- Advanced Batteries
- Lithium Batteries
- Li-ion Batteries
- Battery Manufacturers
Gigafactories Are Shaping the Advanced Battery Market
Lithium ion (Li-ion) batteries continue to be the technology of choice for both new stationary storage applications and EVs, largely because they have benefited from economies of scale. Guidehouse Insights estimates Li-ion batteries will continue to be the leading technology in the market by 2026, reaching 581.0 GWh across both stationary storage and EVs.
More Lithium Production in the Works
Though there have been recent reports detailing the potential of a lithium shortage that would plague major industries that rely on batteries, several companies are planning new production advanced battery facilities. Guidehouse Insights believes that this ramp up in production strategy is occurring because of (but not limited to) several contributing factors:
- Cost: For companies that have plans to significantly increase revenue over the long-term timeframe, streamlining throughput can eliminate costly steps of manufacturing on a smaller scale
- Efficiency: Labor, material, and energy efficiency are driving forces behind lowering costs and fulfilling customer orders in a timely manner
- Limiting cell variability: Standardizing fabrication processes helps create a reliable, repeatable product so customers can grow to trust that the batteries that they are receiving have been battle tested
Movement in the Market
Dutch energy storage company Lithium Werks announced that it will be building a new Li-ion battery gigafactory plant in China for $1.85 billion, chiefly being funded by its key partners. This plant is scheduled to have an annual production capacity of approximately 500 GWh when it comes online by 2030. Lithium Werks has been looking to bolster its battery business in recent months. In March 2018, it announced it had acquired former battery giant A123 Systems' industrial battery business.
Additionally, Sweden-based Northvolt, a Li-ion battery company started by two former Tesla employees, announced it has broken ground in building its own gigafactory in Sweden. With planned operations starting in 2020, Northvolt plans to grow from producing 8 GWh per year to 32 GWh per year when construction is completed in 2023. Industrial engineering giant Siemens will be assisting Northvolt as an investment and engineering partner. Siemens states that it intends to purchase batteries from this facility when it is up and running.
Panasonic also reports that it is ahead of its initial cell production schedule in its Tesla Gigafactory 1 as it has overcome a bottleneck that temporarily stymied operations. This factory fabricates the Model 3’s 2,170 Li-ion cells jointly developed by Panasonic and Tesla. With an annual throughput of 20 GWh since 2013, Panasonic announced that it now plans to add three production lines to Gigafactory 1 by the end of 2018 to push production capacity to 35 GWh annually.
Further Production Increases Expected
As advanced batteries become a more integral part of the way consumers interact with energy, Guidehouse Insights predicts that more companies will announce larger production lines to keep up with market and customer needs. It will be important for integrators to engage with advanced battery manufacturers to guarantee that they will have a sustainable product pipeline. These manufacturers can also help integrators find more customers and end use markets. Though advanced battery manufacturing companies may have varying go-to-market strategies across the board, addressing the needs of the customer must be the priority. With increased capacity on production lines, stakeholders across the advanced battery value chain stand to benefit in the long run.