Catch-up and reverse catch-up processes in the market for lithium-ion batteries

The diffusion of electric vehicles (EV) represents a cornerstone of climate control and innovation policy in Europe, North America and Asia. Greater penetration of EV crucially depends on sourcing strategies for advanced batteries and their continuous price decreases. Lithium-ion batteries (LIB) are the most critical technology and attract increasing R&D funds. Our paper describes the evolution of LIB technology over time and the changing patterns of technological capabilities in this field. Asian countries and multinational firms from Japan and South Korea were successful in absorbing LIB technology originally invented in the USA and in Europe. At present, Asian manufacturers are dominating the world market for LIB cells and are presently leading in terms of technology and manufacturing capacity for LIB cells, specifically for automotive applications. International innovation, however, is a dynamic process and technological leadership changes over time. The novelty of our paper involves reciprocal processes of learning and technology transfer between Europe and Asia. International technology transfer is not a one-way road. Emerging countries can follow successful catch-up strategies. But this does not necessarily imply that former lead countries will lose international competitiveness forever. Winning back and reciprocal catch-up may be possible under specific conditions. Based on the present transformation of the European EV market, there are some chances for reversing the flow of technology from Asia to Europe and for regaining international competitiveness in battery technology.