The world is gradually approaching the electric mobility era, so the production of batteries is becoming a priority for many countries. However, China is leading the race and will remain in first place until at least 2027.
Based on BloombergNEF’s lithium-ion battery supply chain rankings, Visual Capitalist visualized battery production capacity by country in 2022 and 2027, highlighting the extent of China’s dominance.
Battery production capacity by country in 2022
In 2022, China had more battery manufacturing capacity than the rest of the world combined. With nearly 900 GWh of capacity or 77% of total production, China is home to six of the world’s top 10 battery manufacturers (China’s CATL (Contemporary Amperex Technology Co Ltd) was the world leader in 2021 with a market share of 32.5 %).
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Behind China’s dominance in batteries is its vertical integration in the rest of the EV supply chain, from metal mining to EV manufacturing. It is also the largest market for electric vehicles, accounting for 52% of global sales in 2021.
Poland ranks second with less than 1/10 of China’s power. In addition, Wroclaw is home to the LG Energy Solution gigafactory, the largest of its kind in Europe and one of the largest in the world. In total, European countries (including non-EU countries) accounted for only 14% of global battery production capacity in 2022.
While the US is in China’s shadow when it comes to batteries, it is also one of the world’s leading manufacturers of lithium-ion batteries. As of 2022, there were 8 major battery factories in the country, concentrated in the Midwest and South.
China’s monopoly will last until 2027
It is predicted that global lithium-ion production capacity will grow eightfold over the next five years. Here are the top 10 countries by projected battery production capacity in 2027:
China’s established advantage will continue through 2027, with 69% of global battery capacity.
Meanwhile, the US is projected to increase its capacity by more than 10 times over the next five years. Electric vehicle tax credits in the Inflation Reduction Act are likely to boost battery production by rewarding manufacturers of electric vehicles made from domestic materials. Along with Ford and General Motors, Asian companies including Toyota, SK Innovation and LG Energy Solution have announced investments in battery manufacturing in the US in recent months.
In 2027, Europe will host six of the top 10 battery producing countries. Current and future European factories are set up by both domestic and foreign companies, including Germany’s Volkswagen, China’s CATL and South Korea’s SK Innovation.
Can countries cut ties with China?
Despite rising production in North America and Europe, China’s dominance is unmatched.
Battery manufacturing is only one piece of the puzzle, though the main one. Most of the parts and metals that make up the battery, such as lithium, electrolytes, separators, cathodes and anodes, are predominantly made in China.
Therefore, the fight against China’s near-monopoly will be expensive. According to Bloomberg, the US and Europe will have to invest $87 billion and $102 billion, respectively, to meet domestic demand for batteries with local supply chains by 2030.