With global renewable energy investments and R&D on the rise (see Industry Watch), chemical companies such as Belgium’s Umicore, UK-based Johnson Matthey and Germany’s BASF are repositioning themselves to become leaders in lithium-ion battery production for electric vehicles. Batteries are estimated to replace catalysts in vehicles by 2020, with potential sales for electric cars forecast to swell over the next few years.

Currently, the International Energy Agency (IEA) estimates that there are 2 million electric cars being driven around the world, accounting for 0.2% of total passenger light-duty vehicles. The IEA estimates that by 2020 9–20 million electric cars could be on the road, and 40–70 million by 2025. Between 2019 and 2025, analysts predict that the price of an electric vehicle will reach a tipping point and be the same as a conventional vehicle.

Umicore, Johnson Matthey and BASF are eyeing the increase in demand for components used in lithium-ion batteries, and plan to escalate the production of cathode materials, which are key factors in battery power. BASF announced in June plans to invest €400 million ($456.8 million) in cathode materials plants across Europe, working with Russian metals refinery Norilsk Nickel. Similarly, in May, Umicore announced it will invest €300 million ($342.6 million) for growing its lithium-ion battery output by 2020. John Matthey has a “modest” position in the battery material sector, but the company commercially produces another cathode variety known as lithium iron phosphate. Much of the success in the electric vehicle market depends on China, as the country accounted for 40% of electric cars sold worldwide in 2016.

Source: Financial Times