Battery makers bringing supply chains closer to home

15 July 2021

Eight in 10 (80%) battery manufacturers in Europe are in the process of bringing supply chains closer to home or are planning to do so in the next year, according to research.

A survey of executives by prototype maker Protolabs found reshoring was a priority for many respondents, with 82% saying they were developing or expanding additive-manufacturing, such as 3D printing, to help bring manufacture of speciality components closer.

Eight in 10 (79%) were building partnerships with a technology specialist provider to enable this.

The survey involved 200 industry executives in France, Germany, Italy, Spain, UK, Netherlands and Norway.

The report said reshoring and near-shoring were essential to supply chain resilience, while avoiding shortages and ensuring speed to market were critical to compete in the global battery market.

It concluded the Covid-19 pandemic had accelerated a trend of moving supply chains closer to destination markets in Europe.

The report said global battery demand was set to increase 14 times by 2030. China, Japan and South Korea dominate the global market for lithium-ion batteries, with only 6% produced in Europe.

Last year, Europe’s electric vehicles (EV) sales overtook China’s for the first time since 2015 to become the largest EV market in the world.

Surging consumer demand is driving battery manufacturing in Europe, with a focus on ultra-high performance and sustainability.

Sustainability principles would give European battery makers an edge in the international market, according to 58% of survey respondents. Shifting to renewable energy would be an important move, with pressure to lower emissions in the industrial supply chain.

The report said the European Commission hoped to have strict new environmental standards for batteries next year, include regulations on recycling, which could help to keep out imports of cheaper components and boost local production.

There was some concern over availability of raw materials in the future, with global cobalt production in 2025 needing to be double that in 2016 to satisfy EV demand.

Raw material costs make up an increasing proportion of total battery costs, and 53% of respondents were concerned that a lack of return on investments for all but the market leaders was already one of the biggest risks to Europe’s battery industry.

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