There is an acute shortage of li-Ion batteries globally, and the situation may last till H1 2022, per a report from Beroe. Europe has ramped up the production of li-Ion batteries to meet demand and reduce dependency on Chinese li-Ion batteries and raw materials.
Saptaparni Kundu, Senior Analyst at Beroe.
Top tech companies have re-engineered their designs.
“Innovative chip-based design products range will gradually replace li-Ion battery dependency and give greater control over manufacturing processes. In-house development of custom-made chip-based technologies will allow these companies to regulate prices and production bottlenecks and resolve issues in hardware-software integration.”
“The industry giants are set to retain control over facility management services and design that sets them apart from their competition.”
“The shortage has been catalytic to greater innovation and better design. The future trends are clear: A new product base that reduces dependency on China as the supplier of raw materials.”
Beroe, which is based in North Carolina, further stated that procurement experts can access this report on its recently launched market intelligence platform Beroe LiVE.Ai: https://www.beroeinc.com/beroe-live-ai/
China currently controls almost 80 percent of global raw material output and produces 77 percent of the total cell phone manufactured in the world.
Rising fears about trade restrictions and geopolitical fallouts between the U.S. and China, the two significant Lithium suppliers, have sparked concerns in the lithium-ion battery market. Prices of li-Ion batteries and other components have been steadily rising since 2021 and threaten to create shortages and skew demand-supply equations.
Battery pack prices have shot up 40% and 60% in the U.S. and Europe respectively. This trend has forced large consumers to rethink manufacturing strategy and design components to accommodate rising prices and shortage of li-Ion battery packs.
Lead time for memory component manufacture has increased significantly, causing shortages and supply bottlenecks. The average increment in lead time is as much as 14 times translating to nearly 50 weeks in general for all semi-conductor companies, leading to a cost increase of almost 8-12 percent in Q3 2021.
The trend outlook remains upward, signifying manufacturing delays and subsequent shortages in memory components.
The looming crisis has generated fear of shortage and distress in the lithium battery market as most businesses have embraced the digital route in recent times. The requirement for li-Ion batteries has exploded due to the pandemic as more and more companies have shifted to digital platforms.
China has the lion’s share of raw material supplies. Restrictions in manufacturing, strict lockdowns, and trade embargoes have adversely impacted the battery pack and semi-conductor industry. The added burden of environmental concerns has amplified the issue.
The long-term strategy is chip-based design components, but that remains a work in progress.
Saptaparni Kundu, Senior Analyst at Beroe.
Short-term predictions for li-Ion battery-dependent companies continue to be turbulent.
“The larger corporations have started taking steps to reduce Lithium usage by chip-based design, but concrete manufacturing and facility management processes are yet to be viable.”
“There seems to be no respite from rising costs, lead time delays and shortages due to demand-supply gap in the short-term scenario. Some relief can be expected in the lithium-ion battery market by end of 2022”.
About Beroe
Beroe is a global SaaS-based procurement intelligence and analytics provider. We deliver intelligence, data, and insights that enable companies to make smarter sourcing decisions – leading to lower cost, reduced risk, and greater profits.
Beroe has been a trusted source of intelligence for more than 15 years and presently partners with 10,000 companies worldwide, including 400 of the Fortune 500 companies.
For more information about Beroe Inc., please visit https://www.beroeinc.com/.
Shortage of Li-ion Batteries to Persist in Short-Run, Reveals Beroe Report, RALEIGH, N.C., February 1, 2022
