If you've no account register here first time
User Name :
User Email :
Password :

Login Now

Automakers Increasingly Comply with Emission Standards, Drive EV Battery Production and Capacity

(Credit: SK Innovation)

Demand for EV batteries is expected to soar as automakers increasingly comply with emission standards and boost their production of battery electric vehicles (BEVs), according to a new report from Moody’s Investor Service. Tightening regulations and growth of BEVs are also expected to spur improvements in battery capacity. The International Energy Agency projects global battery capacity for BEVs and plug-in hybrid vehicles will grow by 24% on a compounded annual basis between 2020 and 2030.

Top makers of EV batteries, including Contemporary Amperex Technology, LG Chem, Panasonic Corporation and SK Innovation are set to benefit from rising demand. These four account for more than half of global production.

But a sharp rise in production will pose operational risks and increase the challenge of keeping leverage ratios stable, according to the report. As battery makers invest in emerging technology, strong relationships with automakers are critical for their credit quality, says Motoki Yanase, a Moody’s vice president and senior credit officer.

Makers of EV batteries who maintain solid relationships with automakers that have a clear strategy to expand BEV sales will see their revenue and profit stay stable. Among the four rated battery makers, Amperex Technology’s margin will remain the highest and stay around low double-digits over next 12 to 18 months, thanks to high capacity utilization and China’s EV subsidies. In comparison, other battery makers’ margins are single-digit or less, according to the report.

Related Stories

Sign up for our newsletter

Receive Environment + Energy Leader's top news stories two times each week

© Copyright 2023 C-Suite Compass LLC. Environmental Leader ® is a registered trademark of C-Suite Compass LLC. Privacy Policy.