U.S. Ramps Up Battery Production With 13 New Gigafactories

GM, Ford, Tesla, SK Innovations and LG Energy Solutions are among the builders of new gigafactories

The energy transition is driving the next commodity supercycle, with immense prospects for technology manufacturers, energy traders, and investors. Indeed, new energy research provider BloombergNEF estimates that the global transition will require ~$173 trillion in energy supply and infrastructure investment over the next three decades, with renewable energy expected to provide 85% of our energy needs by 2050.

The transition from ICEs to EVs has become a focal point of the global electrification drive. In 2020, global sales of EVs increased a robust 39% year on year to 3.1 million units, an impressive feat right in the midst of a major health crisis. Bloomberg New Energy Finance(BNEF), however, says 2021 is “yet another record year for EV sales globally,” with an estimated 5.6 million units sold, good for 83% Y/Y growth and a 168% increase over 2019 sales. BNEF has forecast that annual EV sales will approach 30 million units globally by 2030.

That means that the world will need a massive ramp up in electric battery production. Indeed, DOE says the worldwide lithium battery market is expected to grow by a factor of 5 to 10 in the next decade. Luckily, the United States appears to be up to the task.

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China’s Coal Prices Soar To All-Time High

Secure supply “at all costs”

The world’s second-largest economy is grappling with a shortage of coal supply and a power crisis, which threaten to slow economic growth. Just last week, Chinese authorities ordered 72 coal mines in Inner Mongolia to boost production by almost 100 million tons amid an energy crunch that has seen factories shut down and prompted fears of a disruption to the global economy. China is now allowing coal mines to produce the dirtiest fossil fuel even if they have already hit their production quotas.

 

China is also said to have resorted to Australian coal once again to plug the supply hole gaping in its energy security. Last year, China imposed an unofficial ban on Australian coal imports amid a political spat between the two governments. China is scrambling for energy supply ahead of the winter, with a global shortage of natural gas and coal that has led to record-high prices of the fuels in Asia. China has also reportedly ordered its state energy companies to secure supply “at all costs” despite the rallying prices of liquefied natural gas (LNG) and coal.

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