Report: EV Batteries A $240 Billion Industry In The Making

2 months ago by Mark Kane 21

Tesla

Tesla Model X on the Panasonic show stand

The market for batteries in electric vehicles is one huge blue ocean, that brings tremendous business opportunities today and in the future. Forbes expects that market will be worth $240 billion in 20 years time.

Contemporary Amperex Technology Co., Limited (CATL) battery cells

That assumption is based on the electrification of 40%  of vehicles over the next teo decades, which would be at least 40 million units annually, out of about 100 million currently produced yearly (a which of course still grow much larger).

In the future to hit these numbers, the pricing of electrification and batteries is said to achieve parity with the internal combustion engine systems, at about $6,000 per vehicle on average.

At this point, are are not sure whether 40% is not too conservative, but whatever it will ultimately be, there is need to build dozens of new battery gigafactories around the world.

40 million cars with average 60 kWh battery requires 2,400 GWh of battery capacity (more than 20x completed Tesla Gigafactory at 105 GWh cell production).

Forbes notes also that the Chinese government is working hard to enable Chinese manufacturers to acquire the biggest share of the growing pie.

Most consumers familiar with EVs today know of Panasonic and LG Chem, ahve heard about Tesla Gigafactory, and maybe even recognize BYD or Samsung SDI – but China alone has more than 140 EV battery manufacturers with more than 125 GWh capacity today (to be 250 GWh by 2020).

An interesting policy in China is pushing manufacturers for higher production capacity:

“With so many Chinese companies hoping to enter the battery sweepstakes, China’s government is considering policies that will set minimum production capacities for battery manufacturers as a way to further strengthen its position as a global leader.

Although not yet official, Beijing would like Chinese manufacturers to have a production volume of at least 3 to 5 GWh per year. Separately, Beijing released draft guidelines at the end of 2016 stipulating that battery manufacturers would need to have at least 8 GWh of production capacity in order to qualify for subsidies. As a signal to the market, the government is planning to back the development of only those battery companies with annual production capacities of 40 GWh or more.

According to the article, production capacity of BYD is around 20 GWh annually, while CATL is at 7.7 GWh (to be 50 GWh by 2020).

source: Forbes

Tags:

21 responses to "Report: EV Batteries A $240 Billion Industry In The Making"

  1. Recoil says:

    This is why Tesla stock is where it is at. With one of the largest factories in the world being able to produce more batteries in a year than all others combined they are well ahead of the game and in a great position to capture a large percentage of that 240 Billion market all the while keeping their own battery costs in check for their own cars and power walls.

    1. Another Euro point of view says:

      “With one of the largest factories in the world being able to produce more batteries in a year than all others combined”

      Do you know what is today’s (December 2017) production capacity ? (could not find it on the net).

      Do you have a link supporting what you wrote ?

      1. Recoil says:

        Hey Euro can you show me another factory even close to the size that the Gigafactory is right now that produces as many batteries? How about showing me one that will even come close to producing the amount of batteries that the gigafactory will produce in the next 2 years as it finishes being built.

        How about a battery factory that has even broken ground that plans on even coming close to what the gigafactory will achieve in the next year?

        Sorry you can’t because Tesla in partnership with panasonic is so far ahead of all the others in future capacity that none even come close.

        This is why they are best prepared for the coming 240 Billion industry for batteries and electric cars.

        P.S. if you actually read the story it talked about the large demand in the future when the gigafactory will be up and running. This would have saved you from asking the inane question of what they are producing today when we are talking about future production. Then again it seems you have to get your dig into Tesla somehow.

      2. Pushmi-Pullyu says:

        Reality check: Tesla’s Gigafactory One is planned to have an annual output when it is completed equal to the global li-ion battery output in 2013.

        Claiming that Gigafactory One currently has an output equal to all the other battery factories in the world is a wild exaggeration, and sadly one that gets repeated a lot. Even statements by Tesla reps often leave off the “…in 2013” qualifier.

        1. arne-nl says:

          “Claiming that Gigafactory One currently has an output “

          And re-reading Recoil’s comment you’ll see that (s)he said no such thing. Only talking about ‘being able’, obviously referring to the planned capacity once finished.

        2. P-P, the Original Number Goal from Tesla Itself, was to be able to Produce 35 GWh worth of Cells, and 50 GWh Worth of Batteries (By Assembling some of those Batteries on Site, from Cells imported into the Factory, just for Building Batteries with them).

          Next, they upgraded the Numbers – by 3X – to 105 GWh of Cells to be Produced, and 150 GWh worth of Batteries to be Assembled in it.

          The Point is – those are Announced Planned Capacity Figures, so how does that compare with the portion China is now Talking about, and – also – how does the massive expansion in Capacity of Cells and Battery Production at GF1 – intimidate – even the Chinese – into pushing harder to Re-Take – or to Take – the Lead, going forward!

          Not only that – we are now under 2 weeks away to the End of the Year – Any Dates to Guess on when Elon will make his next Gigafactory Announcement? (It was said to be going to be announced before Year End, so any time up to Midnight – December 31st, still qualifies!)

        3. Another Euro point of view says:

          Thanks for info Pu-pu

  2. Pushmi-Pullyu says:

    In 20 years, only 40% of vehicles will be plug-in EVs?

    Not likely! I expect it to be more like 70%+ by then, and mostly only older vehicles that still get all their miles by burning gasoline or diesel.

  3. Smattmul says:

    why do we need to wait 20 years? Why are battery cars more expensive than ice. Battery tech is not where it needs to be. Li-ion is ok for your laptop but ice is better for planes trains and auto and will take a breakthrough to get into the oil market unless regulations can be passed and sustained

    1. scott says:

      Thanks for the Kremlin talking points.

      1. DJ says:

        It’s a friggin fact. I don’t know why some people just bury their heads in the sand.

        I just saw an Acadia with a MSRP of $29k Meanwhile a Bolts is $37k.

        EVs right now cost more and are overall less capable than ICEs. Any point to the contrary is just wishful thinking. That doesn’t mean that they can’t work or be viable transportation options but even with the incentives they have higher MSRPs. Leasing them these days largely is really the way to go just given that you get the $7,500 and can get a new one in a few years that is much more capable than your 3 year old model.

        As costs come down this difference will lessen or disappear but right now it’s a simple fact that ICEs are cheaper and EVs need a pretty big tech jump to be cost competitive, especially without incentives.

        And no I don’t work for Putin or Trump so there pretty much goes any smart ass reply you could probably come up with…

        1. David says:

          Yes when you just looking at the MSRP then ice is cheaper but when looking at gas prices and vehicle maintenance the EVs are about 5 to 7 thousand cheaper. I’m especially excited about the Tesla rig with it’s 1 million miles warranty.

          https://www.google.com/amp/s/electrek.co/2017/08/30/tesla-model-s-hits-300000-miles-in-just-2-years-saving/amp/

        2. pjwood1 says:

          You’re conflating cost and technology, but you do you.

          I ran into a guy at Interstate Battery, yesterday with my son. He told him you’ll have to “wait until that German battery, that charges 500 miles in one minute, comes out”.

          I added, “and lasts two cycles”, but I’m sure this “battery professional” says it to any who’ll ask.

          He does him, and the world moves really slowly. Not that he was clued in but the corporate line at Interstate until recently was Mild Hybrid, 48V support. So, “slow walk” is the culture, top to bottom.

        3. scott says:

          Most people don’t buy new cars. Used Leafs sell from $5k. A nicely equipped used Leaf is $9k.

    2. SJC says:

      One way to get lower battery costs is higher energy density. Fewer cells required for a 40 kWh pack will bring costs down.

  4. Get Real says:

    Uh, no.

    The batteries we have now are more than sufficient to replace ICE in light duty vehicles and with the price per kwh falling rapidly they will also eventually replace much HD transport as well.

    The issue that will exist is that there will be production restrained because unlike Tesla, the laggard OEMs did not do the legwork necessary to start the rapid buildup in capacity and really still haven’t.

    There will need to be 100-200 Gigafactories of battery output for the full transition for both PEV vehicles and stationary storage.

    Planes are another matter as they will need very energy dense batteries but it will happen.

    Electrified rail is already common in most of the world using power lines. It’s just the US and a few others that are laggards in this regard.

  5. windbourne says:

    It amazes me how short sighted American car makers have become.
    The batteries is the major costs and will likely be a major portion of the profits as well.
    As such, only the car makers that own that portion will make good profits.

    This shows why W/O really screwed up when they bailed out the car makers. Rather than simply bailing out the stock holders, they should have split GM/Chrysler into multiple car makers and re-introduced competition.
    Even now, I would like to see Raevin get help from Tesla on growing and enable Tesla to really grow their battery plant.

  6. Scott says:

    Tesla is about the batteries not the cars. The cars help bring down the battery cost for residential and commercial battery storage. I have waited a year for my Tesla powerwall and still waiting! Prices keep falling!

  7. Timmy says:

    Tony Seba (and I, because of him) think it’ll be all over for ICE in about 10 years. 40% by ’40, pfft.

    1. Jim says:

      Nice to see another Tony Seba fan. Love the way that man thinks!

  8. Jean-Marc Blanchette says:

    @MarkKane – It looks to me like one of your next articles should be a global battery production overview… where the battery factories are, projected outputs and production dates… ad a few maps and graphs…

Leave a Reply to Jim Cancel reply