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.

HUIYAO Product Page

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.

If you are looking for more details, kindly visit Lithium Battery Tabs Laser Welding Machine manufacturer.

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.

Related ETFs

LIT &#; Global X Lithium & Battery Tech ETF

Click the fund name above to view current performance and holdings. Holdings are subject to change. Current and future holdings are subject to risk.

This section provides an overview for lithium ion batteries as well as their applications and principles. Also, please take a look at the list of 23 lithium ion battery manufacturers and their company rankings. Here are the top-ranked lithium ion battery companies as of November, : 1.FEIN Power Tools, Inc., 2.OHARA INC, 3.SAFT.

Categories Related to Lithium Ion Batteries

What Is a Lithium Ion Battery?

A lithium-ion battery is a rechargeable battery that charges and discharges as lithium ions move between the positive and negative electrodes.

They are used in electric vehicles, industrial storage batteries, smartphones, and laptop computers. Compared to lead-acid batteries, the voltage is higher, and the ratio of active materials that can store energy in the battery is smaller, which has the advantage of making the battery smaller in size compared to batteries with the same amount of energy.

Batteries are products that deteriorate as they are repeatedly charged and discharged and eventually reach the end of their useful life. Lithium-ion batteries are no exception, but they have been confirmed to have a longer life than other batteries in an endurance test called a cycle test.

Applications of Lithium-Ion Batteries

Typical applications for lithium-ion batteries include IT, automotive, and energy.

Lithium-ion batteries have a high energy density, making it possible to produce small, thin, and high-capacity batteries. Applications such as cell phones and notebook PCs require smaller and lighter batteries, and lithium-ion batteries are widely used to meet these demands, with lithium-ion batteries being used in almost all products.

They are also used as a medium and large-sized batteries for electric vehicles (EVs) and energy storage systems, taking advantage of their high electric capacity.

Structure of a Lithium Ion Battery

A lithium-ion battery is similar to a typical storage battery, consisting of a cathode, an anode, and an electrolyte in which they are immersed.

The cathode and anode are separated by a membrane called a separator that allows lithium ions to pass through but not electrons, and the gap between them is filled with electrolytes. The lithium ions in the electrolyte move from the positive electrode to the negative electrode during charging, generating a potential difference (voltage) between the negative and positive electrodes, which can be connected to the desired circuit to generate a current (discharge).

In charging, lithium ions are transferred from the positive electrode active material to the negative electrode active material by applying an external voltage. After charging, lithium ions can move again in the direction of discharge, so the battery can be used repeatedly for charging and discharging.

Other Information on Lithium Ion Batteries

1. Electrode Materials

Cathode-active materials are mainly lithium-based oxides, such as lithium cobalt oxide (LCO). The type of cathode active material greatly affects the performance of lithium-ion batteries.

Carbon-based materials such as artificial graphite, natural graphite, and hard carbon are the main active materials for the negative electrode. Less commonly used materials include silicon (Si) and tin (Sn) alloys and lithium oxides such as titanium (Ti) and niobium (Nb).

2. Reaction Equation of Discharge in Lithium-Ion Battery

The reaction equation for discharge in a lithium-ion battery varies depending on the type of metal oxide and other factors, but an example is shown below. When charging, the reaction occurs in the opposite direction of when discharging, i.e., from the right side to the left side.

• Reaction on the cathode side: Li(1-x)MO2 + xLi^(+) + xe^(-) &#; LiMO2
  *M is a metallic element
• Reaction on the anode side: LixC &#; C + xLi^(+) + xe^(-)
• Reaction of the whole system: Li(1-x)MO2 + LixC &#; LiMO2 + C

3. Safety of Lithium-Ion Batteries

Abnormal Heat Generation in Lithium-Ion Batteries
The electrolyte used in lithium-ion batteries is a carbonate-based organic solvent that is highly flammable. Therefore, if a lithium-ion battery malfunctions and the temperature rises excessively, it may cause a fire or explosion.

Most abnormal heat generation is caused by a short circuit (short circuit) between electrodes. Short circuits between electrodes can be caused by various factors, such as strong external shocks and lithium metal precipitation (lithium dendrites) in the electrodes. Accidents involving the ignition of lithium-ion batteries can occur not only by mishandling but also during normal use.

How to Prevent Lithium-Ion Battery Ignition Accidents

The majority of lithium-ion battery-related ignition accidents are caused by misuse. Therefore, it is necessary to understand the proper handling of lithium-ion batteries in order to prevent ignition accidents. Specific precautions are as follows.

• Always use the charger specified by the manufacturer when charging.
• If you notice anything unusual during charging, stop using the battery immediately and consult the manufacturer or seller.
• If the lithium-ion battery swells or smells strange, stop using it and replace it with a new one. It is also essential not to disassemble or replace the lithium-ion battery forcibly, as it is difficult to replace it in some products and is not recommended.

It is also essential to select products with guaranteed safety. Products that have passed the safety standards set by the government are marked with the PSE mark, which indicates safety.

Contact us to discuss your requirements of Lithium Battery Tabs Laser Welding Machine supplier. Our experienced sales team can help you identify the options that best suit your needs.