Automakers look to secure own supply chains as COVID-19 threatens battery production

The shutdown of Chinese manufacturers as a result of COVID-19 has caused carmakers around the world to re-consider their reliance on China for parts and supplies, particularly batteries for their electric vehicles (EVs).

This comes as leading data and analytics company GlobalData released new data showing the output of Chinese battery manufacturers could decline by as much as 26 GWh in 2020, with many local manufacturers witnessing severe decreases in production whilst they battle the COVID-19 outbreak.

Senior Power Analyst at GlobalData, Sneha Susan Elias believes now is the time for automakers to begin looking at sourcing their own supply chain of batteries and reducing their reliance on China, to avoid potential external supply chain issues occurring in the future.

“The industry’s over dependency on China has been showcased recently with the coronavirus outbreak leading to disruptions in the supply of components,” said Elias. “China itself is expected to take a beating on production of around one million vehicles. The country exports around $US70 billion worth of car parts and accessories worldwide, with nearly 20 per cent going to the US.”

The depleted supply is expected to cause battery prices to rise in 2020, providing another incentive for companies to consider developing their own supply chains.

Source: GlobalData | Coronavirus threatens China’s battery sector dominance, says GlobalData

6 April 2020

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