Elon Musk Says Batteries Will Be As Crucial To Transport As Oil Is Today

Tesla Inc TSLA CEO Elon Musk said on Monday electric vehicle batteries will play an essential role in transport, just as oil does today.

What Happened: Musk was responding to a social media post by an electric vehicle enthusiast who pointed out that nearly all of today’s electric vehicle battery production is done by Asian firms and a lot of it is being done in China. 

The social media post, which shares an infographic from SNE Research, shows the top ten battery manufacturers in the world are in Asia. The research said China accounts for 44.1% of the EV battery market.

The report names Chinese battery maker CATL as the front runner in battery making for electric vehicles with a 32.5% market share. 

Besides Tesla, CATL is also a battery supplier for Volkswagen Ag VWAGGY, Honda Motor Co HMC and several Chinese automakers including Nio Inc NIO. 

The research ranks Korea’s LG Energy Solution and Japan’s Panasonic second and third with 21.5% and 14.7% market shares, respectively. 

Why It Matters: Asian battery makers that currently dominate the market for electric vehicles have been expanding their presence in China, the U.S. and Europe as automakers rush to secure supply chains. The growing demand for batteries has also pushed up prices for lithium and cobalt — key ingredients to make electric vehicle batteries— and some automakers are worried there may not be enough batteries in the coming years.

Tesla, a leading global electric vehicle maker and a trendsetter in the segment, relies on multiple battery partners. Rival legacy players such as General Motors Company GM and Ford Motor Company F are building their own capabilities, partnerships and factories for making batteries for their future electric vehicle lineup.

Price Action: Tesla shares closed 2.75% higher at $774.39 a share on Friday.

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