According to BNEF’s annual assessment – which rates 30 countries on their potential to build a secure, reliable and sustainable lithium-ion (Li-ion) battery supply chain – Canada’s consistent manufacturing and production advances, and strong environmental, social and governance (ESG) credentials, have helped it become a leader in forming the battery supply chains of the future. Strong integration with the US automotive sector means Canada is also a big winner of the ‘friend-shoring’ ambitions of the US Inflation Reduction Act (IRA).

While China still has the strongest established supply chain, the increasing importance of sustainability across the lifecycle of Li-ion batteries means the region must take a more proactive approach to tackle ESG issues to benefit its supply chain in the long term, BNEF notes.

The report finds that, overall, North America’s supply chain has been excelling due to strong policy commitment and implementation, with the US claiming third position in the ranking. Mexico, the only country to make progress in all supply chain categories assessed by BNEF, rose an impressive nine positions in the ranking to 19th. Scaling up a domestic electric vehicle (EV) industry will be difficult for the nation, though existing mining and automotive activities are good starting points. The US IRA has played a crucial role in boosting Mexico’s prospects when it comes to the EV and energy storage sectors, but the government will need to actively support the budding sector to make these improvements sustainable, according to BNEF.  

Kwasi Ampofo, BNEF’s Head of Metals and Mining, comments: ‘Global investment in the clean energy supply chain, including equipment factories and battery metals production, hit a new record at $135bn [in 2023]. That said, trade relations will be an interesting factor to monitor in 2024, as foreign policy efforts in the US and European Union continue to make it difficult for international companies to operate in major markets like China.’

Additionally, all African countries included in the ranking – South Africa, Morocco and the Democratic Republic of the Congo – improved their upstream presence. Recognising the opportunity in their rich mineral deposits, African nations have worked with global partners to expand their mining sectors and start new manufacturing facilities. To ensure local supply chains can emerge, countries in the region need to continue to maximise the value-add steps like metals refining and battery precursors in their materials value chain, the report found.

South and south-east Asia have seen the most improvement compared to last year, with India and Indonesia leading the way for supply chain growth. As previously announced projects start to be commissioned through the year, the region’s momentum is expected to continue, leading to an adjustment in the global supply chain.

Ellie Gomes-Callus, Metals and Mining Associate, BNEF, concludes: ‘The rapid development of targeted supply chain roadmaps has helped emerging economies race through the ranks in our fourth edition. But it is vital for these nations to maintain momentum in order to realise their full potential.’