New IEA analysis finds many energy technology supply chains contain at least one weak link, underscoring need to reduce concentration and improve industrial competitiveness
Supply chains for many of the technologies shaping the emerging Age of Electricity remain highly concentrated in a small number of countries, underscoring the importance of strengthening industrial competitiveness and diversification, according to a new IEA report released today.
The report, Energy Technology Perspectives 2026 (ETP-2026), is the latest instalment of the IEA’s flagship technology publication, which examines supply chains for mass-manufactured technologies including electric cars, batteries and renewable power equipment. The report finds that the geographical landscape of manufacturing for these technologies – of which China holds by far the largest share – is unlikely to change significantly before the end of the decade, based on committed manufacturing and mining projects and market trends.
For the first time, the report includes an ‘N-1’ supply chain security analysis, assessing what would happen if the single largest supplier of a technology were removed from the market. It shows that production outside the largest exporting country, which is China for most steps of the supply chains analysed, could in principle meet most demand outside of China at the final manufacturing stages. However, every major supply chain contains at least one step where less than a quarter of demand could be met without the largest manufacturer, meaning that a disruption at a single weak link could put the entire supply chain at risk. (....)