Battery Boom Charges Onward as Demand Soars

Photo by Kumpan Electric

The global market for batteries continues its meteoric rise, with demand projected to increase more than eighteenfold between 2020 and 2030, representing a staggering 34% annual growth rate, according to a new report.

The report, “Battery Monitor 2023” was published jointly by the management consultancy Roland Berger and the Chair of Production Engineering of E-Mobility Components at RWTH Aachen University in Germany. It provides a comprehensive overview of the burgeoning worldwide battery industry.

Electric vehicles will account for around 80% of demand for lithium-ion batteries over the coming decades, as automakers rapidly transition away from internal combustion engines. This enormous appetite from the automotive sector is fueling a battery gold rush, with new production hotspots emerging in the United States and Europe to complement existing capacity in Asia.

“To thrive on the international market, battery manufacturers need to optimize their production processes,” said Professor Heiner Heimes of RWTH Aachen University. “Developing new production technologies is the key to efficient, cost-effective and sustainable battery production.”

By 2030, global demand for batteries is expected to reach around 4,900 gigawatt hours (GWh), up significantly from last year’s forecast of 4,000 GWh. However, announced production capacities worldwide already total approximately 8,900 GWh in 2030, indicating the potential for overcapacity, particularly in China.

“We do not expect to see overcapacity outside China,” said Wolfgang Bernhart, a partner at Roland Berger. “The lack of materials, available talent and secured sales is impairing the performance of battery manufacturers and production processes worldwide.”

Market imbalances are arising as the development of production capacities differs sharply between the United States, China and Europe. While North America will see new players emerge, Europe’s market may consolidate as newcomers struggle. China, meanwhile, is building tremendous overcapacity that may flood export markets.

With cutthroat competition, technical innovation has become vital. European and American companies are focused on sustainable production methods and pioneering manufacturing technologies to keep pace with Asia’s more experienced factories.

“In the medium-term future, this will be the only way for firms to secure their position in this dynamic market,” the report concluded. The world’s insatiable appetite for batteries shows no signs of abating.

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