Will the world produce enough electric vehicle batteries?
You wouldn’t try to install a conventional battery into an electric vehicle (EV) and expect the car to perform, would you?
The answer to this question (or one similar) is the driving force behind the demand for what are known as gigafactories—providers of purpose-built batteries for the EVs of the future. As the transport industry evolves, unique battery applications are influencing the demand for custom-built batteries and state-of-the-art facilities to ensure that production meets the high levels of demand.
Growing excitement around EVs could, in many scenarios, actually become the industry’s downfall; emphasis is currently heavily weighted towards the vehicles themselves, rather than the individual elements slotted together for ultimate functionality. This is no surprise, though. The industry is led by enthusiasm around the end product, with consumers drawn to the latest automotive features, the fastest cars, and the best-looking bodies—as car enthusiasts have always been.
But, before long, the flow of battery production (among other factors like charging infrastructure and energy capacity) will determine how fast the industry moves and, as it stands, will likely stunt the growth of EV adoption due to prices remaining high. Without energy, consumers would be purchasing over-priced, heavily-engineered keepsakes rather than reducing their impact on the planet.
Battery manufacturing is now widely recognised as a critical factor contributing to the success of the EV supply chain, yet questions remain around whether the world can even produce enough batteries to fully electrify.
It’s this uncertainty that’s fuelling so many stories of startups driven by EV battery production, as well as those about leading EV manufacturers increasing their stakes in the industry. Even the engineers behind the latest cars, boats, and planes understand that their tireless efforts to create change are at the mercy of available renewable energy and battery storage solutions.
Further concerns around the transport industry’s decarbonisation arise as the supply chain switches from that of fossil fuels and combustion engines to one that’s heavily supported by rare metals and other materials. While mine operators are carefully selecting new vehicles to switch their fleets from diesel to electric, there are still questions to be asked regarding the supply of precious materials. According to the International Energy Agency (IEA), battery vehicles require six times more minerals than a conventional internal combustion vehicle (ICV).
A high potential for growth in battery manufacturing
In order to really understand the scale of potential in the battery manufacturing industry we turn to the trusted management consulting firm, McKinsey, for some critical analysis of its growth.
The company forecasts a significant amount of expansion in the battery value chain over the next eight years, suggesting that the market value will grow by 20% year-on-year to achieve a total worth of US$360bn globally by 2030. If the industry were to follow the pathway of other renewable energy technologies, this value could be significantly higher by the end of the decade with potential for a further US$50bn.
This acceleration cannot come fast enough, particularly when global energy demand is at its highest while the supply is at constraints—not to mention the climate creeping ever closer to the 1.5-degree mark.
“Current market conditions are torrid. The impact of rapidly accelerating inflation is hurting everyone—from businesses to individuals,” says Ben Kilbey, Director of Communications and Media at Britishvolt.
“Headlines are littered with accounts of the pain being felt across the globe. The current energy crisis highlights the dire need for a switch to renewable energy, of which low carbon, sustainable, domestic, battery cell production will be key.”
