China is set to dominate the electric vehicle (EV) market and account for over half of global production by 2026, thanks to its prominence in the lithium-ion battery supply chain, according to analytics company GlobalData.

The company blamed "Western weakness" in lithium-ion supply chains for the slow adoption of EVs. The sector would face rising battery costs, which will hold back deployment and adoption in the ‘Thematic Research: Electric vehicle batteries (2021)' report.

Batteries are the most expensive part of an EV, and GlobalData said that any cost increase will be a "blow to the decarbonisation agenda of advanced economies."

Additionally, despite efforts from the Biden Administration to help the sector, the US and EU will remain dependent on China's lithium-ion battery supply chain "for the foreseeable future."

Daniel Clarke, thematic analyst at GlobalData, pointed to the recent decision by Johnson Mathey to withdraw from UK battery manufacturing, as demonstrating how hard it is to build a supply chain.

A Chinese advantage is its dominance in chemical refining and production of cathodes and anodes - all critical parts of the supply chain.

According to Clarke, Western economies are already far behind China, with an 80.5% share of lithium-ion battery capacity in 2020. Even though it will drop to 61.4% by 2026, the US and EU will still struggle to compete.

"The rising price of lithium demonstrates what many in the industry have warned about for some time: the growing divergence between supply and demand for lithium," Clarke explained.

"Ultimately, this will lead to an increase in the price of EVs, as automakers pass the cost onto the consumer."