Four Companies Leading the Rise of Lithium & Battery ...

The ongoing paradigm shift in the mobility segment toward electric vehicles (EVs) created a need to build out the entire value chain. Consequently, demand for materials like lithium and lithium-ion batteries has increased meaningfully in recent years. Compared to consumer electronics, EV batteries can contain thousands of times more lithium by weight and anywhere from tens to thousands of times more lithium-ion cells. While many investors are familiar with dedicated electric automakers such as Tesla and Rivian, there&#;s an entire ecosystem of companies further up the value chain making the EV revolution possible.

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In this piece, we highlight four key players in the lithium and battery space. It serves as a follow-up to our piece by the same name.

• BYD: Vertically integrated battery and EV manufacturer with top market share in both segments
• Arcadium Lithium: New lithium major following the merger between Allkem and Livent
• Albemarle: Global lithium producer with ambitious expansion plans
• LG Energy Solutions: Critical battery supplier for ex-China automakers

BYD: The Integrated Battery Maker

BYD is a Chinese battery maker turned automaker that sold more battery electric vehicles (BEVs) than any other company in Q4 .1 BYD is unique for its dominance as a manufacturer of EVs and batteries, and for a virtually unmatched level of vertical integration. In , BYD was the second largest battery maker and the second largest BEV producer by market share.2,3 If plug-in hybrid sales are included, BYD was the largest seller of EVs by a wide margin. No other automaker possesses meaningful market share in the global EV battery industry.

BYD has been able to keep costs down and sell increasingly inexpensive models thanks to its in-house capabilities in batteries and even semiconductors. The BYD Seagull at USD 11,400 and Dolphin at USD 31,000 are some of the least expensive EV models in the world.4,5 Integration has also helped BYD improve margins even with increasing competition in the Chinese automobile market. Between Q3 and Q3 , BYD&#;s net profit margin increased by nearly 70%, compared to net margin across the Nasdaq OMX Global Automobile Index, which declined about 32%.6

Outside of internal usage, BYD also sells its batteries under its Blade series to automakers such as FAW, Toyota, Volvo, and Ford.7 As an iron-based phosphate (LFP) specialist, BYD devotes close to 100% of its capacity toward this chemistry.8 LFP batteries have become an important portion of the lithium-ion chemistry mix because of their relatively low cost and long lifespans compared to higher energy density architectures. However, very little LFP expertise exists outside of China, and as automakers look for ways to improve unit economics, they may have to partner with suppliers such as BYD.

BYD is likely to enhance its efforts to expand globally and to continue to build on its already market-leading integration. About 8% of BYD&#;s unit sales were from exports in , a share that we expect to grow.9 In late , the company confirmed plans to build a factory in Szeged, Hungary in a clear bid to expand into Europe.10 At the time of writing, BYD was also reportedly in talks with lithium miner Sigma Lithium regarding a possible supply agreement, joint venture, or acquisition.11

Arcadium Lithium: A New, Fully Integrated Lithium Major

Finalized in early January , the merger of Livent and Allkem is the largest such event in the lithium industry&#;s history. The combined entity, Arcadium Lithium (&#;Arcadium&#;), joins Albemarle, Ganfeng, and Tianqi as lithium producers with offerings across all major lithium product segments, including spodumene, carbonate, and hydroxide.12 By Arcadium&#;s estimates, the company will be the third largest lithium producer by capacity in .13

Before the merger, Allkem focused on lithium production from conventional brine and hard rock mining, specifically from assets in Argentina, Australia, and Canada. Livent was more of a dedicated lithium refiner and specialty chemical producer with operations in Argentina, Australia, Canada, the United Kingdom, and China. Synergies between these business lines are expected to unlock cost savings while the placement of assets could improve logistics.

The geographic footprint of Arcadium&#;s supply chain could position the company to benefit from the Inflation Reduction Act (IRA) in the United States. The IRA provides various incentives to boost EV and battery manufacturing, but it requires a minimum threshold of minerals to be produced or processed domestically or in countries that maintain fair trade agreements with the United States. Much of Arcadium&#;s production capacity is likely to align with IRA sourcing requirements, which could boost the attractiveness of the company&#;s lithium for customers downstream who are trying to become eligible for the incentives.

Arcadium could also be a name to watch in the emergent direct lithium extraction (DLE) segment. DLE is an umbrella term referring to technologies that produce lithium from brine resources without the need for prolonged evaporation pond usage. The technology remains in its early stages, but pilot programs show promising water and resource savings. Innovations in DLE could drastically improve the economics of existing brine operations and expand the amount of lithium deposits that are viable for development around the world. Livent has operated a DLE-augmented process in Argentina since and Arcadium is slated to expand its efforts in this field.14 In December , Livent acquired a minority stake in the parent company of DLE technology firm ILiAD Technologies and plans to license the company&#;s tech in future endeavors.15

Albemarle: A Growing Giant

In any given year, Albemarle competes with SQM and Ganfeng for the crown of largest lithium producer in the world. As of September , Albemarle boasted the world&#;s largest lithium salt capacity and was the most valuable lithium producer by market capitalization.16 The company operates extraction and conversion facilities around the world and has access to some of the highest-grade lithium resources, including Greenbushes in Australia and the Salar de Atacama in Chile.17,18

Even as the world&#;s top lithium producer, Albemarle maintains an aggressive project pipeline. The company plans to boost lithium production and conversion capacity by as much as 3x between and , which aligns with the company&#;s long-term expectations for lithium demand.19 Albemarle expects global lithium demand to grow by about 3.1x between and , with more than 80% of that demand growth likely to come from EV applications.20

Expansions to current lithium projects could be Albemarle&#;s growth engine in the coming years. In the near term, expansion efforts at Greenbushes and Wodgina in Australia and improved efficiency from various South American projects are expected to boost output. In the second half of the decade, Albemarle expects to recognize more contributions from its American assets, namely King&#;s Mountain, North Carolina, and Magnolia, Arkansas.

Currently, Albemarle operates the only lithium-producing mine in the United States, the Silver Peak mine in Nevada, and the company will likely be involved in the U.S. government&#;s efforts to ramp up critical material production.21 Since , Albemarle has received $240 million in government grants and loans to support the development at King&#;s Mountain.22,23

Additionally, high-profile offtake agreements and partnerships are likely to remain a focus for Albemarle. In May , the company announced a definitive agreement with Ford to supply 100,000 metric tons of battery-grade lithium hydroxide between and .24 This deal would be enough to supply as many as 3 million EVs.25 In September , Albemarle reached an agreement with Caterpillar to supply the construction and mining equipment manufacturer with lithium for battery-powered machinery.26

LG Energy Solution: A Key Supplier for Growing EV Markets

Today, three-plus years after its September spin-off from LG Chem to accommodate rising demand for batteries from the auto industry, LG Energy Solution sits just behind BYD as the third largest EV battery maker by market share.27 The company has established a global operational presence with manufacturing capacity in South Korea, China, Poland, and the United States, as well as joint ventures with automakers such as GM, Honda, and Hyundai.28,29

The company&#;s top clients by battery volume include strategically significant automakers like Volkswagen, Tesla, Stellantis, GM, and Ford.30 Battery and EV research provider Rho Motion expects these automakers to all be top 10 BEV producers in , together comprising 39% of the global market.31 LG Energy Solution also recently signed a long-term agreement to supply Toyota with American-made nickel-based based batteries from .32

LG Energy Solution&#;s customer base also positions the company to benefit from further EV penetration in less mature markets. China accounted for nearly 60% of global EV sales in and is likely to remain the largest market by volume into perpetuity.33 However, because China was an earlier EV adopter, growth rates in other major EV markets could be higher, including North America and Europe, home to most of LG Energy Solution&#;s customers. Between and , EV sales in North America and Europe are forecast to grow at compound annual growth rates of 27% and 20%, respectively, compared to 14% in China.34

During its Q4 earnings call, the company reported FY operating profit of KRW 2.2 trillion (USD 1.6 billion), which represented 78% year-over-year growth.35 Notably, about 31% of this operating profit was attributable to IRA incentives.36 Given LG Energy Solution&#;s manufacturing presence in the United States, management believes IRA incentives may continue to benefit the company.

Conclusion: The Electric Mobility Opportunity Is More Than the EV

The EV value chain is vast, and the four companies highlighted in this piece have been significant players in its growth. Along with these firms, many other lithium miners and battery producers are enabling the transition toward EVs. We believe the lithium and battery industries remain in their early stages, but we expect them to grow significantly as electrified mobility options displace conventional means of transportation. For investors, understanding the full scope of how an EV makes its way to the road can help them capture paradigm-shifting growth in their portfolios.

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As per the analysis by Expert Market Research, the global lithium-ion battery market is expected to grow at a CAGR of 10.8% in the forecast period of -, owing to the increasing demand for electric vehicles.

An advanced type of battery, a lithium-ion (Li-ion) battery makes use of lithium ions as a crucial part of its electrochemistry. Many everyday electronic products, including earbuds, laptops, and cell phones, use lithium-ion batteries.

With the spike in demand for electric vehicles, such as electric automobiles and electric motorcycles, the need for lithium-ion batteries has been rising. In addition, the use of consumer electronics products that employ lithium-ion cells, like mobile phones and laptops, has caused a sharp increase in the demand for lithium-ion batteries.

Further, lithium-ion batteries are generally recognised as the industry standard for any product requiring a portable rechargeable battery because of their capacity to be recharged. During the forecast period, these factors will accelerate the expansion of the global lithium-ion battery market.

Due to the demand for inexpensive, secure batteries with a better energy density, the consumer electronics market for lithium-ion batteries is anticipated to rise significantly in the next years. In terms of regional penetration, the lithium-ion battery market is anticipated to be led by Asia Pacific. Some of the biggest markets for electric vehicles are thought to be in China and Japan.

Additionally, the region is expected to see an increase in demand for consumer electronics like smartphones and other gadgets that use lithium-ion batteries. Due to the increased emphasis that governments in the region are placing on greenhouse gas emissions, the market for lithium-ion batteries in North America and Europe is also anticipated to expand at a rapid rate.

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Top 12 Global Lithium-Ion Battery Manufacturers:

Contemporary Amperex Technology Co., Limited. (CATL)

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Headquarters: Ningde, China Establishment: Website: https://www.catl.com/
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CATL, a leading global innovator, is committed to providing the best goods and services for innovative energy applications worldwide. It is one of the leading lithium battery manufacturers in the world, with its corporate headquarters in Ningde, China.

BYD Company Ltd.

Headquarters: Shenzhen, China Establishment: Website: https://en.byd.com/

BYD is a top high-tech firm in China with expertise in IT, autos, and new energy. BYD dominates the markets for keypads, handset Li-ion batteries, and nickel-cadmium batteries. It is also one of the largest producers of rechargeable batteries in the world.

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CALB-CALB Co., Ltd. (CALB)

Headquarters: Henan, China Establishment: Website: https://en.calb-tech.com/

Chinese Aviation Lithium Battery Co., Ltd. (CALB), a state-owned enterprise, specialises in the design and manufacture of lithium-ion batteries and power systems for a range of applications, including those for electric vehicles, renewable energy storage, telecommunications markets, mining equipment, and rail transportation. Now, among other markets, the United States, European Union, Japan, Korea, and Taiwan sell lithium-ion batteries made by CALB.

LG Energy Solution

Headquarters: Seoul, South Korea Establishment: Website: https://www.lgensol.com/en/

LG Energy Solutions is a worldwide leader in the renewable energy industry owing to its development of premium materials and next-generation batteries. The company is a leading producer of chemical-based batteries in the world and dominates the lithium-ion battery market as a result of its advanced material science. Additionally, it has developed into a significant global player in the battery and energy storage system (ESS) industries.

Panasonic Corporation

Headquarters: Osaka, Japan Establishment: Website: https://holdings.panasonic/global/

The creation, manufacture, and marketing of electronic items, heating and cooling equipment, food distribution, and electrical equipment are all areas of business for Panasonic Corporation. Certain Panasonic technologies have reduced the weight and decreased the thickness of batteries used in devices like laptop computers and mobile phones. Additionally, they are used in solar-powered electricity storage systems, mobile backup base stations, electric vehicles (EV), as well as a number of other industrial applications.

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Samsung SDI Co., Ltd.

Headquarters: Gyeonggi-Do, South Korea Establishment: Website: http://www.samsungsdi.com/

Since its founding in , Samsung SDI has been striving for an innovative and creative future. Its area of expertise is the development of lithium-ion battery (LIB) technology. Cathode ray tubes (CRTs) are another product that the company makes for computer and television monitors. For solar panels, PDAs, energy storage systems, and mobile devices, Samsung SDI also produces rechargeable batteries and LCD component parts.

SK Innovation Co., Ltd.,

Headquarters: Seoul, South Korea Establishment: Website: http://eng.skinnovation.com/

For 60 years, SK Innovation has been at the forefront of Korea's energy sector. It develops its know-how for current industries and identifies fresh sources of growth, with a goal of becoming a global &#;green energy & materials company&#;. SK Energy, SK Geo Centric, SK On, SK Lubricants, SK Incheon Petrochemical, SK Trading International, SK IE Technology, and SK Earthon are the 8 subsidiary businesses that make up SK Innovation. With its cutting-edge LiBS (Lithium-ion Battery Separator), SK IE Technology, a member of the RE100, is a global leader in wet separators.

Shenzhen Grepow Battery Co., Ltd.,

Headquarters: GuangDong, China Establishment: Website: https://www.grepow.com/

Grepow was founded with the goal of manufacturing rechargeable nickel-metal hydride batteries that are more environmentally friendly than disposable and dry nickel-cadmium batteries. They are an advanced technology business that specialises in the development and manufacture of lithium polymer, nickel metal hydride, lithium ferrocene, and lithium-ion button cell batteries. Grepow established a team in to focus on the manufacture and development of that specific method, making it one of the first lithium battery producers to make stacking pouch cell lithium batteries.

Toshiba Corporation

Headquarters: Tokyo, Japan Establishment: Website: https://www.global.toshiba/

The Toshiba Corporation was formed by a series of mergers of smaller companies, combining under the name Tokyo Shibaura Denki, and was later renamed as Toshiba in . A multi-national conglomerate, Toshiba Corporations specialises systems and solutions for infrastructure, energy, building, retail, printing, batteries, and electronic devices and storage solutions. It offers the SCiB&#; series of rechargeable lithium-ion battery cells.

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A123 Systems LLC

Headquarters: Michigan, United States Establishment: Website: http://www.a123systems.com/

A123 Systems LLC is a global leader in specialised energy storage solutions based on lithium-ion, providing clients with battery products that offer robust power, strong safety, and a long lifespan. Their advanced technologies are guided by sustainability practices to help in reducing reliance on fossil fuels, lower emissions, and facilitate a better fuel economy. The company caters to markets such as low voltage hybrids, plug-ins, commercial vehicles, motorsports, and other industrial end-users.

Envision AESC Group Ltd

Headquarters: Kanagawa, Japan Establishment: Website: https://www.envision-aesc.com/en/

Envision AESC is a global leader in battery technologies, using artificial intelligence powered innovations to develop improved technologies for their batteries, along with versatile applications. They encourage the use of clean energy and support the deployment of green electric vehicles through their custom battery solutions. Their lithium-ion batteries are used by more than 600,000 electric vehicles worldwide.

TianJin Lishen Battery Joint-Stock Co., Ltd.

Headquarters: Tianjin, China Establishment: Website: http://en.lishen.com.cn

TianJin Lishen Battery Joint-Stock Co., Ltd. is a leading manufacturer of lithium-ion batteries, and through its robust research and development activities, holds more than 1,800 patents. Its annual production capacity has increased to 10 GWh, and it provides products across six major categories: power batteries, cylindrical batteries, polymer batteries, prismatic batteries, ultra-capacitors, and photovoltaic.

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