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 2020 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 2023.1 BYD is unique for its dominance as a manufacturer of EVs and batteries, and for a virtually unmatched level of vertical integration. In 2023, 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 2022 and Q3 2023, 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 2023, a share that we expect to grow.9 In late 2023, 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 2024, 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 2027.13

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 1998 and Arcadium is slated to expand its efforts in this field.14 In December 2023, 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 2023, 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 2022 and 2030, 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 2023 and 2030, 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 2022, 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 2023, the company announced a definitive agreement with Ford to supply 100,000 metric tons of battery-grade lithium hydroxide between 2026 and 2030.24 This deal would be enough to supply as many as 3 million EVs.25 In September 2023, 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 2020 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 2030, 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 2025.32

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 2023 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 2023 and 2030, 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 2023 earnings call, the company reported FY2023 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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In an era marked by technological evolution and the pursuit of sustainable energy solutions, lithium-ion batteries have emerged as a game-changer. From electric vehicles (EVs) to renewable energy storage, these batteries play a pivotal role in reshaping industries and reducing our carbon footprint. Let's delve into the world of innovation by exploring the top lithium-ion battery manufacturers in the USA.

1.     eWorldTrade: Connecting Industry Players

eWorldTrade is a business-to-business online marketplace that connects lithium ion battery manufacturers with likable prospects from around the world, allowing them to trade various products and services.

eWorldTrade provides a platform where manufacturers, suppliers, distributors, and buyers can create profiles, list their products, and interact with potential business partners. It serves as a facilitator for manufacturers to showcase their products to a global audience and connect with potential buyers who might be interested in purchasing those products.

For example, a lithium-ion battery manufacturer could create a profile on eWorldTrade, list their battery products, specifications, and other relevant information. Buyers searching for lithium-ion batteries might come across these listings and initiate discussions or transactions with the manufacturer through the platform.

2.     Tesla, Inc.: Pioneering the Electric Revolution

Tesla's journey into lithium-ion battery manufacturing was fueled by its ambition to revolutionize transportation and energy systems. Recognizing the need for high-performance batteries in electric vehicles and energy storage, Tesla established its Gigafactories. These massive production facilities are dedicated to manufacturing lithium-ion battery cells, packs, and modules for its EVs and energy products. By controlling the entire battery production process, Tesla ensures quality, scalability, and innovation, driving the EV revolution forward.

3.     Panasonic Corporation: Collaborative Excellence

Panasonic's involvement in lithium-ion battery manufacturing stems from its partnership with Tesla. As a key player in electronics and battery technologies, Panasonic brings its expertise to the table. Their collaboration began with supplying battery cells to Tesla, contributing to the success of vehicles like the Model S. This partnership showcases the synergistic benefits of combining EV expertise with battery technology to produce high-performance and efficient lithium-ion battery solutions.

4.     LG Energy Solution: Empowering Innovation

LG Energy Solution's engagement in lithium-ion battery manufacturing arises from its commitment to innovation. As part of LG Chem, the company invested heavily in developing advanced battery technologies. Their focus on lithium-ion batteries for EVs and energy storage systems stems from a vision to power a sustainable future. By providing reliable and energy-dense batteries, LG Energy Solution accelerates the adoption of EVs and renewable energy solutions.

5.     A123 Systems: Performance and Reliability

A123 Systems' entry into lithium-ion battery manufacturing was driven by the pursuit of performance and reliability. The company's expertise lies in producing high-power and high-energy battery systems for various applications. A123's lithium-ion batteries are designed to deliver consistent power and endurance, making them suitable for EVs, industrial equipment, and other demanding scenarios.

6.     EnerSys: A Beacon of Stored Energy Solutions

EnerSys' engagement in lithium-ion battery manufacturing aligns with its position as a global leader in stored energy solutions. Their broad range of applications, from aerospace to transportation, necessitates innovative energy storage options. By producing lithium-ion batteries, EnerSys caters to emerging energy-efficient technologies, contributing to a sustainable and interconnected world.

7.     Duracell Inc.: Beyond Alkaline Horizons

Duracell's expansion into lithium-ion battery manufacturing is a strategic response to evolving consumer demands. While the brand is synonymous with alkaline batteries, the rise of modern gadgets and rechargeable devices necessitated a shift. By producing lithium-ion rechargeable batteries, Duracell adapts to changing technological landscapes and remains relevant in the digital era.

8.     East Penn Manufacturing Co.: Innovating Tradition

East Penn's foray into lithium-ion battery manufacturing is an extension of its commitment to innovation. Recognizing the growing importance of renewable energy and telecommunications, the company diversified its offerings. By producing lithium-ion batteries for these applications, East Penn combines its traditional strengths with new-age technologies, creating a comprehensive energy storage portfolio.

9.     Samsung SDI America: Advancing Energy Solutions

Samsung SDI America's involvement in lithium-ion battery manufacturing aligns with its parent company's pursuit of technological advancements. As part of the Samsung Group, SDI America contributes to the conglomerate's vision of sustainable technology solutions. By producing lithium-ion batteries for EVs, consumer electronics, and energy storage systems, they contribute to reducing carbon emissions and advancing energy solutions.

10. Saft America: Powering High-Tech Industries

Saft's engagement in lithium-ion battery manufacturing reflects its commitment to high-tech industries' energy needs. Their expertise in designing and producing advanced batteries spans various sectors. By manufacturing lithium-ion batteries for transportation, defense, and other industries, Saft addresses unique energy requirements with cutting-edge solutions.

In conclusion, the USA's top lithium-ion battery manufacturers are powering innovation across various sectors, from transportation to energy storage. As these manufacturers continue to push boundaries, lithium-ion technology will remain a driving force behind sustainable progress, reducing our environmental impact and shaping a cleaner future.

Incorporating lithium-ion battery manufacturing into their portfolios allows these companies to drive innovation, address energy challenges, and contribute to a sustainable future. Each manufacturer's unique expertise and approach contribute to the broader evolution of energy storage solutions across various sectors.

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