Quarterly Market Review Q2 2023 Update
In the rapidly evolving world of electric vehicles (EVs), Europe is making significant strides in battery cell production. The continent's efforts are driven by the increasing demand for EVs and the need for renewable energy storage solutions.
According to the International Energy Agency (IEA), global EV sales are projected to reach 14 million units by the end of 2023, as outlined in the Global EV Outlook 2023. This surge in demand has prompted Europe to focus on domestic battery plus to meet the rising need for batteries.
In 2022, sales of batteries used in EVs reached a combined energy capacity of 690 GWh, marking a 76% growth compared to the previous year. This growth is expected to continue, with total production capacities for EV batteries in Europe set to increase from approximately 145 GWh/a in 2022 to 175 GWh/a by the end of 2023.
Leading battery cell production market companies, such as CATL, LG Energy Solution, BYD, Panasonic, Samsung SDI, and SK On, are investing in Europe's battery production landscape. LG Energy Solution, Samsung SDI, and SK On, for instance, are producing battery cells in Poland and Hungary. Samsung SDI's plant in Hungary is anticipated to have a capacity of 40 GWh/a following expansion. LG Energy Solution's production capacity in Poland is expected to expand to 90 GWh/a in 2023, and SK On plans to open another facility in 2024 with an additional 30 GWh/a capacity.
New battery cell production plants are springing up across Europe. Germany, Sweden, France, and Poland are host to several new facilities, each with capacities ranging from 10 GWh to over 40 GWh per year. Notable examples include Northvolt's cell production in Sweden and CATL's serial production near Erfurt, Germany, which began in December 2022.
Building a battery cell production plant is a multi-year process, typically taking around five years from the initial announcement to the start of operations. A pilot line is often constructed during development to test battery terminal production processes and designs.
Europe's battery cell production is not limited to cell manufacturing. Several companies are involved in electrolyte production, mainly in Poland, Hungary, and the Czech Republic. LG Chem and Toray manufacture separators in Poland and Hungary through a joint venture. BASF and Umicore produce cathode active material (CAM) in Europe.
Securing skilled labor in the vicinity of the factory is essential. Access to over 650 EV Market Insights, including detailed reports on European battery cell production, is available via www.EVMarketsReports.com.
The choice of location is critical, considering the rising energy prices in Europe and the emphasis on renewable energy sources. China, for instance, has a significant demand for stationary battery storage systems due to government policies mandating simultaneous installation with renewable energy generation.
Europe aims to contribute significantly to the global battery market through domestic production. The continent's efforts in battery cell production are a testament to its commitment to a sustainable and electrified future.
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