Benchmark reports there are now 401 gigafactories planned to be in operation by 2030 and this will make nine terawatt hours of annual production capacity. Two-thirds of the pipeline is based in China, which is currently set to have 6 TWh of capacity in 2030.
35% of the 2030 pipeline capacity is associated with a Tier 1 cell producer that can supply the automotive market outside of China.
Tier 2 producers who can supply the domestic EV market make up 45% of China’s pipeline capacity.
Tier 3 producers are the remaining 20% but they are not yet unqualified to supply any EV market.
Cathode makers’ believe lithium prices will keep falling. Chinese EV demand is still growing but current growth does not support the capacity commitments made over the past two years. There was an over building of capacity based upon an expectation of more growth.
The US is making a lot of new battery factories based upon the tax credits of the Inflation Reduction Act. However, the majority of new US battery factories will still be making nickel based batteries. Those batteries will be too expensive.
Benchmark reports that lithium production is underinvested by $54 billion to $170 billion by 2030. It depends whether it is the production levels that carmakers and policy makers are hoping for or if a different situation develops.
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So this would then slow the adoption of EVs into the wider public market?
Semis and Trucks will suck up any “excess” production as long as prices drop enough.
The US market is ready for a 50kwh+ PHEV trucks with a small REX and far superior city MPG than dumb old trucks.
He makes valid points.
However, he assumes the U.S. and Europe cannot reconfigure their factories to adjust to market changes. Tesla can, and as their engineers are hired by other companies, they will bring with them expertise in reconfiguring.
He is right about one thing: Chinese are out-innovating in this area.
What’s hard to pin down is the (1) actual manufacturing of stable products vs. (2) the claims about what is possible.