Wall Street consulting firm Bernstein, predicts that electric vehicles will account for up to 40% of all vehicle purchases in 20 years. Taking into consideration that around 100 million vehicles are now produced annually, the EVs (electric vehicles) will represent 40 million, even if the total production stays the same, in 2037.
Additionally, considering that an EV battery costs the same as an internal combustion engine, around $6,000, we then have a $240 billion industry in its infancy.
Although battery technology originated in Japan and then moved to South Korea, its center is now in China. Proof is the fact that in the last 3 years, worldwide battery cell manufacturing capacity has more than doubled, up to 125 GWh, increase led mostly by Chinese companies.
The most renown electric vehicle battery suppliers in the world are Panasonic from Japan, Samsung and LG Chem from South Korea, together with the Gigafactory opened recently in Nevada, U.S., by Panasonic and U.S. based Tesla.
However, there is another important battery supplier and electric vehicle manufacturer worldwide, BYD, a large Chinese company. BYD, which stands for Build Your Dream produced almost 500,000 cars and buses in 2016, out of which 100,000 were EVs. It is also China’s largest battery producer, having a 20 GWh of battery cell capacity.
There are plenty of other Chinese battery cell manufacturers. Since the number of electric vehicles is growing really fast in China, many firms want a stake out of the $240 billion associated battery market. Additionally, the Chinese government offers plenty of subsidies to battery manufacturers.
Therefore, it can be said that today, China is well positioned for the electric revolution and will have a large share out of the $240 billion battery market. However, it should pay attention that for every extra battery and electric vehicle produced, investments made in internal combustion engines become obsolete.