Lithium-Ion Battery Value Chain Analysis: Assessing Ethiopia's Competitiveness and Strategic Framework
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Date
2023-06
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Addis Ababa University
Abstract
The Lithium-Ion Battery (LIB) industry has gained significant importance as a key enabler for electric vehicles. The Federal Democratic Republic of Ethiopia has ambitious plans to decarbonize its transportation sector through the introduction of a sizable number of electric buses and small cars. However, these cars will eventually require new batteries after a while.
This study uses a value chain analysis of the LIB industry, with a focus on assessing Ethiopia's competitiveness in the LIB value chain. It examines the entire value chain of LIBs, starting with the upstream stage involving the extraction and processing of raw materials, moving on to the midstream stage involving the manufacture of battery cells and component assembly, and finishing with the downstream stage involving battery integration and end-use applications. The study assesses Ethiopia's current position and potential for competitive advantage in each stage of the value chain using a combination of SWOT and Porter's five-force frameworks. It examines important elements such as the availability of raw materials, technological capabilities, and infrastructure development.
The results highlight that Ethiopia has an estimated total of 3 million tons of Lithium brines linked to the potash horizons in Danakil, Afar region, with a 50% recovery rate. The nation also possesses abundant reserves of other important raw materials like nickel and graphite. Lithium, a key component of LIBs, holds significant value and is abundantly available in Ethiopia. Compared to graphite and nickel, lithium extraction requires less complex infrastructure and lower capital investments. Experts suggest that Ethiopia should prioritize lithium extraction to maximize its potential in the LIB value chain. However, substantial investments in infrastructure, technology, and knowledge are still required for the extraction and processing of these materials.
Based on the analysis, the study provides a strategic framework to enhance Ethiopia's competitiveness in the LIB value chain. It can also serve as a valuable resource for policymakers, industry stakeholders, and investors interested in understanding Ethiopia's competitiveness in the LIB sector.
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Lithium-Ion Battery (LIB), Value Chain Analysis, strategic framework, Ethiopia Competitiveness