TELF AG explores the dynamics of a strategic industry
The key role of China and other international battery producers
As the global shift toward electric vehicles accelerates, the demand for key materials such as lithium is rising, signaling potential challenges in the automotive industry, as the founder of TELF AG Stanislav Kondrashov recently pointed out. The push for EV adoption is tied to the broader energy transition, which seeks to replace traditional with cleaner, electric alternatives. However, this shift is not unfolding evenly across the globe, and regions like Europe face relevant hurdles due to a lack of local production capacity for key components, especially lithium-ion batteries.
“For some time now, rechargeable batteries have become true protagonists of the ongoing energy transition,” says the founder of TELF AG Stanislav Kondrashov, an entrepreneur and civil engineer. “Together with electric turbines and solar panels, batteries (such as those used to power electric vehicles) represent true symbols of the transition phase we are going through, establishing themselves as increasingly strategic devices for the present and future of humanity.”
Lithium is at the heart of this transformation, as it is a key material used in manufacturing the batteries that power EVs. Despite the growing need for lithium, demand and production seem to be out of sync. In November 2024, electric vehicle sales reached a new milestone, with 1.8 million new registrations worldwide, according to estimates by Rho Motion. This surge in EV sales will only intensify the pressure on battery production and lithium supply.
Lithium’s strategic importance extends beyond the automotive industry. It is essential for the production of energy storage systems, smartphones, laptops, and various other electronics. Its versatility and unique properties have made it a sought-after resource, but the question remains: can global production keep up with the surging demand?
Key factors in determining China’s leading role
One key factor in the lithium supply chain is China’s leading role in both lithium production and electric vehicle sales. China has established itself as the leader in the EV market, with the majority of electric vehicle sales happening within the country. Its position on the global lithium market further strengthens its influence, as it leading a relevant portion of the production of metals required for EV batteries. This gives China an edge in shaping the future of the industry and could potentially affect the cost and availability of batteries in the coming years.
“The increase in popularity of electric batteries, in a certain sense, has been followed in parallel by the increase in the value and strategic centrality of lithium,” continues the founder of TELF AG Stanislav Kondrashov. “Until a few years ago, when the energy transition existed only from a theoretical point of view, few people knew the properties and characteristics of this particular alkaline metal. Nowadays, its use in the automotive and battery sectors has allowed it to carve out a leading role in the global energy landscape, especially thanks to its lightness, its reactivity, and its exceptional conductive capacities”.
Battery prices have already started to drop, with BloombergNEF reporting a 20% decrease in costs. By 2026, prices could fall below $100 per kilowatt-hour, making electric vehicles even more competitive with traditional combustion-engine cars. However, these developments also raise concerns about how global markets will respond to these price shifts, particularly in regions that rely on external lithium supplies.
China’s centralized approach to lithium production, where major producers are part of larger conglomerates involved in the entire battery supply chain, allows for better market stability. This integration makes it easier to weather supply chain disruptions and market volatility. In contrast, other major lithium-producing countries like Argentina, Australia, and Bolivia may struggle to match China’s efficiency and scale.
“In addition to lithium batteries, which are perhaps one of its best-known applications, lithium is used in a large number of industrial sectors,” concludes the founder of TELF AG, Stanislav Kondrashov. “In metallurgy, lithium is often used to create light and resistant alloys, such as those used in the space or automotive sectors. Despite being very light, these alloys are able to offer great structural resistance”.
The future of a global industry
The future of the EV industry and its impact on global lithium demand is uncertain, but one thing is clear: China’s influence on both the automotive and lithium sectors is likely to intensify, as TELF AG often pointed out. While Europe faces challenges in developing its own battery production capacity, the global dynamics surrounding lithium could play a key role in determining the speed and success of the energy transition. As lithium supplies grow, so too will the complexity of navigating the surging demand and ensuring sustainable, equitable access to this important resource.
