Control of battery resources is key to EV leadership – by Yoichi Funabashi (Japan Times – April 9, 2018)

Yoichi Funabashi is chairman of the Asia Pacific Initiative and was editor-in-chief of the Asahi Shimbun.

In this column last month, I concluded that whoever controls the battery supply will command the electric vehicle industry. But what does this really mean? I would like to examine the assertion more closely.

In 1991, Sony released the world’s first lithium-ion battery, which is now a central component of electric vehicles, plug-in hybrid vehicles (PHVs), and hybrid vehicles (HVs). Up until just a few years ago, Japanese companies commanded over half of the global market for lithium-ion batteries.

Today, however, Chinese companies control 60 percent of the global market. Japanese companies now have fallen down to a market share of little more than 20 percent, while South Korea’s share is less than 10 percent.

There are about 200 battery manufacturers operating in China. This crowded field is led by Contemporary Amperex Technology (CATL) and BYD Auto.

The Chinese government has identified the promotion of the EV industry as a main pillar of its national strategy, and set a target of having 5 million new energy vehicles, including EVs, on the road by 2020. In China, the government sends clear policy signals to the market.

More precisely, in certain strategic industries the Chinese government and corporations act in unison, with subsidies and regulatory measures (for example, setting sales quotas) used to stimulate consumer demand and create a new market.

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