electric car plugged in

Asian Factories Dominate EV Battery Market



Bottlenecks and Bargaining Power

Demand for electric vehicles is booming and carmakers are rushing to keep up. Batteries are a critical component of these EVs and at the moment there is a gap between the amount of batteries being produced and the amount of batteries EV makers need to fulfill their short-term production goals.

As a result, new battery factories are springing up in China, Japan, and South Korea. These factories yield more bargaining power over carmakers than traditional parts suppliers because electric car companies are so desperately in need of batteries.

Relations Between EV Makers and Battery Suppliers

Tensions between EV battery makers and car producers have been high recently for a number of reasons. There have been intellectual property disagreements, logistics difficulties, supply chain disruptions, and product recalls.

Because of bottlenecks in the battery supply chain earlier this year, Volkswagen AG paused production of its e-Tron, and Jaguar Land Rover Automotive Plc (TTM) had to temporarily stop making its I-PACE model. Four EV models have also been recalled because of battery-fire risks.

Looking Ahead

Despite these difficulties, EV makers are finding ways to work with their foreign battery suppliers because these products are crucial for meeting the onslaught of demand for electric vehicles.
The rush to build electric car batteries has been called “a new arms race.”

Currently, US electric vehicle companies are very dependent on foreign battery makers. European countries are working to spur more domestic EV battery production. Some activists and lawmakers are encouraging the US to do the same. It is estimated that over 500 different EV models will be on the market by 2022. Analysts expect that by 2040 more than half of all passenger vehicles sold will be electric, meaning that EV batteries will become even more sought-after in the coming decades.


Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS102603


All your finances.
All in one app.

App Store rating

Download on the App Store Get it on Google Play

ABOUT SoFi SoFi helps people achieve financial independence to realize their ambitions. Our products for borrowing, saving, spending, investing, and protecting give our more than one million members fast access to tools to get their money right. SoFi membership comes with the key essentials for getting ahead, including career advisors and connection to a thriving community of like-minded, ambitious people. For more information, visit SoFi.com. Want an easy and convenient way to manage your financial life? Get the SoFi app. For iOS and Android.


TLS 1.2 Encrypted
Equal Housing Lender