The era of the electric vehicle market began in earnest with the release of cost-effective electric vehicles that use platforms exclusive to them, and global automakers nowadays are fiercely joining the competition to take the initiative in the market. Although not yet ready to compete with internal combustion engine vehicles, it is without a doubt that electric vehicles will be able to strengthen its competitive edge within several years.
Recent announcements made by global automobile companies support such trend. Earlier this year, General Motors announced that it would stop selling petrol-powered and diesel models by 2035. Audi, the German automobile maker, also announced their plan to stop producing such vehicles by 2033. Many other multinational automobile companies also have released similar plans.
One of the most significant factors that drive the future of respective automobile companies is the price of the battery used in automobiles. While internal combustion-engined cars get energy from burning petrol or diesel, an electric vehicle gets its power directly from a big pack of batteries. Currently, this battery price amounts to about 40% of the cost of electric vehicles, serving as one of the factors that block the consumers’ willingness to purchase electric vehicles. Therefore, without a lower battery price, the competence of electric vehicles will be limited.
Currently, the most advanced type of battery is a lithium-ion battery. A lithium-ion battery is a type of rechargeable battery used in electric. However, the battery is very vulnerable; the slightest pressure on the battery can lead to fire hazards. The alternative is a solid-state battery that increases energy density and resilient to shorted life from repeated charging. A solid-state battery is resistant to heat, which decreases the chance of the battery overheating. Since the technology needed to produce solid-state batteries in mass quantities is yet to be developed, battery companies are making every effort to succeed in do so.
Along with such innovation in production methods, competition in a national level is fierce given the growth of the electric vehicle battery market. Currently, the world's top players in the electric vehicle battery market can be grouped as three Asian countries: South Korea, China, and Japan. Recently, Chinese battery maker CATL's plan to shift the electric vehicle market toward a sodium-ion battery received a support from the Chinese central government. Korean companies including LG Chem, Panasonic, Samsung SDI and SK Innovation are also dominant players – Several automobile companies in Asia, Europe and the US would receive battery from these producers for the next few years. Japanese car maker Toyota and Panasonic have also recently announced its plan to initiate joint venture to produce batteries either.
Until now, electric vehicle manufacturers have delegated about 40% of their batteries to companies specialized in manufacturing batteries, but recently global manufacturers are hoping to produce batteries on their own. Tesla has recently declared to develop its own battery production within a few years, and many global manufacturers seem to be willing to follow Tesla’s footsteps in the field. Of course, manufacturing batteries itself is a rather high-tech industry and so it is not likely that start-up companies would be able to succeed. Still, it is expected that global manufacturers will eventually succeed in producing their own batteries.
As existing battery companies have picked up on such trend, they will secure and specialize in more relevant specialized technologies, and eventually, it is expected that global battery companies will also be able to produce electric vehicles since it becomes easier for them to subcontract electric vehicles. In the end, it is expected that there will be fierce competition among companies regardless of their respective fields.
So far, among the three Asian countries taking the initiative in global battery market, the industry's overall excessive reliance on China has been pointed out with the outbreak of coronavirus, which resulted in massive shortage of battery production. As a result, carmakers are actively seeking for the opportunity to secure independent battery supply mechanism from the excessive dominance of Chinese battery makers, making their effort to challenge Chinese hegemony. After all, the key factor of the future of mobility depends on who achieves independence in producing batteries and the possession of differentiated and high-performing battery technology. We look forward to the next generation of batteries in the future.