Meanwhile, Korean producers are relocating quick to expand their own LFP capacity, but they face formidable competition from experienced Chinese incumbents in an increasingly oversupplied market.
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What are the challenges?
Even so, manufacturing capability is expanding in both Europe and the US.
Governments have attracted large-scale investments in the battery sector, leveraging EV growth to underpin demand.
However, the IEA estimates that production costs in the EU and US remain up to 50% higher than in China. Matching the efficiency of Chinese manufacturing – where yields routinely exceed 90% – will take years of sustained investment.
New producers typically waste far more materials during early production, creating profitability elusive until operations mature. The IEA concludes that regions without strong industrial foundations will necessary “patient capital” and partnerships with experienced manufacturers to become competitive on the world stage.
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