China's dominance could be unwound by protectionist policies, alternative battery chemistries and the rise of battery recycling.
Reuters
Battery production at Mercedes's Untertürkheim factory near Stuttgart.
The U.S. and Europe could cut their dependence on China for electric vehicle batteries through more than $160 billion of new capital spending by 2030, the Financial Times said, citing a Goldman Sachs report.
China's dominance could be unwound by protectionist policies in the U.S. and Europe, along with alternative battery chemistries that require fewer critical minerals from China, and the rise of battery recycling.
The Goldman Sachs report calculated that to achieve a self-sufficient supply chain, countries competing with China would need to spend $78.2 billion on batteries, $60.4 billion on components and $13.5 billion on mining of lithium, nickel and cobalt, as well as $12.1 billion on refining of those materials, the FT said.
In the U.S., the Inflation Reduction Act will give a boost to EV manufacturing. The law, signed Aug. 16 by President Joe Biden, includes provisions aimed at boosting U.S. manufacturing of electric vehicles and batteries, including new sourcing requirements for vehicles to qualify for EV tax credits.
The investment bank's analysts believe demand for finished batteries could be met without China within the next three to five years, as a result of investments in the U.S. by South Korean conglomerates LG and SK Hynix.
Goldman forecast that the U.S. market share of the Korean battery makers would soar to about 55 percent in three years, from 11 percent in 2021.
For now, China dominates battery production, including the mining and refining of raw materials.
Goldman Sachs did not immediately respond to a Reuters request for comment.
