The 2020 Lithium-ion Battery Shortage
The lithium-ion battery market has been a rapidly growing industry across the world, and until now has had the raw materials and capacity to deal with this exponential growth.
This growing demand has been driven by the ease of availability, high energy density and longer discharge cycles. Up until now, satisfying this growth has been sustainable – however, we are now facing a short-term industry-wide shortage of lithium-ion batteries.
This impending shortage is driven largely by a raw material shortage of high-quality chemicals required to manufacture the batteries. To give you an idea of the market growth, demand for lithium carbonate and lithium hydroxide increased rapidly last year, up almost 20% in 2019 alone (Source: Forbes).
The mining of critical chemicals such as cobalt is driven largely by the Democratic Republic of Congo who are responsible for 65% of the world’s supply. Suffice to say, the impact of COVID-19 has hit operations hard. With a single country being responsible for such a huge share of the world’s raw material supply, the effects of this are now being felt worldwide.
Analysis of the global market back in 2019 by BloombergNEF highlighted that there were 316 gigawatt-hours of manufacturing capacity for lithium-ion batteries, with China being home to 73% of this capacity. So, with many of China’s major battery manufacturers having to delay production due to COVID-19, labour shortages and accessibility to raw materials are beginning to impact the supply chain.
Analysis suggests all of this will have a short-term impact on the supply of lithium-ion batteries, also driving prices up and lengthening lead-times across the world.
How does this battery shortage impact Fogstar?
Our ethos has always been clear; we only source and supply legitimate, tested and safe batteries. However, our biggest concern during this temporary shortage is that businesses and consumers will look to alternative suppliers, with potentially hazardous consequences.
The advice we give remains clear, if it sounds too good to be true, it probably is.
The good news is, we have put in place measures to ensure a sustained and consistent supply of legitimate batteries over the coming months. These include, placing quantity limitations on wholesale customers and ensuring we have enough stock in place to cover short-term retail demand.
We’re hoping that you will see minimal impact from these global shortages, and we will be sure to keep you updated as the situation develops over the coming months. You can always continue to have confidence in the products we supply and know that our approach to rigorous safety, testing and quality measures will continue to be a core element of the Fogstar brand.
As always, our team are on-hand to help and answer any questions you may have.