|Soaring demand for lithium-ion batteries in the United States is fueling an import boom that is largely fulfilled by China.
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U.S. imports of lithium-ion batteries are surging, mainly from China, as auto, energy and tech giants race to meet rising demand for electric vehicles, energy storage and consumer electronics.
Imports hit a quarterly record of 103,889 metric tons in the final three months of 2021, jumping 137% from a year earlier and 24% from the previous quarter, according to data from Panjiva.
The sixth consecutive quarter of increasing imports comes as the Biden administration, U.S. automakers and energy storage suppliers step up efforts to create more domestic alternatives for battery materials and factories for finished cells and packs. A shortage of batteries has led to significant delays for U.S. utility-scale projects and limited deliveries of electric vehicles.
China accounted for 80% of U.S. lithium-ion battery imports in the period, up from less than 50% in the fourth quarter of 2020, as the country nearly quadrupled its shipments to the United States. South Korea accounted for nearly 9% of U.S. lithium-ion battery imports in 2021's fourth quarter, while Japan made up 3.1%.
Overall, U.S. battery imports more than doubled in 2021 to 320,360 metric tons, from 158,687 metric tons in 2020, and jumped 272% since 2019.
Manufacturers in China expand their reach
China's expanding share of imports reflects its domination of the global supply chain. That includes the rise of Chinese battery behemoth Contemporary Amperex Technology Co. Ltd. into the world's largest producer of lithium-ion batteries for electric vehicles, according to SNE Research.
Much of China's output feeds its own domestic market, including for Tesla Inc. vehicles made in Shanghai, but the U.S. import data underlines the country's export prowess and deep reach into U.S. clean energy supply chains.
"And when it comes to clean energy, China has spent years cornering the market on many of the materials that power the technologies that we rely on," President Joe Biden said during a Feb. 22 briefing on a series of actions aimed at strengthening U.S. battery and critical mineral supply chains. "That's why I committed us to build a clean energy supply chain stamped '"Made in America.'"
Ford Motor Co. said in 2021 that it would spend $11.4 billion on battery and EV production, including three battery factories in Kentucky and Tennessee in partnership with South Korean battery-maker SK Innovation Co. Ltd. As part of its initiatives, Ford is working with Redwood Materials Inc. to recover end-of-life batteries and recycle materials for domestic cell production.
Panjiva is a business line within S&P Global Market Intelligence, a division of S&P Global Inc.