 The Asian Battery Companies Charging the EV TransitionMatt Hopkins and
William Lazonick
No inetwp253, Working Papers Series from Institute for New Economic Thinking Abstract: On January 4, 1990, Roger Smith, CEO of General Motors (GM), announced that his company was about to launch a program to develop a zero-emission electric vehicle (EV). Between 1996 and 1999, GM produced 1,117 units of the EV1, leasing them to selected customers. In April 2003, GM announced the termination of the EV1 program, and proceeded to reclaim the cars and literally crushed them out of existence. Recognizing the opening created by GM's destruction of the EV1, on July 1, 2003, Martin Eberhard and Marc Tarpenning founded Tesla in California. Seven months later, Elon Musk became Tesla's third co-founder by investing $6.35 million of the $7.5 million that Tesla raised in its first round of venture funding. Flash forward 15 years to 2019, when Tesla sold 367,656 battery electric vehicles (BEVs) worldwide, with 51.5 percent delivered outside the United States, including 42,715 BEVs produced and sold in China. The first new car company to achieve mass-production status in the United States since Chrysler was founded in 1925, it appeared that, with Tesla's success, the United States had emerged as the global leader in the EV transition. Not so fast! China-based BYD, which sold just 147,185 BEVs in 2019, delivered 2,256,714 BEVs in 2025, compared with Tesla's 1,636,129. In addition, BYD sold 2,288,709 plug-in hybrids (PHEVs), compared with zero for Tesla. BYD could claim global leadership in both types of EV. Moreover, inside every single vehicle that BYD delivered in 2025 was a BYD battery, making the company the second largest EV battery maker in the world. BYD's 16.4-percent share of the global EV battery market was less than half the 39.1-percent share of China-based CATL, a pure-play battery maker, but far surpassed Korea-based LG Energy Solution's 9.3-percent share. As for Tesla, the batteries for its cars produced in the United States come from a joint venture with Japan-based Panasonic, which held a 3.9-percent share of the global EV battery market in 2005. Batteries drive the EV transition. All the leading EV battery companies are based in Asia, while there are no major EV battery makers based in the United States. This paper documents the rise to dominance of the Asian EV battery companies, focusing on Panasonic, LG Energy Solution, BYD, and CATL, providing an accurate historical foundation for our larger project on innovation and competition in the global EV battery industry. Building on the contents of this paper, we are currently deploying the "theory of innovative enterprise" to explain fully, in future papers, the sources of competitive advantage of the Asian battery makers and the reasons why the United States has fallen so far behind in the development and production of this critical technology. Keywords: Lithium-ion batteries; electric vehicles; global leadership; innovative enterprise; Sony; Sanyo; Matsushita; Panasonic; LG Chem; LG Energy Solution; BYD; ATL; CATL; Tesla; General Motors (search for similar items in EconPapers) Published Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:thk:wpaper:inetwp253 DOI: 10.36687/inetwp253 Access Statistics for this paper More papers in Working Papers Series from Institute for New Economic Thinking Contact information at EDIRC. |
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