Specialised vertical integration: the value-chain strategy of EV lithium-ion battery firms in China

Wang, Xieshu; Wang, Zhao; Ruet, Joël

doi:10.1504/ijatm.2022.124377

Cited by 5 publications

(4 citation statements)

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“…The strategy of vertical integration is controlling the whole EV battery value chain as much as possible, from upstream activities of mining, materials processing, cell component making, through cell, module, BMS production, to downstream pack assembling and applications in various sectors [7] (pp.178-201). Battery makers may even downstream integrate further other key electric components supply, e.g., electric engine and electronic control system, etc.…”

Section: Implications To Battery Makersmentioning

confidence: 99%

Manufacturing Competency: Roots of Competitive Advantage of Chinese Electric Vehicle Battery Industry

Zhao,

Luethje

2024

Preprint

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China’s leading development of a complete battery value chain for Electric Vehicles (EV) is restructuring the global automotive sector. The competitive advantage of China's EV battery industry lies on its firms’ core competency and political economic geography. Based on first-hand empirical material and data obtained from years of fieldwork in an EV battery cluster in South China, this paper identifies what the Chinese EV battery industry’s core competency is and details how it is built up from below. The current core competency of Chinese battery firms is their mass manufacturing capability to supply lithium-ion batteries vehicle manufacturers (OEMs) with stable and consistent quality as well as competitive prices. This competency is acquired by firms through technological learning at workshop level while taking use of their experiences accumulated in mass production of batteries for consumer electronics sectors. Furthermore, the rapid learning and accumulation of knowledge on battery manufacturing at large scale is also facilitated by the industrial cluster environment where firms are embedded. Supported and promoted by local government policies, Chinese EV battery clusters are composed of firms from different segments of a complete battery value chain. The findings illuminate the likely strategic strengths, weaknesses, and futures of the Chinese EV battery industry in global competition.

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Section: Implications To Battery Makersmentioning

confidence: 99%

Manufacturing Competency: Roots of Competitive Advantage of Chinese Electric Vehicle Battery Industry

Zhao,

Luethje

2024

Preprint

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“…At a time when Japanese and Korean battery manufacturers are far outpacing Chinese newcomers, MIIT introduced the 'Regulations on the Standards of Automotive Power Battery Industry' catalog in 2016, which restricted the awarding of subsidies to only vehicles with batteries produced by the listed Chinese companies (X. Wang et al, 2022).…”

Section: Development Of the Battery Industrymentioning

confidence: 99%

“…Lastly, according to the International Energy Agency (2022, p. 31), "China dominates the entire downstream EV battery supply chain" with 76% of battery cell manufacturing capacities, 70% for cathode, 85% for anode, 80% for graphite mining and refining. Wang et al (2022) explain how Chinese battery makers have developed a "specialized vertical integration" strategy to develop the most comprehensive battery value chain in the world which dominated the market. This strategy consists in both continuing to reinforce their existing capacity using specific established assets in their original segment of the value chain, and actively entering related upstream and/or downstream segments.…”

Section: China Has Achieved a Significant Step In Mass-production Of ...mentioning

confidence: 99%

When regulations shape the future of an industry, the case of the high voltage battery

Alochet,

Midler

2023

IJATM

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In China, Europe and the United States, the transition from thermal to battery electric vehicles is ongoing under the effect of technology forcing regulations. We investigate whether and how those related to high voltage batteries could shape the future of the automotive industry. While China is leading the way, Europe and the United States, with very high levels of funding, are racing against time to catch up and develop a sustainable battery value chain controlled by local champions. As the U.S. resorts to protectionism, we hypothesize that we may see the emergence of three geographic production hubs, ending the globalization of the battery industry.

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“…The BRI enabled China to extend a "web of global partnerships" (Kalantzakos, 2020) which includes 146 countries in 2022 that host a large number of Chinese companies. The outcome of this systematic long-term policy is that when the EV market took off, there was overwhelming Chinese domination in rare earths and other critical materials from the early stage of mining to processing and trade (Wang et al, 2022) (Bonnet et al, 2022) (Sanderson, 2019). According to the IEA, China controls the processing of 35 per cent of the world's nickel, half the lithium, 70 per cent of cobalt and 90 per cent of rare-earth elements (IEA, 2022, p.32).…”

Section: Hhi K = =mentioning

confidence: 99%

Electric batteries and critical materials dependency: a geopolitical analysis of the USA and the European Union

Jetin

2023

IJATM

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This article estimates the import dependency of the USA and the European Union on the raw materials needed to produce batteries that equip Electric Vehicles. The dependency is very high on many critical materials and on batteries themselves. In a geopolitical context marked by the rising US-China rivalry and new cold wars, it has prompted the USA and the EU to support local mining and processing of critical materials in an attempt to recover their strategic autonomy. They have also deployed raw material diplomacy to secure access to resource-rich countries by favouring allied countries whenever possible. Both decisions are difficult to implement, and progress is slow. China's dominance over the electric battery is difficult to circumscribe, especially since the USA, with the Inflation Reduction Act (IRA), does not hesitate to defend its interests at the expense of the EU. The result is a politicisation of business, forcing global production networks to align themselves with the opposing blocs.

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Specialised vertical integration: the value-chain strategy of EV lithium-ion battery firms in China

Cited by 5 publications

References 0 publications

Manufacturing Competency: Roots of Competitive Advantage of Chinese Electric Vehicle Battery Industry

Manufacturing Competency: Roots of Competitive Advantage of Chinese Electric Vehicle Battery Industry

When regulations shape the future of an industry, the case of the high voltage battery

Electric batteries and critical materials dependency: a geopolitical analysis of the USA and the European Union

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