Surge in EV Demand Spurs the US Phosphorus Pentachloride Market Growth

The downstream demand in lithium-ion battery manufacturing, pharmaceuticals, and other related industries primarily drives the Phosphorus Pentachloride market in the USA. Phosphorus Pentachloride is used in various applications, including chlorinating agents, catalysts, organic compounds, intermediates, and dyestuffs. It is currently widely used in producing Lithium Hexafluorophosphate, a key electrolyte in lithium-ion batteries.

The higher the emphasis on sustainability, the larger the chance for the Phosphorus Pentachloride market to develop at an outstanding rate. Currently, the USA depends on China for most of its lithium-ion batteries and the cathodes and anodes used in Electric Vehicle (EVs) batteries; consequently, the Phosphorus Pentachloride market in the US remains subdued.

In the United States, all-electric car sales continue to exceed the entire automobile market. In the first three months of 2023, the total number of Battery Electric Vehicle (BEV) registrations was 257,507, a 63 percent increase over the previous year and over 7% of the total market (up from 4.6 percent in Q1 2022).

In the recent development, Oklahoma is seeing a surge in foreign investment interest, particularly in its renewable energy industry, and is on the verge of signing significant new deals with companies from Switzerland and Asia. This indicates a huge drive by governments and firms to diversify their supply networks and lessen dependency on China, which assists the EV market and consequently benefits the Phosphorus Pentachloride market.

The Chinese government has always played an essential role in supporting the supply and demand for EVs. A swarm of local EV businesses have developed and continue to optimize new technologies to suit the real-life demands of Chinese customers due to hefty government subsidies, tax breaks, procurement contracts, and other policy incentives. As a result, many youthful vehicle purchasers have emerged.

Additionally, according to the International Energy Agency (IEA), China produces almost 75% of all lithium-ion batteries, a critical component of EVs, in the globe. The country also has 70% of the ability to produce cathodes and 85% of the capacity to produce anodes, two critical components of such batteries.

The entry of the USA as a competitor in the Phosphorus pentachloride market could introduce some changes. The USA is known for its strong chemical industry, research capabilities, and advanced production technologies. If US manufacturers can offer competitive pricing, high-quality products, and efficient supply chains, they may challenge Chinese producers in the Phosphorus pentachloride market.

Battery manufacturing will increase in those primarily southern states, and solar manufacturing will follow suit. The proposed plants are primarily in Alabama, Georgia, and South Carolina, with some in Ohio and solar powerhouse Texas. Another 11 renewable energy manufacturing projects worth more than $7.5 billion have been announced but have no location.

As per the ChemAnalyst database, the Phosphorus Pentachloride market is expected to develop in the US due to strong demand for EVs, and local manufacturing is projected to boost the market growth of chemicals used in EV batteries. With this, the chemical manufacturing sector, like the Phosphorus Pentachloride market in China, would likely face competition.