Mitsubishi Chemical [4188:JP], Tokai Carbon [5301:JP], and other Japanese electric vehicle (EV) battery material providers are raising outputs overseas to appeal to Western countries intending to diversify their sources of supply, as reported by Nikkei Asia on April 18th. By 2023, Mitsubishi Chemical plans to invest billions of yen in the US, the UK, and other Western countries to double electrolyte solution output, while Tokai Carbon expects to grow its output capacity of graphite, a raw material for anodes in batteries, in Europe to 30,000 tons per year by 2030. Another Japanese manufacturer, Sumitomo Metal Mining [5713:JP], is also planning to establish a new manufacturing site in the US to increase its cathode material output by 2030.
Cathode and anode materials, electrolyte solution, and separator are all major components of an EV battery. Currently, battery manufacturers around the world are heavily reliant on Chinese suppliers for these materials. According to the US Department of Energy, the US supplied only 0.6% of cathode materials worldwide, while China supplied 84%. Furthermore, China occupies 95% of the market for the high-purity manganese sulfate required in cathode production. Consistent with China’s new energy vehicle development, the EV battery business in China is growing rapidly. From January to March 2022, China’s cumulative EV battery sales volume hit 65 gigawatt-hour (GWh), up 172.6% YoY.