Global lithium-ion battery capacity may increase over five-fold to 5,500 gigawatt-hour (GWh) by 2030 from 2021, consultancy Wood Mackenzie said on Tuesday.
The report said supply of batteries will remain tight this year.
The Asia Pacific region, led by China, accounted for 90 percent of the world’s battery manufacturing in 2021.
By the end of decade, the region is expected to reduce its share to 69 percent. North America’s cell capacity could expand 10-fold by 2030.
Europe is on track to overtake North America in 2022 and will account for over 20 percent of global capacity by 2030 through more rapid expansion.
Wood Mackenzie consultant Jiayue Zheng said: “The electric vehicle (EV) market accounts for almost 80 percent of lithium-ion battery demand. High oil prices are supporting more markets to roll out zero-emission transportation policies, causing demand for lithium-ion battery to skyrocket and exceed 3,000 GWh by 2030.
“The lithium-ion battery market already encountered shortages last year due to thriving EV market demand and rising raw material prices. Under our base case scenario, we project that battery supply will not meet demand until 2023.”
Global battery manufacturers are responding with massive expansion plans, taking total capacity to more than 5,500 GWh by 2030 across 300 manufacturing facilities. Among them, Chinese manufacturers have announced plans to build more than 3,000 GWh of capacity to date.
The top 15 manufacturers by planned capacity put into operation a total of about 200 GWh in 2021, and the cumulative capacity reached 600 GWh. Meanwhile, 3,000 GWh of capacity is at the planning or construction stage.
CATL leads the expansion with outstanding operating and planned capacity – 800 GWh in total by 2030. Chinese battery manufacturers such as SVOLT, CALB and Gotion High-Tech also have ambitious 2025 capacity targets. Wood Mackenzie expects many more new plant announcements in 2022.
Electric vehicle market accounts for almost 80 percent of lithium-ion battery demand and high oil prices are supporting more markets to roll out zero-emission transportation policies, causing demand for lithium-ion battery to skyrocket, Wood Mackenzie consultant Jiayue Zheng said in a report.
U.S. carmakers Ford Motor and General Motors recently announced their EV expansion plans, with Ford set to launch seven electric models in Europe by 2024 and deepen its partnership with Volkswagen to produce a second EV for the European market.
GM has partnered with South Korea’s POSCO Chemical to make battery materials in Canada, with a goal of having the new plant running by 2025.
Having met shortages last year due to EV market demand and rising raw material prices, battery supply will not meet demand until 2023.
Tesla supplier Contemporary Amperex Technology leads the expansion among battery makers, according to Wood Mackenzie. A recent media report said CATL was weighing sites for a $5 billion plant in North America, Mexico and Canada.
Many more new plant announcements are expected in 2022, the consultancy added.