Woodmac: Lithium-ion Cell Manufacturing Capacity to Rise 4 Times by 2030

Despite COVID-19, the push toward the electrification of the world has not lost ground this year, with the energy revolution continuing to unfold.

Demand for batteries has led to an increase in plans for lithium-ion cell manufacturing capacity — according to research firm Wood Mackenzie, capacity could rise fourfold by 2030 compared to 2019.

The firm forecasts a jump to 1.3 terawatt hours (TWh) in capacity, supported by 119 battery manufacturing facilities either operational, under construction or announced by more than 50 vendors.

“Manufacturing capacity in Asia Pacific accounts for 80 percent of global capacity pipeline. The region will remain as the leader of lithium-ion battery production for the next decade,” Woodmac Senior Analyst Mitalee Gupta said.

Asian manufacturers such as CATL (SZSE:300750), LG Chem (OTC Pink:LGCLF,KRX:003550), BYD (SHA:002594) and SK Innovation (KRX:096770) are leading the way, followed by emerging European vendors Northvolt and ACC.

“Within Asia Pacific, China dominates the pipeline capacity and is expected to double its capacity from 345 gigawatt-hour (GWh) in 2020 to more than 800 GWh by 2030,” Gupta added.

Europe currently accounts for only 7 percent of global capacity, but Woodmac expects the region to ramp up significantly in the next few years and to hit 25 percent of global pipeline capacity in 2030.

As demand for electric vehicle (EV) batteries and energy storage solutions rises, both Asian and local manufacturers, including CATL, LG Chem, Samsung SDI, Northvolt and ACC, have invested in new plants.

Woodmac forecasts the Americas will maintain their share for the next decade, with pipeline capacity concentrated in the US and current capacity led by Tesla’s (NASDAQ:TSLA) gigafactory in Nevada.

When looking at the specific chemistry that these plants will target, currently nickel–cobalt–manganese (NCM) is the mainstream chemistry in operating facilities, followed by lithium-iron–phosphate (LFP).

A push for greater energy density, which is required for widespread EV adoption in western markets, has seen a move toward high-nickel NCM chemistries in the past couple of years.

But the market has also seen moves into LFP from companies like Tesla and Volkswagen (OTC Pink:VLKAF,FWB:VOW) as cost reductions, improvements and the scaling back of Chinese EV subsidies have revived interest in this cobalt-free cathode chemistry.

Woodmac also notes that capacity is often unspecified due to constantly advancing battery technologies and changing market preferences.

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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.