What does the EV industry supply chain look like and how does it work?

The upstream industry involves the supply of raw materials and components for vehicle manufacturing. It encompasses extraction of minerals, namely lithium and cobalt, and manufacturing of major parts, including power battery, drive motor, and electronic control system. Most of these minerals are concentrated in a few countries, including the Democratic Republic of Congo, Argentina, Chile, and Australia. The dispersion and concentration of these key materials make the global supply chain vulnerable and susceptible to disruptions caused by developments linked to geopolitics, shifts in trade alliances, and corporate consolidation.

China currently holds a prominent position in this stage, accounting for 75 percent of global lithium-ion battery production and 70 percent of cathode capacity. It stands as the leading refiner of battery metals globally and currently hosts a significant share of battery cell manufacturing capacity, anode, and electrolyte production as well as battery component manufacturing.

The midstream industry covers the vehicle manufacturing process. China is a major player in this industry stage, with a robust manufacturing ecosystem in place for electric cars, commercial vehicles, and special-purpose vehicles. Supportive government policies and investments have contributed to the rapid growth of the automotive manufacturing industry, making China a leading force in the global electric vehicle market.

The downstream segment of the EV supply chain comprises charging services and after-market services. This includes charging equipment infrastructure, automobile finance, insurance, trading, automobile repair and maintenance, and automobile dismantling and recycling. In recent years, the number of EV charging piles in China has been steadily increasing. Private charging piles are growing at an even faster rate compared to public charging piles. However, there is still a significant gap between the current number of charging piles and the market demand, leaving ample room for further development in the charging infrastructure. According to industry researchers, in 2020, China had a total of 1,751,000 charging piles—874,000 private charging piles and 807,000 public charging piles. By September 2021, the number of publicly owned charging piles rose to 1.044 million units.