China leads in battery production; US, Europe race to keep up
An (LFP) battery pack for the Ford Mustang-Mack E is displayed during the Ford Motor Company announcement that it will partner with Chinese-based, Amperex Technology, to build an all-electric vehicle battery plant in Marshall, Michigan, during a press conference in Romulus, Michigan U.S., February 13, 2023. (Reuters Photo)
China continues to lead the global market in battery production, maintaining a significant technological edge. This dominance extends across the entire supply chain, from raw material extraction to final battery assembly.
In contrast, European manufacturers are struggling to keep pace with the rapid advancements in battery technology, finding themselves lagging behind their Chinese counterparts.
Post-pandemic shifts in automotive market
Following the pandemic, the automotive market has undergone notable shifts. Electric vehicles (EVs), with their environmentally friendly features, have rapidly gained popularity.
Many automakers have set their sights on electric vehicles, with strategic plans aiming for 2030. European and Japanese manufacturers have phased out diesel engines and introduced hybrid options for gasoline engines. However, in the race to advance electric vehicle technology, Europe has found itself trailing behind the more rapidly advancing Chinese competitors.
China’s dominance in battery production
China has not only secured a dominant position in battery production but has also expanded its influence across the entire supply chain. The country is expected to control around 70% of the global capacity for lithium-ion batteries by 2030.
This comprehensive control over the supply chain – ranging from raw material extraction to battery production – strongens China’s position in the global market.
US witnesses surge in battery production
Despite China’s clear lead, the United States is making significant strides in battery production. With an estimated capacity of 1,261 gigawatt-hours (GWh), projections indicate that the U.S. will emerge as the second-largest global producer of lithium-ion batteries by 2030.
American companies, including Tesla, are collaborating with international partners like LG Energy Solution to drive this growth. Tesla’s gigafactories in Nevada exemplify this strategic push.
Germany’s position in the European battery market
With a projected capacity of 262 GWh by 2030, Europe expects Germany to lead in lithium-ion battery production. However, a significant portion of this capacity is anticipated to come from Tesla’s “Giga Berlin” facility, marking the company’s first production site in Europe.
Meanwhile, major European automaker Volkswagen is pursuing substantial partnerships with Chinese firms. In Türkiye, the domestic car brand Togg has partnered with Chinese technology giant Farasis for battery production.
