Europe’s Battery Cell Production Capacity to Increase to 1.5 TWh by 2030

Europe is likely to accommodate a quarter of the global cell production capacities

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Europe is expected to achieve a battery cell production capacity of 124 GWh during 2022, with significant Asian cell producers expanding operations in the region and extensive investments in many newly established European cell gigafactories.

The Fraunhofer Institute for Systems and Innovation Research (ISI) has forecast battery cell production will quadruple to over 500 GWh in the next three years and up to 1.5 TWh by 2030.

The latest numbers reveal that Europe will likely accommodate around a quarter of global battery cell production capacities by the end of the decade, with current announcements for the construction of battery cell factories covering at least 15 European nations.

Fraunhofer ISI predicts that until the end of the current decade, new cell-producing factories in Germany will contribute the largest share of 400 GWh battery cell production in Europe. The current global automotive sector is focused on battery-electric drives as it helps mitigate large amounts of greenhouse gas (GHG) emissions. Even sustainable power storage solutions are based on battery cells.

Such a rise in demand for batteries calls for a rapid build-up of manufacturing facilities with capacities that would meet the needs of diverse sectors. Fraunhofer ISI’s researcher Lukas Weymann said, “The rapid development in Europe’s battery cell production is largely driven by European players such as Northvolt, Volkswagen (VW), and Automotive Cells Company (ACC). The three mentioned have jointly announced about a third of Europe’s cell production capacities.”

Northvolt has aggressively implemented its expansion strategies across the region with a target to achieve a maximum battery cell production capacity of 40 GWh from five factories once the construction is completed.

Overall, more than 40 cell producers have announced the establishment of battery factories in Europe, including non-European cell makers such as China’s CATL and Tesla with their planned German cell factories. With their Eastern European factories, South Korea-based cell producers LG Energy Solution and Samsung SDI will also establish a large share of European cell production.

Germany, France, and Italy are set to get battery cell facilities with the ACC’s announcement on the construction of gigafactories in the three countries. ACC benefits from the support provided by the Important Project of Common European Interest (IPCEI) launched by the European Union. The car manufacturers Mercedes-Benz and Stellantis, and French battery producer Saft, are shareholders in ACC and would also share the investments in establishing the cell production factories.

India has also witnessed a drastic rise in demand for batteries with increased sales of electric vehicles. According to a joint report published by NITI Aayog and the Rocky Mountain Institute, the country’s annual battery market is likely to surpass $15 billion (~₹1.12 trillion) by 2030, pushing the battery demand to 260 GWh in an ‘accelerated scenario’.

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