the total market, Japan – 18 % and Korea – 14 % (see Figure  7). 

Soulbrain - a producer with headquarters in the US and production facility in Korea – has 

supplied  7 %  of  the  market  in  2015.  The  EU-based  electrolyte  producer  –  BASF  (DE)  – 

has supplied ca. 200 tons of electrolyte or ca. 0.4 % of the total market volume in 2014, 

but decreased the supply significantly in 2015 [5, 28]. 

Figure 7: Left – Development of the electrolyte market in 2000-2015 (Used with permission from 
Avicenne Energy [5]) and right – Regional distribution of the electrolyte producers in 2015 (based 
on data from [5]). 

17 

 
 
 
 
 
The competition in the market is very intense, with  Chinese companies expanding their 

production  volume  quickly  and  others  slowing  their  growth  or  even  experiencing  a 

decline  [5,  28].  One  of  the  quickest  growing  Chinese  electrolyte  producers,  CapChem, 

has  more  than  doubled  its  share  on  the  market  from  ca.  3,500  tons  in  2013  to  8,600 

tons  in  2015  to  become  the  global  market  leader  with  a  14 %  share  of  the  total 

electrolyte  market.  Zhangjiagang  Guotai-Huarong  (GTHR)  (CN)  has  also  increased  its 

production  from  ca.  3,500  tons  in  2011  to  8,000  tons  in  2015  becoming  the  second 

biggest  electrolyte  supplier  with  a  13  %  share  of  the  total  electrolyte  market  in  2015. 

Conversely,  Korean  (e.g.  Panax-Etec)  and  mainly  Japanese  (e.g.  Mitsui  Chemicals  and 

Ube)  electrolyte  producers  are  currently  experiencing  a  decrease  of  their  market  share 

[5, 27]. 

New entrants on the global market of electrolytes for Li-ion batteries are companies such 

as LG Chem (KR), DuPont (US) and Daikin (JP) [5, 28].  

Worldwide  there  is  currently  a  significant  overcapacity  for  electrolyte  production  for  Li-

ion  batteries  (see  Figure  8)  [5].  Less  than  half  of  the  available  production  capacity  is 

currently being utilised in Japan and Korea and in the US and Europe only 5% and 1%, 

respectively. 

Figure 8: World-wide demand and offer of electrolytes for Li-ion batteries (Used with permission 
from Avicenne Energy [5].) 

18 

 
 
 
Nevertheless, there may be opportunities in formulation and production of new advanced 

electrolytes,  e.g.  for  high-voltage  Li-ion  cells,  where  advanced  (likely  fluorinated) 

additives and solvents will be required [5]. Given this dynamic market climate and taking 

into account the expected market growth, there may be  business  opportunities present 

for EU-based producers. 

The  market  for  electrolytes  is  expected  to  grow  from  the  current  62,000  tons  to  more 

than 235,000 tons in 2025, with the automotive share increasing from current ca. 33% 

to ca. 50% of the market, see Figure 9 [5].  

Figure 9: Electrolyte market forecast till 2025 (Used with permission from Avicenne Energy [5].) 

3.2.4  Separators 

The total market for separators for all applications of Li-ion batteries was approximately 

900  Mm2  in  2015;  revenues  generated  were  B$  1.1  and  the  compound  annual  growth 

rate (CAGR) amounted to 15% in the period between 2005 and 2015 [5]. Approximately 

30% of the global separator market volume or ca. 300 Mm2 is supplied for production of 

automotive Li-ion battery cells [5].  

As for cathode and anode active materials and electrolytes, the market of separators for 

Li-ion  batteries  is  dominated  by  Asia,  with  Japan's  current  market  share  of  48  %  (by 

product surface area, Mm2) of the total market supply, China – 17 % and Korea – 10 % 

19 

 
 
 
 
(see  Figure  10).  Market  leaders  are  Asahi  Kasei  (JP),  Toray  (JP)  and  SK  (KR).  The 

separator market position of the US is also strong with Celgard having a market share of 

9% and Entek of 3% in 2015 [5].  

Companies  such  as  DuPont  (US),  Dow  (US),  LG  Chem  (KR),  Teijin  (JP)  and  Mitsubishi 

(JP)  have  recently  shown  interest  in  the  separator  materials  market  for  Li-ion  batteries 

but currently do not play any significant role in the global supply. EU-based Evonik (DE) 

is  among  the  new  entrants  on  the  market  of  separator  materials  [5].  Litarion  (DE)  has 

manufacturing  capacity  to  produce  electrodes  and  ceramic  separators  for  lithium-ion 

battery cells, but the actual production volume for 2015 is unknown [29]. 

Figure 10: Left – Development of the separator market in 2005-2015 [5] (Used with permission 
from Avicenne Energy [5]) and right – Regional distribution of the separator producers in 2015 
(based on data from [5]). 

It is expected that the separator market for Li-ion batteries will continue to grow steadily 

with  CAGR  of  12%  reaching  ca.  2700  Mm2  in  2025  [5].  A  major  contribution  to  this 

growth will come from the needs of electric vehicles and buses (see Figure 11).  

20 

 
 
 
 
 
 
Figure 11: Projected separator market growth (Used with permission from Avicenne Energy [5]). 

3.2.5  Future cell chemistries 

Significant research  effort is dedicated world-wide to the development of  several future 

cell  chemistries  which  have  the  potential  to  outperform  contemporary  Li-ion  cells. 

Chemistries  which  are  often  identified  as  the  ones  capable  of  advancing  battery 

technology to beyond the Li-ion include: 

a) Lithium metal (Li metal) batteries 

b) Solid State batteries (SSB) 

c) Lithium-sulphur (Li-S) batteries 

d) Lithium-air (Li-air) batteries 

The  development  status  as  well  as  challenges  facing  these  chemistries  are  briefly 

outlined in the following sections. 

21 

 
 
 
 
 
 
 
 
 
Li metal [30] 

With a specific capacity more than ten times that of the LiC6 anode used in present-day 

lithium-ion batteries,  cells based  on  Li metal anodes are of particular interest.  Effective 

strategies  for  stabilizing  the  anode  in  such  cells  are  required  for  progress  on  future 

storage technologies, including Li–S and Li–air batteries. Several challenges — parasitic 

reactions  of  Li  metal  with  liquid  electrolytes,  unstable  and  dendritic  electrodeposition, 

and  dendrite-induced  short  circuits  —  derailed  early  efforts  to  commercialize  lithium 

metal batteries.  

Recent  research  efforts  to  minimise  reactions  between  the  metal  and  electrolyte  use 

surface  coatings  to  alter  the  composition  and  ion  transport  properties  of  the  solid 

electrolyte interface (SEI) layer and are expected to yield lithium-metal batteries based 

on layered hybrid electrolytes in which Li anodes, protected by an artificial SEI,  coexist 

with conventional liquid electrolytes. Artificial SEI designs which can also be applicable to 

other  reactive metal anodes,  e.g. Na, Al or Zn, are  of particular interest because these 

anodes exhibit similar parasitic reactions to Li. 

In the longer term, the inherent design flexibility that comes from the malleability of Li 

will be exploited allowing Li metal batteries to be lithographied, 3D printed, gelated from 

sols, or integrated into load-bearing structures through layer-by-layer deposition or self-

assembly.  Design  of  Li-metal  anodes  compatible  with  manufacturing  outside  the  glove 

box will emerge as an area of high priority. 

Solid State batteries [31] 

Solid-state  batteries  (SSBs)  that  use  solid  electrolytes  (SEs)  (either  inorganic  or 

polymer) instead of liquid ones could offer both high energy and high power density. SEs 

allow transfer of lithium ions only and act as functional separators with only minor self-

discharge  (due  to  negligible  electronic  conductivity).  Moreover,  lithium  ions  and  anions 

are  mobile  in  liquid  electrolytes,  causing  severe  concentration  gradients  of  the 

conducting  salts  during  current  flow  and  limiting  the  cell  current,  whereas  only  lithium 

ions are mobile in SEs so this bulk polarization cannot occur.  As a result higher current 

densities  and  quicker  charging  times  are  conceivable  in  SSBs.  Some  inorganic  solid 

electrolytes  are  stable  at  elevated  temperatures,  improving  battery  safety.  The 

mechanical  rigidity  of  SEs  may  prevent  the  dendrite  formation  that  is  caused  by  the 

electrodeposition of lithium, and thus facilitate the use of lithium-metal anodes. 

Despite  fast  growing  interest  in  SSBs,  many  challenges  remain  in  both  manufacturing 

and fundamental understanding of the technology. For example, lithium-ion conductivity 

of the polymer electrolytes is too low for battery operation at room temperature, and the 

22 

 
 
operation  in  electric  vehicles  requires  temperatures  above  80  °C.  Even  then,  their  rate 

capability  is  limited,  preventing  fast  charging.  Hence,  the  search  for  stable  polymer 

electrolytes for use with lithium-metal anodes and lithium nickel cobalt manganese oxide 

or lithium nickel cobalt aluminum oxide cathodes at ambient temperature at sufficient C-

rates is one of the challenges scientists and engineers face in the forthcoming years. 

The  major  drawback  of  many  inorganic  SEs  is  their  low  thermodynamic  stability.  Most 

solid electrolytes are easily reduced at low potentials (for example, by lithium metal)  — 

just  like  their  liquid  competitors  —  and  oxidized  at  intermediate  potentials.  Protecting 

interphases  are  therefore  required  to  stabilize  the  electrolyte/electrode  contact,  as 

happens in conventional lithium-ion batteries. 

Li-S [32] 

Li-S batteries based on abundant sulphur, high-capacity sulphur-containing cathodes and 

lithium  anodes  are  considered  among  the  most  promising  candidates  to  achieve  a  low-

cost  and  high-energy-density  system.  Fundamental  challenges  facing  Li-S  batteries 

originate  from  the  insulating  properties  of  elemental  sulphur  and  lithium  sulphides,  the 

dissolution of lithium polysulphides in the electrolyte, the volume change at the cathode 

on  cycling  and  the  need  to  passivate  membranes  at  the  anode  to  inhibit  dendrite 

formation.  Moreover,  it  is  now  widely  realized  that  high  sulphur  loading  electrodes  are 

essential for Li-S technology in the marketplace. 

Li-air [33] 

The  Li-air  battery,  which  uses  oxygen  from  air,  has  the  highest  theoretical  specific 

energy  density  of  any  battery  technology,  3,500  Wh/kg.  Estimates  of  practical  energy 

storage  are  uncertain,  as  many  factors  are  unknown,  but  values  in  the  range  500  to 

1,000  Wh/kg  –  sufficient  to  deliver  significantly  in  excess  of  a  500  km  driving  range  if 

deployed  in  an  electric  vehicle  battery  –  have  been  proposed.  Despite  significant 

research  over  the  past  decade,  there  is  a  lack  of  a  true  understanding  of  the 

underpinning chemistry and electrochemical processes in Li-air batteries. Li-air batteries 

combine two challenging electrodes, Li metal and oxygen. Li-metal electrodes still do not 

deliver  the  necessary  cycling  efficiency  (ratio  of  discharge/charge  capacity)  and  related 

suppression of dendrites. Aprotic Li-O2 faces a number of challenges, not least of which 

is  the  stability  of  the  electrolyte  solution  and  the  cathode  towards  reduced  oxygen 

species. Also, the issue of air handling and filtering would need to be addressed by new 

engineering solutions. 

23 

 
 
 
Technology evolution [34] 

Given  the  numerous  fundamental  challenges  facing  the  above-listed  future  battery 

chemistries, and taking into account that time-to-market for new battery materials and 

concepts has historically been shown to range between 10 and 20 years [5], projections 

regarding  the  commercialisation  timeline  of  the  future  technologies  need  to  be  made 

with  caution.  According  to  the  German  National  Platform 

for  Electromobility 

contemporary  Li-ion  cells  (generations  1  and  2a  in  Figure  12),  largely  based  on  LFP, 

LMO,  NCA  and  NMC  cathodes  and  graphite  or  carbon  anodes,  will  soon  be  gradually 

substituted  by  generation  2b  technology  with  nickel-rich  cathodes  and  higher  energy 

density. 

Another  advance  is  to  be  expected  with  the  introduction  of  Generation  3,  which  is 

characterized  by  the  use  of  carbon-silicon  anodes.  Generations  3a  and  3b  can  be 

expected  to  subsequently  upper  the  cut-off  voltage,  which  will  lead  to  an  increase  in 

energy density.  

In  the  medium  to  long  term,  a  doubling  of  range  or  halving  of  costs  appears  to  be 

possible especially with traction battery cells of Generation 4. If the challenges related to 

solid state and lithium-sulphur technology (and other conversion chemistries (Generation 

4))  are  resolved,  they  can  become  important  parallel  technologies  co-existing  with 

lithium-ion on the market (see Figure 12). 

It  is  still  largely  an  open  question  whether  the  theoretically  proven  advantage  of  the 

higher  energy  density  at  the  cellular  level  can  be  efficiently  implemented  at  a  battery 

pack  level.  Therefore,  at  present  a  question  whether  and  when  a  transition  to  "post" 

lithium-ion  technology  (traction  battery  cells  with  conversion  materials  (Generation  4) 

and  lithium-air  (Generation  5))  will  take  place  in  future  cannot  be  answered  with 

certainty.  From  today's  perspective  advancement  to  solid  state  systems  in  the  near 

future (Generation 4) looks more likely.  

For all of these chemistries no significant manufacturing base has yet been developed by 

any global economy.  This leaves a potential opportunity open for Europe to break-in to 

cell manufacturing for chemistries where currently no significant barrier to entry exists.  

24 

 
 
 
Figure 12: Forecasted battery technology evolution [34]  

25 

 
 
 
 
3.3  Cell manufacturing 

3.3.1  Cell manufacturing – current status 

The  total  sales  volume  of  Li-ion  battery  cells  in  2015  was  ca.  5,600  million  cells 

(equivalent  to  ca.  60  GWh)  and  the  cell  market  value  was  ca.  B$  16.7,  its  compound 

annual  growth  rate  (CAGR)  amounted  to  22%  for  volume  and  15%  in  value  between 

2005  and  2015  [5].  In  2015  approximately  31%  of  the  total  Li-ion  battery  cell  sales, 

equivalent  to  more  than  18  GWh  in  volume  and  ca.  B$  5.3  in  value,  were  used  in 

automotive applications [5]. This number excludes Li-ion battery cells for SLI (Starting, 

Lighting and Ignition) application, which at present has a very minor market share, but 

is expected to grow in the future [5]. 

Lithium-ion batteries were first commercialised in the early 1990s by Sony. Their uptake 

grew  rapidly  as  they  delivered  a  superior  performance  relative  to  other  rechargeable 

chemistries deployed at the time. The surge in demand, in terms of number and product 

range,  for  portable  electronic  devices  drove  the  corresponding  need  for  high 

performance  lithium  ion  batteries.  Asian  battery  manufacturers'  dominance  in  this 

market positioned them favourably to respond quickly and competitively  to the growing 

demand. This allowed establishment of a strong manufacturing base in Asia, which later 

enabled quick scaling up of the production volume, further development and optimisation 

of  the  technology  and  diversification  of  their  product  range  toward  emerging  markets, 

including automotive [35]. Asian companies, notably Samsung SDI (KR), LG Chem (KR), 

Sanyo-Panasonic  (JP),  Sony  (JP)  and  BYD  (CN)  among  others,  dominate  the  Li-ion 

battery cell manufacturing (see Figure 13) [5, 34, 35]. 

Cell  manufacturers  for  automotive  applications  include  Panasonic  (JP),  Samsung  SDI 

(KR),  LG  Chem  (KR),  AESC  (JP),  GS  Yuasa  (JP),  Li  Energy  Japan  (JP),  BYD  (CN), 

Wanxiang (CN), Lishen Tianjin (CN) and Toshiba (JP) [26, 34, 36].  

26 

 
Company 

Market volume 

Company 

in 2015, 

million cells 

Market value in 
2015, 
million US $ 

Samsung SDI 

1376 

Samsung SDI 

LG Chem 

1008 

LG Chem 

SONY 

ATL 

Tesla 

Sanyo-

Panasonic 
Lishen 

Coslight 

BYD 

Maxell 

BAK 

Other 

Total 

490 

465 

430 

408 

290 

185 

180 

76 

67 

625 

5600 

ATL 

Sanyo-

Panasonic 
BYD 

SONY 

Tesla 

Lishen 

NEC 

Coslight 

GS Yuasa 

Other 

Total 

3000 

2530 

1490 

1125 

1120 

1040 

970 

850 

520 

450 

210 

3395 

16700 

Figure 13: Market share of various Li-ion cell producers in 2015, left – in volume, right – in value. 
(Used with permission from Avicenne Energy [5]) 

27 

 
 
 
 
 
Table  2  illustrates  the  total  completed,  under  construction  and  planned  Li-ion  cell 

manufacturing capacities in various regions in 2014 according to the data cited in reports 

of the US Clean Energy Manufacturing Analysis Center (CEMAC) [7, 37]. As can be seen, 

in 2014 the global manufacturing capacity for Li-ion battery cells for all applications was 

ca. 76.3 GWh and 88% of this manufacturing capacity was located in Japan, China and 

South Korea (see Table 2). Production capacity for automotive Li-ion cells was 27.5 GWh 

in  2014,  79%  of  which  was  located  in  Asia  [7,  37].  A  similar  number  for  the  global 

production  capacity  for  automotive  Li-ion  battery  cells  -  27.2  GWh-  is  quoted  by  the 

German National Platform for Electromobility [34].  

According to Avicenne  Energy, the global production capacity for Li-ion battery  cells for 

all  applications  was  approximately  100  GWh  in  2015,  from  which  40  GWh  were  for 

portable Li-ion cells and 60 GWh for all other applications including automotive [5]. 

In the time period from 2014 to 2016 the global manufacturing capacity for automotive 

Li-ion cells has increased significantly (compare Table 2 and Table 3) [6, 38]. Korea has 

increased  its  manufacturing  capacity  for  automotive  cells  ca.  1.5  times,  Japan  ca.  2.4 

times  and  China  2.7  times  from  2014  to  2016.  China  plans  further  expansion  of  its 

manufacturing  capacity  for  lithium-ion  battery  cells  and  has  announced  construction  of 

extra  19.3  GWh  manufacturing  capacity  in  addition  to  its  30.4  GWh.  Especially 

aggressive growth in the manufacturing capacity for automotive cells is observed in  the 

USA,  where  an  explosive  growth  of  the  manufacturing  capacity  increasing  almost  10 

times  from  2014  to  2016  is  observed  thanks  to  construction  of  the  Tesla  Gigafactory. 

The fully commissioned manufacturing capacity of the EU has not changed significantly. 

Please  note  that  5  GWh  capacity  mentioned  as  "under  construction"  in  the  CEMAC 

reports [7, 37] refers to a new BMZ Li-ion battery manufacturing facility in Karlstein (DE) 

(see section 3.4). 

28 

 
 
Table 2: Annual manufacturing capacity of Li-ion cells worldwide in 2014 [7, 37] 

Fully 

Partially 

Under 

Announced  

Total 

Share 

of 

Automotive 

Share 

of 

commis-

commis-

construc-

(GWh) 

manufacturing 

total  global 

manufacturing 

global 

sioned 

sioned 

tion 

capacity* 

capacity* 

capacity* 

automotive 

(GWh) 

(GWh) 

(GWh) 

(GWh) 

(GWh)  

capacity* 

China 

16.704 

3.576 

18.730 

12.847 

39.010 

51 % 

11.240 

41 % 

Japan 

10.778 

Korea 

16.059 

U.S. 

3.770 

EU** 

1.798 

Rest 

of 

2.440 

world 

0 

0 

0 

0 

0 

1.200 

0 

0 

0 

11.978 

16 % 

5.750 

16.059 

21 % 

4.600 

1.200 

35.0 

4.970 

0 

0 

0 

1.798 

0.564 

2.440 

7 % 

2 % 

3 % 

4.600 

1.300 

0 

21 % 

17 % 

17 % 

5 % 

0 % 

TOTAL 

51.549 

3.576 

21.130 

48.412 

76.255 

100 % 

27.490 

100 % 

* includes fully commissioned, partially commissioned and under construction capacity; excludes announced capacity 

**Please note that JRC analysis of the underlying data for the EU indicated that numbers for the EU include data on pack manufacturing [38]. 

29 

 
 
 
 
Table 3: Annual manufacturing capacity of automotive Li-ion cells worldwide in 2016 [6, 38] 

Fully 

Partially 

Under 

Announced 

Total 

Increase 

commissioned 

commissioned 

construction 

(GWh) 

manufacturing 

compared 

to 

(GWh) 

(GWh) 

(GWh) 

capacity* 

2014 

(GWh) 

(%) 

China 

11.152 

3.038 

16.244 

19.246 

30.434 

Japan 

13.623 

Korea 

6.570 

13.623 

6.570 

U.S. 

8.925 

8.750 

26.250 

0.150 

43.925 

EU** 

1.293 

5.000 

6.293 

Rest of world 

3.390 

0.120 

3.390 

TOTAL 

44.953  

11.788 

47.494 

19.516 

104.235 

271 

237 

143 

955 

0 

139 

* includes fully commissioned, partially commissioned and under construction capacity; excludes announced capacity 

**Please note that JRC analysis of the underlying data for the EU indicated that numbers for the EU include data on pack manufacturing; 5 GWh capacity 
mentioned as "under construction" refers to a new BMZ Li-ion battery manufacturing facility in Karlstein (DE) (see section 3.4) [38]. 

30 

 
 
 
 
 
 
 
 
 
 
 
 
 
The  EU  does  not  have  a  significant  manufacturing  capacity  for  Li-ion  battery  cells  and 

published  data  on  capacity  and  on  actual  production  differ  slightly  depending  on  the 

sources:  

a)  According  to  the  US  Clean  Energy  Manufacturing  Analysis  Center  (CEMAC) 

whose reports are based on data from Bloomberg New Energy Finance (BNEF), the total 

production capacity of fully commissioned facilities in Europe was nearly 1.8 GWh/year in 

2014  (corresponding  to  2%  in  the  global  production  capacity  of  Li-ion  cells  for  all 

applications) out of which 1.3 GWh/year were for automotive Li-ion cells (corresponding 

to 5 % of the global production capacity of automotive Li-ion cells) (see Table 2) [7, 37]. 

(Please note that JRC analysis of the underlying data for the EU indicated that numbers 

for the EU include data on pack manufacturing [38]).  

b) In its "Roadmap integrated cell and battery production Germany" the German 

National  Platform  for  Electromobility  indicates  that  EU's  production  capacity  for  large 

format Li-ion cells for automotive and energy storage applications was 1.5 GWh/year  in 

2014  [34].  This  number,  based  on  Roland  Berger's  data,  takes  into  account  only  an 

estimate of production capacity of AESC (Nissan) facility in Sunderland (UK) [34]. 

c) According to the analysis of Avicenne Energy, manufacturing capacity for Li-ion 

cells  in  Europe  was  nearly  1.5  GWh/year  in  2015  [5],  distributed  over  a  number  of 

relatively small producers, however it quotes the actual production volume of Li-ion cells 

in Europe at only ca. 350 MWh [5]. 

Compared  with  Asian  counterparts  the  number  and  relative  size  of  European  Li-ion  cell 

manufacturing  companies  are  significantly  smaller.  These  manufacturers  include  (see 

also Table 4): 

  SAFT, recently taken over by Total  [39], is currently the largest active European 

producer of Li-ion cells. Its manufacturing facility in Nersac (FR) has a production 

capacity  of  60  MWh/year  [5,  40],  however  SAFT's  actual  production  volume  in 

2015  was  84  MWh,  exceeding  its  nominal  capacity  [5].  SAFT  cells  and  batteries 

are used for various applications including space, military and aircraft applications 

[41].  

  ABSL  Power  Solutions  in  Culham  (UK),  recently  acquired  by  EnerSys,  is  a 

European manufacturer of Li-ion battery cells for space applications [42].  

  AGM Batteries Ltd. in Thurso (UK) develops and manufactures rechargeable Li-ion 

cells and non-rechargeable lithium cells. Its production facility with capacity of 50 

MWh  supplies  Li-ion  batteries  across  a  range  of  markets  including  defence,    oil 

and gas markets [43].  

31 

 
 
 
 
  Switzerland-based  Leclanché  operates  a  production  facility  in  Willstätt  (DE), 

where  it  produces  Li-ion  cells  and  batteries  for  energy  storage  applications.  The 

current manufacturing capacity of this facility is 100 MWh [44]. 

  EAS Germany GmbH, located in Nordhausen, Germany, produces cylindrical cells, 

which  are  currently  deployed  in  space,  submarine,  marine  and  automotive 

applications  in  Europe,  Asia  and  North  America  [45].  Production  capacity  of  this 

facility is 100 MWh/year while actual the production in 2015 was 40 MWh [46]. 

  Litarion  GmbH,  a  subsidiary  of  Electrovaya,  in  Kamenz  (DE),  is  a  supplier  of 

lithium-ion  cells  for  mobile  and  stationary  energy  storage  and  other  demanding 

applications.  Furthermore,  Litarion  has  manufacturing  capacity  to  produce 

electrodes  and  ceramic  separators  as  key  components  for  high  performance 

lithium-ion  battery  cells  [29].  Production  capacity  of  this  facility  for  cells  is  500 

MWh/year, actual production in 2015 was ca. 25 MWh [46]. 

  Custom Cells Itzehoe GmbH, located in Itzehoe (DE), produces Li-ion pouch cells 

for  various applications and of various formats, specified by the customers  [47]. 

Production capacity of this facility is 20 MWh/year, actual production in 2015 – 1 

MWh [46]. 

  SSL  Energie GmbH in Kelheim  (DE) manufactures  Li-ion cells for  energy storage 

solutions 

for 

telecommunication  and 

industrial  plants,  as  well  as 

for 

electromobility  applications    (on  land  and  on  water)  [48].  Production  capacity  of 

this  facility  is  0.1  MWh/year  while  the  actual  production  in  2015  was  negligible 

[46]. 

  Liacon GmbH, located in Itzehoe (DE), has a vertically integrated production plant 

for large-scale lithium titanate polymer cells [49].  

  VARTA  Microbattery  GmbH,  located  in  Ellwangen  (DE),  is  a  manufacturer  of 

microbatteries  and  is  one  of  the  market  leaders  in  the  hearing  aid  battery  and 

nickel-metal hydride and lithium-ion coin battery segments [50]. 

  European  Battery  Technologies  Oy  in  Varkaus  (FI)  develops  and  manufactures 

large,  rechargeable  lithium-ion  based  prismatic  cells  and  battery  systems  which 

can  be  used  to  power  hybrid  and  electric  drive  trains  and  to  store  energy 

produced  by  renewable  energy  sources  [51].  Production  capacity  of  this  facility 

was 30 MWh/year and the actual production volume amounted to 1 MWh in 2015 

[46]. 

  Advanced Lithium System Europe S.A. (ALSE S.A.) has a manufacturing facility in 

Xanthi  (GR),  where  Li-ion  cells  and  batteries  for  defence  applications  such  as 

exercise  torpedoes,  are  produced  [52].  Production  capacity  of  this  facility  is  100 

MWh/year and the actual production volume amounted to 0.1 MWh in 2015 [46]. 

32 

 
  A special type of Li-ion cells - solid-state cells with a Li-metal anode – is produced 

in France and in Canada by Bolloré (FR). The cell production capacity in France is 

500 MWh per year and the actual production in 2015 amounted to 120 MWh [46]. 

Table 4. Li-ion cell actual production volume for 2015 and production capacity of selected 
European manufacturers. Source: [5, 40] [43] [44] [46]. 

Company 

Actual  production 

Production 

in 2015, MWh 

capacity, 

SAFT (FR) 

EAS Germany GmbH (DE) 

Litarion GmbH (DE) 

Leclanché GmbH (DE) 

84 

40 

25 

5 

European Battery Technologies Oy (FI)  1 

Custom Cells Itzehoe GmbH (DE) 

1 

Advanced  Lithium  System  Europe  S.A. 

0.1 

(GR) 

AGM Batteries Ltd. (UK) 

n.a. 

SSL Energie GmbH (DE) 

negligible 

Bolloré (FR) 

Total 

120 

276.1 

MWh 

60 

100 

500 

100 

30 

20 

100 

50 

0.1 

500 

1460.1 

Due  to  the  high  production  costs  Daimler  subsidiary  Li-Tec  (DE)  stopped  production  of 

Li-ion  battery  cells  and  batteries  at  the  end  of  2015,  marking  the  closure  of  the  only 

German  factory  producing  cells  for  EVs  [36,  53].  According  to  data  of  BNEF  the 

manufacturing capacity of this factory was 480 MWh [38]. 

Renault, CEA (French Atomic Energy and Alternative Energies Commission), and Nissan 

were planning to build a factory in Flins (France) to produce automotive Li-ion cells and 

batteries, with an annual manufacturing capacity of 100,000 batteries [54]. This cell and 

33 

 
 
battery  production  plant  foreseen  to  supply  batteries  for  Renault's  ZOE  electric  vehicle, 

was delayed due to technical constraints [55]. At present only a battery pack assembly 

line is operational at this location [56]. In 2009 Renault Nissan announced it would build 

an advanced Li-ion electric vehicle battery factory in Cacia (Aveiro, Portugal) to produce 

50,000 batteries per year starting in 2012 [57]. However, this plan did not go ahead and 

the facility is currently still not operational [58]. 

In  the  meantime,  mature  Asian  cell  manufacturers  are  planning  to  establish  Li-ion 

automotive cell and battery production  in the  EU. For  example, LG Chem (KR) plans to 

build  a  production  plant  in  Poland  (most  likely  in  Wrocław)  with  an  annual  production 

capacity of 50,000 Li-ion automotive batteries  [59, 60]. Samsung SDI (KR) has started 

preparing  for  Li-ion  battery  (cell,  module  and  pack)  production  in  Jaszfenyszaru, 

Hungary [61]. 

3.3.2  Projected market growth 

The Li-ion battery cell market is forecasted to grow rapidly in the coming years reaching 

ca. 140 GWh in volume and ca. B$ 28.5 in value by 2020 and ca. 215 GWh and B$ 35.5 

by  2025,  respectively,  according  to  the  data  of  Avicenne  Energy  [5].  The  automotive 

part of the market is predicted to grow to nearly 76 GWh in volume and B$ 15 in value 

by  2020  and  121  GWh  and  B$  20  by  2025,  respectively  [5].  Major  contribution  to  the 

anticipated growth of the Li-ion cell market for electric vehicle is expected to come from 

China.  Indeed,  it  is  forecasted  that  ca.  2/3  of  the  automotive  Li-ion  cells  produced  (or 

approximately  80  GWh)  will  be  used  to  power  electric  vehicles  in  China  in  2025  [5]. 

Considering  only  the  necessity  to  reduce  transport  CO2  emissions  defined  by  the 

regulations  the  German  National  Platform  for  Electromobility  forecasts  that  the  global 

market  of  Li-ion  automotive  cells  will  grow  even  quicker  and  reach  150  GWh  in  2025 

("conservative  scenario" ††)  [34].  When  other  factors,  such  as  governmental  financial 

incentives, are taken into account growth of the market to 400 GWh by 2025 is expected 

("optimistic scenario"‡‡) [34]. Demand for automotive Li-ion cells by European OEMs for 

BEVs  and  PHEVs  production  is  estimated  to  be  ca.  15-28  GWh  in  2021  and  ca.  37-117 

GWh in 2025 for the two scenarios considered [34]. 

†† The conservative scenario is based on the required minimum sales of electric vehicles to meet the regional 
limits on CO2 emissions. No governmental subsidies of the purchase and maintenance costs of BEVs and PHEVs 
are considered. 
‡‡ In  the  optimistic  scenario  governmental  incentives  for  promotion  of  PHEVs  and  BEVs  are  considered  in 
addition  to  the  regional  requirements on  CO2 emissions.  This  results  in  a  cost  advantage  of  PHEVs  and BEVs 
over conventional powertrains. 

34 

 
                                           
3.3.3  Global cell production over-capacity 

Comparing  data  on  the  manufacturing  capacity  for  automotive  Li-ion  cells  in  2014,  ca. 

27,5 GWh [7, 34, 37], to the corresponding demand and sales volume, 10-11 GWh [27, 

28, 34], it can be seen that a noticeable global production overcapacity existed in 2014.  

Production  overcapacity  is,  however,  not  unique  for  Li-ion  cell  for  automotive 

applications.  In  fact,  a  global  manufacturing  overcapacity,  albeit  to  a  lower  degree,  is 

seen  for  all  types  of  Li-ion  cells  and  even  in  the  mature  and  well-established  lead-acid 

battery sector (see Figure 14) [5]. 

Figure 14: Battery cell production capacity (Used with permission from Avicenne Energy [5]). 

Global overcapacity for automotive Li-ion cells was unevenly divided among the regions 

in  2014  as  shown  in  Figure  15  [7,  37].  The  lowest  utilisation  of  the  manufacturing 

facilities for automotive Li-ion cells – ca. 10% - was observed for China and the highest 

utilisation – ca. 40% and 30% - for Japan and Korea, respectively. Utilisation for US and 

EU was around 20% [7, 37]. Analysis by Avicenne Energy shows that domestic European 

Li-ion cell manufacturing facilities continued to be under-utilised also in 2015 [46].  

A possible reason for the current cell manufacturing over-capacity [6] may be that high 

profitability of a supply chain segment covering a promising growing product/service will 

35 

 
 
 
naturally  encourage  investments  in  capacity  expansion.  Also,  as  explained  in  [7,  37]: 

"Initially  overly  optimistic  assumptions  regarding  electric  vehicle  demand  have 

contributed  to  an  overbuild  of  large  format  Li-ion  battery  cell  production  capacity 

targeted at vehicle markets". 

The observed global production overcapacity for automotive Li-ion battery cells has likely 

led  European  battery  manufacturers  and  automotive  OEMs  to  conclude  in  2013  that 

"Current estimates suggest that international resources would be sufficient for the EU to 

fulfil demand for hybrid electric and full electric vehicles for the foreseeable future" [62]. 

Figure 15: Automotive Li-ion battery cell manufacturing capacity and utilization in 2014. 
Source:[7, 37]. 

This  position  was  recently  reiterated  by  Daimler's  CEO  according  to  Automotive  News 

website post from February 2016 [63]: "Daimler CEO Dieter Zetsche ruled out investing 

in battery cell production for electric cars with other German premium brands for at least 

another few years, citing a massive overcapacity in the market that has turned cells into 

a commodity. "The dumbest thing we  could do is to add to that  overcapacity," Zetsche 

said  earlier  this  month  in  Stuttgart.  "Contrary  to  the  expectation  four  or  six  years  ago 

when everyone thought that the cells would be a rarity that could even be used as a tool 

of  industrial  policy,  there  is  de  facto  a  massive  overcapacity  in  the  market  today  and 

cells have become a commodity," he said". 

Nevertheless,  another  automotive  OEM  –  Volkswagen  Group  and  also  its  brand  Audi  – 

has recently expressed interest in domestic production of Li-ion cells for electric vehicles 

[63-66]. 

36 

 
  
 
 
According to CEMAC the market situation is expected to come into better balance in the 

near  future,  with  global  overcapacity  decreasing  in  2016  [6].  Taking  into  account 

projected  market  growth  for  automotive  Li-ion  cells  and  assuming  the  production 

capacity  remains  at  the  present  level,  CEMAC  has  estimated  that  the  need  for  new 

capacity will arise in 2019-2020 (see Figure 16) [6]. 

However,  data  presented  in  the  same  report  by  CEMAC  [6]  also  suggests  that 

manufacturing  capacity  is  likely  to  continue  growing,  and  overcapacity  conditions  may 

persist.  Nearly  25  GWh  of  capacity  is  currently  either  partially  commissioned  or  under 

construction, and a further 55 GWh of capacity has been announced.  

Also  the  German  National  Platform  for  Electromobility  has  come  to  the  conclusion  that, 

even considering today's excess of manufacturing capacity for automotive Li-ion battery 

cells, a significant need for additional cell production capacity may be expected to arise 

from about 2020 (see Figure 17) [34]. According to the data published in [34], there will 

be worldwide§§ additional demand of about 5 GWh/year in 2020 and up to 100 GWh/year 

by 2025 in the conservative scenario. In the optimistic scenario the demand increases to 

above  300  GWh/year.  Further  demand  is  generated  by  buses  and  stationary 

applications.  This  situation  opens  up  the  possibility  for  competition-enabled  cell 

production also in Europe (Figure 17) [34]. 

Figure 16: Estimated electric vehicle Li-ion battery cell demand and global automotive Li-ion 
battery cell manufacturing capacity [6]. 

§§ Following  world  regions  are  considered:  Europe,  Japan  and  South  Korea,  China,  Canada,  USA  and  Mexico. 
Their demand covers more than 90% of the total world demand. 

37 

 
 
 
                                           
Figure 17: Worldwide demand for automotive Li-ion battery cells in 2015-2025. Source:[34]. 

38 

 
 
 
 
 
3.4  Battery pack manufacturing 

The battery pack is a key part of the EV power train, accounting for around 30% of the 

total vehicle value.  The Li-ion battery pack market for all applications was more than B$ 

22  in  value  in  2015  and  the  automotive  share  was  slightly  less  than  8  B$  [5].  The 

automotive battery pack market value is expected to grow to ca. B$ 21.3 in 2020 [5, 8] 

and ca. B$ 27.3 in 2025 [5] (see Figure 18). 

Battery  pack  manufacturing  accounts  for  approximately  40  %  of  the  total  cost  of  the 

battery  pack  [37].  As  a  whole,  all  the  components  of  the  electric  powertrain  (electric 

engine,  power  electronics,  battery  pack  and  charging  devices)  will  account  for  almost 

half  of  the  global  automotive  market  expansion  up  to  2020,  equivalent  to  €100  billion 

[67].  

Figure 18: Projected growth of Li-ion pack market (Used with permission from Avicenne Energy 
[5]). 

Different car manufacturers have different strategies whether to invest and develop the 

required pack manufacturing capacity in-house or to outsource it to specialist suppliers. 

39 

 
 
 
The  majority  of  OEMs  producing  electric  vehicle  maintain  a  technological  core 

competence around battery pack design and battery management system to keep some 

control and profit margins. Consideration of the specific circumstances of the lithium ion 

cell manufacture value chain in different regions (US, EU, China, Japan) can help explain 

the  different  manufacturing  strategies  adopted  by  the  OEMs  located  in  these  regions. 

Japanese  and  Chinese  OEMs  typically  keep  a  higher  control  on  all  steps  up  to  the 

segment  of  the  cell  and  battery  pack  manufacturing  process  whereas  European  OEMs, 

who  are  forced  to  relinquish  control  over  cell  manufacturing  due  to  the  absence  of 

significant domestic cell manufacturing capacity, are trying to keep pack design and pack 

assembly in-house. 

Table 5: OEMs Battery pack manufacturing strategy 

OEMs battery pack manufacturing strategy and control. 

US 

CN 

EU 

JP 

Per region: 

Lower control …  

… Higher control 

Cells 

and 

pack 

Cells/modules 

Cells 

production 

In-house 

manufacturing 

manufacturing 

through 

joint 

manufacturing of cells, 

completely outsourced. 

outsourced 

through 

ventures/controlled 

pack 

design 

and 

Tier 1 suppliers.  

subsidiary 

manufacturing. 

In-house  pack  design 

and manufacturing. 

companies.  In-house 

pack 

design 

and 

manufacturing. 

GM 

BMW 

Nissan  

Tesla (plan to) 

Renault 

Mitsubishi 

BYD 

Daimler 

In  the  US  the  two  main  OEMs  active  in  the  EV  business,  Tesla  and  GM,  are  adopting 

opposite  strategies as illustrated in  Table 5.  Tesla (US) is the leader  on the  BEV-PHEV 

market despite being less heavily resourced as some of its competitor OEMs. Rather than 

relying on the Tier 1 and Tier 2 supply chain, Tesla is opting to produce the majority of 

its key components in its California plant in Fremont. This includes the battery packs for 

its  Tesla  S  and  Tesla  X  vehicle  model  using  cells  supplied  by  Panasonic  (JP).  Those 

models  have  also  the  biggest  battery  pack  on  the  market  (with  an  average  energy 

storage capacity of 90 kWh). For the upcoming Tesla Model 3, the full production of the 

battery  pack  (estimated  energy  storage  capacity  of  50  kWh)  including  its  cells,  is 

40 

 
 
 
 
 
 
planned  to  be  performed  at  the  Tesla  Gigafactory  plant  in  Nevada.    GM,  on  the  other 

hand, chooses to  outsource  its entire cell and pack manufacturing including the battery 

management system. 

The Chinese OEM BYD shares a similar strategy as Tesla and is designing, producing and 

assembling the complete  electrical power train system  including cells,  battery pack and 

BMS in-house. 

In Japan the full battery pack of the  Mitsubishi Outlander PHEV is provided by "Lithium 

Energy Japan", a joint venture between GS Yuasa, Mitsubishi Corporation and Mitsubishi 

Motors  Corporation.  The  battery  pack  is  thus  designed  and  produced  in-house  by 

Mitsubishi albeit through this joint venture. The Nissan Leaf battery pack is supplied by 

Automotive Energy Supply Corporation (AESC) which is jointly owned by Nissan and the 

Japanese  electronics  firm  NEC.  Similar  to  Mitsubishi,  Nissan  designs  and  manufactures 

battery  packs  in-house  for  its  own  use.  Japanese  Li-ion  battery  pack  manufacturing 

facilities  in  the  EU  include  Nissan's  battery  production  plant  in  Sunderland  (UK)  –  the 

largest  of  its  type  in  Europe  –  which  became  operational  in  2013  producing  Li-ion 

batteries  for  the  Nissan  Leaf  and  the  Nissan  e-NV200  van  [68].  The  full  annual 

production capacity of this plant is 50,000 EVs and 60,000 battery packs [69]. 

Within European OEM's, the BMW Group has invested more than €100 million in electric 

drive  technology  in  Dingolfing  (DE)  where  they  set  up  a  plant  to  manufacture  their 

electric  drive  systems.  BMW  designs  and  develops  its  core  electric  drive  components 

including the power electronics, BMS and the whole vehicle electrical system [70] using 

cells  supplied  by  Samsung  SDI.  Renault  assembles  its  BEV  model,  Renault  Zoe,  in  its 

plant in Flins (FR). The battery pack including the BMS is developed in close partnership 

with LG Chem who also provides the battery cells [56, 71].   

Daimler  AG  has  heavily  invested  and  committed  to  produce  its  own  line  of  electric 

vehicles,  challenging  BMW  and  Tesla.  Deutsche  ACCUMOTIVE,  founded  in  2009,  is  a 

wholly-owned subsidiary of Daimler AG. At its manufacturing facility in Kamenz (DE), the 

company  develops  and  produces  Li-ion  traction  batteries  packs  for  hybrid  and  electric 

vehicles  [72].  Since  the  start  of  series  production  in  2012,  it  has  delivered  more  than 

70,000  lithium-ion  batteries  packs  [73].  Daimler  AG  recently  announced  it  will  invest 

€500 million into the creation of a second lithium-ion battery pack production facility in 

Kamenz.  This  new  facility  will  produce  lithium-ion  batteries  packs  for  use  in  electric 

vehicles  released  under  the  Mercedes-Benz  brand.  Daimler  currently  has  a  supply 

agreement arrangement with LG Chem [73] who provides the cells for its battery packs. 

In  addition  to  supplying  batteries  for  Daimler  automobiles,  Deutsche  ACCUMOTIVE  is 

also  entering  the  stationary  battery  storage  market  for  residential  and  industrial 

applications.  The  scalability  of  the  systems  enables  the  use  of  lithium-ion  batteries  in 

41 

 
large  static  energy  storage  systems  for  network  stabilization  and  smoothing  of  peak 

shaving for electricity producers as well as for private households.  

LG Chem (KR) supplies the whole battery pack including BMS and thermal management 

system to General Motors (US) for the Chevrolet Volt. The new Chevrolet Bolt (aimed to 

compete with the Tesla Model 3) will depend on the same battery pack supply chain and 

the assembly of the vehicle will most probably be performed outside the US [74]. 

It  is  possible  to  express  the  volume  (expressed  in  GWh)  of  automotive  battery  packs 

deployed  in  the  sector  (quantified  on  the  basis  of  the  energy  storage  capacity  of  a 

battery  pack  times  the  number  of  vehicles  sold  with  this  pack)  and  to  make  a 

comparison  based  on  the  geographical  location  where  the  OEM's  headquarters  are 

located (i.e. EU, US, China, Japan and Korea). Such an analysis is illustrated in Figure 19 

and Figure 20 using data on the top 20 BEV-PHEV global sales in 2015 [58].  Doing so 

reveals  the  very  high  volume  of  battery  packs  deployed  in  EVs  manufactured  by  US 

OEMs relative to other regions. The high energy storage capacity of battery packs in the 

Tesla  Model  S  combined  with  its  high  sales  ranking  explain  the  US  lead  in  this  aspect 

(Figure 20). The EU has a similar volume compared with Japan and China (Figure 19). 

Figure 19: Cumulative volume of automotive battery pack sales by region of OEMs headquarters 
[75] 

42 

 
 
 
Figure 20: Volume automotive battery pack sales by model and region of OEMs headquarters [75] 

43 

 
 
 
 
Besides  the  European  automotive  OEM's  with  battery  pack  production  interest,  other 

companies  with  battery  pack  manufacturing  business  cases  based  in  Europe  worth 

mentioning include: 

  Kreisel  Electric  GmbH  based  in  Freidstadt,  Austria  is  establishing  a  business 

network  with  German  automakers  such  as  BMW  and  Volkswagen  and  the  British 

sports carmaker McLaren Automotive. Kreisel Electric manufactures battery packs 

and electric drive trains for orders up to 10,000 vehicles. They are also designing 

lithium ion battery production lines for  OEMs and creating prototypes  for top-tier 

automakers.  Kreisel  has  started  the  construction  of  a  new  800MWh  battery  pack 

factory for high energy density packs for EVs [76]. Kreisel currently has a supply 

agreement arrangement with Samsung SDI. 

 

Johnson  Matthey  Battery  Systems  (formerly  Axeon)  (UK)  is  one  of  Europe’s 

largest  Li-ion  battery  systems  suppliers,  processing  over  70  million  cells  a  year 

and supplying volume production of batteries for global markets [70]. 

  The  facility  of  Continental in  Nuremberg  (DE)  assembles  lithium-ion  batteries  for 

hybrid  electric  vehicles  such  as  Mercedes  S400  BlueHYBRID  [77].  In  September 

2008,  production  commenced  with  a  capacity  output  of  15,000  lithium-ion 

batteries per annum. Full annual manufacturing capacity of this plant is 333 MWh. 

The plant incorporates recycling technology that allows at least 50 percent of the 

content of lithium-ion cells to be recycled [77]. 

 

In  2015  BMZ  GmbH  has  announced  expansion  of  their  battery-manufacturing 

facility in Karlstein (DE)  [78] to enable production of up to 80 million lithium-ion 

batteries of various sizes with a total storage capacity of around 5 GWh annually 

[78].  This  project  is  expected  to  be  completed  by  2020.  BMZ  GmbH  (BMZ)  is  a 

battery  systems  provider  whose  high-tech  batteries  are  used  to  power  a  wide 

range of products made by leading manufacturers including electric tools, electric 

vehicles, e-bikes, portable medical devices and batteries for use in the renewable 

energy sector [78].  

  Dow  Kokam  has  completed  the  construction  of  a  105  MWh  lithium-ion  battery 

manufacturing  plant  Le  Bouchet  2,  located  in  France.  This  battery  facility  is 

designed  to  manufacture  up  to  15,000  battery  packs  of  7  kWh  to  power  5,000 

fully electric vehicles annually (assuming a 21 kWh battery system) [7, 37].  

 

In 2015 Samsung SDI acquired the EV battery pack business of Magna Steyr, an 

Austrian-based  operating  unit  of  Magna  International,  including  production  and 

development  sites  [79].  Magna  Steyr  Battery  Systems  product  portfolio  included 

battery packs for HEVs, PHEVs, BEVs as well as for Heavy Duty Vehicles and 12 V 

and  48  V  systems  [80,  81].  In  2014  the  manufacturing  capacity  of  Magna  Steyr 

Battery  Systems  for  16-36  kWh  BEV  packs  was  3,000  units  per  year,  for  6-18 

44 

kWh  PHEV  packs  –  more  than  35,000  units  per  year  and  for  0.25-3  kWh  HEV 

packs – 50,000 packs per year [80, 81]. 

  Bolloré (FR) assembles battery packs for its BlueCar electric vehicles at the facility 

in Ergue-Gaberic (FR) with manufacturing capacity of 300 MWh [41], [82].  

3.5  Electric vehicles manufacturing 

3.5.1 Production volumes and deployment 

More  than  68.5  million  passenger  vehicles  were  produced  worldwide  in  2015  with  ca. 

24% of these, or more than 16.5 million vehicles, produced in the EU [83].  

In recent years the development of hybrid electric vehicle (HEV) batteries has yielded a 

relatively mature generation of vehicles with ca. 1.9 million HEVs sold worldwide in 2014 

and ca. 1.8 million HEVs sold in 2015 [8]. The majority of HEVs are sold in Japan (nearly 

60% of the global sales) and USA (ca. 22% of the global sales) resulting in current HEV 

penetration  level  of  ca.  23%  and  3  %,  respectively  [8,  27,  84].  In  Europe  ca.  234,000 

HEVs  were  sold  in  2015  [8],  ca.  1.5%  of  the  total  car  sales.  The  leading  producer  and 

supplier  of  HEV,  both  historically  and  currently,  is  Toyota  (JP),  whose  market  share  in 

HEV  global  sales  was  nearly  70%  in  2014  and  2015  [8,  27].  Most  of  Toyota  and  Lexus 

HEV  models  currently  use  NiMH  traction  batteries,  but  the  general  market  trend  is  that 

NiMH traction batteries will gradually  be substituted by Li-ion technology [84]. Avicenne 

Energy  forecasts  that  50%  of  HEVs  will  be  equipped  with  a  Li-ion  battery  by  2020  and 

90% of HEVs by 2025 [84]. 

Production  and  sales  numbers  for  PHEVs  and  BEVs  increased  rapidly  in  the  past  few 

years. Sales numbers cited vary depending on the source. For example, figures cited for 

worldwide PHEV and BEV sales in 2014 range from ca. 289,000 [85] and to ca. 318,000–

390,000 [27, 75], and in 2015 this number increased to ca. 462,000–550,000 [75, 85]. 

In the EU between ca. 71,000 [86] and 100,000 PHEVs and BEVs [27, 75, 85] were sold 

in  2014,  which  corresponds  to  ca.  22%  -  25%  of  PHEVs  and  BEVs  sold  globally.  This 

number  doubled  in  2015  and  reached  between  150,000  [86]  and  193,500  [75]  PHEVs 

and  BEVs  sold  corresponding  to  27%  -  35%  of  PHEVs  and  BEVs  sold  globally.  On 

average,  the  fraction  of  PHEVs  and  BEVs  in  the  global  passenger  vehicle  sales  in  2015 

was ca. 0.8% - 1.1% [85], slightly lower than  the ca. 0.9% - 1.3 %  average in the EU 

[87].  It  must  be  noted  here,  however,  that  PHEV  and  BEV  penetration  levels  vary 

significantly among the world regions [88] and even in the EU among its member states 

[86,  87],  with  countries  such  as  Norway,  The  Netherlands,  Denmark,  Sweden  and  USA 

having  a  higher  fraction  of  electric  vehicles  on  the  road  (above  12%,  12%,  8%,  1.7% 

and 1.9%, respectively) compared to the rest of the world [86, 88]. 

45 

In 2015 the American Tesla Model S was globally the most sold vehicle among PHEVs and 

BEVs  with  a  market  share  of  ca.  11%.  Tesla  was  closely  followed  by  two  Japanese 

producers  –  Nissan  with  the  Nissan  Leaf  (9%  global  market  share)  and  Mitsubishi  with 

the Outlander PHEV model (9% market share)  [75], ranking 2nd and 3rd, respectively, in 

the top 20 BEV-PHEV 2015 global sales. Chinese producers were leading in global PHEV 

and  BEV  sales  in  2015  with  33  %  of  the  market  share.  BYD  is  currently  the  largest 

electric  vehicle  manufacturer  on  China’s  automotive  market.  Automobile  business 

contributed  50%  to  the  company’s  revenue  in  2015  and  nearly  half  of  its  2015  vehicle 

sales  revenue  was  from  EV  models  [89].  BYD  ranks  respectively  4th  and  8th  with  its 

models Qin and Tang in the top 20 BEV-PHEV 2015 global sales. Japanese, USA and EU 

producers had almost equal market share in PHEV and BEV sales of 21-22% (see Figure 

21) [75]. 

Figure  21:  Global  market  share  of  the  top  20  PHEV  and  BEV  producers,  based  on  [75]. 
(Producer  is  assigned  to  a  region  according  to  the  location  of  its  Headquarters,  e.g.  Toyota  is 
considered to be a Japanese producer regardless of whether manufacturing is taking place in Japan 
or elsewhere) 

Among European PHEV and BEV models BMW i3, Renault Zoe and Volkswagen Golf GTE 

are globally the most sold ranking respectively 5th, 7th and 10th in the top 20 global sales 

for 2015.   

In Europe the Mitsubishi Outlander is  the most sold model (ca. 16% share  of PHEV and 

BEV sales), followed by Renault Zoe ( 10%), Volkswagen Golf GTE (9%), Tesla Model S 

(9%) and Nissan Leaf (8%) [75]. 

All categories of electric vehicles – HEVs, PHEVs and BEVs – are expected to gain ground 

in the future.  However, projections on  electric vehicles deployment vary among sources 

and  depend  strongly  on  the  assumptions  made,  e.g.  what  deployment  driver  is 

46 

 
 
considered most influential for the number of HEVs, PHEVs and BEVs on the road globally 

and regionally. For example, UBS's "regulation-driven" forecast as well as the projections 

of  the  German  National  Platform  for  Electromobility  in  their  "conservative  scenario"  are 

based on the necessity to reduce transport CO2 emissions defined by the regulations [34, 

90].  Bloomberg  New  Energy  Finance  forecast  considers  the  total  cost  of  ownership  for 

electric vehicles  and their economic competitiveness with conventional ICE vehicles as a 

major  factor  determining  the  rate  and  volume  for  their  deployment  [91,  92].  In  the 

following paragraph a non-exhaustive compilation of data available from different sources 

is presented and discussed. 

Figure  22  shows  projected  global  sales  of  new  PHEVs  and  BEVs  for  the  period  between 

2015  and  2040.  Most  of  projections  do  not  go  beyond  2025,  probably  due  to  the  high 

development  pace  of  this  market.  Figure  23  shows  a  zoomed  view  of  the  time  period 

between 2015 and 2025. It can be seen that projections vary both in absolute numbers 

and  in  predicted  rate  of  market  growth.  For  example,  Bloomberg  and  German  National 

Platform for Electromobility (optimistic scenario) predict a steeper growth  between 2020 

and  2025  than  UBS  and  Avicenne  Energy.  As  for  the  absolute  numbers,  the  optimistic 

forecast by the German National Platform for Electromobility falls noticeably higher than 

other projections while the base case forecast made by Avicenne Energy, which does not 

take into account strong anticipated growth in China, falls below other projections. Both 

Avicenne  Energy  and  the  German  National  Platform  for  Electromobility  point  out  that  a 

rapid growth of Chinese PHEV and BEV market is to be expected in the next decade [27, 

28, 34] and therefore projections accounting for this may be more accurate. 

In short, conservative projected numbers of global sales for PHEVs and BEVs are ca. 1.5-

2.75  M/year  in  2020  and  ca.  4-6.5  M/year  in  2025  (see  Figure  23).  Europe  will  have  a 

significant share in this market  with sales of new PHEVs and BEVs at 0.7-0.8 M/year in 

2020 and 1.65-1.9 M/year in 2025 (see Figure 24), which corresponds to 25-50% of the 

global  sales.  Regarding  HEV  sales,  Avicenne  Energy  forecasts  2.5  M/year  to  be  sold 

globally in 2020 and 3.2 M/year in 2025 [8] and 0.8 M/year European sales in 2020 and 

ca. 1.4 M/year in 2025 [84].  

47 

 
Figure 22: Projected global sales of new PHEV and BEV vehicles. Source [5, 8, 34, 75, 90-92] 

Figure 23: Projected global sales of new PHEV and BEV vehicles for 2015-2025. Source [5, 8, 34, 
75, 90-92] 

48 

 
 
 
Figure 24: Projected European sales of new PHEV and BEV vehicles for 2015-2025. Source [34, 
75, 90] 

An important driver for OEMs to reduce GHG (greenhouse gas) emissions of their fleet is 

the requirements set by legislation in Europe as well as in Asia and US [53, 93-96]. Many 

OEMs  have  demonstrated  their  commitment  to  decarbonisation  of  road  transport  by 

developing new electric vehicle models in addition to alternative strategies which include 

optimization  of  the  internal  combustion  engine  (ICE)  [97],  reducing  vehicle  weight  and 

development  of  fuel  cell  vehicles  [98].  However,  consumer  demand,  as  recently  shown 

by new players on the market (e.g. Tesla Model 3 early reservations) may soon become 

another  important  motivation  for  OEMs  to  launch  competitive  and  high  performance 

electrical  vehicles  on  the  market.  Introduction  of  a  new  vehicle  on  the  market  is  a 

massive,  time-consuming  R&I  undertaking  with  a  time  to  market  for  a  new  vehicle 

ranging between 4 to 7 years [8].  In a rapidly evolving global electrical vehicle market, 

automotive  OEMs  that  are  not  quick  to  react  to  market  trends  and  customer  demands 

may  lose  their  competitive  edge.  On  the  other  hand  great  opportunities  exist  for  OEMs 

that  are  willing  and  able  to  adapt  and  respond  quickly  to  changes  in  this  very  dynamic 

market.  In  this  sense  the  automotive  market  and  customer  base  in  Europe  is  not  the 

same as that in the US, China or elsewhere.  OEMs need to consider regional variations in 

driving  expectations,  infrastructure,  economic  affluence  and  government  incentives  that 

may affect consumer preferences and hence impact sales of new electric vehicle models 

(e.g. see the consumer view and expectations in the US [99]).  

In this  respect it is interesting to look at the  upcoming models (2017-2020) announced 

by different OEMs, particularly for models with a foreseen price below $ 50,000 and with 

49 

 
 
a reasonable driving range. When the exact vehicle price is not fully disclosed by OEMs, 

estimations  based  on  similar/previous  models  are  provided  when  possible.  The  realistic 

range in km is similarly provided. A list of upcoming BEV and  PHEV  models  filed below, 

while not exhaustive, can reflect expected future trends in the automotive industry (see 

Table 6). 

Table 6: Price and range of upcoming EV models (2017-2020) as announced by OEMs 
differentiated by region 

Brand 

Model 

Year of release 

Price [$] 

Range [km] 

EU 

US 

JP 

KR 

CN 

BMW 

Updated BMWi3 

2017 

< 50,000 

Renault 

Updated Zoe 

2017 

~ 35,000 

200 

300 

Daimler 

Updated Smart 

ForTwo electric 

2017 

< 30,000 

100 

Tesla 

Model 3 

2018 

< 40,000 

GM 

Chevrolet Bolt 

2017 

< 40,000 

300 

300 

Ford 

Nissan 

Nissan 

Ford Focus 

Electric 

Nissan Leaf 

version 2017 

Nissan Leaf 

version 2018 

2017 

< 30,000 

150 

2017 

> 30,000 

150 

2019 

< 40,000 

300 

Mitsubishi 

eX SUV 

2019 

< 40,000 

300 

Hyundai 

Ioniq model 

BEV 

Kia 

BYD 

Update of Soul 

Electric 

BYD Qin EV300 

BEV model 

2017 

< 35,000 

150 

2018 

~ 35,000 

150 

2017 

~ 35,000 

240 

50 

 
Among European  OEMs, BMW is announcing a new strategy where a  further advance in 

e-mobility is foreseen [100]. In 2017 a new version of the BMW i3 will be launched with a 

range  of  around  200  km  [101]  and  its  price  is  expected  to  be  below  $  50,000  [102]. 

Renault has announced delivery of a new version of the Renault ZOE in 2017, which will 

have a driving range of up to 300 km. The price, with the battery on sale option, should 

be around $ 35,000 [103]. 

Daimler is investing more than €7 billion ($B 7.9) in green technologies in the next two 

years  alone.  As  part  of  this  strategy  Mercedes-Benz  will  expand  its  PHEV  fleet  (GLC 

Coupé  350  e  4MATIC,  E  350  e,  S  500  e)    by  2018  [104],  with  all  models  priced  well 

above  $  50,000.    Daimler  will  also  launch  a  new  Smart  ForTwo  electric  vehicle  in  2017 

with a range of 100 km [105], whose price is expected to be well below $ 30,000 [106]. 

Volkswagen    has  confirmed  its  strategy  to  launch  over  20  additional  electric  vehicle 

models  by  2020  but  without  disclosing  concrete  proposed  models  [60,  107].  Within  the 

group, the brand Audi announced  the launch, by 2018,  of the first large‑series battery‑ 

electric vehicle based on the PHEV Audi e-tron concept. The models, however, have not 

been released yet [61]. 

PSA  Peugeot,  Citroën  and  Dongfeng  Group  (CN)  have  strengthened  their  strategic 

partnership  with  the  signing  of  a  new  agreement  to  design  an  electric  version  of  the 

Common  Modular  Platform  (CMP).  This  future  electric  platform  (e-CMP)  will  deliver  all-

electric vehicles for the Peugeot, Citroën, DS and Dongfeng brands from 2019. However, 

no concrete model has been presented yet [57]. 

Outside Europe, other automotive OEMs are proposing several electric vehicle models to 

be launched in the next 2 - 3 years.  

Tesla is anticipated to be the worldwide frontrunner with the launch of the Tesla Model 3 

announced for 2018. It will be priced below $ 40,000 with a driving range above 300 km 

[108]. 

Looking at other US  OEMs,  General Motors will launch the Chevrolet Bolt in 2017 which 

will  also  be  priced  below  $  40,000  and  with  a  driving  range  above  300  km  [109].  Ford 

will not try to compete with the other two US OEMs in terms of driving range, but  rather 

deliver  lighter  vehicles  with  a  range  of  around  150  km  at  a  more  affordable  price, 

estimated to be below $ 30,000 (e.g. the new Ford Focus Electric to be launched in 2017) 

[110].  

Among  Japanese  OEMs,  Nissan  is  going  to  launch  an  updated  version  of  Nissan  Leaf  in 

2018-2019  with  a  driving  range  of  300  km  and  with  a  price  estimated  below  $  40,000 

51 

 
[111].  Before then, the 2017 Nissan Leaf version, is expected to have a driving range of 

150 km and a price above $ 30,000 [112].  

Toyota  has  been  reluctant  to  take  on  board  the  full  electric  vehicle  concept  with  its 

strategy focusing instead on HEV and PHEV for short-range, urban applications, and fuel 

cell  electric  vehicles  for  longer-range  applications.  However,  with  the  steady  arrival  of 

competing  battery-electric  vehicles  with  ever  increasing  driving  ranges  (e.g.  Chevrolet 

Bolt  EV,  Tesla  Model  3),  Toyota  appears  to  be  adjusting  its  thinking.  They  recently 

decided  to  establish  an  in-house  venture  company  responsible  for  developing  electric 

vehicles (EVs) by 2020 [113]. However, no concrete models are expected to be launched 

in  the  next  2  -  3  years,  other  than  new  update  versions  of  their  PHEV  fleet  [114]. 

Thereafter,  by  2020,  Toyota  has  announced  plans  to  introduce  a  small,  all-electric  SUV 

[115]. 

Mitsubishi  has  announced  the  launch  of  the  new  eX  SUV  Concept  in  2018-2019  with  a 

range above 300 km and a price below $ 40,000 [116]. 

South Korean OEMs, Hyundai and its sister company Kia, together have aggressive plans 

to become the world's second highest-volume maker of green cars by 2020, after Toyota. 

Although HEV and PHEV models will be a substantial part of this plan, full electric models 

are  also  foreseen.  Hyundai  is  joining  the  race  with  a  new  all-electric  SUV  with  150  km 

range  by  2018  [117],  but  price,  pictures  and  previews  are  not  available.  Hyundai  has 

also  announced  the  launch  in  2017  of  the  Ioniq  model  BEV  with  more  than  150  km 

driving range and a price below $ 35,000 [118]. Meanwhile Kia is preparing to launch a 

new version of its Kia Soul Electric BEV in 2018 with an improved driving range close to 

150 km and expected price of around $ 35,000 [119]. 

Chinese OEMs are much more linked to delivery to the domestic market. Looking at the 

top 20 PHEV and BEV sales in 2016 (up to October) on the Chinese market [75], the only 

non-Chinese  electric  vehicle  model  sold  is  the  Tesla  Model  S  (which  ranks  17th).  This 

trend  is  expected  to  remain  at  least  until  2020  mainly  due  to  the  competitive  prices  of 

local models [120]. Most sales are expected to be low-speed models (as is currently the 

case  e.g.  Kandi  Panda,  and  Zotye  E-20/30  [89])  but  also  higher  class  vehicles,  such  as 

the new BEV version of the BYD Qin EV300 to be launched by 2017 with 240 km driving 

range and price around $ 35,000 [70]. 

3.5.2 OEMs Tier 1 and Tier 2 supply chain 

The  growing  electrical  vehicle  market  may  be  a  challenge  also  for  the  consolidated  EU 

OEMs Tier 1 and Tier 2 supply chain industry, which has an annual revenue amounting to 

1/3 of the EU OEMs industry. Electric vehicle manufacturers require suppliers of a range 

of  new  components  for  electric  power  train  other  than  cells  and  battery  packs.    Such 

52 

components include connectors, cables, power electronics for controllers, converters and 

chargers,  novel  system  integration  services,  innovative  thermal  management  solutions 

and  new  light  materials  for  the  car  body/frame  such  as  aluminium  or  carbon  fibre-

reinforced  polymers.  OEMs  need  to  build  up  a  new  set  of  suppliers  for  these  products 

which  changes  the  traditional  group  of  Tier  1  and  Tier  2  suppliers  (which  are  mainly 

designing and producing parts for internal combustion engine powertrain such as pistons, 

camshafts,  spark  plugs,  injection  pumps,  turbo  chargers,  fuel  tanks,  alternators,  oil 

pumps,  motor  oils  or  manual  and  automatic  gear  boxes).  The  current  status  of  Tier  1 

OEM's suppliers shows a strong competitive position of EU companies with total revenue 

of  B$  277  (see  Table  7  and  Figure  25).  Besides  that,  their  manufacturing  capacity  is 

globally  distributed,  since  their  production  plants  for  parts  are  normally  located  in  the 

proximity  of  OEM's  vehicle  assembling  plants,  which  are  also  distributed  around  the 

globe.  The  degree  of  manufacturing  delocalization  can  be  quantified  looking  at  the 

financials  of  the  top  10  automotive  suppliers  with  headquarters  in  Europe  and  North 

America,  where  it  turns  out  that  they  generate  18%  to  28%  of  revenues  in  Asia 

supplying  OEMs  with  their  products  [121].  With  a  growing  electrical  vehicle  market  this 

picture may change substantially and this competitive position of EU Tier 1 industry may 

be challenged. 

Table 7: Geographical comparison of automotive suppliers' 2014 financial indicators (figures in 
US$) [121] 

53 

 
 
Figure 25: 4D analysis of top 20 automotive suppliers for EBIT margin (ratio of Earnings before 
Interest and Taxes to net revenue earned) and revenues (2014) [121] 

The  growing  electrical  vehicle  market  may  create  great  opportunities  for  companies 

accepting  risks  and  willing  to  invest.  In  this  context,  besides  the  traditional  OEM's 

suppliers,  new  companies  are  also  supplying  the  car  manufacturers.  Some  traditional 

suppliers are investing heavily in a range of new technologies relevant to e-mobility (e.g. 

Continental  (DE),  Michelin  (FR),  ZF  Friedrichshafen  AG  (DE))  or  are  looking  to  create 

joint  ventures  with  established  companies  already  active  in  the  e-mobility  sector  (e.g. 

Bosch  (DE)).  Other  companies,  traditionally  operating  in  the  industrial  sector  are  also 

becoming  OEM's  suppliers,  such  as  companies  active  in  the  power  electronic  field  (e.g. 

Semikron  (DE),  Mitsubishi  (JP),  Toshiba  (JP)  and  Actia  (FR)),  or  specialised  in 

converter/charger  products  (e.g.  BRUSA  Elektronik  (CH),  EDN  GROUP  (IT)),  cable  and 

connectors (e.g. Lapp Holding AG (DE), Lem Holding SA (CH)) and electric engines (e.g. 

Yasa Motors (UK), Sram Technology (IT), BorgWarner (USA)). Similarily companies, who 

traditionally supply the aerospace and military industry and who have already developed 

suitable products and services for e-mobility (e.g. BAE Systems (UK), Ricardo (UK)) are 

breaking  into  the  OEM  supply  market.  In  addition  there  are  also  companies  providing 

consulting services for system integration (e.g. AVL (AT), Lenze Schmidhauser (CH)).  

54 

 
 
3.6  Recycling  

Due  to  the  constantly  increasing  significance  of  lithium  ion  batteries,  especially  in  the 

growing  automotive  and  energy  storage  sectors,  recycling  processes  and  related  issues 

are  highly  relevant  for  the  EU  circular  economy  package  [122].  Greater  recycling  of 

waste  batteries  and  increased  re-use  or  second  use  will  bring  benefits  for  both  the 

environment  and  the  economy  by  boosting  business  and  reducing  waste.  Increased 

recycling will also mitigate the dependence on certain critical materials, such as cobalt.  

The  Circular  Economy  Strategy  is  related  to  the  transfer  of  the  Extended  Producer 

Responsibility  (EPR)  and  to  the  End-of-Waste  status.  The  EPR  concept  is  aimed  at 

promoting the integration of environmental costs associated with goods throughout their 

life  cycles  into  the  market  price  of  the  products.  The  EU  has  issued  a  number  of 

directives aimed at increasing producer responsibility, including the EU Battery Directive 

(Directive  2006/66/EC)  [9]  that  introduces  the  EPR  for  battery  waste.  The  directive 

enforces battery producers, or third parties acting on their behalf, to finance the net cost 

of  collecting,  treating  and  recycling  waste  batteries.  However,  the  Directive  needs  to 

consider the specificities of lithium-ion traction batteries in the absence of guidelines on 

the  transfer  of  ownership  and  changes  to  EPR  with  corresponding  identification  of 

responsibilities  for  a  second  use  option.  In  addition  the  Battery  Directive  needs  to  be 

harmonized  with  Directive  2000/53/EC  on  end-of-life  vehicles  and  with  Directive 

2008/98/EC on waste (Waste Framework Directive).  

Recycling  of  lithium-ion  batteries  is  a  complex  and  costly  process  hindered  by  the 

absence  of  a  standardised  product  across  the  lithium  ion  battery  market  which,  as  a 

result,  has  a  wide  variety  of  chemistries  and  battery  formats.  Furthermore,  additional 

complexities  arise  from  the  need  for  dismantling  and  pre-treatment  of  large  electric 

vehicle  batteries  to  reach  sizes  compatible  with  recycling  process.  A  comprehensive 

overview of various steps in recycling processes is given in [22, 123, 124]. Four types of 

recycling technologies exist [22]:  

a) mechanical 

b) pyrometallurgical 

c) hydrometallurgical 

d) thermal pre-treatment followed by hydrometallurgical method (often also called 

a combination of pyrometallurgical and hydrometallurgical methods) 

55 

 
Mechanical  treatment  includes  crushing  and  physical  separation  of  components  and 

recovery  of  the  black  mass,  which  contains  valuable  metals  such  as  cobalt,  nickel, 

manganese, lithium etc. [22].  

In  pyrometallurgical  processes  spent  Li-ion  cells  are  processed  at  high  temperature 

without  any  mechanical  pre-treatment  as  batteries  are  loaded  into  the  furnace  directly. 

This class of recycling process recovers cobalt, nickel, copper and iron in form of a metal 

alloy. Metals such as aluminium, manganese, and lithium are lost in the slag and plastic 

and other organic components are incinerated [22].  

Hydrometallurgical  methods  include  mechanical  pre-treatment  and  metal  recovery  from 

the  black  mass  by  means  of  leaching,  precipitation,  solvent  extraction,  ion-exchange 

resins  and  bioleaching  [22,  123].  In  addition  to  cobalt,  nickel,  copper  and  iron, 

hydrometallurgical processes enable recovery of lithium with high purity.  

A hydrometallurgical process is often preceded by a thermal pre-treatment step (type d) 

to  remove  organic  compounds  and  graphite  which  adversely  affect  leaching  and  solid-

liquid separation steps of the recycling process [22]. 

At  present  the  main  focus  in  recycling  of  Li-ion  batteries  is  the  recovery  of  cobalt  since 

this metal has a high economic value  and is a critical raw material for the EU  [22]. The 

recycling rate of lithium from end-of-life products, including batteries, is currently below 

1% according to the International Resources Panel [125]. Nevertheless, recovery of less 

economically  valuable  metals,  including  lithium,  may  become  viable  in  future  [22]. 

Therefore, R&I needs exist for improving the cost effectiveness of the recycling processes 

and development of more efficient recycling processes.  

The  efficiency  of  battery  recycling  is  a  combination  of  two  factors:  collection  rate  and 

recycling  efficiency.  Collection  rate  expresses  the  fraction  of  produced  lithium  ion 

batteries that are collected at their end-of-life, while recycling efficiency is expressed as 

the  weight  percentage  of  metals,  metal  compounds,  plastics,  and  other  products 

recovered from the collected waste that can be directly reused in battery production or in 

other  applications  or  processes.  Recycling  efficiency  is  considered  a  key  parameter  for 

assessing the quality of recycling  however a methodology is not yet standardized for its 

calculation.  Pre-normative  research  to  develop  standards  and  guidelines  for  collection 

and  transportation  of  used  batteries  as  well  as  standards  and  guidelines  for  battery 

second-use are needed.   

Efficiency of recycling for various elements in selected processes in terms of % recovery 

of different material are compared in Table 8.  

56 

Table 8: Efficiency of recycling for various elements in selected processes for NMC and LFP 
chemistries [75] 

Material  

Combination of 

Purely 

Purely 

pyrometallurgical & 

hydrometallurgical 

hydrometallurgical 

hydrometallurgical 

process - NMC only [%] 

process - LFP only 

processes - NMC and LFP 
[%] 

Lithium 

Nickel 

Manganese 

Cobalt 

Iron 

Phosphate 

Natural graphite 

57 

95 

0 

94 

0 

0 

0 

94 

97 

~  100 

~  100 

NA 

NA 

0 

[%] 

81 

NA 

NA 

NA 

0 

0 

0 

At  present  recycling  of  lithium ion  batteries  is  mainly limited  to  portable  batteries  since 

still  there  are  no  big  volumes  of  waste  electric  vehicle  battery  that  have  reached  their 

end-of-life. Spent Li-ion batteries are recycled industrially in many regions of the world. 

An  overview  of  recycling  companies  and  their  processes  is  given  in  Table  9.  Data  was 

compiled  from  various  sources  and,  where  possible,  cross-checked  with  information  on 

the websites of the listed companies or by contacting listed companies directly.  

Table 9. Li-ion battery recycling companies, processes and capacity. [22, 123, 124, 126, 127] 

Company 

Recycling 

Battery types 

Process 

Recycling 

(HQ location) 

facility 

location 

volume,  tons 

of  batteries 

per year 

Europe 

Umicore  Battery 

Hoboken (BE) 

Li-ion, NiMH 

P 

7000* 

Recycling(BE) 

Accurec Recycling 

Mülheim (DE) 

NiCd, NiMH 

GmbH (DE) 

Krefeld (DE) 

Li-ion 

P 

with 

H 

1500-2000 

treatment 

of 

57 

 
 
the  slag  and  flu                             

6000* 

e dust 

Glencore 

(formerly 

XStrata) (CH) 

Sudbury (CA) 

Li-ion 

P 

with 

H 

7000* 

Rouyn-Noranda 

(CA) 

Kristiansand (NO) 

treatment 

of 

the  slag  and 

electrowinning 

Recupyl S.A. (FR)  Grenoble (FR) 

Li-ion 

Singapore (SG) 

AEA  Technology 

Sutherland (UK) 

Li-ion 

(UK) 

H 

H 

110* 

SNAM (FR) 

Saint 

Quentin 

NiCd,  NiMH,  Li-

P+  mechanical 

300* 

Fallavier (FR) 

ion 

separation  +  H 

to  extract  Co 

and Ni 

AkkuSer Oy (FI) 

Nivala (FI) 

NiCd,  NiMH,  Li-

mechanical 

1000 (Li-ion) 

ion, Zn alkaline 

4000* 

Batrec  Industrie 

Wimmis (CH) 

Li 

P  +  mechanical 

200* 

AG (CH) 

treatment 

Euro  Dieuze  / 

Dieuze (FR) 

Li-ion 

SARP (FR) 

Valdi 

(ERAMET) 

Commentry (FR) 

Various 

H 

P 

(FR)  

G&P 

(UK) 

including Li-ion 

Batteries 

Darlaston (UK) 

Various 

including Li-ion 

200* 

20000*  

(from 2017) 

North America 

Retriev 

Trail, BC (CA) 

Li metal, Li-ion  H 

4500* 

Technologies  Inc. 

Baltimore, 

OH 

58 

 
 
 
 
(CA) 

(US) 

Anaheim, CA (US) 

AERC  Recycling 

Allentown, 

PA 

All types,  

P 

Solutions (US) 

(US) 

West  Melbourne, 

FL (US) 

Richmond, 

VA 

(US) 

including Li-ion 

and Li metal 

Japan 

Li-ion 

P 

120-150  

Sony  Electronics 

Inc.  -  Sumitomo 

Metals 

and 

Mining Co. (JP) 

Nippon  Recycle 

Osaka (JP) 

Ni-Cd, 

NiMH, 

P 

Center Corp. (JP) 

Aichi (JP) 

Miyagi (JP) 

Li-ion, alkaline 

Dowa Eco-System 

Co. Ltd. (JP) 

JX  Nippon  Mining 

and Metals Co. 

Various 

including Li-ion 

Various 

including Li-ion 

P 

P 

China 

Shenzhen  Green 

Jingmen,  

NiMH, Li-ion 

H 

Eco-manufacturer 

Hubei (CN) 

Hi-Tech 

Co. 

(GEM) (CN) 

1000* 

5000* 

20000-

30000* 

Hunan 

BRUNP 

Ningxiang, 

Various 

H 

3600-10000* 

(CN) 

Changsha,  Hunan 

including  NiMH 

(CN) 

and Li-ion 

>6000 

P – pyrometallurgical process; H- hydrometallurgical process; * recycling capacity of the facility 

59 

 
 
 
 
 
 
In Europe companies such as Umicore (BE) and Recupyl (FR) active for several years in 

the  battery  recycling  sector  have  developed  their  own  recycling  processes.  Umicore  has 

developed  a  so-called  "Umicore  process",  an  ultrahigh  temperature  pyrometallurgical 

process, and runs a facility in Belgium with an annual capacity of 7000 tons of batteries 

[21].  Recupyl  patented  a  hydrometallurgical  recycling  process,  which  has  a  higher 

material recycling efficiency (see Table 8). Accurec Recycling GmbH runs a facility Krefeld 

(DE) recycling 1500-2000 tons of spent Li-ion batteries [22, 128]. Their annual capacity 

for disassembly and subsequent recycling of Li-ion automotive batteries is more than 600 

tons [128]. Valdi (FR), a ERAMET Group subsidiary, has transferred its battery recycling 

facility  from  Le  Palais-sur-Vienne  (FR)  to  Commentry  (FR),  where  batteries  will  be 

recycled through a dedicated pyrometallurgical process [129]. The unit will recover 100% 

of  metal  content,  enabling  it  to  achieve  a  recycling  efficiency  target  of  65%,  above  the 

minimum  requirement  of  50%,  stipulated  by  the  EU  Batteries  Directive  (Directive 

2006/66/EC)  [129].  From  2017,  Valdi  will  have  annual  processing  capacity  of  20,000 

tons  of  batteries  [130].  AkkuSer  Oy  (FI)  operates  a  battery  recycling  facility  in  Nivala 

(FI),  where  Ni-Cd,  NiMH,  lead  accumulators,  alkaline  batteries  and  Li-ion  batteries  are 

mechanically recycled in a so-called Dry-Technology® process [22, 131]. Annually about 

1000 tons of spent Li-ion batteries, coming from the European market, are processed at 

this facility [22]. 

In the United States, there is no federal law governing EPR, and  each state may choose 

to implement its own policy and laws. California, for example, is pioneering a process for 

waste  regulation  [132],  but  so  far  only  portable  batteries  are  considered  and  California 

lacks  the  infrastructure  to  manage  the  forecasted  volume  of  EV  lithium  ion  batteries  at 

their end-of-life [133]. Since 1996, a voluntary programme called Call2Recycle, which is 

funded  by  electronics  manufacturers,  has  recycled  more  than  38.5  million  kilograms  of 

small consumer batteries and mobile phones in the US and Canada, but this is still just a 

tiny  fraction  of  the  total  [134].  In  Canada  provinces  of  British  Columbia,  Quebec  and 

Manitoba  have  a  mandatory  recycling  programme,  and  in  these  places,  Call2Recycle 

collects about 25% of what is sold [134]. Retriev Technologies Inc. (former Toxco Inc.), 

which  has  developed  its  own  hydrometallurgical  process,  is  a  leading  battery  recycling 

company  in  Canada  and  the  US.  Over  the  past  20  years,  Retriev  has  processed  more 

than 10,000 tons of lithium ion batteries. Retriev is researching a new recycling method 

for  Li-ion  batteries  called  "direct  recovery",  originally  developed  by  OnTo  Technology,  a 

research  and  development  company  in  Bend,  (Oregon,  USA)  [134].  As  explained  in 

[134]:  "Rather  than  recovering  basic  elements,  as  with  pyrometallurgy,  or  partially 

breaking  down  the  molecular  structure  of  compounds,  as  with  hydrometallurgy,  this 

method involves bathing the cathode in a soft chemical solution to rejuvenate it". It is a 

low-temperature,  low-energy,  low-emissions  process  with  very  limited  waste.  Recycling 

60 

using  this  process  is  also  significantly  cheaper  compared  to  conventional  pyro-  and 

hydrometallurgical  processes  [134].  Most  of  the  cost  savings  come  from  not  having  to 

rebuild the cathode again as materials are retained in their battery-ready state and since 

direct recovery uses less energy than conventional methods [134]. 

Looking  at  the  Asian  region,  Japan  has  a  legislation  requirement  for  batteries  similar  to 

the  EU  [135].  Japan  Portable  Rechargeable  Battery  Recycle  Center  (JBRC),  non-profit 

organization, provides used battery collection boxes across the country. Companies such 

as Sony and Nippon Recycle Center Corporation are contracted to receive these batteries 

for recycling. There are also contracts directly with companies to collect and recycle their 

end-of-life batteries as well as battery production scrap material [136].  

In  China  there  is  currently  a  shortage  of  appropriate  policies  and  collection  systems  for 

batteries despite of a growing community concern about the impact of waste lithium ion 

batteries  on  the  environment  and  public  health.  Industry  is  increasingly  expected  to 

report  on  and  be  accountable  for  the  waste  their  products  generate.  Furthermore  the 

criticality  of  some  raw  materials,  such  as  nickel  and  cobalt,  puts  more  pressure  on 

manufacturers  and  government  to  properly  address  battery  recycling.  Therefore, 

appropriate policies and collection systems for batteries in China need to be defined, and 

recycling infrastructure also needs to be developed [137]. Some Chinese companies are 

active  in  the  battery  recycling  business  such  as  GEM  Jingmen  and  BRUNP  Hunan.  GEM 

has an annual disposal capacity of waste batteries and Co and Ni scrap of about 30,000 

tons, with an annual production of recycled cobalt and nickel more than 3300 tons [137]. 

A  facility  of  BRUNP  Hunan  has  a  total  designed  processing  capacity  of  10,000  tons  per 

year.  

61 

 
4  Conclusions 

This report has gathered data on the automotive traction battery value chain with a view 

to  underpin  decisions  where  European  R&I  investments  are  needed,  considering  where 

these  can  create  opportunities  to  boost  European  competitiveness  in  the  automotive 

battery  sector.  On  the  basis  of  this  data  a  number  of  opportunities  for  increased  R&I 

support in specific areas of the automotive battery value chain, which may help achieve 

the objective for increased European competitiveness in this sector, have been identified 

and are highlighted below.  

OEMs  are  facing  increasingly  stringent  emission  targets  and  they  will  need  to  consider 

greater investment in efficient powertrain technologies going beyond optimization of the 

internal  combustion  engine.  Furthermore,  OEMs  are  looking  at  evolving  consumer 

purchasing behaviour and electrical vehicle acceptance which may soon become relevant 

in global sales. How European OEMs will adjust their strategies varies, however a growing 

electrical  vehicle  market  may  justify  growing  R&I  effort  to  support  a  competitive 

domestic manufacturing in relevant segments of the value chain including cells for use in 

vehicle battery packs. 

The information provided in this report shows that EU industry has some production base 

in all segments of the battery value chain, but it is far from being self-sufficient.  In the 

raw  and  processed  materials,  cell  component  and  cell  manufacturing  value  chain 

segments  Europe  holds  a  minor  share  of  the  market,  whereas  in  the  pack  and  vehicle 

manufacturing  and  recycling  segments  Europe  is  among  the  market  leaders.  Within  the 

car manufacturing  segment,  EU industry  is expected to maintain its position also  for  EV 

production.  

European  OEMs and their Tier 1 and Tier 2  suppliers need to be prepared to satisfy the 

future demand for electric vehicles as projections for global electrical vehicle sales up to 

2040  show  an  increase  in  demand.    Many  European  Tier  1  and  Tier  2  automotive  OEM 

supply  industries,  currently  serving  the  ICE  market,  are  demonstrating  their  ability  to 

adapt  and  respond  to  new  opportunities  presented  by  the  growing  electrical  vehicle 

market.    This  flexibility  should  be  supported  given  the  dynamic  needs  of  their  OEM 

customers  many  of  whom  are  still  developing  their  own  strategy  on  what  part  of  pack 

manufacturing to outsource.  

Support  to  R&I  in  this  sector  can  help  existing  and  new  Tier  1  and  Tier  2  industries 

innovate and increase their flexibility and hence maintain a competitive edge.  

62 

 
 
In the recent past the numbers of EV sales did not meet the anticipated level and for the 

majority  of  European  OEMs,  this  may  have  been  one  reason  not  to  start  and  sustain 

private investments in competitive domestic cell manufacturing.  

Another factor which has discouraged large scale European cell manufacturing, and which 

is often cited by car manufacturers, is the current global cell manufacturing overcapacity. 

Nevertheless, looking to the future, the current over-capacity in itself should not prelude 

investments  in  this  area  since  projections  for  large  penetration  of  EV  indicate  that 

automotive lithium-ion cell demand and supply may soon be matched (by around 2020).  

To  become  competitive  in  this  time  frame  however,  consolidated  R&I  action  at  a 

European level is required in the short term to secure Europe's strong industrial position 

in pack manufacturing in the future. 

Current  projections  indicate  a  research  trend  to  develop  improved  (e.g.  higher  voltage) 

cells for automotive use based on conventional Li-ion chemistries such as NMC and LFP.  

The  general  approach  being  adopted  is  to  develop  advanced  materials  (e.g.  silicon 

enriched anode, solid state electrolytes) rather than developing new chemistries, at least 

until  2025.  These  improved  technologies  are  speculated  to  transition  by  2030  towards 

post  Li-ion  technologies  (Li-air,  Li-S,  Na-ion)  once  their  performance  is  proven  in 

automotive  applications.    Li-ion  technology  is  therefore  expected  to  remain  as  the 

dominant deployed technology at least until 2025 - 2030.  

R&I investments in improved contemporary chemistries, from materials up to large scale 

cell  manufacturing  capabilities,  are  needed  to  satisfy  the  current 

incremental 

performance improvements needed.   

Similar  R&I  investments  are  needed  for  post-lithium  ion  chemistries  to  allow  sufficient 

time  for  their  development  and  subsequent  translation  into  a  manufacturing  process  to 

realise significant improvements in performance.  

Failure  to  invest  the  necessary  resources  in  this  way  will  only  prolong  and  exaggerate 

Europe's  historical  deficit  in  competitive  cell  manufacturing  which  may  also  threaten 

Europe's  knowledge  base  which  has  the  tendency  to  move  where  production  sites  are 

located. 

Secure  access  to  materials  used  in  cell  manufacture  is  a  fundamental  prerequisite  if 

Europe is to become competitive in this segment.  Issues associated with access and use 

63 

 
 
 
 
 
of  critical  materials  for  cell  production  can  be  addressed  by  (i)  tapping  new  sources  of 

critical  materials,  (ii)  substituting  critical  materials  with  less  critical  ones  and  (iii) 

recycling/reuse of critical materials.  

R&I support to develop new mining/extraction techniques may alleviate potential supply 

concerns for materials where reserves are located outside the EU territories. 

R&I on alternative Li-ion chemistries, made of more accessible raw materials, could cover 

development  of  alternative  chemistries  to  alleviate  the  need  for  the  critical  materials, 

cobalt and natural graphite.  

With  regard  to  lithium,  projections  suggest  that  reserves  are  sufficient  to  satisfy  the 

increase in demand brought about by increased use of batteries for automotive purposes.  

Benefits gained from mitigating dependence on critical materials will not be limited to the 

raw material sector but, and maybe most importantly, can enhance opportunities for the 

EU  industry  to  break  the  foreign  monopoly  in  the  cell  manufacturing  sector  by 

substitution of materials.  

A sector where EU industry has a strong and dominant position is in the battery recycling 

part  of  the  value  chain.  EU  pioneering  legislation  in  this  area  has  made  it  possible  to 

develop  a  well-structured  industry.    Recycling  also  helps  alleviate  concerns  on  the 

security  of  supply  of  critical  raw  materials  used  in  batteries.    However  the  battery 

recycling sector is currently struggling to prepare for increased volumes of battery waste 

expected from the automotive traction sector.   

R&I  needs  exist  for  improving  the  cost  effectiveness  of  the  recycling  processes, 

development  of  more  efficient  processes,  pre-normative  research  to  develop  standards 

and guidelines for collection and transportation of used batteries as well as standards and 

guidelines for battery second-use.   

Opportunities for increased European R&I support in areas other than those identified in 

this  report  may  also  exist  including  battery  R&I  for  applications  other  than  automotive.  

When  pursued,  targeted  and  strategic  R&I  efforts  should  be  performed  in  an  integrated 

approach  to  leverage  the  knowledge  generated  in  a  cost-effective  and  innovation-

enhancing manner. 

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71 

 
 
72 

 
 
List of abbreviations and definitions 

LCO 

Lithium Cobalt Oxide – Cathode Material 

NMC 

Nickel Manganese Cobalt Oxide – Cathode Material 

NCA 

Nickel Cobalt Aluminium Oxide – Cathode Material 

LFP 

Lithium Iron Phosphate - Cathode Material 

LMO 

Lithium Manganese Oxide (spinel) – Cathode Material 

EV 

Electric Vehicle 

HEV 

Hybrid Electric Vehicle 

PHEV 

Plug-in Hybrid Electric Vehicle 

BEV 

Battery Electric Vehicle 

ICE 

Internal Combustion Engine 

CAGR  Compound Annual Growth Rate 

GWh  Giga Watt Hour 

kWh 

Kilo Watt Hour 

ESS 

Energy Stationary Storage 

GHG 

Green House Gases 

LME 

Lithium Metal Equivalent 

LCE 

EPR 

US 

KR 

JP 

EU 

CN 

CH 

DE 

FR 

NL 

BE 

IT 

Lithium Carbonate Equivalent 

Extended Producer Responsibility 

United States 

South Korea 

Japan 

European Union 

China 

Switzerland 

Germany 

France 

The Netherlands 

Belgium 

Italy 

73 

 
List of figures 

Figure 1: Automotive lithium-ion battery value chain (data from 2015). ...................... 6 

Figure 2: Geographical distribution of Li resources and reserves. Source: [22] ............11 

Figure 3: Left – Development of the cathode active materials market in 2000-2015 
(Used with permission from Avicenne Energy [5]). Right –demand division per material 
type (Used with permission from Avicenne Energy [5]) and regional distribution of the 
manufacturers (according to the location of the headquarters) in 2015 (based on data 
from [5]). ............................................................................................................13 

Figure 4. Expected market volume per material type in 2025 (left) (Used with 
permission from Avicenne Energy) [5] and as compared to 2015 (right) (based on data 
from [5]). ............................................................................................................14 

Figure 5: Development of the anode active materials market in 2006-2015, market 
division per material type (Used with permission from Avicenne Energy [5]) and regional 
distribution of the top-12 manufacturers of natural and artificial graphite anode materials 
in 2015 (based on data from [5]). ..........................................................................15 

Figure 6: Forecast market division per anode active material type in 2025 (left) (Used 
with permission from Avicenne Energy [5]), and as compared to 2015 (right) (based on 
data from [5]). .....................................................................................................16 

Figure 7: Left – Development of the electrolyte market in 2000-2015 (Used with 
permission from Avicenne Energy [5]) and right – Regional distribution of the electrolyte 
producers in 2015 (based on data from [5]). ...........................................................17 

Figure 8: World-wide demand and offer of electrolytes for Li-ion batteries (Used with 
permission from Avicenne Energy [5].) ...................................................................18 

Figure 9: Electrolyte market forecast till 2025 (Used with permission from Avicenne 
Energy [5].) .........................................................................................................19 

Figure 10: Left – Development of the separator market in 2005-2015 [5] (Used with 
permission from Avicenne Energy [5]) and right – Regional distribution of the separator 
producers in 2015 (based on data from [5]). ...........................................................20 

Figure 11: Projected separator market growth (Used with permission from Avicenne 
Energy [5]). .........................................................................................................21 

Figure 12: Forecasted battery technology evolution [34] ..........................................25 

Figure 13: Market share of various Li-ion cell producers in 2015, left – in volume, right – 
in value. (Used with permission from Avicenne Energy [5]) .......................................27 

Figure 14: Battery cell production capacity (Used with permission from Avicenne Energy 
[5]). ...................................................................................................................35 

Figure 15: Automotive Li-ion battery cell manufacturing capacity and utilization in 2014. 
Source:[7, 37]. ....................................................................................................36 

Figure 16: Estimated electric vehicle Li-ion battery cell demand and global automotive 
Li-ion battery cell manufacturing capacity [6]. .........................................................37 

Figure 17: Worldwide demand for automotive Li-ion battery cells in 2015-2025. 
Source:[34]. ........................................................................................................38 

Figure 18: Projected growth of Li-ion pack market (Used with permission from Avicenne 
Energy [5]). .........................................................................................................39 

Figure 19: Cumulative volume of automotive battery pack sales by region of OEMs 
headquarters [75] ................................................................................................42 

Figure 20: Volume automotive battery pack sales by model and region of OEMs 
headquarters [75] ................................................................................................43 

74 

Figure 21: Global market share of the top 20 PHEV and BEV producers, based on [75]. 
(Producer is assigned to a region according to the location of its Headquarters, e.g. 
Toyota is considered to be a Japanese producer regardless of whether manufacturing is 
taking place in Japan or elsewhere) ........................................................................46 

Figure 22: Projected global sales of new PHEV and BEV vehicles. Source [5, 8, 34, 75, 
90-92] ................................................................................................................48 

Figure 23: Projected global sales of new PHEV and BEV vehicles for 2015-2025. Source 
[5, 8, 34, 75, 90-92] ............................................................................................48 

Figure 24: Projected European sales of new PHEV and BEV vehicles for 2015-2025. 
Source [34, 75, 90] ..............................................................................................49 

Figure 25: 4D analysis of top 20 automotive suppliers for EBIT margin (ratio of Earnings 
before Interest and Taxes to net revenue earned) and revenues (2014) [121] .............54 

75 

 
List of tables 

Table 1: Main producers, main source of import into EU, substitutability index and 
recycling rate of cobalt, natural graphite, silicon metal and lithium. [4, 15-18] .............. 8 

Table 2: Annual manufacturing capacity of Li-ion cells worldwide in 2014 [7, 37] ........29 

Table 3: Annual manufacturing capacity of automotive Li-ion cells worldwide in 2016 [6, 
38] .....................................................................................................................30 

Table 4. Li-ion cell actual production volume for 2015 and production capacity of 
selected European manufacturers. Source: [5, 40] [43] [44] [46]. .............................33 

Table 5: OEMs Battery pack manufacturing strategy ................................................40 

Table 6: Price and range of upcoming EV models (2017-2020) as announced by OEMs 
differentiated by region .........................................................................................50 

Table 7: Geographical comparison of automotive suppliers' 2014 financial indicators 
(figures in US$) [121] ...........................................................................................53 

Table 8: Efficiency of recycling for various elements in selected processes for NMC and 
LFP chemistries [75] .............................................................................................57 

Table 9. Li-ion battery recycling companies, processes and capacity. [22, 123, 124, 126, 
127] ...................................................................................................................57 

76 

 
 
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doi:10.2760/6060 

ISBN 978-92-79-66948-4