Cell Production

Hundreds of cell factories, so-called gigafactories, are being built worldwide. These are necessary to meet the increasing demand for lithium-Ion batteries. Currently, a large part of cell production takes place in Asia, more precisely in China, Korea and Japan. In the next few years, however, the global market shares will shift. Due to demand from European and American automakers, for example, there will be more and more cell factories outside Asia by the end of the decade. Many OEMs either enter into cooperation with established cell manufacturers or try to establish their own cell production.

The tool shows production capacities that are theoretically available in the built or already announced production locations.

The largest cell manufacturer in 2022 was China with a 76 percent market share. The country had a production capacity of approximately 450 GWh at that time. By 2030, the global market share will drop to 47 percent due to the diversifying market, but the production capacity still increases to 2.8 TWh. Korea (2022: 4 percent market share) and Japan (2022: 3 percent market share) were the largest cell manufacturers after China, but will continue to lose their market share over the next few years. Nevertheless, they have each expanding production capacities from 25 to 100 GWh and 15 to 95 GWh per year, respectively.

Extreme growth markets for cell production are Europe and the USA. In the USA, supported in part by the Inflation Reduction Act (IRA), there will be a massive capacity expansion from 45 GWh in 2022 to over 1,000 GWh in 2030. In individual European countries such as Germany, cell production will increase. Around 450 GWh production capacity are announced by the end of the decade. Overall, production capacities of around 2 TWh by 2023 are currently announced in the EU.

There are now almost 600 different production sites worldwide with major production facilities. However, the announcements must be critically analyzed. Depending on the source, but also the actor, the chances that the announcements will be implemented vary. Through an expert assessment of the individual announcements, different scenarios of future cell production sites can be created.

Currently, the production capacity exceeds the current demand for batteries. However, it is repeatedly discussed whether the construction and expansion of the production facilities can grow with the rapidly growing demand market. A slow production ramp-up, delayed construction projects or even completely abandoned projects often leave the actual production capacity significantly below the announced production capacity.

The investment costs for cell production vary and are strongly dependent on the total production capacity of the production facility. There are many scaling effects for the factories. Primarily with the required building infrastructure, for example, a lot of costs can be saved. A smaller production facility with less than 20 GWh production capacity per year causes on average approximate investments of 80 million USD per GWh. In comparison, the average investment for production facilities of more than 20 GWh is reduced to 65 million USD per GWh.

In the individual production facilities, different cell formats can be manufactured. A distinction is made between pouch, cylindrical and prismatic cells. On the one hand, the cells are manufactured differently in sub-steps, and on the other hand, they differ in the energy densities achieved or have different cell properties (e.g. with regard to safety). It is difficult to predict how the proportions of cell formats will develop. Whereas in 3C applications (see application tool window) primarily round cells were used in the past and today primarily pouch cells, there is no clear trend towards a specific cell format in the automotive sector. Different manufacturers rely on completely different cell formats and their integration into the vehicles.